Despite the collaboration between telecom companies (telcos) and banks, a survey by PricewaterhouseCoopers (PwC) has revealed that banks are on the losing end as a result of the mobile money platform’s success.
According to the survey, 80 per cent of 19 bank executives, who responded to the survey, confirmed that the mobile money platform had led to erosion of banks’ revenue generated from fees and fund transfers. The amount of revenue lost, though, was not stated.
What this essentially means is that monies that the banks used to generate from charges on customers who employed their services to transfer funds to other accounts are now being lost to the telcos, as customers now find it more convenient to use the mobile money platforms than banks.
“For 80 per cent of the respondents, mobile money is having the greatest impact on their businesses. Bank executives are of the view that the uptake of mobile money has contributed to eroding revenue, especially fees on fund transfers,” the survey said.
The report, however, added that banks remain committed to the country’s financial inclusion agenda, and as such intensification of the financial inclusion drive and growth in mobile and Internet banking will facilitate greater credit access.
In addition, 83 per cent of the surveyed banks expect to invest significantly in technology and create agile businesses over the medium-term – which will be crucial to meet customer demands and grow profitability.
Again, despite some activities of fintechs causing disruptions for banks, the survey said more than 80 per cent of the banks viewed them as partners rather than competitors, and are willing to collaborate with them.
The survey also showed that 92 per cent of the respondents placed a high priority on cyber and information related issues; with 83 per cent of the banks saying they have a cyber and information security plan in place which they follow religiously.
However, the banks added that the cost of engaging qualified consultants for cyber security services remains high and continues to be a challenge.
The PWC says it expects to see growth in underwriting credit to both the private and public sectors, and this will be largely driven by strong demand across expanding economic sectors.
It further said that it expects a rebound of confidence in the banking sector following recapitalisation, good corporate governance practices, and sanitisation of the non-bank financial institutions, among others.
Specifically as regards Nigeria, the telcos are also actively involved in some aspects of financial services delivery that is for now not enough to threaten bank revenue.
However, the recent resolution to issue licences to enable them operate under the Payment Service Bank platform could disrupt the current establishment in future.
According to report in mondaq.com, while it may be too early to predict, the numbers show that telcos are connecting with locals at a higher rate than any bank currently.