Technology advancements have played a significant role in allowing many people in the world to have access to services they need. One of these services is mobile banking that seeks to simplify money transfer and banking while at the same time ensuring that the client’s funds are secured.

Mobile technology is revolutionizing the global banking and payment industry. It offers new opportunities for banks to provide added convenience to their existing customers in developed countries, and reach a large population of unbanked customers in emerging markets. However, banks face significant challenges as new players enter these markets and change the ecosystem of the industry. Although no single model has been successfully imported from one country to another due to significant country-specific differences in the financial regulatory infrastructure, and customer needs; financial service firms can learn some lessons from the limited success of current approaches to design their strategy in this exciting area.

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The mobile banking industry is one that is still young which indicates vast possibilities for any interested banks and providers. It has been very successful in developing countries with platforms such as Kenya’s M-Pesa showing great innovation and service. The developed world, however, is yet to embrace such opportunities. The system will involve the following fundamental characteristics;

1.Instant, 24/7, 365 days/year operation — the first such remittance solution without the need for cards of any kind, money moves from account to account instantly using mobile as the channel

2.Works on all mobile phones

3.Mobile Money Identifier (MMID)

  • A unique 7 digit number for each account
  • Enables customers to link the same mobile to multiple accounts
  • Removes chances of wrong transfer resulting from change of mobile numbers and typing errors

4.Mobile number and MMID combination uniquely points to a bank account

5.Works on the existing ATM Messaging, Switch, and Network, making it easier for banks to adopt this quickly.

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The industry presents an opportunity for better collaborations between network companies and banks as mobile banking utilizes the existing mobile number and ATM messaging. The system promises some incredible benefits apart from making banking easy, and on the go.


1.Banks are already investing in mobile technology and security, developing Smartphone apps, adding new features such as the remote deposit of checks, and educating consumers. Consequently mobile banking adoption among consumers has been much faster than the adoption of online banking more than a decade ago.3

2.Most banks believe that the mobile channel will help them reduce transaction costs as well as increase customer engagement and retention. This is similar to the intended benefits of online banking several years ago. However, a Harvard study shows that while online banking improved customer retention and reduced cost per transaction, it led to an increase in the total number of online and offline transactions that resulted in an increase in the total transaction cost.4

3.More importantly, banks will be myopic if they view mobile as just another channel for doing business. Mobile technology is changing the ecosystem of the banking industry as new players with innovative solutions enter this market.

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Luckily, the success of the industry in other countries has challenged banks to invest in secure mobile technology systems. However, the mobile banking system is still young, so there are some kinks that still to be worked out.

1.However, to-date there has been a lack of corporate banking features that enable businesses to review and approve payments remotely. As the adoption of mobile banking and its convenience continue to drive consumer demand for personal banking, more and more businesses will require the same for their corporate banking services. Mobiles can provide treasurers and cash managers access to real-time information in their corporate environments. They’re also willing to pay for mobile services that will increase efficiency for their businesses. Tablets can further extend corporate mobile services as they’ve already found their place in the boardroom.

2.As with any product, it must be relevant and tailored to the end users. Simply masking the retail offering under a corporate banking banner won’t be enough.

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3.Corporate banking is centered on roles and workflows. Take for example the wire/funds transfer between companies. An employee within the finance department might create the initial transfer instruction, but a few or even just one senior manager at a company will make the actual approval. The bottleneck in this process is the approver – as they need to be online to approve.

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