Mobile money, mobile banking: Africa's telecom firms are becoming rivals for banks (Video)

Africa’s telecom firms are becoming rivals for banks
The number of people across Africa using mobile phones continues to grow.

The increasing volume of financial transactions made on these phones has enabled telecommunications companies across the continent to set themselves up as major competitors in the banking business.

The number of telecommunications companies offering financial payment services, like M-PESA in East Africa, has pushed these telcos into an area of business that is usually a core part of banking.

“I don’t think banks should see them as competition. We should see them as collaborators. On a lighter note, I do have a word for them – I call them ‘disruptors,’ in a more positive sense. They disrupt the status quo. I think banks should work more closely with the mobile phone companies,” says Ecobank‘s Group CEO, Albert Essien.

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Given trends in the telecommunications industry in Africa, mobile banking will likely play an even greater role in financial services across the continent in coming years.

70% of Africans have access to a mobile phone. The number of mobile subscriptions in Africa is estimated to reach one billion in 2015. Sales of internet-enabled smart phones is predicted to overtake that of traditional handsets within the next five years. Annual revenues from mobile data use across Africa is forecasted to reach $23 billion by 2018, three times the current figure.

Given that development of both the banking and telecommunications industries could boost economies across Africa, it is likely that there will be even more collaboration between both industries going forward.

Watch more videos from African Business Central.

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