It used to be that mobile banking was the future. Today we can safely say that the future is here. Cellular phones are increasingly becoming personal assistants to individuals. Thus for a mobile banking application to be successful, it must necessarily be built on a sound understanding of this relationship between our phones and our personal lives. Failure to understand this relationship results in development of solutions inadequate to meet market needs.
In 2004, we set out to create a fortune 500 company in Africa, out of Africa and by Africans. Cellulant now operates the largest mobile payments ecosystem on the continent. We are trusted by over 50 banks, and have touched the lives of over 30 million consumers. We are also integrated into more than 30 mobile network operators. In that time, we have invested substantially in the development of mobile banking applications, and have built two of the top three apps in the Kenyan market. We also provide USSD based mobile banking for 11 of the largest banks in the country.
With all this investment in mobile banking technology within the industry, one would expect the adoption of the apps to be correspondingly high. Our deep experience has shown this not to be the case. In fact, our data shows that in Kenya only 3% to 10% of a banks’ customers ever make use of an app or dial a USSD. This stands in stark contrast to mobile money, where the leading player has been able to achieve usage upwards of 60% in any particular month. Unlike the popular quote, in technology at least, it seems that no matter how crafty the solution “just because you build it does not mean they will come!”
This fact is disappointing for most commercial finance institutions which invest in mobile banking applications in order to move their customers to a channel with lower cost-to-serve. There is also an expectation of increased revenues from services on a channel which creates a level of convenience that customers are willing to pay more for.
This is where Cellulant truly differentiates itself. At the core of our DNA is the need to listen and anticipate market needs. We have therefore recently invested substantially in developing a set of proprietary tools which enable a bank to accelerate adoption of mobile banking from current levels to upwards of 40% within a 3 month timeframe, and towards 60% over a longer time horizon. These tools make use of sophisticated analytics to profile customer groups based on aggregated behavioral data and suggest actions to drive individual customers to use the mobile banking channel.
Having employed these tools at some of our partner banks, the results have been phenomenal. Not only has usage on mobile increased, we have also seen an increase in mobile purchases of particular services in the region of 600%. This has corresponded with a significant drop in bank transfers to mobile money accounts, as customers have chosen to transact within their mobile banking applications instead. This increase in mobile banking adoption is a game changer in Kenya.
Ultimately, the institutions that will win on mobile are those that increase adoption to levels which enable them convert mobile into a heavily profitable channel and thus obtain a true competitive advantage. Cellulant is in the unique position to not only build innovative mobile banking solutions but also drive customers to embrace these solutions, in order to revolutionise the ways in which people interact with banks and their money.
Bryan Kariuki is the CEO of Cellulant Kenya. He can be reached at firstname.lastname@example.org. Connect with him on twitter @bryankariuki.