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Analysis Robert Ndlovu
ONCE upon a time there used to be a postage stamp that one bought to stick on an envelope which contained a “hand written” letter. The price of the stamp varied with the distance that the letter had to travel to its destination. This postal service was so solid and pretty reliable and was a key element of any country’s socio-economic system.

But things changed and they changed very fast. Enter electronic mail (e-mail) and communication was never the same again. I remember very vividly making some presentation in Harare to some Post Office managers trying to convince them (then) to convert their Post Offices to Internet Cafes and that they become an ISP.

One of them told me straight in my face that maybe I had puffed some green leaf – which I didn’t and don’t. Fast forward. A few years ago a mobile network operator in Kenya Safaricom launched a service called – Mpesa, which is a mobile money transfer system. Well it did not take long before our local operators jumped on the band wagon to provide the unbanked (millions) with basic financial services.

Today you can literally pay for any service or product using your mobile phone. The game change was due to the mobile network operators’ vision, which saw beyond their eyelids. Two things were happening and are still happening, that are in the epicentre of mobile banking.

1) There has been an exponential penetration of mobile phones into Africa. 2) More and more people now have access to basic internet services like e-mail, social networking, voice calls and chatting. Thanks to open source systems like Android developed by Google. Mobile phone technology removes the distance and connectivity barrier that used to exist.

So this means that mobile network operators (MNOs) can now piggy back on their existing networks to offer financial services, which were NOT originally in their strategic plans when they were formed. This was an opportunity that presented itself and found the mobile operators ready to grab it. In Zimbabwe initially there were issues raised by banks in that cellular operators were now offering banking services and yet they didn’t pay for the banking licences or were not registered financial institutions.

While the banks were “baby crying” mobile operators moved swiftly and connected with banks at the back end to take care of any banking regulations and complied with the laws of the land.

Now with this in place banks were literally left with egg on their faces. Innovate or die. As we move into an era where a very thin line exists between the phone and the computer, the increase in the adoption of smartphones will again change the game rules. Too bad regulatory organisations like BAZ, CAAZ, Potraz, RBZ and the like continue to play the catch up game as they still figure out how to stay current with fast moving technological trends. This is the same bug that banks suffer from. This is especially the case with the previously unbanked population.

Even business to business transactions are taking a mobile transfer posture. Are our banks doing anything to stay in the game or just ball watching? Are they putting any resources to understand what is happening around them via research and development (R&D)?

Let me be more precise. Ever since mobile banking hit the floor I do less ATM transactions and so do many people I know. Do our banks collect and have such data? By the way the fact that in Europe and USA mobile banking is not a hit and people very comfortable with their credit cards does define the consumer behaviour in developing countries where most people previously had no bank account let alone an internet connection.

If you are a bank executive and can’t figure out the relationship between mobile banking, broadband connectivity and a smartphone I urge you to resign or change professions. Let me break this up into smaller chunks for those who are at sea with what I am saying. We are having more and more people owning mobile phones and more and more of these phones are smart phones. So what? Smartphones bring in the connectivity factor. Broadband connectivity.3G/4G.Once connected it then means it is now possible to push and pull services to and from your phone via SMS, USSD and mobile applications.

Now since banks can’t own USSD codes to do their transactions they must move into the mobile application arena, which does not depend on the mobile network operator in so far as using it is concerned. Look around, why do you think some company is busy digging and laying fibre optics all over the show?

Readying for broadband connectivity. Easier said than done. Payments are mainly effected via use of plastic money in developed countries. But this is Africa my phone is my wallet. There are regulatory issues that banks with guts to venture into this will have to deal with. Also the cost of laying out communications infrastructure around the country. Banks need to form smart partnerships with struggling BUT licensed and existing telcos.

No brainer. This way they do not have to deal with licensing issues from the telecoms regulator. Think of it, Zimbabwe has more than 12 registered telcos most of whom are struggling and one wonders why they do not enter into smart partnership so that they can leverage on their combined resources. Forget it local business people would rather own 99 percent of garbage than one percent of gold. Local banks should be allocating more resources into mobile banking. Such adoptions can allow the banks to grow very fast without need to expand their branch network.

This calls for careful market analysis, technological research on part of the banks. The fact that efforts are being done at a national level to rationalise, understand and optimise mobile commerce and mobile transactions must be enough of a wake-up call to the banks. Why do you think measures will be put in place to regulate and monitor mobile transactions? The growth and surge of mobile transaction are inevitable – wake up and smell the coffee.

A quantum leap in the dependence of mobile phones is expected in the next decade. This is based on historical data, present user adoption and the pace at which more people use the smartphone than the PC.

Did you know what an e-mail was in 1995? If you are a banker or financial institution, your answer to the above questions will take care of your doubts as to what the future holds for your industry.

We want to hear of CabsTel or BankTel or TeleBank companies. Summing it up, my message to banks is wake up or be ready to whither one day. The mobile phone, broadband connectivity and mobile applications are the core of your new strategy and survival first aid kit.Virtual telcos? Yes as they will not need to get a telecom licence but a number of transaction servers.

Well the answer to the “why” is that in a few years to come ALL bank clients will have mobile phones, smart ones for that matter. So if you do not prepare to keep and retain your clients, someone surely will.

Telcos are gradually redefining their roles and adopting banking services via mobile banking.

No need of rocket science to figure out what you should do to survive. Else you will soon remind us of the postman! Need more info?

Robert Ndlovu: [email protected]