Mobile financial services, while still being a new market, has the genuine power to change people's lives by revolutionising how we use financial services. At present 3.5 billion people cannot currently access financial services according to the GSMA.
Mobile financial services extend the privileges associated with a financial identity by improving economic and social inclusion as well as the convenience and security of access to new financial services. It also contributes to a sustainable increase in national GDP and transforms the way in which financial services are offered.
It also offers a lucrative market to banks, operators and technology companies keen to get ahead of the game. The market is predicted to continue growing exponentially. The GSMA estimate it will be worth around US $5 billion by 'banking' 364 million unbanked people by 2012.
It is clear that mobile technology will be a critical part of how financial services are delivered across the globe. Mobile financial services are becoming a core, or at least planned, offering for the majority of banks and mobile operators. The market is still growing rapidly with over 65 live deployments worldwide and a further 82 about to be launched (GSMA, June 2010).
These services have barely scratched the surface but still have been able to reach the millions of people currently without access to financial services. Research shows that for every 10,000 people in developing markets, there is only one bank branch and one ATM but 5,100 mobile phones (McKinsey, 2010). Adoption rates will continue to rise and the market will continue to grow to be worth $630 billion by 2014 (Juniper Research, 2010).
Fundamo has always said "start small, think big", and expects to see services evolve from simple remittance offerings to deliver full transformational banking. Already available in certain markets, transformational banking will offer utility bill payments, savings, loans and many other services.
Industry bodies such as the GSM Association continue to drive the growth of the mobile financial services in developing markets. The Mobile Money for the Unbanked (MMU) programme, supported by a US $12.5 million grant from the Bill and Melinda Gates Foundation continues to work with mobile operators, banks, microfinance institutions, government and development organisations to encourage the expansion of reliable, affordable mobile financial services to the unbanked. Last year Bill Gates pledged US $5m to help the world's poor access banking accounts and the 11 projects have already begun offering innovative services. More recently the GSMA announced the details of a further seven grantees.
Financial institutions also have important roles to play and are beginning to look much more seriously at mobile. A number of banks such as MCB in Pakistan are delivering sophisticated mobile financial services directly to customers in partnership with mobile operators. Many, many more banks are in the advanced planning stages. Other large financial institutions like MasterCard, Western Union and VISA are establishing commercial and technical frameworks in which to deliver mobile money services on a global basis.
The mobile financial services market address two very sensitive areas for consumers: people's money and mobile phones. People are understandably keen to ensure their personal finances are secure and the mobile phone has become a tool for daily life for most around the globe. Mobile financial services therefore need to work perfectly first time and every time. There is no room for error when consumer confidence is at risk. The stakes are very high. Fundamo envisages a future in which innovative technology and business models bridge the divide between the developed and developing, the digital and physical and the mobile and financial worlds.
Fundamo, established in 2000 and backed by strong venture capital investors, is a pioneering and specialised mobile banking and payment software solution provider. The company has established its leadership position based on a history of technical innovation and successful deployments. With over 50 successful deployments in over 35 countries Fundamo has the expertise to build the technologies, the experience to build the businesses and the vision to build the industry.
In 2010, Fundamo announced the largest ever mobile money deployment, with MTN that will bring banking facilities to 80 million mobile subscribers across 21 countries in Africa and Middle-East. Some of these deployments have gone live and have been phenomenally successful.
Fundamo has been visionary in predicting the trend towards providing financial services through mobile phones and the impact this will have on the delivery of financial services in both developing and developed markets. Fundamo will continue to be on the cusp of this revolution in Financial Services with a number of new rollouts across the globe and key strategic partners.
(The writer is COO Access Group.)
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