Industry Overview

The state of play

It is clear that mobile will be a critical part of how financial services are delivered across the globe.

Mobile financial services are now 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 and will continue 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.

Mobile market makers

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 organizations 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 services market followers

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.

‘Developed’ markets play catch up

With the majority of the 65 live and 82 planned deployments in the developing world the developed world, has been slow to capitalise on the opportunity. However, all the signs are that this is set to change. Smartphone sales are growing 50% year on year (IDC). The capabilities of these devices are allowing banks and operators to offer more sophisticated mobile financial services, and early bank-led iPhone banking apps already seem popular. It is just a matter of time before the ‘developed’ world catches up with the developing.

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