Why Telcos Shouldn’t Be Complacent About Mobile Financial Services73% of the population rely on mobile money for daily transactions, bills and salaries, and even remittance payments. Alternatively, only 15% of the population have accounts with formal banks.
Portfolio Diversification is Key to SurvivalWith the drastic drop in revenue from voice and SMS at the hands of new technologies (Whatsapp, Skype, etc.), telcos are scrambling to diversify their product offerings and establish new revenue opportunities. Telcos need to diversify portfolios and replace lost revenues. Financial inclusion for a largely unbanked population is the ideal opportunity to achieve these goals. In a 2016 report of the Mobile Economy in Africa, GSMA posited that, by 2020, there will be 725 million unique mobile money subscribers across the continent. The biggest risk to telcos in this growing market? Complacency.
The Mobile Money Revolution is HereThe mobile money revolution is already well underway. With a little bit of education, markets will quickly catch up. The fact is if your telco doesn’t jump on the market opportunity, another will. If the biggest threat to any telco is a subscriber swapping out their sim card for a competitor’s, why not create stickiness with mobile financial services. Research indicates that “active usage of mobile money was also confirmed as a mediator in the relationship between satisfaction and trust, on customer continuance.” There is a correlation between mobile money usage and reduced customer churn. Once a customer places their financial dealings with a telco, the chances of them jumping ship are greatly reduced. So if your telco is looking to diversify product offerings, reduce churn, and replace lost revenue, consider mobile financial services. Send me a message to discuss the steps you, as a key stakeholder, can take to accelerate the mobile economy and establish your telco as a trustworthy provider of mobile financial services.
About the Author
The Co-Founder and Managing Director at Safarifone, Abdulrahman Ali has more than 15 years of experience in delivering SaaS and IaaS solutions to telecoms and financial service providers with an emphasis on the Mobile Financial Solutions (MFS) services provided by telcos in African and Latin American developing countries. Mr. Ali also has particular interest in the human element of providing financial services to the unbanked and rural populations, and is involved in a number of projects facilitating financial inclusion to the unbanked. Mr. Ali holds a Bachelors Degree in Computer Science from Benadir University and a Post-Graduate diploma in Business Administration from the University of Wales.