Only 47 percent of the world’s population is included in the formal banking system, but 76 percent subscribes to mobile phones.

So an opportunity presents itself to banks and alternative issuers alike: Providing financial services or their equivalent to those with no access. Mobile network operators (MNOs) have begun to make strides towards financial inclusion by bringing basic financial services directly to consumers through the use of a nifty device we all have come to know and love: the mobile phone.

Alternative approaches like that of Apliman Technologies and Creova’s partnership with Africell look to enable the use of mobile money transfer in The Gambia and Sierra Leone. The venture will leverage the existing mobile network as the primary mechanism to transfer money between individuals who may not be bank customers, enabling faster transactions that are secure and simple to initiate.

Similarly, providers like M-PESA and WIZZIT are going one step further by offering mobile bill payment, the ability to buy airtime, and saving and transfering money securely without the need for a bank account. These providers offer a range of features that create a new form of inclusion for the unbanked through non-traditional means.

In the developing world, MNOs are successfully ingraining themselves into the fabric of consumers’ lives by engendering loyalty and trust among consumers—something that has been problematic for banks. Since mobile networks tend to be trusted more than banks in the developing world, at least, approaching the unbanked in developing markets with the traditional banking model may not be the optimal solution.

These emerging markets have become forerunners in the advancement and innovation of mobile financial services. If banks hope to stay in the game, they should consider collaborating with new entrants in the financial services space and acknowledge that others may better know and understand the target market.

Topics: Payments Strategy