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  • user 11:36 am on October 19, 2016 Permalink | Reply
    Tags: , banks, financial inclusion, mobile phone banking,   

    The Evolution of Mobile Phone Banking Services: A tool for Financial Inclusiveness 

     

    aaeaaqaaaaaaaahdaaaajdrkmjczmtnklwm1yjutngq2mi04n2jklwyyyzu5ytu4mzdlngI do have a question for you. Is the use of making significant efforts in bridging the gap to universal ? Come to think of it!

    Mobile banking is simply the act of performing financial transactions on a mobile device like a cell phone or a tablet to send remittances, pay fees and utility bills. Mobile devices are increasingly being use by people for banking, planning, and financial management. The commonness of mobile devices explains the extent to which they have suddenly become entrenched into our modern digital evolution.

    Guess what, about 62% of Americans primarily bank online and 54% of consumers use mobile banking apps according to the Bank of America report on “Trends in Consumer Mobility” published in 2016. According to the Michelle Moore, head of digital banking at Bank of America, there are growing numbers of people adopting and using the mobile devices in managing their finances and navigating their lives. . According to the 2014 World Bank figures, the Sub-Sahara was leading the world with the fastest growth in new bank accounts premised on the penetration of mobile banking. About 12 percent adults in the region had a mobile money account compared with 2 percent globally. Kenya for instance, has championed the cause of Africa’s mobile banking evolution with more than 58 percent of her adult population having a mobile account.

    Not long ago in my part of the world, it was difficult to locate a financial institution much more transact a basic financial transaction. There were quite a few dotted around the country. The few ones available were established in the big towns and cities. As time evolves, the number of banks quadrupled but there is still a numberless of unbanked people left out of the formal financial system.

    These groups who are mostly from poor rural communities are deprived of basic financial services and have to travel over a long distance from their rural setting to the big cities were the banks are located to transact financial services. Indeed, the hand of the traditional banking isn’t long enough to feed this rural folks.

    Cost, time and infrastructural barriers prevent the conventional banks from establishing their branches in these deprived communities to serve the un/under banked customers thereby creating an economic opportunity for the telecoms and banks to deploy mobile to serve this niche market.

    It is estimated by the World Bank that about 2 billion working age adults are still left of the formal financial system. Most of these unbanked and under banked people live in remote communities distant from the financial institutions and are therefore practically cut off from the accessing financial services and products.

    On the backdrop of technological advancement and as fate will have it, the advent of mobile phones came to answer the fore-said puzzle ,and attempt to wipe out the tears of the un-served customers, and complement the gains chalked by the conventional banks.

    In the mobile phone money ecosystem are the telecommunication service providers, banks, regulators, and mobile agents who use mobile technology to reach out the poor in the rural settings at cost effective manner. Customers who are users of mobile money can conveniently check the balance on their wallets, transfer, earn interest on their deposits, and pay utility charges and other services. You don’t have to make a trip to an ATM or financial center either.

    Why it matters? The proliferation of the use of mobile phones and other innovative technologies is helping to rope in the unbanked people especially in the rural setting to access financial services at affordable cost. This thereby provides a complementary channel to progress towards a universal financial inclusion. Along the value chain, it is believed that financial access enhances the quality of living as it allows customers banking access anytime and anywhere to save time and their money, and use it for transactional purposes. Again, families can easily plan and take precautionary measures against future uncertainties including deaths, poor farm harvest and illness. Households and small medium businesses with access to a transaction account can use it to conduct financial services that can improve their livelihood and diminish their operational costs. This branch-less banking is also a source of employment to large throng of youth who act as Mobile agents or merchants to earn revenue from the fees charged and commission received. Bank of America, HDFC, HSBC, Barclays, Ecobank, FNB and other banks with mobile phone banking platforms can leverage on it to expand their collection levels and make savings on their operational costs while the telecoms expand their mobile subscriber base and earn additional revenue on fees and charges.

    However, adequate security measures must be maintained when using mobile phone banking to minimize the exposure to phishing scams (identity theft) and cyber related attacks by hackers who are sniffing around like vultures with amber eyes desperately looking for carcass.

    Universal Financial Inclusion is now a flagship issue for boardroom discussions and a key priority for nations, development partners and policy makers globally. The World Bank group has identified financial inclusion as an instrument for combating the war against poverty and set to achieve a universal financial access by 2020. Member nations have demonstrated frantic efforts by crafting their national policies and strategies to foster universal financial inclusion via public financial literacy sensitization, establishing financial consumer protection frameworks and ICT infrastructural development, to reach out to the hard to reach citizens within the nooks and crannies of their countries with basic financial services.

