2013 The Year of Mobile Money

Mobile Money – My assertion that the integration of mobile phone technology will revolutionise the financial industry in 2013 is bolstered by various factual justifications. The notion of incorporating financially marginalised individuals into the system has long been disregarded, but it is now receiving the appropriate recognition and attention. Mobile financial services offer a broad range of opportunities, encompassing mobile money, payments, banking, commerce, MFS VAS Services like international remittances etc. and additional potential applications.

Mobile Money – Introduction

The new term which now gripping and gaining traction fast i.e. FinTech and it now replacing our very own Mobile Financial Services Term. It represents the convergence of financial services and technology to create innovative solutions for financial transactions, investments, and overall money management. FinTech has rapidly evolved and expanded its scope, often replacing or transforming traditional financial services, including Mobile Financial Services (MFS). Here are some key technologies and tools that have played a significant role in shaping the foundation of FinTech and will be making it stronger and stronger:

• Advanced Data Analytics: Advanced data analytics will play a crucial role in providing insights into customer behavior, market trends, and risk assessment. This will allow FinTechs to make data-driven decisions, offer personalized services, and optimize their operations.
• AI / ML (Artificial Intelligence / Machine Learning): AI and ML technologies will become foundation pillars within FinTech, including chatbots for customer service, credit scoring, fraud detection, and automated trading algorithms. They will enhance efficiency and enable predictive modeling.
• Blockchain: Blockchain technology is not only used for cryptocurrencies but will also enhance the security and transparency of financial transactions, supply chain management, and identity verification.
• New Channels: New channels, such as mobile apps, web platforms, and APIs, will enable FinTech companies to reach a wider audience and provide services through various touchpoints.
• FinTech Value-Added Services (VAS): These services will become default and essential for generating revenue, boosting revenue and protecting against potential threats. Services like insurance, investment, and financial planning etc will be basic financial services.
• Non-Financial Services Entities as Partners: Collaboration with non-financial services entities, such as e-commerce platforms, telecommunications, and retailers, will expand the reach and accessibility of FinTech services to a broader customer base.
• Ecosystem Strength: The core of the FinTech ecosystem will become leaner and stronger as more players will enter the market, driving innovation and competition, which ultimately benefits consumers and businesses.
• Information and Cyber Security: Robust security measures will be essential to protect sensitive financial data and maintain customer trust. FinTech companies invest heavily in cybersecurity to prevent data breaches and fraud.
• Access to a Wide Range of Financial Services: FinTech will expand beyond basic Mobile Financial Services (MFS) to offer a wide range of services, including lending, international remittances, CBR, and more. This will provides consumers with a comprehensive suite of financial solutions.

These technologies and tools are just a few examples of the innovations that have strengthened and empowered the FinTech industry, leading to a more convenient, efficient, and inclusive financial landscape. The rapid adoption of FinTech is likely to continue shaping the way we manage our finances in the future.

Rise of Mobile Money

The payment sector is currently undergoing a significant transformation as a result of the emergence of digital payment technologies. This transformation is being greatly facilitated by mobile money, which is now a leading force with the help of advanced technology such as data science and machine learning. The current transformation is leading to beneficial growth for emerging digital economies.

• In today’s “Pay” obsessed world, startups are diving into the Mobile Payment sector faster than a kid on a waterslide on a scorching summer day!
• Mobile phones aren’t just for selfies and memes anymore; they’re your one-stop-shop for banking services! Who needs to visit the bank when you’ve got it all in your palm? Talk about keeping up with the times!
• Say goodbye to the days of traditional institutions holding all the power. With transactional data at the helm, creating client credit records is easier than making instant noodles—now that’s some serious convenience!

Yesterday I was reading on the internet that around 2 billion people don’t use formal financial services, and more than 50% of adults in the poorest households are still unbanked. The domain of mobile financial services is quite versatile and can support a variety of services, in particular person-to-person (P2P) money transfers, and now very easily crosses borders without visa requirements (regulations or KYC), including cross-border transactions, which are of significant value for emerging economies.

These factors highlight how FinTech is not only transforming traditional financial services but also opening up new opportunities and partnerships. It’s a dynamic and evolving industry that continues to disrupt and shape the future of finance, offering more convenience and accessibility to individuals and businesses worldwide.

Mobile Money Adoption

The acceptability of mobile money under Mobile Financial Services was the biggest breakthrough. The role of the mobile money agent is crucial and very critical for the success of this service. The agent selection criteria, as well as agent distribution on the city or country map, are also very critical.

• The mobile payment system is like a potluck dinner, everyone needs to bring their best dish to the table for it to be a success—no room for those store-bought cookies!
• Financial inclusivity is the cool kid in town now; everyone wants to hang out with it. It’s like that one party you don’t want to miss, or you’ll be hearing about it for weeks!
• With smartphones set to be the superheroes of the interconnected era, get ready for life-changing experiences even the most imaginative of sci-fi movies couldn’t predict. Time to buckle up, folks!

