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Mobile banking – a profitable and innovative channel?. Massifying financial products through cellular phones August 2009, Colombia. Contents. Market opportunity? Banking technologies and pushing the frontier to access The role of the cellular phone Challenges on the demand side

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mobile banking a profitable and innovative channel

Mobile banking – a profitable and innovative channel?

Massifying financial products through cellular phones

August 2009, Colombia

Jenny Hoffmann, Riskfrontier Consultants

contents
Contents
  • Market opportunity?
  • Banking technologies and pushing the frontier to access
  • The role of the cellular phone
  • Challenges on the demand side
  • Challenges on the supply side
  • Profitability conclusions
distribution infrastructure frontiers
Distribution infrastructure frontiers

branch

Merchant Cell phone

ATM and conventional POS

Current Banked

Potential New Product

Very Low cost Banking Product

Passive products

critical mass pushing the frontier
Critical mass: pushing the frontier
  • Debit cards reaching critical mass in many countries.
  • Adoption limited by:

Penetration of bank accounts among population

Weak business case for deploying sufficiently dense network of acquiring infrastructure in environments with low economic activity or population density

Cost of communications underpinning real –time authorization of payments in markets with limited communications infrastructure or very low-value transaction

mobile banking the marketing
Mobile banking – the marketing

“Mobiles begin calling the shots on banking and payments”

The Banker, 1 Feb 2007

GSMA 2009: Unbanked with a cell phone

1 billion today and 1.7 billion in 2012

“The end of the cash era”

The Economist, 15 February 2007

mapping main benefits for using mobile phones to banks strategic drivers
Mapping main benefits for using mobile phones to banks’ strategic drivers

Strategic drivers for banks

Use of mobile phone

CGAP Focus note 48, June 2008

challenges
Challenges

Demand Side

Supply Side

Low Cost

Viable business case for all stakeholders

  • Affordability
  • Value proposition
  • Ease of use
  • Multiple channels
  • Reliability and trust
  • Access to widespread eco system
  • Financial education and training
income and affordability zambia
Income and affordability: Zambia

Mobile phone Owners – 2.6 million

Poverty line – 56% of Population

population groups mozambique
Population Groups: Mozambique

Population 21 million

Population over 15 – 11.5 million

Population aged over 15 – 11.5 m

value proposition anytime anywhere
Value proposition: Anytime, anywhere

More convenient

Cheaper to use

Quick and efficient

Unique or value add

offerings

low cost solution
Low cost solution
  • Initial investment – system and implementation
  • Transaction volumes
  • Transaction types
  • Interoperability/ubiquity of acquiring infrastructure
strategic approach to mass adoption
Strategic approach to mass adoption

Choice – no channel silver bullet

Reliability and trust

Access to widespread eco system

Viable business case for all stakeholders

Access to client base

Education and training

mobile banking
Mobile banking
  • Profitability
  • Alternative benefits
    • Loyalty programme
    • Branding and reputation
  • Critical mass
thank you

Thank you

Riskfrontier Consultants Ltd