Wireless Blog

While there is understandably much buzz about fancy new features on cellphones and cool applications like mobile music or games, the world of mobile banking is steadily entering the limelight as well in the mobile ecosystem. In a number of forums from Malaysia to India I am seeing growing attention on how the mobile phone can provide payment and banking services which are convenient for some users and indispensable for others.

Chew on this statistic for a while: in many developing countries, there are more mobile phone subscribers than bank account holders. And many of the loan requirements of many citizens of developing countries, especially in rural areas, are infeasible for traditional banks to meet. Enter the world of microfinance: enhanced by mobile communications to bring down workflow costs.

A number of start-ups such as Obopay and mChek are targeting this market to help people access banking services on their cellphones, observes entrepreneur Sraman Mitra in Forbes magazine. Even the stodgy World Bank is getting involved.

In the Philippines, a transaction on a cellphone costs one fifth that of a traditional visit to a bank branch, observes Gautam Ivatury, manager of the Technology Program at the Consultative Group to Assist the Poor (CGAP). However, regulator challenges can block operators from becoming bankers, what a pity….

I always continue to be amazed at the ingenuity of the Philippines in the mobile space each time I visit Manila. A successful player in the mobile banking space is Globe Telecom, the second-biggest Philippine phone company. It reportedly has 1.3 mil customers for G-Cash, its mobile-payment and remittance service.

In another recent move, citizens of Bangladesh will soon be allowed to transfer funds through their mobile phones as Bangladesh Bank (BB) is reportedly in the process to finalise guidelines on mobile banking . The central bank has taken the initiative following GrameenPhone's application for a license to introduce mobile banking.

In developed markets as well, a survey by the Aite Group, a financial services analysis firm, found that 23 of the 80 largest US financial institutions expect online and mobile banking will be top priorities for product development in the next two years; the percentage is higher in regions like Latin America.

An interesting company whose fieldwork in India I had a chance to witness is EkGaon (“One Village”) Technologies (www.ekgaon.com). It won an international award for its project enabling financial inclusion and increasing efficiency of microcredit federations by using appropriate technologies like SMS for workflow.

The main problem in rural financial services is the non-availability of accurate, timely and needed information for decision making at higher levels, according to the committee of the Stockholm Challenge Award . EkGaon was one of the award winners in this category thanks to its mobile browser solution enabling offline and online workflow for mobile finance organisations.

With more attention and case studies like this, it is a thankful development indeed that mobile banking will empower the full spectrum of society!