Growth in mobile banking

Mobile banking trend seems to be picking up in Pakistan. The central banks latest quarterly Payment Systems Review, released last week, shows that between January and March this year, commercial banks performed 1.11 million mobile banking transactions that amounted to Rs7.35 billion. That comes up to a growth of 23 percent in volume and 31 percent in value over previous quarter.
That builds upon the momentum seen in CY12, during which commercial banks conducted over three million mobile banking transactions worth Rs16.24 billion in value. Transactions from the branchless banking segment, which is reliant primarily on mobile phones, are not part of these statistics.
Based on convergence of information and communication technology and the financial services, mobile banking offers customers the ease and convenience over visiting a bank branch. They can execute transactions such as balance enquiries, funds transfer, bill payments and mobile top-ups in a secure way, at any given time.
In Pakistan, several banks - of sizes big, medium and small - have embarked on this service platform. However, it is one large-sized bank MCB and two medium-sized banks, Faysal Bank and Standard Chartered that seem to be paying special focus to mobile banking services, through their MCB Mobile, Faysal mobit and SCB Breeze brands, respectively.
MCB has also introduced a mobile wallet, MCB Lite that comes with its own Visa card. Breeze, which is Standard Chartereds global mobile banking application and was launched in Pakistan last week, is available on major Smartphone mobile application platforms. Specifically designed for mobile phones, the service can be used through mobile application as well as mobile browser.
The banking regulator has maintained distinction between mobile banking, internet banking and call centre banking transactions, and has been reporting separate data for the three alternate delivery channels (ADCs). However, a mobile phone can be used to access internet or call a banks helpline for a banking transaction - which blurs the line between these three channels.
In fact, the banks mobile banking applications are accessible through both internet-enabled mobile phones and personal computers.
Therefore, the actual quantum of ransactions originating from mobile phones may be higher than the Rs7.35 reported billion in the Jan-Mar period. As per the SBPs quarterly review, the three ADCs collectively resulted in 3.7 million transactions for Rs135.6 billion during the period. Over 90 percent of that value is owing to internet banking- however, it is not known how much of those transactions were performed through internet-enabled handsets or smart phones.
In any case, more Pakistani commercial banks need to introduce technologies and invest in ADCs to reduce their operational overheads and inefficiencies. By launching mobile banking platforms, they will not only get to retain their share of customers, but also open up another revenue stream through levying fees and charges on this service.