From a financial inclusion perspective, mobile money services were essentially for unbanked and underprivileged customers, but due to the unavailability of a Ministry of Innovation as well as strong control from central banks, this got lots of support and attention, resulting in rapid growth for those providers who got the principles right, though the majority of such services failed (no offense to any, just referring to the statistics available across the globe on successful and vanished mobile money deployments).

Mobile Payments Domain

Well-known and established big brothers in the mobile payments space are not bothered by these startups to the point that they ignore them and treat them as if they don’t exist. It is like a very famous saying: “The biggest mistake of forgetting one small mosquito is enough to keep you awake the whole night”. Methodologies or approaches that are basic in nature but without clear relevance to the challenge always get into closure mode, like a deep, thick mud soup from which it’s impossible to come out.

• Mobile payments are riding the wave of success, thanks to the expanding mobile device army and the budget-friendly computing power that’s dropping faster than my neighbor’s beat-up old car.
• It’s like a magical potion for business success: mix a bunch of smartphones with a generous sprinkle of affordable tech, and voila! Even Grandma’s ready to whip out her phone and make some transactions like a pro!
• With technology getting cheaper and more devices flooding the market, it’s like a party where everyone’s invited—even that cousin who shows up uninvited but ends up being the life of the bash!

Money transfers, retail purchases, bill payments, welfare payments (savings clubs in Africa created by small rural communities to support them in times of need and other social services), savings for mobile, microinsurance, withdrawals, and domestic and international (cross-border) remittances are now common services offered by mobile money service providers.

From Myth to Reality

The notion of mobile financial transactions has surpassed mere discussions in academia and on informative television programs. Currently, forward-thinking individuals are emphasizing the importance of leveraging the intersection of industries that generate dissatisfaction among consumers while also generating substantial profits for stakeholders. By adopting this strategy, they can attain maximum market success by gradually diminishing the prevalence of established competitors’ highly desirable products.

• When it comes to financial services, it’s like building the coolest amusement park: create exciting channels that make everyone want to ride the rollercoaster of banking fun!
• Mobile Money is shaking things up faster than a bartender at happy hour, offering a buffet of services at warp speed. They’ve gone from a regular bank to a 24/7 superhero in no time!
• With Mobile Money on the scene, say goodbye to those dreadful queues for bill payments and tickets—it’s like skipping to the front of the line at the trendiest hot dog stand in town!

Subscribers and customers want value, convenience, and ease in their lives, and if you offer those ingredients, people will taste them, and if they like them, they will continue and will be ready to pay an extra fee. Anyway, this article is focused only on basic mobile money or real mobile money functions to drive financial inclusion. Add-on services will be discussed in subsequent articles.

Key Stakeholders in Mobile Money Game

The payment sector is currently undergoing a significant transformation as a result of the emergence of digital payment technologies. This transformation is being greatly facilitated for mobile money, which is now a leading force with the help of advanced technology such as data science and machine learning. The current transformation is leading to beneficial growth for emerging digital economies.

As mentioned below, mobile money was essentially designed for domestic remittances (for migrants from the village to the city to send money home in a safe and secure way), which is also known as send money to peer or peer to peer send money, and “cash in and cash out,” so lots of emotions went into this and this became an emotional money service. Family members back home feel good, smile, and relax whenever they see money come in on a mobile device. It is critical and absolutely necessary to understand the real benefits & potential of mobile money. Key questions to put here are

• What actually is mobile money?
• What it has to offer?
• Who are the real stakeholders or targets?
• Who should use and get the most out of it?

The adoption of the existing system by new technologies like artificial intelligence, 4G (5G and 6G are not very far away though), quantum computing, and big data analytics indicate that we still have a long way to go to become a 100% cashless society. Get up, spread your wings, and grab as much sky (I guess there is no more land left) as you can. These are policies from Ministries of Innovation, and MNOs are the best admirers and advantage takers. Sadly for the majority of the banks, this is still an unknown path, and some don’t find or consider it a preferred route.

Conclusion – On the sinking Titanic, amidst the chaos, a bewildered voice piped up from the upper deck, asking, “If we’re going down, why are we still hundreds of feet above water?” Perhaps that’s how some traditional banks feel in the sea of fintech, desperately trying to stay afloat. But in this wild race of opportunities, it’s the early bird that catches the worm, or in this case, the first to seize the chance gets the upper hand. All thanks to the much-needed support from regulations and the Ministry of Innovation acting as the bank’s own personal life raft.

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Feedback & Further Question

Do you need more details or have any questions on topics such as technology (including conventional architecture, machine learning, and deep learning), advanced data analysis (such as data science or big data), blockchain, theoretical physics, or photography? Please feel free to ask your question either by leaving a comment or by sending me an  email. I will do my utmost to offer a response that meets your needs and expectations.

Points to Note:

it’s time to figure out when to use which tech—a tricky decision that can really only be tackled with a combination of experience and the type of problem in hand. So if you think you’ve got the right answer, take a bow and collect your credits! And don’t worry if you don’t get it right.

Books Referred & Other Material referred

• Self-Learning through Live Webinars, Conferences, Lectures, Seminars, Open Internet research, news portals and white papers reading
• Lab and hands-on experience of  @AILabPage (Self-taught learners group) members.

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