The Great Unbanked to Drive the Mobile Finance Market
A new report from Juniper Research is forecasting that over 41 billion mobile financial service transactions will be made by the end of 2011. The key drivers for these transactions will be the high speed of adoption by consumers of new mobile finance facilities -- particularly those currently without access to any form of banking. Bespoke payment applications for remittance purposes will also be popular but issues around legislation must still be overcome.
The new study reports that the desire from all sections of the MFS (Mobile Financial Services) ecosystem to deliver intelligent applications and services has created an atmosphere that is both creative and pragmatic. It also found that there is a strong desire from the MFS sector for cooperation in order to create non-silo services that work together.
The Great Unbanked
The new research identified two exciting sectors:
- The millions of mobile phone users in developing countries who do not currently hold bank accounts or credit cards and would like access to accessible banking services at the right price.
- The millions of mobile phone users in developed countries who cannot currently access financial services due to age i.e. 13-18 year olds.
The report forecasts that in-between 2007 and 2011, we will see an additional 517m global mobile phone users of MFS, although the report does warn that a number of issues still need to be overcome. One issue particularly for new entrants is that of legislation.
Most developed world economies have strict rules and regulation governing the financial industry, to protect both the consumer and the retailer. It can be a costly exercise, in both time and money, to design and implement an alternative MFS payment scheme that adheres to such regulation, particularly the case with mobile fund transfers and remittances potentially offering an easy route to money laundering around the world.
Other key report findings include:
- 612m mobile phone users generating over $587bn worth of financial transactions by 2011
- Annual global mobile banking transactions will rise from 2.7bn in 2007 to 37bn by 2011
- The Far East & China region forecast to embrace mobile finance the most, with over 250m total mobile phone users to use MFS by 2011