Business consultancy project

Mobile Financial Services Background

1. Introduction

The rapid growth of the network extension and the number of subscriptions reinforce the business opportunities not only for mobile communications but create a positive environment for other sectors as well. The development of wireless telecommunication industry allows the rapid development of e-commerce management from mobile devices as well. The new type of e-commerce transactions performed through mobile devices using a wireless telecommunications network is called Mobile Financial Services. In the generation of advanced technology and digital transformation, the financial sector has passed the essential changes, and the new ones are modifying the traditional financial services. (GSMA Intellegence, 2019)
Mobile financial services are also characterized as ‘mobile money’ which enables the user to carry out financial transactions (ITU, 2016). Together with mobile banking services, which work via bank account consumers, the different types of other payment methods like e-wallets, e-payments are also getting popularity nowadays. The existence of mobile network operators endorses the usage of mobile phones as the new paradigm in the application of mobile financial services. MFS first emerged in the regions where
mobile communications services prevailed the banking system. Mainly the inclusion of financial services through mobile communications first started in Africa and Asia region where most people do not have access to the traditional financial institutions. (State of the Industry Report on Mobile Money, 2017) Meantime the service was spreading to other continents, and the number of users increased. From the first launching days, the service popularity gradually increased, and in Y 2018, the annual growth rate constituted 20% (State of the Industry Report on Mobile Money, 2018).
The possibility of making money transactions, paying bills, and purchasing good and services through mobile devices simplify the consumers' financial lives. MFS is considered as money and time-saving opportunity tool for consumers, as consumers do not have a time limit and can control their money anytime. Therefore, accessing financial information and managing finances in real-time is a valuable opportunity for consumers. (Mobile Financial Services, 2015). Besides, the existence of the MFS and the prevalent usage of mobile communication creates new channels and instruments for the financial institution for reaching additional users. The MFS positively influences the financial services market position as today highly demanded consumers require more sophisticated and user-friendly digitalized tools. Meantime, consumers, particularly in developed countries, prefer the cashless opportunity. According to the world payment report, the non-cash transaction increased significantly in the worldwide and forecasted the global compound annual growth is 12.7% (World Payment Report, 2018)
Generally, mobile financial services characterized all services that are performed through mobile devices. However, the board interpretation of MFS can be differentiated in the following way. (Mobile Financial Services, 2010)
Figure.16. Mobile Financial Services

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