The world is rapidly moving towards a cashless society and mobile financial services are playing a big role in this transition. MFS allows users to make payments, transfer money, and access banking services using their mobile phones. This is especially useful in developing countries where traditional banking infrastructure is not well developed. The growth of the MFS industry can be attributed to the increasing adoption of smartphones and mobile banking apps, as well as the growing number of people who are underbanked or unbanked.
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What is Mobile Financial Services
Mobile financial services (MFS) is a term used for financial services accessed through a mobile device. MFS can include basic banking and payment services, as well as more sophisticated products such as credit, insurance, and investment products. The growth of MFS has been driven by the rapid expansion of mobile phone ownership and internet access, particularly in developing countries.
The mobile financial services (MFS) landscape is constantly evolving as mobile technologies and devices advance. MFS providers must continuously adapt their offerings to stay ahead of the curve and meet customer needs. In order to provide the best possible service, MFS providers need to have a good understanding of the latest trends in mobile technologies.
Pros of Mobile Financial Services (MFS)
Technology has revolutionized the way we live and work, and mobile financial services are one of the most convenient ways to manage your finances on the go. Here are some of the benefits of using mobile financial services:
1. 24/7 Accessibility:
Mobile financial services give you 24/7 access to your accounts, so you can check your balance, transfer funds, or pay bills anytime, anywhere. You have the freedom to access your fund any time of the day and any day of the week without limiting working hours or vacation. Your mobile wallets are with you.
2. Convenience:
With mobile financial services, there’s no need to visit a bank branch or ATM – you can do all your banking from your smartphone or tablet. You can easily and instantly check balances, transfer funds, even deposit checks, find ATM locations, and many more.
class=”wp-block-heading”>3. Security:
Mobile banking is secure – most banks use encryption technology to protect your personal and financial information. Plus, if you lose your phone, you can usually disable access to your accounts remotely. In addition to your concern, your service provider is also in the fight to secure your fund. MFS can help reduce crime by allowing users to store funds electronically instead of carrying cash.
4. Lower costs:
Mobile banking can save you money on fees for things like wire transfers or overseas transactions. And if you use mobile payments instead of cash, you’ll eliminate ATM withdrawal fees altogether.
Financial inclusion
MFS is the most influential financial inclusion weapon in developing countries. Bangladesh has also used the weapon in the right way over the years in the financial inclusion of remote people outside traditional banking. MFS can help people in developing countries who do not have access to traditional banking services. MFS can help promote financial inclusion by providing access to financial services for people who are otherwise excluded from the formal banking system.
Optimizing your money
As you can pay instantly, you need not deposit beforehand and get stuck in your fund. Therefore, you are set to make optimum use of your fund.
Control on Funds
Your control is in your hands. Your mobile money can be controllable in versatile ways. Offering clarity of where your financial data is going. As you can monitor your transactions and balances anytime, your surveillance against fraud is always active.
Customized options
You are sometimes given customized options with the service providers based on the transactions.
Timesaving:
Your fund transfer or payment or finding balances are just a few clicks away. So you need not spend a lot of time on those anymore. You can send money quickly and easily to friends and family members who live in different parts of the world.
With MFS, there’s no need to wait in line at the bank or fill out paperwork anymore. Everything can be done quickly and easily on your mobile device. For example, if you want to transfer money to another account, you can do it in just a few clicks on your phone.
Banking on the go:
Your mobile phone is your on-the-go bank. All bank-related services are always with you everywhere.
Good for budgeting:
As all your tracks are recorded with balances, you can focus on the budgetary priorities.
Avail of a loan or add fund:
Your mobile app is enough to get loans digitally. So apply in your app and get loans instantly. You may instantly add funds from your banks, and credit cards to your MFS account. The features come free of charge.
class="wp-block-heading">No or low cost:
MFS provides most of the services free of charge. However, a few bill payments and cash out require fees.
Offers and Rewards
Offers and rewards are great for MFS users. Personalized offers are available as in-app notifications and SMSs. Users enjoy discounts on shopping and bookings.
Improved Customer Experience
Banks that offer digital banking services can also improve customer experience by providing self-service options and 24/7 availability. Customers can quickly and easily resolve issues without having to wait on hold or visit a branch during business hours. Additionally, online and mobile features provide greater transparency into account activity, helping customers stay on top of their finances.
