The explosion of mobile phone usage, internet data, and other technologies has expanded rapidly into traditionally underserved markets and customer segments, changing the way people transact and communicate.
Ugandan banks seem to have realised the threat as more of them are partnering telecoms to swiftly roll out mobile banking products to boost their customer base and increase revenue streams.
Bank of Africa, for example, recently launched its first mobile banking app dubbed 'Tap Tap', which allows its customers access their accounts and withdraw cash across all the banks with whom it has partnered on the Inter-switch platform, and selected mobile money outlets across the country.
Similarly, one can pay utility bills such as electricity, water, DStv/GOtv, school fees, and money transfers, among others. This means that their mobile money accounts will no longer be just about money transfer. Instead, they will become virtual bank accounts.
According to Claver Serumaga, the general manager, business development, at Bank of Africa, mobile banking is poised to offer more sophisticated banking services, which can make a difference in people's lives.
"The mobile phone has revolutionised the way we access funds and it's becoming the preferred banking hall for many of the future majority users," he said.
"As banks, we just can't sit back; investment in brick and mortar is quite expensive for us. What we are saying is let's partner with the telecoms that have very wide coverage and be able to provide more financial services," he added.
According to data from the central bank, Ugandans are embracing mobile banking faster than they did with ATMs. For instance, the number of mobile money account holders grew faster than those opening up traditional bank accounts, hitting 18.8 million as of December 2014, up from 13.2 million in 2013.
The number of mobile money agents shot to 79,000, up from 51,000 agents in December 2013, while there were 861 ATMs as of late December 2014, up from 786 in 2013. The growth signifies a narrowing space for banks as the majority of the unbanked Ugandans show interest in mobile money services.
Source: Balancingact-Africa
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