Mobile banking and the Transformation of Businesses

Mobile banking and the Transformation of Businesses

Jun 18

Mobile banking is a technological solution that allows a bank account holder to conduct financial transactions through a mobile phone or other capable mobile device. In 1999, some European banks were offering mobile services through Short Messaging Service (sms banking). Currently, mobile banking allows one to access and query their bank account, transfer money between different accounts, pay bills, deposit and withdraw money at ATMs and many other convenient functions.
The biggest impact of mobile banking, however, has been the transformation of small and medium size businesses. Opening an account used to be the preserve of a few and one had to have a regular income to maintain their account. With mobile banking, all one needs is a mobile phone and a SIM card, a quick visit to the nearest bank branch for registration (where there will typically be no charge) and they are good to go.
This simplification brought massive numbers of informally employed people and rural communities into the banking system and spurred the growth of micro lending. Credit is an engine of growth and easier access to micro loans empowered many people to start self supporting ventures. Repayments can be made cheaply and remotely. Banks like Grameen Bank of India and Equity bank of Kenya are examples of micro lending institutions that are experiencing exponential growth due to mobile banking.
Mobile banking has enabled faster money transfers between businesses and deals can be paid for instantaneously leading to improved response times to customers.