Mobile financial services technology plays a significant role in building secured and robust technology solutions for an inclusive cashless society. Various technological applications such as FinTech solutions, API built architecture and blockchain technology have witnessed a drastic change within the financial sector. Majority of the banks in Africa and the Middle East are adopting mobile financial services which is a key solution to reinvent business. Few reasons that compelled banks in Africa and the Middle East to adopt digitalization are increasing adoption of smartphones, ease of online banking operations, banks adopting hybrid business strategies, blockchain technology, Fintech, and API.
According to the study “Mobile Financial Services Market Opportunities for Telcos in Africa and the Middle East”, the most excellent element is that banks in Africa and the Middle East do not need to develop any of the latest technologies by themselves. They can simply partner with any of the mobile financial service technology providers which help in connecting their bank to the customers on a mobile phone. To compete with Africa’s diverse mobile money markets, all the banks offer mobile digitalization across the financial services spectrum. The leading players in mobile financial services market opportunities for Telcos in Africa and the Middle East are Orange, Safaricom, and M-Pesa.
Fintechs are well established either individually or with a partnership with various services to withstand the battle within the financial market in Africa and the Middle East. Mobile financial services include a spectrum of financial services starting from payments, current accounts, savings, loans, investments, and insurance. All the mobile services initiate the customers to send, receive, and store money using their mobile smartphone. Mobile financial services market has expanded drastically to include a broad array of financial services such as credit, insurance, and cross-border remittances. Mobile money or mobile financial services extends vast opportunities, which enabled consumers and small businesses where many of them had little or no access to a bank. These services send and receive money quickly and securely across great distances.
Although banks are adopting various advanced technologies, software and services; mobile network operators (MNO’s) play an important role in dominating the financial landscape. With the number of active mobile money users, the margins within the payment sector are large and highest in the world, at approximately two percent of the transaction value. Introduction of banking apps for smartphones and text-based money transfer services is increasing using basic Smartphone handsets. FNB’s banking app is utilized by approximately two million active customers in South Africa.
The merging of successful mobile network operators and mobile money services has witnessed an increase in clients and reduced bank-centric approaches in Africa and the Middle East. Mobile financial services witnessed drastic growth and momentum in mobile payments based on networks, customer concentration, and client experience. Africa is the global leader in mobile money and showcases its advanced financial services landscape. It was estimated that one individual out of ten individuals has adopted the mobile money accounts. These newer trends have generated ample room for growth in mobile financial services in Africa and Middle East countries.
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Ankur Gupta, Head Marketing & Communications