BANKING AND BEYOND – A MOBILE REVOLUTION: by Alex Leslie

Alex Leslie was founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector.  During the ten years of the GBA as an independent association he guided it through times of enormous change, challenge and opportunity for the communications industry.  He is widely published in communications magazines around the world.

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IMG_0580A ten percent growth in mobile phone subscriptions in sub-Saharan Africa will translate into a one percent increase in that region’s GDP.  

So said Bill Clinton recently, quoting statistics from the International Telecommunications Union (ITU), the communications offshoot of the United Nations (UN).

Demand in the region is far greater than supply suggesting that much of the continent is set for an exciting period of growth.  It is not just the take up of mobile phones fuelling the revolution – it is what people are using them for.

Stories are commonplace of mobiles being used to discover what goods are in the market 20 miles away, and therefore whether a journey is necessary. Before mobiles were widely available, the journey simply had to be made, often for nothing.

Mobile phones create a more efficient use of time – and time is money.   They are also creating markets, allowing producers and traders to begin the business of buying and selling before the market is even open.

In banking there is a similar revolution thanks to the mobile.

M-Pesa in Kenya is now providing banking services to 15 million Kenyans, almost 70 percent of the adult population.

Triggered by a distrust of banks, possibly following a series of banking collapses in Kenya two years or so ago, M-Pesa is now the de-facto way of transferring money. Whether to and from relatives, or to and from a passenger and a taxi driver, the system is seen as more secure, easier and more ubiquitous than credit cards and a lot safer than cash.

The circumstances in Kenya that enabled take up on an unprecedented scale might have been unique – a broad-minded central bank and a weak banking system – but people’s lives have been transformed. And there is more to come.

Now that M-Pesa has become the way that money is moved, it becomes possible to step up a gear. Invoicing via M-Pesa is now possible; managing payroll is on its way; and, most recently, savings and loan services have just been announced. This latest is an innovation from the CBA, Kenya’s largest bank, who will offer interest rates of up to five percent on amounts as low as Ksh 1.  This will enable people to borrow money as their savings increase.

The key, according to Bob Collymore, CEO of wireless operator Safaricom, architect of the system, is that there are no application forms, no fuss and no fees.

Kenya provided a unique combination of events that made M-Pesa possible and then enormously successful.   The system is now being rolled out across other African countries, where the banking regulation and infrastructure allow it, and, with luck, encourage it.

Beyond banking, we enter the realm of imagination. The possibilities and potential of mobile devices, connected to the Internet, are extraordinary.

Professor Nicholas Negroponte from the Massachusetts Institute of Technology (MIT) recently donated tablets to a community of students in Uganda.   The tablets’ language was English and the students’ was not, yet, within days, they had opened and experimented with around 50 apps each.  They had mastered basic songs based around the English alphabet and within five months they had hacked into the operating system and enabled the video capability of the tablet, which had been blocked.

A thirst for knowledge combined with devices that can satisfy that thirst seems to be a recipe for success – a catalyst for innovation on a scale we can only begin to guess at.

Next time – smartphones and healthcare

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