Smarter than a smartphone?

FinanceAsia – Mobile telephone capabilities may have come a long way since the days of the brick-size device, but how much can they really change banking?

Communicating through radio link has come a long way since World War II. With voice calls, text messages, mobile internet access and built-in cameras, today’s smartphone is already a remarkable all-in-one handheld computer — but its potential could be even greater in the developing world.

This is particularly true in banking. Asia’s fragmented payments infrastructure and large unbanked population mean that millions lack even limited access to branch-based banking, but rising mobile penetration is creating new options for person-to-person payments.

“Mobile banking works because the individuals and small businesses in the emerging markets have access to a mobile phone,” said Richard Davies, Asia-Pacific director of Logica’s global products business. “Similarly, in the more mature markets, it would be strange to see somebody who does not own a smartphone.”

Telecommunications service providers have been quick to pick up on this trend. Mobile banking and payments solutions, such as GCash in the Philippines and MPesa in Kenya, have been very successful in the emerging markets. “Banks in Southeast Asia are interested in mobile banking to get ahead of the game and provide additional services for their customers,” said Dean Young, vice president of product management at SunGard’s ambit retail banking business arm.

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