Topic: Mobile phones and the Internet are changing the banking - page 4. (Read 1253 times)

Online banking is the thing now in Canada, US and several other people. As an associate of Bell Canada, most of our customers don't really go to their local bank to create some paperwork to send their payment, which is the case for the last decades. Also, the fact that almost everyone agreed to receive e-billing is a strong statement that we are tied to the digital trends today especially with our banking and finance. Bitcoin is a strong contender in the field of finance if, like M-Pesa, it is implemented with SMS and not just tied to the internet where it can only reach a certain point. Agree or not, our money is tied to the digital age, as we are tied with our smartphones and internet.

I've heard of M-pesa before, does it accept bitcoin and other currencies as well? It would be nice if the mobile wallet can handle other cryptos in addition to bitcoin and fiat. At least they can convert cryptos during hikes so they won't be caught penniless during plunges.

M-pesa is used by the natives. They have in the village may not be TV, but when they go into town for food, they are calculated using your mobile phone. Bitcoin does in this respect, more opportunities, but in Kenya, the government supports non-cash payments, while in developed countries banks and governments are parasites on their currencies and fighting against any competition in the field of Finance.

The emerging markets have outpaced the mature one’s development significantly, experts say. Let’s check out two of the major trends.
Smartphones golden age
The first trend implies that emerging market buyers are shifting from PC, laptops, and tablets with a high penetration in mature countries right towards a new generation technologies. That means that smartphones there have been adopted not only before PCs but instead of them. Due to continuous smartphone penetration on the market, the growth in a number of mobile phones in emerging markets is proceeding exponentially. According to GSMA Intelligence, for instance, it stands for 76% in Taiwan and for 70% in Myanmar. The reason is that smartphones in Asia have recently become rather affordable and its cost varies just from $30 to $50. Moreover, the capabilities of smartphones processors are on par with PCs’ processors, and the features sometimes wider — photo shooting, for example.
Contrary to all the rules
The second trend covers rising of the Internet penetration even among people with very low income. The emerging markets show interesting statistics: usually, they have a high percentage of the unbanked and underbanked population and, at the same time, the high level of penetration of the Internet and mobile services.

For example, Asian region overall is expected to become the world’s fastest-growing Internet region by 2020. While Internet industry is flourishing, only 27% of the South East Asian population have a bank account. In 2017, China has 731 million internet users and 53,1 %t of them are online. The country demonstrates a fast development pace but still has 21% of unbanked. In Myanmar, the Internet traffic growth is 58% and, at the same time, Myanmar has one of the lowest banking penetration rates in Asia, with over 70% of adults (aged 15+ years) unbanked.
Traditional banks and alternative fintech projects battle
What is more surprising, these trends have the strong impact on the totally different industries, for example, on the financial markets. Emerging market consumers, in the same way, skip traditional banking services and move to online wallets, payday loans cards, P2P credits and to online applications for loans that can be taken via smartphones! That happened since people found it is much easier and faster to do it by phones, however, this fact formed a new trend in financial services. As mobile and Internet services do not need paper documentation, therefore, neither financial services nor their customers need such traditional creditworthiness proofs as papers, credit histories, collaterals, persons to vouch and so on. All the traditional banks’ requirements make sense as they are just trying to de-risk their ​businesses, especially for the emerging markets banks.

In Kenya, for example, M-Pesa financial service lets customers store, transfer and send money via simple text messages. Usage of WeChat Pay and Alipay apps is approximately 7 times greater than average of top five conventional banking apps in China!

However, at the same time, alternative mobile services market is growing rapidly making all the classic rules senseless because the fintech projects found the way not only to accept applications online from mobile devices but to assess their customers online too.

For instance, the blockchain company MicroMoney has developed the mobile scoring system based on neural networks technologies that allow estimating of customer's creditworthiness remotely just having an access to a customer’s smartphone data. So its clients don’t have to collect a pile of papers, to provide a collateral and a one to vouch, or to wait for the bank approval. No struggle to prove that they are reliable credit customers or wasting the time if they had no credit history before (because for a bank it means the obvious rejection). MicroMoney’s mobile scoring system after getting the access to mobile data explores around 12 000 different parameters of data stored on a phone (SMS, contacts, social accounts data, searches and purchases, and even a music a user likes) within just several minutes and approves (or disapproves) a loan. In case it approved, MicroMoney immediately sends money right to a client’s e-wallet.

With the trends we mentioned before, it’s obvious that the banking industry will not stay the same anymore. Moreover, these changes give the banks the key to the audience untapped before — to the unbanked and underbanked people in emerging markets and worldwide.