Bright future for mobile banking

With over 130 million mobile phone users, Pakistan has emerged as the fifth largest mobile phone consumer market in Asia thus opening the rich chances of further growth for mobile banking market. The mobile banking sector is not a new phenomena in the developed world with offering quality, speedy, accurate as well as paperless services involving the customers through mobile phones. Pakistan has been aggressively in this sector especially for the last couple of years and now the introduction of 3G and 4G technologies the sector is set to witness further boom. With the launch of branchless banking, Pakistan has emerged as one of the fastest developing markets in banking sector across the world and has a great potential for banks to penetrate the unsaturated market and around 130 million mobile users will take the advantage of financial banking services. The country had witnessed impressive growth in the telecom sector since mid 2000s and achieved an incredible 73 per cent market penetration within a decade. Wide network coverage, easy availability of SIM cards and reload vouchers and ever reducing call rates and SMS packages did play a key role in the acceptance of mobile service by the masses. From 2011 to 2013, there has been a 327 per cent growth in the number of branchless banking transactions; and the value of these transactions has grown by almost 400 per cent. These numbers not only illustrate the need for mobile banking in the country, but also the demand that continues to be on the rise. This provided a golden opportunity to tap the unbanked segment. Compared to rural areas that have 64 per cent of population, banking has been more effective in urban areas. The cost of doing business in rural areas is great and infrastructure is under-developed for efficient and effective banking. Mobile phone, due to its wide coverage, has become an accessible banking channel and we witnessed the beginning of branchless banking which is satisfactorily successful. Currently telecoms are offering very low cost internet packages to their subscribers and prices of smartphones are rapidly coming down. High-tech phones are becoming accessible to lower strata of socio-economic classes. With 3G, the demand for smartphones will soar even further facilitating customers to enjoy quality services Mobile Wallets, Financial Apps, insurance and restaurants. Its time in Pakistan for bankers to invest in potential untapped areas by offering their own mobile financial services to grab the new potential opportunity to maximize their revenues.

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