Global banking outlook: 2013-14

Embracing mobile money

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Banks will need to defend existing revenue streams from start-ups offering better terms for merchants or digital wallets reducing credit/debit card use.

After a few false starts, we believe mobile money (both for banking and payments) has reached a tipping point thanks to new technology and customer expectations. Not all banks will choose to be early adopters though, and many will play it safe until there is greater customer adoption and standardized technology.

Banks that wait take a risk though. As more alternative providers emerge, transaction fees will be at risk. Banks will need to defend existing revenue streams from start-ups offering better terms for merchants or digital wallets reducing credit/debit card use.

The lack of physical branches in rapid growth markets has been the catalyst for the development of the most sophisticated mobile banking platforms. However, poor internet connections may constrain adoption. Banks would be wise to ensure government and private sector investment in broadband is sufficient to justify their own spending on mobile platforms and applications.

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