Mobile Banking

Mobile Banking: Overview

Branchless banking, or mobile banking via the mobile phone, has significant potential to provide a range of affordable, convenient and secure banking services to poor people in developing countries. The number of mobile banking service deployments has increased substantially since 2007. In fact, we expect ongoing innovation to generate new opportunities, as well as answer some unresolved challenges.

By the year 2012 CGAP and GSMA estimate there will be 1.7 billion people with a mobile phone but not a bank account and as many as 364 million unbanked people could be reached by agent-networked banking through mobile phones.

Though the early experience with branchless banking is encouraging, it is not a foregone conclusion that such services will reach poor people at scale, or go beyond payments and transfers.

1. Most branchless banking is about payments, so far. What is the value proposition for clients that would drive adoption and usage such that poor people have a range of services that are adopted at scale? This question focuses on the area of customer adoption.
2. Most providers do not focus on poorer clients when launching branchless banking. Under what conditions would providers offer branchless banking services to large numbers of low-income people? This question focuses on the area of business models.
3. Branchless banking may offer electronic money services, but cash still needs to go into and out of the system. Where can customers convert their e-value into cash to use in the economy? This question focuses on the area of agents.
4. Governments often react conservatively to new innovations like branchless banking, perhaps more so at this time of financial turmoil. How can (1) regulators construct safe and enabling regulations for branchless banking and (2) governments develop policy that promotes adoption of branchless banking? This question focuses on the area of policy and regulation.
5. Branchless banking is fundamentally a business based on large volumes of transactions. Given that governments pay large sums of money on a consistent basis to many of its citizens, how can these flows be leveraged to increase the volumes in branchless banking? This question focuses on the area of government-to-person payments (G2P).