Like so many other industries, banking has been hugely affected by the digital revolution that’s taken place over the past decade or so. People now expect to be able to check their account and pay for things using their mobile phone but while UK banks are finally finding their feet in the world of apps and online transactions, mobile banking has been commonplace in the many parts of the developing world for the last 5 years.
Not wanting to miss out on this largely untapped market, Mozilla, most famous for their Firefox browser, announced earlier this year that they have signed a partnership to release the world’s cheapest Smartphone. Earlier this week, the handset went on sale in India for 1999 INR (about $33) Up to now, even the cheapest Smartphones on the market have been priced at around $80 so this technology paired with Google’s current plans to introduce an ‘outernet’ in the less connected parts of the world thanks to their latest project, Project Loon, will undoubtedly have a huge impact on the already booming industry.
What will this increased ownership of cheap Smartphones mean for banks? Well for one thing they’re going to have a much bigger market to target their digital products and services to. Banks are also going to have to consider how to make their mobile apps as useful and more importantly user-friendly for new adopters of Smartphone technology. It also gives them a lot to think about as far as increasing revenue through the increased adoption of mobile banking.
As strange as it is to think that smartphones and similar gadgets are so prevalent in the developing world, in Africa these items aren’t considered flashy luxuries in the way that they are in Europe and the US. In Africa these devices are vital to their way of life from financial services to healthcare and diagnosis and whilst the arrival of the new phone from Mozilla and others like it will certainly prove popular with consumers in first world countries who don’t want to spend hundreds of dollars on a mobile phone, the biggest impact will be in developing parts of the world where a cheaper model will provide more people with more opportunities.
It’s clear that banks in developing countries are already very focused on digital and how it will affect their business. Alex Bray recently wrote about subject in a post for Misys, where he told of his experiences attending the West African Banking Dialogue in Lagos. A key topic of discussion at the event was the future of banking in Nigeria and Ghana.
Talking about how banks in Africa are already implementing mobile banking technology into Smartphones, he writes: “An excellent example from the Lagos meeting was Standard Bank in South Africa – which is now the largest distributor of iPhones in South Africa. The bank offers the phones to customers at a low price, with their mobile banking app already loaded on it.
Having realised that the cost of mobile data was a big blocker for many potential customers on low wages, the bank had a great idea. All their branches have excellent internet access which was not utilised from 5pm to 9am. So they simply made their branches into wifi hotspots after branch hours. Customers who qualified for the bank’s loyalty scheme were given free access.”
What’s most interesting about the new breed of super-cheap mobile phones that are set to be released, is that for the first time, average citizens in countries like Nigeria and Ghana will be able to benefit from online banking, which is not only great for the citizens themselves but also provides a way for Africa as a whole to catch up with the technology trends in the rest of the world, which can only prove beneficial for the continent in the future.