Mobile Financial Services An Untapped Market In India: EY
With over 90 percent of the villages in India without a commercial bank branch, and over 350 million rural mobile subscribers, there is a large untapped population to be covered under the financial net, says the latest report by EY, titled Decoding mobile financial services.
For financial institutions, mobile financial services (MFS) can help serve a vast mass market, which otherwise may be out of reach due to high physical infrastructure costs, the report suggests. For telecommunications providers (telcos), it acts as an additional revenue stream and can help the industry cross-sell services, the report said.
Prashant Singhal, EY Global Telecommunications Leader, said, “The area of mobile financial services is at the tip of a digital iceberg. We expect to see the world change the way banking is done in the next two to five years, as both telcos and financial institutions leverage mobile as a platform for growth. Given complementary competencies and infrastructure, they are well-positioned to collaborate, bring synergies and innovation to mobile financial services and meet changing customer demands.”
The necessary building blocks for promoting inclusions and access to financial services have already been initiated by the Government of India. The introduction of payment bank licenses and the Central government’s endeavor are steps in this direction. Interestingly, Indian telecom operators are well positioned to take forward the financial inclusion agenda with their wide reach and prior experience in mobile money services.
Also Read: Mobile Banking in India - Technology Drivers
The m-commerce boom in India is another driver for MFS growth. It is expected that the m-commerce market in India is poised to grow by 55 percent from US$2 billion in 2015 to US$19 billion by 2019. Additionally, cashless transactions are increasingly replacing cash based payments, typically in business-to-business (B2B) and business-to-consumer (B2C) transactions, which is an advantage.
In essence, MFS has the potential to create value across multiple fronts of the financial services ecosystem. Given the prevalence of mobile phones—particularly smartphones, the transformational impact of MFS on mobile payments, microfinance, and banking services can be a real differentiator in unlocking economic and social benefits in India, the report said.
Although innovation is leading to an upswing of innovative MFS business models, their uptake and sustainability is greatly impacted by the rise of cyber security concerns in the digital age. Globally, organizations have faced serious financial damages and dent in reputation as a result of the growing cyber-attacks. Companies not only risk losing their customer base but may also be affected by regulatory levies for noncompliance to protect customer data.
“In view of changing consumer preferences and needs, organizations need to be able to create a balance between the user convenience and security aspects of mobile financial services. To this end, security measures such as tokenization and biometric authentication are likely to have a strong impact on the digital payment industry. Robust know-your-customer, anti-money laundering and transaction authentication procedures will remain a key focus to combat cyber threats,” said Singhal.
- Altaf Halde Steps Down; Kaspersky Lab Appoints New GM
- The 10 Best Companies For Women In India
- Delving Into The ABC Of Cyber Security
- Rubique To Expand To 100 Cities by March 2018
- Telecom Consolidation: Tata Tele Merges With Airtel
- Content Strategy Strongly Impacts IT Sales
- Ola Vs Uber And The Battle Of Dominance In India
- Tele-Health To Bolster Home Healthcare Services
- Facebook India MD Umang Bedi Resigns
- AMD Plans Expansion In India, To Hire 500 Engineers: Report