from gtnews.com

Much has been made of how mobile technology can be instrumental in providing a range of financial services to both the banked and the unbanked. This article provides a basic view of the stakeholders and technology involved.

Mobile is a channel very similar to the internet for providing commerce, payments and banking to end consumers. However, unlike the internet, the platform, technology, applications and the range of services for mobile are still being piloted and the last decade has seen many initiatives with varied degrees of success across the globe. Hence, mobile financial services are continuously being reinvented as a service, solution, technology, platform or a combination of all these. While mobile banking is widely considered as part of the mainstream, other areas, such as mobile payments and mobile commerce, are largely more hype than reality. In a recent research report, Gartner has identified money transfer and mobile payments as among the top 10 consumer mobile applications for 2012. One of the reasons for such a promise is that, in spite of being a late entrant compared with other telecommunication technologies, mobile has now become equally ubiquitous across both the developed and emerging markets.

Most of the large banks across the globe have adopted some form of mobile banking, either as an additional feature to their banking channels or as an alternative channel to the existing ones. Telecom providers have also shown their financial intermediation capability through examples such as g-cash, m-pesa. An interesting aspect is the convergence of banking, telecoms and e-commerce. International money transfer companies, card scheme issuers, handset manufacturers, retailers and other similar organisations have teamed up to exploit the latent revenue opportunities coming out of this. Due to disparate standards, infrastructure and regulations across different countries, consumer demand hasn’t really picked up. In the last few years the government and central banks have issued varied sets of guidelines concerning mobile financial services. While some countries, such as India, Japan, and the Philippines have issued detailed guidelines, countries in North America and western Europe have left a lot of grey areas that are preventing volumes from increasing. Some of the global trade bodies, such as the GSM Association, are working with established and experienced players in the industry to define a common framework. A recent Deloitte report cites the need for well-defined industry standards to enable mobile financial services to really take off.

Using mobile, consumers can safely and conveniently receive alerts on their accounts, buy goods and services and immediately make the payment, transfer cash to peers and access a host of personal financial services such as loans, mortgages, wealth management, etc.