Hybrid Mobile Financial Services (HMFS) The evolution of financial and payment systems has been a long but interesting journey characterised by sudden changes in the underlying technologies has just begun. The introduction of artificial intelligence and its subdomain technologies making this business a fantastic and low-cost proposition. HMFS business model presents an excellent value proposition for modern FinTech world. This new combo pack is helping to lower down the cost which eventually can push the businesses to offer its services at a lower price.

The businesses which will fail to understand/appreciate the importance of AI, machine learning, 4G, 5G (6G in another decade) and blockchain in FinTech domain will lack behind the race and eventually will be wiped out. 


m-Commerce & Mobile Payment Solutions

m-Commerce & Mobile Payment Solutions – Financial payments and banking started in a traditional (inefficient way in today’s language) way which was slow with almost no electronic data or no data at all. Though it was still acceptable to the customers due to the stage in the information age. Today if any business fails to incorporate big data analytics and AI bundled technologies like machine learning etc, that business looks like old fashion.

In this age of digital transformation where almost every business is exploring 5G, AI, Blockchain and Big Data, one can imagine where digital payments will land as faceoff with payment intelligence under financial services. Initially, almost 100% joy in the shape of activities in the financial services (Except Non-Banking Services) space was attributable to banks with all the revenue being collected by the same entities.


With the advancement in technology like artificial intelligence, quantum computing, blockchain etc. organisations outside the banking industry are diversifying and demystifying the financial services. By targeting small & succinct margins in the space they are making a lot. These were organisations servicing millions of customers through broad distribution channels, be they, mobile operators, mobile handset manufacturers, retailers or online merchants.

By the time advancement in machine learning got in and machines became intelligent machines, deep learning caused a huge disruption in the info security and made machines super intelligent (off-course artificial super intelligence and machine consciousness is not the discussion here as these are still almost 80-100 year far from today). Artificial consciousness also known as machine consciousness or synthetic consciousness is a field related to artificial intelligence and cognitive robotics which is outside the scope of this article.


Mobile Commerce and eCommerce

The phrase mobile commerce was originally coined in 1997 to mean “the delivery of electronic commerce capabilities directly into the consumer’s hand, anywhere, via wireless technology Singapore’s e-commerce market will hit US$2.99 billion while m-commerce will reach US$1.18 billion by end-2014, clocking an annual growth of 38% and 65%, respectively, between 2011 and 2014, according to the latest stats released by PayPal with the average consumer forking out US$1,861 a year on purchases. By 2018.

In the early days, banking services were basic; covering deposits, withdrawals, loan processing and interest capitalisation. These transactions were conducted in-branch and one had to physically visit a marble banking hall to conduct the banking transactions also same branch hall all the time.

Access to banking services was restricted to the banks operating hours. Slowly, transactions evolved from being intra-bank to interbank with settlements being conducted through a settlement partner.

The introduction of magnetic stripe technology upped the tempo by allowing transactions on ATMs and POS machines through debit and credit cards. ATMs brought about 24×7 access to banking services and the underlying technology evolved from simple cash dispensers to deposit handlers which allow customers to do a multitude of transaction sets which were previously confined to a brick and mortar banking hall.

The internet age brought about an era which took banking to the comfort of one’s home or office. However, internet banking was quickly coupled with mobile banking which was SMS based in the initial days. Mobile banking paved unity and collaboration between mainstream banks and telecommunication companies. This fusion brought about the rise of mobile financial services.


Mobile Money – A New Form Of Money/Payment Method

The most common form of mobile financial services is mobile money – Empowers a service provider with a set of distinct features that provides an intuitive and convenient way for managing service channels with various interfaces under a single roof and covers airtime buy, peer-to-peer transfers, bill payment and merchant payment. With these advancements, the mobile handset has become a critical channel for assessing financial services.

Due to the heavy involvement of regulators in this space, most mobile money services focused on banked customers. Mobile money services in Kenya, Zimbabwe, Tanzania and many other African countries took a radical move and focused on the underbanked segment of the market. Most of these operations were successful due to the extremely low banking penetration rate, flexible regulation, market need and low trust in banks.

Today, mobile penetration has reached levels equal to or surpassing population levels of multiple countries across the globe. Financial services are a key need of any human being and it makes sense to enable multiple sets of financial tools and features on mobile phones.

Mobile Money Solution has the edge over existing solutions in this domain because of it’s economical and ubiquitous, Flexible & Scalable nature. Singapore’s e-commerce sector will further increase by 13% annually while m-commerce will grow 15%. To continue its growth and begin to fulfil the promise of an e-money economy, industry stakeholders must work together to unleash convergence, drive customer acquisition, and refine enable technology.