    The G20 leaders also took bold step to promoting access to financially neglected members globally by endorsing the G20 High Level principles for Digital Financial Inclusiveness at the recent summit held in Hangzhou, China, in September  2016.This is to further consolidate the gains reaped from the 2010 G20 Principles for Innovative Financial Inclusion which were earlier adopted in tickling the minds of global leaders and development partners to appreciate the importance of innovative financial inclusiveness. They underscore the relevance of financial inclusiveness to achieving economic growth and prosperity.

    Repeated research shows that there is a positive nexus between financial inclusion and productivity, poverty reduction and prosperity. Mobile phone banking penetration is helping in tiptoeing towards the goal of global financial access. Today in the remotest part of the deprived communities in Africa, people with mobile account can access at least more than one mobile phone banking services like reload airtime, send money(remittances), loan receipt and repayment, bill payment, school fees, deposits and withdrawals. Latest survey findings from the 2016 Consumers and Mobile Financial Services report fielded by the U.S. Federal Reserve Board in November 2015 cited that the adoption and use of mobile banking continues to surge with 43 percent of all mobile phone owners with a bank account who had used mobile banking having uptick from 33 percent to 39 percent between 2013 and 2014 among the citizens of Americans.

    The rapid growth of mobile financial services is a key springboard to achieving universal financial access. However, the fight to achieving a universal financial access is tense and requires un-relented efforts from all stakeholders including nations, development partners, and policy makers.


    [linkedinbadge URL=”https://www.linkedin.com/in/abdul-bashit-abdulai-8543b045″ connections=”off” mode=”icon” liname=”Abdul-Bashit Abdulai”] is MBA, BCOM, CA, CH. FE

     
  • user 7:36 am on October 19, 2016 Permalink | Reply
    Tags: banks, , capital markets, , ,   

    Blockchain and the Capital Markets journey – Navigating the regulatory and legal landscape 

    has the potential to revolutionise the profitability of . The promise of risk mitigation, capital efficiency and operational benefits can only be realised through legal and change.

    Blockchain has generated significant interest in capital markets, as start-ups, global and other providers evaluate technology and potential use cases. Yet, many questions remain unanswered as to how blockchain, or other forms of distributed ledger technology (DLT), fit into the current regulatory and legal infrastructure.

    To deliver viable and valuable solutions in the highly-regulated environment of capital markets, blockchain will need to navigate the legal and regulatory landscape – either by evolving solutions which conform or by engaging policymakers to reshape its current contours.

    Innovate Finance has partnered with Hogan Lovells and EY to produce Blockchain and the Capital Markets Journey  which outlines the legal and regulatory challenges of using DLT in capital markets, including the over-the-counter (OTC) derivatives market. This report focuses on the UK’s regulatory and legal environment as a stepping-stone to understanding analysis and issues that are similar to those in other jurisdictions.

    We outline key themes that we believe will help shape the future architecture of blockchain:

    • Informing industry, policymakers and regulators of the potential impact of legal and regulatory requirements on proposed DLT-use cases
    • Providing regulatory insights about DLT for product providers, product buyers and investors (i.e., buy side firms)
    • Providing recommendations to support regulatory action in the UK and EU to accommodate DLT solutions
    • Proposing regulatory and industry collaboration at an early stage to realise its full benefits
    • Building skills and knowledge across the industry to support the DLT ecosystem

    In this report, we have helped to kick-start the debate by addressing important legal and regulatory questions that will impact the development of blockchain. Questions range from organisational to philosophical – all designed to encourage a wider agenda where regulators and law makers will collaborate with the industry to enact change.

    Click here to learn more: http://www.ey.com/ukbanking


    [linkedinbadge URL=”https://www.linkedin.com/in/imran-gulamhuseinwala-b673701″ connections=”off” mode=”icon” liname=”Imran Gulamhuseinwala”] is EY Partner – Head of FinTech

     
  • user 9:40 pm on October 18, 2016 Permalink | Reply
    Tags: banks, , , , , , , , ,   

    Major Hong Kong Lenders Plot Blockchain Mortgage System Launch 

    A group of in are reportedly developing a that uses tech to share information about valuations.

    Source


    CoinDesk

     
  • user 9:40 pm on October 18, 2016 Permalink | Reply
    Tags: banks, , , , , , , , ,   

    Major Hong Kong Lenders Plot Blockchain Mortgage System Launch 

    A group of in are reportedly developing a that uses tech to share information about valuations.

    Source


    CoinDesk

     
  • user 9:40 pm on October 18, 2016 Permalink | Reply
    Tags: banks, , , , , , , , ,   

    Major Hong Kong Lenders Plot Blockchain Mortgage System Launch 

    A group of in are reportedly developing a that uses tech to share information about valuations.

