Mobile banking capabilities required to serve the unbanked market in South Africa

Abstract

In developed countries, the business environment is highly saturated, with large numbers of banks, and mobile network operators. As a result, customers have a range of options in choosing preferential services providers. In Africa, most countries have dissimilar business environments; however, some countries have paved new frontiers in enabling access to financial services mainly through mobile banking services.In South Africa, a different situation prevails even though in certain instances the business environment is more advanced than other African countries. Over the past five years, South Africa reported upward trends in real income for LSM1-5 (living standard measure), and the number of mobile subscribers per household. Conversely, it also reported 60:40 ratios between the number of mobile subscribers and bank account holders with an expectation that the gap will grow further if key fundamentals are not revised in the banking sector.This research explored mobile banking capabilities required to serve the unbanked market of South Africa; and in doing so highlight the prospects of financial inclusion towards social and economic development, particularly when the firm seeks to offer products and services, which are reflective of the demographics of this country.Thus, as an exploratory study, it was necessary to gain insights from experts involved in designing, co-ordinating, and delivering mobile banking products and services. As a result, the research noted gaps in the products and services being offered across the different market segments. It also noted that in addressing these gaps; the banking sector requires participation from other key role players, such as the mobile network operators, regulator, and government.