Mobile money must have a clear appeal to consumers, the public sector, and the private sector. The Mobile Money system identified some key lessons for all the industry’s stakeholders. Primary among these was that mobile money’s development value rests in its ability to ease financial sector inclusion.

To do so will need financial institutions and Mobile Network Operators (MNOs) to work together with regulators on a country-by-country basis. Smartphones, tablets, and, soon, watches, eyewear and other wearables, will emerge as new points of sale. Online retailers with a well planned, flawlessly executed, and tightly integrated mobile presence stand to gain the most.


Mobile Payments & Electronic Payments

More impulse buys come from mobile, with clothes, books, and music noted as leading impulse buys. In 2014, mobile commerce was expected to rise to $57 billion (Google as a source). By 2017, mobile is poised to represent nearly a third of all digital sales at $115 billion (Google as a source). In 2013, physical and digital retailer, Target raked in 43% of its digital sales from mobile-only users (www.internetretailer.com)

Savvy mobile shoppers use their devices for more than just clicking the “Buy Now” button. According to a 2013 survey from Deloitte, smartphone owners used their devices to find store locations (56%), check and compare prices (54%) and get product information (47%).

Mobile is disrupting the way we browse a store’s showroom. Over a third of users report consulting mobile devices in-store to compare retailers and one out of five go mobile in the store to view products on the store’s website. More importantly for retailers, mobile shoppers were prepared to spend 27% more on holiday gifts than non-smartphone owners.

The mobile movement isn’t just for traditional retailers. By integrating mobile into insurance claims processing, the process has become 30% more efficient. Looking ahead to 2015, over 80% of insurers plan to be using mobile technologies in claims, customer service and field sales. 

On a lighter side Recession & Depression are not synonyms for many. For some people, if they don’t make money in the business that’s the recession and for some, if their neighbour makes money from the same business that’s depression. Banks lost out on revenue from mobile transactions as MMS became increasingly popular.

Major success factors of MMS being the flexibility to transact at any time, anywhere and with access to make payments to utility bill companies, airtime sellers and merchants. To maintain relevance, banks started working on technology-based payment solutions in collaboration with card companies and opened their doors to all customers and services.

This brought about the merger of mobile money services, mobile financial services and mobile banking services. With this fusion, cross border remittances, peer-to-peer transfers, payment for water, DTH, electricity, internet subscriptions, income tax transactions can be completed within seconds.

Of late, we have seen companies like Apple bringing NFC functionality on mobile handsets in a bid to claim a share of the mobile payment industry. Whenever an entity outside the telecommunications industry offers a joint payment service with an MNO, the resultant is a hybrid mobile financial and banking service.


Points to Note:

All credits if any remains on the original contributor only. We have covered all basics around adapting cashless payment models. The importance of such a quality system with full of big data are the backbone of any digital economy. In the next upcoming post will talk about implementation, usage and practice experience for markets.


Books + Other readings Referred

  • Research through open internet, news portals, white papers and imparted knowledge via live conferences & lectures.
  • Lab and hands-on experience of  @AILabPage (Self-taught learners group) members.


Feedback & Further Question

Do you have any questions about AI, Machine Learning, Telecom billing/charging, Data Science or Big Data Analytics? Leave a question in a comment section or ask via email. Will try best to answer it.

This post was originally published on 26-November-2014 on Linkedin (click here). 


Sign-tConclusion – Technology is moving beyond 24×7 access so the MFIs (Cross Border & Oceans Remittances, microloans, micro savings, microinsurance, share trading and e-commerce) should consider occupying this scape. The sad thing about this technology advancement is, most of the solutions deployed in Africa are the guinea pig for new by foreign companies”.

Is it fair to say that in Africa and in many other countries, the development of digital credit is sponsored by international development agencies? Was this done with good intentions? If we check payment channels we see that mobile handsets (via SMS, USSD, NFC, QR Codes, WAP, APP), ATMs, POS, internet, debit/credit card companies and money transfer agencies are widely accepted and available for payments along with Money Transfer for Inter/Intra banks/cities/currencies/countries/continents. 


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Posted by V Sharma

Technology specialist in Financial Technology(FinTech), Photography, Artificial Intelligence. Mobile Financial Services (Cross Border Remittances, Mobile Money, Mobile Banking, Mobile Payments), Data Science, IT Service Management, Machine Learning, Neural Networks and Deep Learning techniques. Mobile Data and Billing & Prepaid Charging Services (IN, OCS & CVBS) with over 15 years experience. Led start ups & new business units successfully at local and international levels with Hands-on Engineering & Business Strategy.

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