Ghana bank executives are concerned that the Electronic Money Issuers guidelines may have set the stage for a possible entry into the banking arena by telecom operators in the face of an exponential increase in mobile money deposits at the banks.
At the end of the first quarter of this year money deposits referred to as the balance on the float, surged from GH¢19.6 million in 2012 to GH¢581.3 million .
According to the 2016 Banking Survey on the theme: “How to win in an era of mobile money,” the impact the growing mobile money trend could have on the operations of commercial bank was assessed.
Respondents of the survey including CEOs, Chief Financial Officers and Heads of E-banking of commercial banks confirmed mobile money is evolving into “banking on your phone” providing customers with banking alternatives.
The survey discovered that the framework for mobile money operations as established by the central bank, allows mobile network operators to develop to the point where they can operate mobile money services independently of banks.
“Telcos will at that point become direct competitors to banks instead of partners and service providers to the industry. To curtail this threat, most banks are quickly building the relevant infrastructure that allows them to partner with telcos to jointly deliver mobile money services. Respondents believe there is enough opportunity in mobile money for both banks and telcos,” the PwC survey said.
In 2015, mobile money operators recorded a value of transaction of about GH¢35.4billion, an increment of more than 216 percent over the 2014 figure.
According to B&FT, last year’s transactional value was recorded on the back of more than 260 million transactions in a market that has since seen a new entrant, Vodafone Cash, powered by the namesake mobile operator.
The value of mobile money transactions when put into perspective is just GH¢5.85 billion shy of the total deposit liabilities of the 29 banks as at the end of last year, a figure that is likely to be surpassed by the mobile operators this year.
Since the introduction of mobile money to the Ghanaian market in 2009, it has played a key role in the push for financial inclusion. According to data from the World Bank, in 2010 a relatively large segment of the Ghanaian population – 44 percent, was excluded from the financial services sector altogether.
During this period, access to formal banking services hovered around 34 percent, with banks creating innovative channels to penetrate the market further. By 2015 however, the segment of the population excluded from the financial services system had dropped to 25 percent, according to the World Bank.