Is the rising mobile-banking model led by mobile network operators a real threat to traditional banks?
Banking
Asked by Question Bot04/Jun/20151 answer
1 Answer
F
Faisal Khan
Answered 04/Jun/2015
It is not unconventional per se. Clearly, everywhere else in the world, there is a need for banking people who are either unbanked or need mobility in their banking space. The MNOs play a vital role, however, they misread one bit.
Smartphones!
The smartphone has the ability to provide carrier and bank agnostic banking to the unbanked. A lot many MNOs misread that (in my opinion of the things to come). Whilst the USSD channel banking is still thriving, think of the 100s of millions of people in developing/emerging markets who do not have access to a smart phone, here the MNOs will rule. However, on the flip side, with the advent of 3G/4G/"X"G services being rolled out, the compulsion to switch to a smart phone as a mobile, computing, image capture (camera) and banking device is gaining strength each day.
Eventually, mobile wallets will rule. Which brings us to the basic question, is the "traditional" banking system being threatened? I wouldn't say threatened. The banking system for all practical purposes will remain. The "branch banking" is certainly being threatened and slowly but surely bankers will find out that the customer engagement on the delivery channel like mobile would eventually outpace and outclass that with the engagement model of say a bank branch.
We are in a transitionary phase which will perhaps last a decade or so, before you will see the eventual shrinkage of bank branches. Will the bank branches disappear totally? Perhaps! No one knows for sure. But right now a lot of money has been invested in traditional bank branches. As Brett King has said it so many times, again and again in his speeches, etc. Gen Y will be banking in the mobile space. Not the branches. They will perhaps go there once to open an account and that's it.
With this in mind, and the ever connected (mobile) population that is growing up and coming of age for banking, what do you think they will be more at ease with? A telecom carrier telling them that they can bank with them only? A bank telling them branches are essential, or a bank that has an agnostic mobile wallet - use any carrier and start banking?
You decide.
Smartphones!
The smartphone has the ability to provide carrier and bank agnostic banking to the unbanked. A lot many MNOs misread that (in my opinion of the things to come). Whilst the USSD channel banking is still thriving, think of the 100s of millions of people in developing/emerging markets who do not have access to a smart phone, here the MNOs will rule. However, on the flip side, with the advent of 3G/4G/"X"G services being rolled out, the compulsion to switch to a smart phone as a mobile, computing, image capture (camera) and banking device is gaining strength each day.
Eventually, mobile wallets will rule. Which brings us to the basic question, is the "traditional" banking system being threatened? I wouldn't say threatened. The banking system for all practical purposes will remain. The "branch banking" is certainly being threatened and slowly but surely bankers will find out that the customer engagement on the delivery channel like mobile would eventually outpace and outclass that with the engagement model of say a bank branch.
We are in a transitionary phase which will perhaps last a decade or so, before you will see the eventual shrinkage of bank branches. Will the bank branches disappear totally? Perhaps! No one knows for sure. But right now a lot of money has been invested in traditional bank branches. As Brett King has said it so many times, again and again in his speeches, etc. Gen Y will be banking in the mobile space. Not the branches. They will perhaps go there once to open an account and that's it.
With this in mind, and the ever connected (mobile) population that is growing up and coming of age for banking, what do you think they will be more at ease with? A telecom carrier telling them that they can bank with them only? A bank telling them branches are essential, or a bank that has an agnostic mobile wallet - use any carrier and start banking?
You decide.