Mobile banking roadmap laid out next week

Friday, December 09, 2011

A roadmap for the development of comprehensive mobile financial services system is to be laid out at a symposium on Monday, December 12, says Dr Maurice McNaughton, Director of the Centre of Excellence of the Mona School of Business (MSB), at University of the West Indies (UWI), Mona.

Organised by Solutions for Society, a UWI Think Tank, and the Mona School of Business, the symposium will be held at the Faculty of Law Building at the University, Dr. McNaughton said. Among the key participants will be Carl Rosenquist, an international mobile payments expert, who was commissioned to develop the technical and commercial framework for a mobile financial service delivery system, which targets those persons who currently do not have easy access to the established banking network.

"Mr. Rosenquist will present a technical architecture for a Jamaican mobile payments system," Dr. McNaughton said. "He will also be presenting a commercial business model with projections based on the volumes we estimate from the take-up of mobile services,"

These findings are based on international benchmarking as well as a series of consultations with policymakers, regulators and industry leaders in the financial and telecommunications sectors, which Mr Rosenquist has been conducting since March, Dr McNaughton pointed out.

Recent mobile financial services initiatives in Jamaica have tended to target those persons who already have access to the established banking network. The lower cost of mobile delivery systems is the basis on which such financial services could be extended to those currently 'unbanked', on a commercially viable basis, given this country's high level of mobile phone ownership.

The premise underpinning the study is for mobile financial service to be delivered through a shared common platform, according to Professor Evan Duggan, Executive Director of the Mona School of Business, and another participant in Solutions for Society. He said, "This would allow more financial service providers to participate in the system and keep the operating costs to providers and access costs to subscribers very low.

According to Professor Terrence Forrester, Director of Solutions for Society, "The validity of this integrated approach will obviously depend on the size of the population which can benefit from such a framework" . He cautioned, "If the size of the 'unbanked' were less than 10 per cent of the population, as is the case in economies with a much higher penetration in retail banking services, then the commercial impetus and economic opportunity associated with mobile financial services would not be as compelling."

Prior to this study, there was no definitive estimate of the size of the country's population which is excluded from the formal financial system, Professor Forrester explained. Therefore, another issue to be outlined at the December conference will be the result of a survey of the country's 'unbanked', which was conducted by Dr Dawn Elliott, Associate Professor, Department of Economics at Texas Christian University in conjunction with a team of statisticians from UWI.

The study by Dr Elliott, which was also commissioned by Solutions for Society, not only provides a definitive estimate of the 'unbanked', but also examined the qualitative reasons why more persons are not using the formal financial services, Professor Duggan stated. It will look at the actual needs of the underserved as there may be several factors playing a role in limiting access to the formal system.

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Mobile banking roadmap laid out next week