    Source


    CoinDesk

     
  • user 12:19 pm on October 18, 2016 Permalink | Reply
    Tags: , , banks, , , , , ,   

    Bank of America Reports Strong Mobile Growth, Especially Deposits 

    As previously reported on Innovation, banking is the top area of innovation in which are spending money—and it appears to be working, with Chase and Wells Fargo both reporting accelerated in mobile users last week, and with Bank of also reporting growth today on theRead More
    Bank Innovation

     
  • user 12:18 am on October 18, 2016 Permalink | Reply
    Tags: banks, Each, , Neobanks, ,   

    Neobanks Should Take on Incumbents, Not Each Other 

    If you&;re in charge of a mobile bank, you&8217;d think your top competition would be &; well, other mobile , but evidently that isn&8217;t the case, at last for one neobank. &;Our competitors are the , the Bank of Americas and Chases of the world, which have banking products thatRead More
    Bank Innovation

     
  • user 9:40 pm on October 17, 2016 Permalink | Reply
    Tags: , banks, , , , , ,   

    Bank Trials Show India’s Blockchain Interest on the Rise 

    Two in India have reportedly partnered on a series of aimed at testing the waters for potential new services.

    Source


    CoinDesk

     
  • user 4:54 am on October 17, 2016 Permalink | Reply
    Tags: , banks, , , Taxonomy,   

    Platform Banking Taxonomy 

    shutterstock_300415958

    Like drunken sailors swinging fists at one another, we have been hurling around various terms to describe new ways of , new ways to deliver banking services. This post attempts to sort out a and clarify the meaning behind the most salient terms.

    I am using these terms within the context of the banking world in this post. Do note they apply equally to the insurance, asset management or payments worlds, indeed to the entire financial services industry.

    shutterstock_405401875

    API Banking: Also called “open banking,” API banking is the ability, for third parties, to access a bank&;s software system thereby enabling a programmatic integration between an external third party application and a bank&8217;s internal application via bank-grade security, authentication and access management.

    Within the context of PSD2 in the European Union, are mandated to provide access to checking accounts, which will most probably be managed via APIs. In the US, several banks are working on developing various APIs to interact with a variety of startups to provide an enhanced service to their customers or end users.

    For example, Capital One has launched its DevExchange for 3rd party developers to leverage APIs it has built for two-factor authentication, rewards, and offers.

    In and of itself, API banking is a tactic, not a strategy, although there can be strategic components to an API tool such as key policies, access management, volume, pricing. API Banking can be either push or pull driven:

    • Push: a bank can integrate to a service it needs (for example an API integration with a compliance service provider, or
    • Pull: a bank allows integration for a service its clients want or need.

    Certain banks have started to develop APIs and early indications are these APIs are part of a bigger strategic intent. In other words, a bank&8217;s API initiative could be part of a strategy.

     

    Platform Strategy: The deployment of a set of business capabilities to maximize value creation across a value chain and articulated around defining what capabilities are core and remain within the responsibility of the bank and what capabilities are given to platform partners when delivering services or products to customers or users.

    companies such as Intel, Microsoft, Facebook, Amazon have been very successful at prosecuting platform strategies where value is delivered to customers while the platform owner/sponsor and the platform partners share in the value creation.

    Historically, banks have crafted what many believed to be platform strategies where they owned the entire value stack and did not share with partners, In effect, banks created single-brand financial supermarkets. In our view, these efforts did not (and do not) qualify as platform strategies, as the platforms did not truly enable value creation along a value chain.

    Platform strategies come in multiple flavors. For example, the platform strategy of Intel was/is very different than the one followed by Amazon. It should be noted that based on size, technical sophistication, market dominance, certain banks will own a platform &; in platform parlance, they will be the platform sponsor &8211; and its strategy, while other banks may, having strategically decided so, be partners of another bank&8217;s platform strategy.

    Certain large banks have developed platform strategies not immediately apparent to the fintech community. One example is the proprietary software platforms owned by global banks in the trade finance and supply chain finance sector.

    shutterstock_222807460

    Marketplace Banking: A type of platform strategy where a bank creates a digital place where third parties can showcase and sell their products and services to the bank&8217;s customers. In a sense, a marketplace banking strategy is akin to the eBay or Amazon&8217;s marketplaces where buyers and sellers of products meet and transact. Certain banks have or are in the process of developing app marketplaces.

    The platform strategy, for the sponsor, will consist in defining the rules of engagement, the selection of vendors allowed to the marketplace, the governance, the monetization, data privacy issues, the level of technology integration, amongst other things.

    Successfully executing a marketplace banking strategy will require the sponsor to deliver “match-making” capabilities to help consumers find the right producers—and vice versa. This will become a hurdle for many existing banks as they may be inclined to push their own proprietary products and services. A startup bank may be better positioned to deliver this capability.

