By Maya Barkay, product marketing manager, mobile financial services, Amdocs
Have you ever considered asking to borrow money from a friend to help you through times of difficulty?
Being lent cash isn’t always regarded as the best option, but in emerging markets this is still a common scenario, with over one third of respondents in an Ovum survey saying that they had taken a loan from a friend or relative in recent months. That’s hardly a surprise when the alternatives – borrowing from loan sharks or local banks – are simply untenable, with extremely high interest rates being just one of the dangers.
Exciting times for global m-banking
When you consider this, the growth of mobile banking across the globe is tremendously exciting. For example, the recent news that Philippino operator Globe is planning to offer its mobile banking loan service in countries other than the Philippines shows that service providers are looking to invest further in developing countries.
Currently two billion people across the world lack access to any financial services at all. A simple feature phone opens up unlimited economic opportunities, allowing people to easily access services they never could have dreamed of five years ago.
The banks, too, have jumped on this trend. In Kenya, for example, established brands like M-Pesa are being challenged by Equity Bank, who has partnered with service provider Airtel to compete directly on mobile transfer services offerings. The new service allows customers to take out loans, manage insurance and investment services, carry out international money transfers and transfers from other commercial banks.
Time to jump on the bandwagon
In this competitive environment, it makes sense for service providers to jump on the bandwagon. In emerging markets, the potential for expanding lines of business even further is clear as more and more people have their own mobile devices.
The research weighs in their favour too; according to Ovum, mobile operators in emerging markets already enjoy a good degree of trust with consumers, and even ranked ahead of banks in certain markets.
Furthermore, service providers are ideally placed, given their nature, to instil the confidence of potential subscribers to their mobile financial services. These important advantages, according to Boston Consulting Group, include: being not only customer focused in a generic way, but traditionally focusing on all customers, not only the most profitable; using a secure device that already belongs to the customer – the mobile phone; and having a vast distribution network.
For now, this opportunity is up for the taking. So many new people are using mobile financial services every day that there is still plenty of business to go round.
Amdocs provides customer care, billing and order management systems for telecommunications carriers and internet services providers.