Mobile Financial Services Development

There are now more than 1 billion people around the world who have mobile phones but who have no bank accounts. Aligned with guiding principles from the G20, the Mobile Financial Services Readiness project will consist of a scorecard measuring select countries' preparedness for the scaling of affordable and appropriate mobile financial services. 

The Mobile Financial Services Development Report 2011 provides a comprehensive analysis of more than 100 variables across 20 countries in Africa, Latin America and Asia. Developed in conjunction with the Boston Consulting Group, the report measures the critical factors necessary to achieve meaningful scale of mobile financial services and to meet the needs of billions of individuals excluded from the formal economy.
Defining mobile financial services devel­opment in terms of the key drivers across the institu­tional, market and end-user environments that lead to adoption and scale, the aim of the Report is to build consensus by proposing a taxonomy and analytic structure for assessing the mobile finance landscape in addition to the provision of a comprehensive data set.
The report takes a wide-ranging view in assessing the factors that contribute to the long-term development of mobile financial services. Along with including mobile payments and transfers, vital financial services such as savings, credit, and insurance are also within the Report’s scope.
Measures of mobile financial services development are captured across seven pillars:

1. Regulatory proportionality
2. Consumer protection
3. Market competitiveness
4. Market catalysts
5. End-user empowerment and access
6. Distribution and agent network
7. Adoption and availability

The report highlights that the adoption of mobile financial services is currently confined to a few countries where access to financial services has been historically constrained and the scope of services limited to mobile money transfer. The findings also suggest that the adoption of financial services such as savings, credit and micro-insurance are nascent and that regulatory environments, market competitiveness and the financial literacy of end-users all need to be collaboratively addressed before meaningful scale can be achieved.
Countries such as Kenya and the Philippines are among the few countries covered by the report that have achieved adoption levels of more than 10% of their total adult population. A defining characteristic of these countries is a dense network of agents – retail access points that are capable of registering account holders and handling cash transactions. However, as these countries look to achieve scale beyond payments, focusing on factors such as government disbursements through the mobile platform, the competitiveness of their financial and telecom sectors, and better data collection to facilitate “test and learn” approaches will need to become a priority.
Several countries such as Brazil and India demonstrate relative strengths when compared to those countries that have currently achieved scale in mobile payments. The ability to leverage existing agent networks and consumer protection in Brazil may facilitate the development of more complex financial services through the mobile platform. The widespread availability of mobile phones within India, the degree of competition within its telecommunications sector and recent regulatory changes may drive dramatic improvements in adoption levels.