4 Nov 2014

MNOs cash in on Africa’s growing banking sector

By Nour Al Atassi, Regional Vice President and Managing Director, Middle East and Africa, Syniverse.

Africa is taking a cue from global GSMA forecasts indicating that more than 350 mobile network operators will launch LTE services by the end of the year. More and more of Africa’s operators are bypassing 3G to rollout LTE networks in preparation for the country’s increasing smartphone penetration that is being driven by a rising economy and falling prices for connectivity and components. The mobile technologies enabled by high-speed LTE are creating a mobile revolution in Africa that outpaces some big-name cities in the developed world as African nations are increasingly turning to mobile to overcome challenges associated with the lack of infrastructure and accessibility.

One of the major users of mobile technology in the region is the financial sector, which is leveraging mobile’s versatility to reach those who find it difficult to access ATMs, accounts, credit cards or cash. Mobile payment wallets are enabling subscribers to transfer money, pay their bills and purchase goods via their phones. The proliferation of this type of mobile interaction was highlighted in a GSMA report revealing that 52 percent of the 219 mobile money deployments made around the globe in 2013 were in Sub-Saharan Africa. Mobile banking in Africa is largely conducted via SMS, which would make up a major portion of the $10.4 billion in Middle East and North Africa (MENA) operator revenues for 2013 that Portio Research reported in its 2014-2018 Mobile Messaging Futures report. Additionally, some industry analysts report that operator revenues in MENA will reach up to $96 billion by 2018.

Pressing on the banking opportunity in Africa is the influx of more than 33 million international business and leisure travelers who’ve come to rely on their mobile devices for daily activities, including banking, and need the same quality of mobile service while traveling anywhere in the world.

Global Mobile Banking Trends Impacting Africa 

With only one in three people having subscribed to a mobile service in Africa, there is much room for growth. There are few other regions in the world with as much room to scale. As smartphone penetration increases, device banking will enable operators in Africa to create new revenue streams by selling the subscriber data they hold on their mobile users to local and international financial institutions. This data, known as mobile context, looks at a user’s browsing behavior, geolocation, purchasing preference and opt-in consent. Financial institutions can integrate this mobile context data with their own customer databases to create a complete customer profile that tells the unique story of where an individual frequents, their purchasing preferences and their social networks. As a result, customers can gain banking access and personalized services.

Advanced use of mobile context allows financial institutions to cater to individual accountholders by providing real-time account updates and notifications, fraud protection, customer service updates and loyalty campaigns. These communications can come via multiple channels, including SMS, MMS, web, social networks, mobile app push notifications and email.
An example of how this type of data is being used for those traveling to and from Africa is the fraud protection pilot program between Syniverse and MasterCard. The service ties the geolocation of a customers’ opted-in mobile device with the location of their credit card transaction to confirm that the mobile device is in the same location where a sale or purchase is taking place. With 80 percent of declined transactions made abroad actually being legitimate, these types of services are essential to reducing the amount of declined transactions for traveling banking customers.

Because this data is so valuable to enterprises, including financial institutions, the mobile context market is estimated to be worth $44 billion annually. The key to tapping into this market is by investing in LTE and leveraging partnerships with a global mobile transaction provider.

Banking on LTE

While LTE provides the bandwidth necessary to provide subscribers with next-gen mobile banking services, a mobile transaction processor with global reach can eliminate the costly complexities associated with managing the behind-the-scenes business and technical relationships between operators and financial institutions. To fully benefit from LTE, it’s essential that operators in Africa are able to use a single connection to a transaction processor to obtain flawless interoperability with their partnering operators and are able to exchange mobile context data with financial institutions. The one-to-multiple connections approach allows operators to focus on how to best meet subscriber needs without concerns over disparate network and technology standards.

Implementing LTE infrastructure will remain a critical element in enabling African nations to sustain their rising number of smartphone subscribers, mobile context users and their growing banking sector— all of which rely on fast mobile connections.

About Syniverse 
Syniverse is the leading global transaction processor that connects more than 1,500 mobile service providers, enterprises, ISPs and OTTs in nearly 200 countries and territories, enabling seamless mobile communications across disparate and rapidly evolving networks, devices and applications. We deliver innovative cloud-based solutions that facilitate superior end-user experiences through always-on services and real-time engagement. For more than 25 years, Syniverse has been simplifying complexity to deliver the promise of mobility – a simple, interoperable experience, anytime, anywhere. For more information, visit www.syniverse.com, follow Syniverse on Twitter or connect with Syniverse on Facebook.

Syniverse will be at AfricaCom 2014 at Stand - Dont miss out! Register here: http://africa.comworldseries.com/register/ 

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