Banks see opportunities, threats in mobile money : PwC Banking Survey reveals
Banks need to deploy more technology and partner mobile network operators (MNOs) to leverage the electronic money revolution, such as mobile money, as a cheaper source of floats for their businesses, the 2016 Banking Survey by accounting and advisory firm, PricewaterhouseCoopers (PwC), has indicated.
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The study also highlights the need for the Bank of Ghana to regulate the space to create a level playing field to facilitate better collaboration among stakeholders in promoting financial inclusion.
The 2016 Banking Survey conducted by PWC, in collaboration with the Ghana Association of Bankers (GAB), was launched in Accra.
This year’s survey, which was on the theme: “How to win in an era of Mobile Money,” added a survey of chief executive officers and chief finance officers of banks to pick their perspectives on the emerging mobile money explosion.
Opportunities and threats
Mr Thomas Kyei-Boateng, who presented the findings of the CEO and CFOs’ survey, said a total of 71.4 per cent of the respondents in the survey saw the mobile money revolution as both a threat and an opportunity depending on how the banking institution responded to it. The threat was also because of the potential for telcos and other mobile money operators to enter into the banking space, according to banks.
Interestingly, almost 30 per cent of the respondents saw it as an opportunity only without any threat, Mr Kyei-Boateng pointed out.
The survey also suggests that the impact of network reach on the success of banks in this mobile money era could not be discounted, as it provides easy accessibility “in a more convenient and time-efficient manner across the country.”
For the banks to compete effectively, they must find a way to either tap into the reach provided by mobile money or find alternative ways to compete with that reach, the survey indicated.
The bank executives also view regulatory development as a key factor for winning in the mobile money era. Their reasons are premised on factors such as protecting the integrity of the financial services system as well as safeguarding the confidence in the system.
Regulation will also ensure the stability of the financial system, while providing a level playing field for all participants in the financial services industry.
Unexpected force in banking
Mobile money is gaining much traction in Ghana, with other value additions and products springing up at the back of it to meet investment, insurance and general payments needs.
According to Ms Buddy Buruku of the Consultative Group to Assist the Poor (CGAP), the informal financial services, non-bank financial services and mobile money had combined to reduce the number of Ghanaian adults that were financially excluded from 44 per cent in 2010 to 25 per cent in 2015.
While those included through the banks increased from 34 per cent in 2010 to 36 per cent, those included through the non-bank formal sector have gone up from seven per cent to 22 per cent, as those included through the informal only went up marginally from 15 per cent to 17 per cent.
The influx and increasing adoption of mobile money has significantly helped to increase inclusion and Ms Buruku says Ghana has all the drivers that should deepen its non-cash and mobile money adoption.
Mobile money gains traction
According to a Deputy Governor of the Bank of Ghana, Dr Johnson Asiama, the total value and volume of mobile money transactions have outstripped all other non-cash transactions, except cheques, with total money float balances at the end of June this year reaching about GH¢680 million ($172 million), compared to about GH¢341 million over the same period last year.
Registered agents also reached 108,000 within the period, compared to about 36,000 for the same period last year, confirming the growing acceptance of mobile money across the country.
Dr Asiama said those were funds that could have been outside the banking system if there were no such ecosystem. He said the BoG was committed to facilitating the evolution with the enabling regulatory environment for mobile money to promote financial inclusion without risking the general safety and soundness of the financial system.
On regulation, he said the BoG was engaging stakeholders, adding that: “we are persuaded and ready to take electronic money (mobile money) forward and we call on everybody to come with us and support us.”
The Senior Country Partner of PwC, Mr Vish Ashiagbor, said the PwC Banking Survey, which was in its 15th year, was born of the need to have a credible database of banking information, while providing feedback for the industry to thrive.
He commended the GAB, the Bank of Ghana and other stakeholders for their support in the annual survey.
