How Developing Nations Are Driving The Mobile Banking Revolution

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Mobile banking is proof that technology makes it simple for businesses to open the floodgates of the financial system to the masses through online payment gateway. Furthermore, fintech (of which mobile banking is a subset) has transformed the banking industry, forcing it to make changes that would otherwise be difficult.

However, we now live in an era of customized banking services supported by a solid digital infrastructure. And new technologies are just emerging, which means we are on the verge of seeing major game-changing products, features, and services, particularly in developing countries.
We've heard many stories about mobile banking innovation from around the world, such as NPCI's Interbank Mobile Payment Service (IMPS), M-Pesa, and others.

They changed the face of banking in developing countries by being first to market. However, they may be just getting started in the fintech space.

Mobile Banking Is Helping Build Resilient Nations
Access to banking services in remote areas is nearly non-existent in developing countries such as India. However, mobile banking channels power to provide ...
... people with banking services, making financial inclusion a reality.

Mobile banking, also known as mobile money, is a potential channel for providing banking services via cell phones.
Customers can make deposits and withdrawals, transfer money from accounts, pay bills, and inquire about balances using their mobile phones. Investment options and other schemes are the most recent additions to this facility.

Furthermore, during difficult times, mobile banking made it easier to thrive despite the difficulties. For example, eight out of ten Indians now rely on mobile banking apps as a result of the pandemic. Even in the future, digital adoption can protect people from uncertain times and challenges.

With no geographical barriers, people can become self-sufficient and access financial services as needed.

Developing Nations are Ahead in Mobile Banking Game
Developing countries have, in some ways, outsmarted developed countries in mobile banking development; history demonstrates this.
As the gateway to financial inclusion, developing countries are reaping the benefits of a mobile banking infrastructure.
On the other hand, developed countries rely heavily on cash transactions and other secure mediums such as credit cards.

The rock-solid banking framework makes the process relatively rigid in developed countries, making earlier digital adoption less likely.
This is why developing countries are jumping on the digitisation bandwagon before developed countries can plan implementation.
Tie-Breaker Innovations In the World Of Mobile Banking
We've come a long way since NPCI's person-to-person and business-to-business mobile banking. Here are the most recent mobile banking innovations:

APIs
APIs, or Application Programming Interfaces, enable communication between two software apps, systems, and other services, including third-party services.

This translates to secure communication between banks and third-party products in the banking ecosystem.

If done correctly, banks could integrate multiple channels, apps, services, devices, and more. This speeds up processes such as customer mobile wallets, card systems, third-party financial service providers, payment switches, and so on.

Instant payments
The best online payment gateway services that are real-time, convenient, inexpensive, and simple are the rage right now, or our way of life post-pandemic. This upended the rather traditional process of transferring funds in three business days.

Furthermore, transaction prompts like email, push notifications, account updates, and other requisitions are now real-time.

Biometric
Banks have integrated human physical characteristics (such as fingerprints, iris, and voice) to identify specific customers and their account belongings, taking extreme security precautions.
Biometrics is extremely secure because there are no drawbacks, such as password loss or forgetfulness. Biometrics are also more difficult for hackers to crack and serve as the best firewall.

Chatbots, AI, ML, and automation
Customers no longer have to wait in lines or call to get their questions answered. Chatbots, on the other hand, are built with AI technology to connect with people and provide real-time answers to their questions.
They are digital agents who provide services through various channels such as websites, live chat, social media, and so on.

Banking institutions have used AI and machine learning to help with cost-cutting, productivity, and process improvement.

Banking services are now automated, saving employees the time and effort associated with manual processes. Repetitive human tasks are now delegated to machines and systems that can do the job faster. This makes it easier for both employees and customers, and it reduces the possibility of errors.

Data analytics
Banks are the custodians of customer information. To pinpoint preferences and choices, they now rely on data collected and sourced from customers.
This enables banks to provide detailed and tailored services and products to their customers. Personalisation is the mantra that banks are now following in order to achieve customer engagement.

Is Mobile Banking Free From Any Setbacks?
Unfortunately, mobile banking is not without its critics, challenges, and risks.

Mobile banking is a means to achieve financial inclusion, not a panacea for financial difficulties. Here are some of the difficulties to be aware of:

Infrastructure - Mobile banking, like brick-and-mortar branches, is reliant on telecom operators' infrastructure. As a result, any misalignment of such operators has an impact on mobile banking services.
Internet connectivity remains a challenge in many remote areas of developing countries, and success is dependent on internet coverage.
Operational challenges - Security in mobile banking remains a concern for both leaders and users. Mobile transactions are vulnerable to fraud and data breaches.

Any shortfall can have an economic impact on either party to the transaction, making it a significant risk to be aware of.
Regulatory impediments - In legal terms, the mobile banking process is still not open for resolution. Policymakers and relevant stakeholders are still unable to reach an agreement on constructing parameters that would aid in the development of a network or market. The entire process of developing a secure mobile banking gateway is still in progress, with no final layout approved.

Despite the drawbacks, mobile banking represents a solid blueprint for facilitating financial inclusion. The pandemic is the primary driver of this process, and it serves as proof that we should incorporate it into our lives. The use is already widespread throughout developing countries.