New Report Finds Four Forces Will Shape The Future Of Mobile Banking

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18th November 2009, 09:19pm - Views: 751






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MEDIA RELEASE PR37117


New Report Finds Four Forces Will Shape the Future of Mobile Banking


LONDON, Nov. 18 /PRNewswire-AsiaNet/ --


    - Governments, industry can make choices to increase financial inclusion in

the next decade


    The growing use of branchless banking, including mobile phone banking, is inevitable in most countries. But

it's far less certain whether large numbers of the unbanked poor will use these alternative channels for

financial services beyond payments, such as savings and credit. So says "Scenarios for Branchless Banking

in 2020," a new report from CGAP, a microfinance group based at the World Bank, and the U.K.'s Department

for International Development (DFID).


    UK Minister for Trade and Development Gareth Thomas today said:


    "The fact that many of the 2.7 billion people who currently don't use a

bank will have access to branchless banking methods such as mobile phones and

the internet by 2020 is a huge step towards financial inclusion for people in

developing countries.


    "The poor are kept in poverty when they are financially excluded. This

means they lack safe places to save money, the opportunity to invest in their

future and cannot reduce the risk of their savings being lost in natural

disasters.


    "As this report shows, governments and the private sector both have a

huge role to play in ensuring investment is made to deliver technology-based

financial services to billions of poor people."


    The report sets out four scenarios on the future of branchless banking.

In all four scenarios, the adoption and use of branchless banking services is

forecast to be higher in 2020 than it is today. But in two of the scenarios,

bursts of rapid acceleration are followed by periods of falloff or flatter

growth.


    "Mobile banking pioneers give us hope that millions of poor people,

especially those living in rural areas, finally might be served by the

banking system. That said, new business models and partnerships that provide

the right incentives to banks and banking agents are vital if we are to move

beyond simple payments and transfers to being able to offer other basic

banking services, especially savings, that poor people need and want," said

Elizabeth Littlefield, CEO of CGAP.


    The report is the product of a six month scenario-building project that

engaged nearly 200 leaders from the fields of technology and finance from

more than 30 countries.


    Snapshot of Branchless Banking Today


    - Financial inclusion is growing in most countries. This is

      often as a result of the expansion of conventional banking channels, 

      such as branches and automated teller machines (ATMs);

    - Bricks-and-mortar growth is inherently limited by its cost.

      Branchless banking presents a cheaper option but has only modest reach 

      To date in most countries;

    - Where branchless banking is occurring, several of the following

      factors are usually at work: (i) industry belief in future 

      profitability; (ii) enabling regulatory change; (iii) a dramatic fall 

      in connectivity costs; (iv) the creation of cash-handling agents using 

      existing networks; and,

    - Current hype about the potential of branchless banking is running

      ahead of reality. Massive sustained success in reaching the poor 

      requires more accurate insights on poor people's financial needs and 

      adoption behaviour. This is only now starting to become available.


    Four Forces Shaping Branchless Banking for 2020


    - Demographic changes -- including a greater number of younger

      consumers coming into the market and greater mobility at least within

      countries -- will be favourable for the adoption of branchless banking;

    - Activist governments will play a greater role as regulators of

      the financial sector, providers of social safety nets, and providers or

      encouragers of the rollout of low-cost bank accounts and financial

      infrastructure. This expanded role may be helpful for financial

      inclusion;

    - While security concerns about cash crime will continue to drive

      the adoption of electronic transaction channels, the rise of electronic

      crime will affect consumer confidence and test the risk management of

      financial providers; and,

    - Internet browsing via mobile phones will reduce costs of

      financial transactions and enable new players to offer financial

      services.


    CGAP and GSMA researchers have found that across Africa, Latin America

and Asia, the number of people who do not have a bank account but do have a

mobile phone is set to grow from 1 billion today to 1.7 billion by 2012.

These "unbanked mobiled" individuals represent a compelling market

opportunity for service providers.


    Notes to Editors

    The report will be released today at DFID in London. There will a live

webcast on the CGAP Technology Blog from Washington D.C. on Dec. 1. Learn



    The CGAP Technology Program is supported by the Bill & Melinda Gates

Foundation.


    CGAP is an independent policy and research centre dedicated to advancing

financial access for the world's poor. It is supported by over 30 development

agencies and private foundations who share a common mission to alleviate

poverty. Housed at the World Bank, CGAP provides market intelligence,

promotes standards, develops innovative solutions and offers advisory

services to governments, microfinance providers, donors, and investors. More



    The Department for International Development is the UK Government's

department that manages Britain's aid to poor countries and works to get rid

of extreme poverty. You can find out more at www.dfid.gov.uk/.


    DFID recently launched a Facilitating Access to Financial Services

through Technology (FAST) project to support the introduction of "branchless

banking" to mass-markets in developing countries, such as Kenya, Tanzania,

Pakistan, Nigeria, India, Bangladesh and Ghana. Pilot projects will be

evaluated by teams of finance and technology experts and where appropriate

help and promote increases in scale or spread to different countries.


    SOURCE: CGAP


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    CONTACT: Jim Rosenberg, 

             +1-202-473-1084, 

             jrosenberg@worldbank.org, 

             for CGAP; 


             or DFID Press Office,

             +44(0)207-023-0600


Translations:


   Chinese - Traditional (http://asianetnews.net/Download.asp?ID=140564)


   Chinese - Traditional (http://asianetnews.net/Download.asp?ID=140558)








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