Friday, August 23, 2013

The mobile financial services space is exploding

A good indicator for an industry is the number of job it requires to fill. In recent years the mobile financial services space has seen tremendous growth as you can see from the increase in the number of job postings with the words mobile financial services. From indeed.com we can see an amazingly good upward trend.


mobile financial services Job Trends graph

This is good news for the financially underserved as they will certainly benefit from some well thought out services. MFS companies have their work cut out for them as they are creating a new space and as usual a lot of them will choose the wrong business model. Some of the biggest concerns for these type of services are:
  • Legislation - In LATAM countries like Peru are issuing a whole new set of regulations regarding emoney and the type of companies that can provide services. In others, like Argentina, this is a grey area and in others there is no regulation.
  • Adoption - making services that people use is difficult. Earning the trust of the consumer, being user friendly- and fast- enough to be practical. Having the right product mix, etc. etc.
  • Competitors - everybody and their uncle is getting in on the action. Although, the primary entrants are the incumbent financial industry and the MNOs legislation may open the door to new entrants (like in Peru where MNOs are by law required to open their USSD channels).
  • Competing technologies - USSD, SMS, apps, email. There are plenty of technologies to choose from and not a single one is a clear winner.
  • Price - this one seems like an easy one, but remember that you are competing with cash so the price of the primary competitor is zero. Pricing a P2P under these conditions is hard. At the end of the day somebody has to pay for the service (infrastructure, commissions, etc.)
In any case, this is an interesting time to be in this space and the company that gather momentum and volume (like MPesa in Kenia) can reap the benefits or dominating this market.



3 comments:

  1. Opening a big mobile company is my dream and I want to complete this dream as soon as possible and for this I need advice related to the steps of company formation and I am also searching about the company that can help me for company formation...

    ReplyDelete
  2. By company formation I would suggest talking with a lawyer who knows about corporate taxes and how to protect your personal assets in case the company fail.

    If you do open a big mobile company. Let us know :) -- good luck!

    ReplyDelete
  3. Great idea you shared that is mobile financial service.I really impressed from your graph.Nice article


    Ali mudeen

    ReplyDelete