Cons of Mobile Financial Services (MFS)
Though there are many advantages to using mobile financial services, there are also several disadvantages you must be careful to minimize the extent of drawbacks.
One downside is that it can be easier to mistake a legitimate banking app for a fake one. This could lead to someone unknowingly downloading a malicious app that could steal their personal information.
Theft
Additionally, mobile devices are often lost or stolen, which could give thieves access to your banking information if you’re not careful about securing your device.
Safety
Another challenge is keeping your information safe and secure. This includes making sure your passwords are strong and not sharing personal information with anyone. Mobile apps can sometimes be less secure than traditional online banking platforms, so it’s important to make sure you’re using a reputable and secure app from your bank or credit union.
Customer Care
Poor customer service Another common complaint about mobile banking is poor customer service. If you have an issue with your account or need help using the mobile app or website than it would be in person at a bank branch. It can be difficult to get in touch with someone who can help you resolve the problem. If you have a question or issue that can’t be resolved through the automated system, you may have to wait on hold for a long time before speaking to someone.
Cybersecurity
Cybersecurity As more and more financial transactions are conducted online, cybersecurity risks have increased exponentially. Hackers are constantly looking for new ways to break into company systems and steal sensitive data, such as customer credit card information or account passwords. Financial firms must invest heavily in security measures to protect themselves from these threats, which can often be costly and difficult to implement effectively.
Interoperability
Another issue is interoperability. Different banks and service providers use different technologies and standards, which makes it difficult for customers to use multiple services. There are also concerns about fees, transaction limits, and customer service. Recently, Binimoy platform has been launched in Bangladesh to have more freedom in interoperability.
Inconvenient for Some Transactions:
There are some transactions that are just easier to do in person. For example, depositing a check or withdrawing large amounts of cash. If you need to do these types of transactions frequently, mobile banking may not be right for you.
Limited features:
MFS apps generally have fewer features than online banking on websites or branches. This means that customers may not be able to do everything they need on their phone as they could on their computer. For example, some people may still need to visit the bank in person in order to deposit cash or checks or speak with somebody about more complex issues like loans and investments.
Why Mobile Financial Services grew fast
Mobile financial services are providing opportunities for people who have traditionally been excluded from the formal financial system. There are a number of reasons why MFS is particularly well-suited and growing fast in developing countries context:
1. Mobile phone penetration is high and growing: As the mobile device penetration is rapidly growing, MFS grew fast with the devices.
2. Low banking penetration: Especially in developing countries, there are lots of unbanked population with formal banking access. MFS has provided a great way of financial access for those left over people.
3. Lack of infrastructure: Many parts of Africa lack basic infrastructures, such as roads, electricity, and reliable postal services. This makes it difficult for traditional banks to reach potential customers in these areas.
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4. Cultural factors: In many cultures, women are not allowed to open bank accounts in their own name. This limits their ability to access formal financial services but does not necessarily preclude them from using mobile money services which can be accessed via a mobile phone handset registered in another person’s name (e.g., a husband’s).
5. More at less: Mobile Financial Services are great weapons for ensuring more services and financial inclusion with less time and cost. Versatile advantages have speeded up the penetration with higher growth.
Future of Mobile Financial Services
Mobile financial services are revolutionizing the way we bank and manage our finances. They offer a convenient, fast and secure way to access our money anytime, anywhere. According to a recent report by Juniper Research, the number of mobile banking users is expected to reach 1.8 billion by 2021, up from 1.4 billion in 2016.
This represents a compound annual growth rate (CAGR) of 9%. The report also found that the value of transactions made through mobile banking will increase from $8 trillion in 2016 to $27 trillion by 2021, again at a CAGR of 9%. So what’s driving this rapid growth?
And what does the future hold for mobile financial services? Let’s take a look… One of the key drivers of this growth is the increasing availability of affordable smartphones and data plans.
This has made it possible for people in even the most remote areas to connect to the internet and use mobile banking apps.
Conclusion
Mobile financial services (MFS) is much more convenient since you can access your accounts and make transactions anywhere, anytime. Additionally, MFS tends to be more affordable since there are no physical branches or ATM fees to worry about. Finally, MFS is often more secure than traditional methods since it uses advanced security features like fingerprint recognition and two-factor authentication. However, there are a few disadvantages to mobile banking that customers should be aware of.
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