Mobile Phone-based E-Banking: The Customer Value Proposition

This briefing note discusses the issues in the context of mobile phone-based e-banking solutions.

The document lists the barriers and benefits identified by market research conducted for MicroSave's Action Research Partners implementing mobile phone-based ebanking solutions:

• Benefits:
  • Is fast and time saving;
  • Offers the savings associated with the loan disbursement process;
  • The reduction of hard cash in some transactions enhances security;
  • Is almost a 24 hour service.
• Barriers and challenges:
  • Limited access to mobile phones;
  • Need for significant training to make the customer familiar with phone-based services;
  • Lack of funds with agents to meet client requirements;
  • Inadequate electricity in rural homes;
  • Lack of knowledge of functioning of mobiles phones by rural customers.

The research identifies that if the application is to succeed, the following points must be kept in mind:

• It is important to get into the market with one application responding to a specific need, and then expand usage;
• Providers need to concentrate on areas where cash is inconvenient and the solution can do things that cash cannot;
• It is important to understand when customers need to use cash and when they do not.

The note finally concludes that the ultimate success of mobile phone-based (and all other) e-banking solutions for the poor shall be determined by their ability to:

• Respond to the needs;
• Provide real customer value for the agent and end-use.