Banking on Mobiles: Why, How, for Whom?

This paper examines how banks can leverage the potential of mobile phones to offer greater financial access to poor people. It focuses on smaller banks and MFIs that bear a higher cost of delivery due to smaller transaction values and servicing customers in remote and dispersed locations. The discussion assumes that these banks and MFIs have adequate management and technology capabilities to make mobile banking possible.The paper does not offer a single, generally applicable solution. Instead, it suggests that the bank first identify the fit of mobile banking within its overall customer strategy. It also stresses that implementation will be fraught with adoption hurdles. The paper recommends that financial institutions:

• Make correct technology choices;
• Involve operators in designing mobile banking operations;
• Use agents to provide easy liquidity to customers;
• Develop efficient channels to increase customer awareness of services.