1. Past successes are no guarantee of future demand –
M-Pesa and Globe Telecomoperated in unique and favourableenvironments. M-Pesa was offered bySafaricom, a largely dominant mobile operator,whereas Globe Telecom operated in thePhilippines, a market with very large inboundremittances.
2. Transactions do not equate to revenue –
large volumes of transactions may not translateinto revenue. USD1 billion of inflow remittanceswill, on average, generate only USD7.5 millionof revenue for the receiving bank, due to lowremittance margins and revenue share.
3. The addressable market needs to be understood –
a large proportion of theunbanked may not be addressable simplybecause they are unable to save due to a lack of money or jobs. Of the third of people inIndonesia who do not save, 80% of them donot due to lack of money.
4. Telco partnerships are usually key –
ingeneral, banks have chosen to partner withtelcos for execution, and successes in themobile money area have mostly beentelco-centric. Nevertheless, there have beena few notable banks or bank-related entities,such as Barclays India, WING Cambodia andFirst National Bank, which have gained sometraction in this space.
5. The revenue model needs to be clear –
thesources of revenue – and hence the businessmodels for mobile banking or commerce – arevery different for banks and telcos. Banksprimarily derive income through net interest orthrough transactions such as remittance,whereas telcos derive income primarily fromaccess. Hence banks have to be mindful of thediffering objectives of both parties, when goinginto partnerships with telcos.
6. Regulatory constraints are very real –
for thebanks, regulatory issues have constrainedmost deployments. This is especially evident instringent ‘know your customer’ (KYC) andanti-money laundering (AML) requirements,which are normally only satisfied throughbank branches, and not necessarilythird-party agents.
7. Access methodologies need to suit market requirements –
telecoms access methods forbanks in developing markets have traditionallybeen based on SMS and STK (SIM ApplicationToolkit). These both have issues in terms of usability and take-up. While USSD(Unstructured Supplementary Service Data)can potentially solve some of these issues,banks have had limited success in securingUSSD access from telcos.
8. Costs should not be underestimated –
the costs of deploying a fully fledged mobilebanking service should not be underestimated.While capital expenditure tends to be low,the operating costs for telecoms access,marketing and commissions can bevery significant.To understand the opportunities andchallenges fully, a rigorous business planningand strategic exercise is essential. AnalysysMason offers a unique combination of experience, knowledge and skills in variousaspects of mobile banking and mobilecommerce business planning. This includesdeveloping go-to-market strategies, engaginginternal teams, managing external vendors,and programme management.
For more information, please contactJames Ong, Manager, firstname.lastname@example.org
Figure 1: Wireless penetration versus access to financial services [Source: Analysys Mason, World Bank]
Mobile banking – will the banks lead the next wave? – continued
Television is now almost entirely digital: in Europeand the USA, traditional terrestrial broadcasting isin the final stages of switchover from analogue todigital, and across the world, platforms such assatellite, cable and increasingly IPTV are offeringhigh-quality digital image and sound.The Asia–Pacific region is in the midst of thistransition: pay-TV platforms are steadilyincreasing their penetration in the generalpopulation, spectrum regulators are busynegotiating the frequencies they will use fordigital terrestrial television (DTT), andgovernments have launched massiveawareness-raising campaigns to inform theircitizens that some time in the next ten years,
Written by David AbecassisSenior ManagerConsulting Division
Exploiting the digital dividend: a uniqueopportunity for Asia–Pacific