A new report from Aite Group, LLC highlights key case studies in Africa where the mobile phone has provided access to banking services that would have otherwise been virtually impossible to deliver to end users, and poses the question - would this work for the unbanked and underbanked millions that live in the U.S.?
While the prospect of mobile banking in the United States and Europe makes available services that already exist in some other form, either at the branch, online or via phone, in other parts of the world, such as Africa, mobile banking can mean ALL banking. In Africa - and specifically South Africa and Kenya - large percentages of the population live below the poverty line and may not have access to bank branches. Non-traditional banks such as WIZZIT, MTN Banking, and Safaricom's M-PESA follow new business models and are proving successful in reaching the unbanked and underbanked. The population of unbanked in the U.S. exceeds that of both South Africa and Kenya, and could potentially be addressed through business models that have proven successful in those markets.
"It would seem that the U.S. market is ripe for a mobile banking service that replicates the characteristics of the African companies that have proven successful," says Nick Holland, senior analyst with Aite Group and author of this report. "However, for a mobile banking service for the underbanked to work, pure price arbitrage will not be enough to guarantee success. Factors such as marketing strategy, consumer education and distribution network will be critical elements, as well."
