Phones are the Future of the Unbanked

Telenor “believes that mobile financial services will become the new normal”. They target poor countries where banking is not commonly accessible, such as Pakistan and Bangladesh. Indeed, mobile banking will allow more of the population that uses mobile phones but not banking services, to be able to use bank services conveniently.

However, their business model needs to look carefully at whether the country has a good mobile phone infrastructure and coverage, government regulations that will provide a safe banking experience and whether the government will open up such a market. As Telenor aims to “fix” Myanmar’s banking system, they also face competition from Qatar’s Ooredoo, which will affect their input costs in particular regards to marketing of their SIM cards and use of their services.

Mobile banking is not a new idea, but Telenor is one of the few companies where their value proposition targets the number of “unbanked” in poor countries by allowing more convenient and safe use of banking services. It will be interesting to follow their steps of expansion in the rural world and see how mobile banking will affect the future of all of us.