    Presumably, marketplace banking requires APIs. Retail Banks as well as Wholesale Banks can implement marketplace banking platforms. In as much as lending is predominantly a banking activity, notwithstanding non-bank lending, marketplace lending should be viewed as either a subset or first degree cousin of marketplace banking.

    One can argue (as Philippe Gelis from Kantox has) that marketplace banking could be delivered by new entrants, such as a non-bank or a fintech startup or by an incumbent bank. Some fully digital startup banks in the UK have signaled their intent to build marketplaces.

    It is my view, and that of Ron Shevlin, that this will be quite challenging for a startup to effectively deliver. To be successful with a marketplace banking strategy, the platform sponsor must be a “magnet” – drawing a critical mass of both consumers and producers to the marketplace. As a new entrant into the industry, this will be quite challenging for a startup. An existing bank has a head start as it has already has a critical mass of consumers to feed the marketplace. In other words, many have tried to become eBay or Amazon starting from scratch and only eBay and Amazon have succeeded.

    Smaller banks could participate as vendors within the marketplace platform of a larger bank. In addition, it may be feasible for smaller banks to pursue a marketplace banking strategy if it is focused on a specific consumer segment with unique needs. We should expect marketplace banking to develop and segment itself by size, geography, type of service, type of customers.

     

    Bank as a Service (BaaS): The delivery of certain banking capabilities in a programmatic fashion to enable third parties to deliver their own financial products or services.

    For example, a bank could deliver AML/KYC services, checking account capabilities, financial data storage, payment services via an API. These services would then be used to build and deploy &;last mile&; financial services by a third party, be it a fintech startup, another bank, a non-bank. An analogy would be the technology services Amazon Web Services provides to its clients.

    The strategic intent behind a BaaS strategy is the creation of new non-interest income revenue opportunities, created by driving down the marginal cost of delivering a given service to near zero.

    BaaS can also deliver the necessary drivers to enable a marketplace banking strategy. A bank, a startup or a non-bank can implement BaaS, although an entity that is not licensed as a bank will presumably only deliver a subset of services, compared to a licensed bank. It should be noted that we are now seeing new entrants intent on providing BaaS, notably in Europe.

    As with marketplace banking we should expect segmentation and specialization in this space. The various banks that have lent their license and/or balance sheet to provide certain services to alternative lenders (p2p, marketplace) should be viewed as proto-BaaS. Finally, certain fintech startups have developed a BaaS for specific services targeted at equity crowdfunding companies.

     

    Bank as a Platform (BaaP): Fancy term for a bank’s platform strategy, does include API banking by definition and may include BaaS or marketplace banking.

     

    A few more important thoughts. The &8220;platformification&8221; of the banking industry, in one way or another &8211; as per the above definitions &8211; will necessarily mean different approaches to strategic thinking and technology. As far as technology is concerned, and we have seen this occur with different industries and technology giants, such as the ones referenced above, open source and open standards or standardization of either technology building blocks or data/meta data and its associated methodologies and ontologies, are necessary and required.

    We should therefore expect an acceleration towards standardization. We would not be surprised if certain financial technology building blocks would end up being released as open source libraries, very similarly to what has happened to the AI world (machine learning, deep learning) thereby helping the platformification process. Whether incumbents, new entrants or technology minded third parties with an interest in market optimization and social mandates do so is anyone&8217;s guess.

    I will also note that regulatory trends in the US may force banks to pursue platformification if banks are required to provide some kind of fiduciary responsibility for providing financial services (beyond just investment services).

    If you want to learn more about the subject I recommend you revisit the following posts:

    Articles written by Ron Shevlin:
    The Platformification of Banking

    Full Stack Banking: How Fintech Will Fuel API-Based Competition

    Article written by Philip Gelis:
    Why &8220;Marketplace banking&8221; is better for newcomers while &8220;Platform banking&8221; fits incumbents

    Articles written by David Brear & myself:
    Exploring Banking as a Platform (BaaP) model

    Making Bank as a Platform a reality

    Finally, I owe a debt a gratitude and special thanks to Ron Shevlin for pushing me to think through my arguments as well as having provided his thoughts and comments to this article.

    As usual, thoughts and comments are welcomed and highly encouraged.

    FiniCulture

     
  • user 12:19 am on October 17, 2016 Permalink | Reply
    Tags: , , banks, , , , , ,   

    Mobile User Growth Accelerates at Both Chase and Wells 

    banking active accelerated for two of the nation&;s largest this quarter. Fargo, which had a challenging quarter in many other ways, had a particularly strong quarter in growing mobile banking users. JPMorgan and Wells Fargo &; Co. (as well as Citigroup and PNC) reportedRead More
    Bank Innovation

     
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