The world of banking and saving keeps getting smaller and faster – in Nairobi recently Kenya’s biggest mobile phone operator launched a service called M-Pesa that allows subscribers to send cash via SMS using their mobile phones.

For most consumers, Africa and financial services are only paired together when they are reading media reports relating to Nigerian scams.

But before you dismiss this as another potential scam resulting in people ending up with less money than they started with, the service is a bonafide operation developed by Vodafone which owns a 40% stake in the developer Safaricom.

So far in Kenya more than 10,000 people have signed up with about $8 million shillings (or about US$115,000) being transferred so far.

The deal effectively turns mobile phones into money transfer facilities.

A subscriber has to deposit money into a retailer’s account – typically a newsagent or pharmacy – after which they can SMS the funds to anyone who has a mobile phone who in turn can then go to an agent and withdraw the cash by showing them a secret code and some form of identification.

The agent of course gets a commission but this is apparently compatible with bank fees.

While this service is actually pretty limited – you can’t pay a bill of buy a pair of jeans yet – it’s better than the Australian trial which has people being able to buy coke and pay parking meter costs with their phone and does pose some interesting questions for the future of the banking and funds management industry in Australia.

The last shiver of the baby boomers are now entering their middle 40’s and they are the last generation to not be particularly technically savvy – the generation behind them, the X’s, the Y’s and the shadow boomers are all to a smaller or lesser degree into technology.

The outworking of this is leading to something we are observing as a relatively new behaviour in this group.

For instance, as they enter the home loan market in particular Xers and Ys tend to seek features and benefits and recommendations much more than the generations before them did.

And what do they search with – well the Internet of course.

They use it to verify what they are thinking and to compare features and to see who they can trust – remember that for much of this group the Internet is the fountain of truth.

Why then – in a country that has one of, if not the fastest growing superannuation and savings markets in the world is the financial services industry so poor at running Internet based systems.

No one bank, funds manger or super fund dominates this space in the mind of the customer – which means the opportunity to reach out to this increasingly attractive segment from a technological and interactive sense is still available for one or more groups to own.


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