Can the mobile phone bring a range of financial transactions and services to the underbanked? That is the thesis of a new report out of Celent, the global consultancy, and Center for Financial Services Innovation.
Central to the report's argument is that – given the near ubiquity of mobile phones today and the fact that just about all of them now have Web access capabilities – “there is vast potential for a robust suite of mobile financial management and transaction tools to strengthen the financial lives of underbanked consumers,” said the report.
Celent admitted that the activity that probably seems most central to mobile financial services – that is, payments on the fly using NFC technologies or an electronic wallet – is unlikely to figure as a significant factor in its predicted revolution in cellphone banking.
Limitations of the cellphone technology of the underbanked are one reason. Another is worry about fraud. A third is that mobile payments are presently seen as extensions of existing accounts, not as ways to serve new accounts.
But big opportunities nonetheless exist, said Boston-based Celent, particularly in terms of delivering much more and current information about accounts to the underbanked and, said Celent, the phone is the ideal tool.
“Given the comfort and attachment that people feel with their mobile phones, and considering that many financially underserved consumers are uncomfortable with banks, mobile devices hold considerable promise to provide broad access to financial services,” the report said.
The report’s most startling conclusion in fact is its urging financial institutions to broaden mobile financial services definitions to consciously take aim at the presently underbanked.
According to Celent, “Given the comfort and attachment that people feel with their mobile phones, and considering that many financially underserved consumers are uncomfortable with banks, mobile devices hold considerable promise to provide broad access to financial services.”