The Future of Mobile Phone Banking in the Philippines: Global Trends for Rural Bankers to Consider (Part 3 of 3)

By: Atty. John V. Owens, MABS Chief of Party

During my presentation, I shared with the audience some of the latest relevant updates and trends that we are seeing from around the world in terms of the uses of mobile money and mobile banking services.

Viral Marketing & Use of Social Networks

One interesting theme is the use of viral marketing to support the expanded use of mobile money and mobile banking services by focusing on key influencers in particular markets. I wrote about this a few years ago in an article entitled Creating a Tipping Point for Mobile Phone-based Financial Services. In this article, I talked about the factors needed to reach a critical mass of clients with mobile banking services.

As I mentioned in my paper, Malcolm Gladwell in his book, The Tipping Point: How Little Things Can Make a Big Difference, describes three agents of change that create tipping points in the spread of various social epidemics.  Under the “Law of the Few”, he talks about the importance of building social epidemics by involving a rare set of people or partners with a special skill set. These include connectors, mavens, and salespeople. Connectors are the people who “link us up with the world…these are people with a special gift for bringing the world together”. Mavens are the information specialists or the “people we rely upon to connect us with new information”. They are the ones in each community who accumulate knowledge and know how to share it with others. Salespeople are the “persuaders” who have charismatic and powerful negotiation skills. They tend to be the ones that have a special trait to make others want to agree with them.

There are several interesting examples now of banks targeting various connectors, mavens, and natural salespeople to increase their outreach.  Banks and those promoting mobile money are also utilizing social networks such as Facebook to get the word out.  Interesting examples are banks like Movenbank and for those promoting mobile money, an interesting example is that of Digicel’s Cellmoni in Papua New Guinea.  Closer to home, we find interesting uses of Facebook to target connectors by banks such as  BPI Globe BanKO and even rural banks such as Cantilan Bank which is using its site to stay connected with overseas Filipino workers.

Innovative Marketing

The second major agent of change is referred to as the “Stickiness Factor” or the specific content of a message that makes it memorable and the third major agent of change is referred to as the “Power of Context.” This last factor points to the fact that human behavior is sensitive to and strongly influenced by the environment and the surrounding circumstances at a particular time and place.

Again, an interesting example of creating a message that has a “stickiness factor” is the example from Digicel’s Cellmoni which created two characters that continuously demonstrate the impact that mobile money has on their lives.  Here is an example of one of the videos that was running on television in Papua New Guinea.

Another interesting trend is offering tiered fees in order to promote mobile phone banking services.  We now see several examples from around the world of banks offering clients reduced fees for those using mobile money-enabled services as well as examples of providing a certain number of “free” mobile money transfers each month for clients that maintain active bank accounts.

Addressing Client Needs

Banks, MFI, and even agents are beginning to see the benefits of offering mobile money-enabled banking services in order to better address real client needs. The Philippine rural banks in partnership with GCASH are already leading examples of how to utilize mobile money platforms to support payroll and government-to-person payments and this trend is expected to continue and expand in other parts of the world in 2012.

Linking Mobile Money to ATM/Debit Cards

Banks are increasingly looking at making use of mobile money platforms as hooks to attract more banking clients as well as to cross sell additional banking services to their clients interested in a mobile wallet. A good example of this is MCB Bank in Pakistan which won the “Best Bank Led Mobile Money Transfer Programme” during the Connected World Forum in Dubai in 2011.  The bank’s ability to offer mobile money enabled bank accounts which also provide clients with the ability to manage multiple debit cards all from their phone is a tremendous benefit over only having a mobile wallet solution.  Rural banks are also able to offer these types of services to their clients who are Globe subscribers by making use of the Rural Bank FaceCard powered by GCASH or the new PowerPay+ offer. For Smart subscribers, rural banks can also offer Smart Money Instant cards that allow clients to have a prepaid MasterCard debit card that they can use in any MasterCard POS or ATM.

We are also now seeing tremendous interest of global giants like Google, VISA, and MasterCard which are all entering the mobile money and mobile payment scene. The trend in this area is expected to continue and rural banks should closely follow this as this could open up significant new opportunities on the horizon.

As Scott Bales, chief mobile officer of Movenbank shared with me the other day via twitter:

The Rural Bankers Association of the Philippines – Microenterprise Access to Banking Services (RBAP-MABS) supported by USAID/Philippines, continues to actively support efforts to broaden the access to banking services via mobile technologies such as SMS and mobile money platforms. Assisted rural banks have now registered over 300,000 clients to make use of mobile banking services and have facilitated more than PhP 15 billion in mobile money-enabled banking transactions.