From 'E' to 'M': Banking Goes Mobile
in Emerging Markets

International high finance may still be down in the dumps, but the market for mobile banking is starting to look up in a very big way. A recent KPMG survey in India found that 64% of Indians are "at least somewhat likely" to conduct banking over a mobile device in the next 12 months. Growth in the Indian market is reflected globally, with a Gartner report predicting that the number of people using a mobile phone to make payments would rise from 43 million in 2008 to over 73 million in 2009, with the total reaching nearly 200 million by 2012. More affluent customers who want to access their bank accounts using their mobile device may represent the most immediate market, but the billions of unbanked consumers in emerging markets around the world are the ultimate prize, as mobile banking allows people who have not previously had bank accounts to join the formal financial sector.

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The pervasive use of electronic ("e") transfer systems for financial transactions has essentially obviated the term eBanking. The use of digital computing equipment in financial services is so firmly ingrained that eBanking is now simply banking. However, the concept of banking through one's mobile phone, or mBanking, is still in development and warrants a separate label. Other verticals ripe for digital forms of delivery – health, government services, and commerce – may also manifest initially through stationary electronic IT systems. But in many countries where mobiles are leapfrogging computers as an access point, the "m" version of the service – mHealth, mGovernance, mCommerce - will lead. This will impact the development of the services themselves as well as the computer infrastructure that supports them.

The influence of mobile devices, especially in emerging markets, will reach across industries. Traditional IT companies, as well as health and commerce-related corporations will do well to consider the ways in which the pervasiveness of mobile phones will affect their marketing and delivery channels. Firms that tailor their products and services to the mobile channel might end up ahead of the curve.

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