Cellphone banking soars despite economic downturn

The bank says that a year ago its monthly cellphone banking transactions were 1.2 million, but are currently at more than 3.5 million transactions per month. The bank says it has almost doubled its` financial transactions from just under R260 million to R500 million per month.

Today, more than 600,000 customers are actively using cellphone banking and this number is growing. More important is not the volume and value of transactions but number of people that have used and benefited from cellphone banking.

For a traditional bank such as FNB, cellphone banking has successfully managed to take banking into the customers' homes. It enables them to make transactions from anywhere.

Ironically, the current economic climate in South Africa is probably one of the main contributors to the massive growth in cellphone banking, especially in the last few months. Apart from cellphone banking being free from bank transaction charges at the bank, it is saving millions of rands to users by allowing them to bank from anywhere.

Since the bank launched cellphone banking in March 2005, it has become clear that in the short term, traditional banks will be the pioneers in driving the success and adoption of the method. Even more surprising is the effect that cellphone banking is having on traditional banks. It is changing the approach of doing banking for traditional banks as well as distribution strategy, altering the focus on how to offer services to customers, provide services to customers specifically designed to meet their needs - conscious of their lifestyle and daily needs. It has changed the relationship between traditional banks and customers.

Unlike computers, cellphones do not have a wealth barrier, nor do they require one to be born during the last decade or to hold a qualification. This is the first technology that a bank has deployed that serves entry-level banking customers as well as higher-income groups. However, this is not a stand-alone service. Customers still want to be banked and deal with a brand they trust. They still need to be shown how to use a cellphone to bank and be taught how to do it in a secure and responsible way.

Unlike any other banking channel, cellphone banking's peak usage is at night, demonstrating the ‘everywhere, anywhere' nature of the service. This banking platform saves customers the hustle of paying money to travel to a bank or an ATM to queue only to check their balance or transfer money into another account.

Whether one runs a small business or works six days a week, this method of banking does not interrupt one's daily schedule, as there is no need to travel. Perhaps cellphone banking will have a bigger impact on the public taxi industry, as more and more people move towards this trend.

Where to from here? Over the last few years, we have seen a proliferation of mobile payment and banking services. This has accelerated rapidly during the last few months, with a new service being announced nearly every week. Virtual mobile bank services are already available from most traditional banks, and individual successes are around the corner.