A Perfect Storm

by: Michael Wolper

A major paradigm shift is afoot in the financial world. Specifically: we are poised to see explosive growth in the mobile banking space that would not have been possible at any prior time in history.

Currently, there are 2.5 billion underserved adults, when it comes to traditional financial services. Couple that with the 1.93 billion readily connected smartphone consumers, and it becomes clear: the move toward mobile banking is all but inevitable. But while the numbers tell one story, real life events hit mobile banking growth potential home.

Consider a remote, underserved Mexican village, where every month a designated townsman is tasked with driving several hours to the nearest money transfer office, to retrieve funds wired by relatives in the States. After hemorrhaging money on gas, transaction fees and other expenses, our ambassador returns home holding a fraction of the amount originally sent. Now consider the same transaction done over a smartphone app, without having to travel, at a cost significantly less those associated with traditional brick and mortar banks.

The social aspect of this new approach can be astounding. Global remittances currently constitute more than $583 billion annually. With streamlined transactions slashing up to 5.9%, from the 7.9% global average wire transfer fees typical with traditional banking structures, mobile banking services can direct some $34 billion back into the pockets of those people who need it the most. It’s a new way for banks to give back to the community, and a humanitarian outreach made possible by smartphone technology.

John Lennon famously asked us to “imagine all the people, sharing all the world”. Could he have ever predicted just how globally connected the world would one day become, due to advances in FinTech?

Editors Notes: This entry has been submitted to the FINTECH Book, the world’s 1st globally crowd-sourced book on FINTECH. Readers that enjoyed this initial abstract are invited to share and like it so that it may be featured in a longer version.

The FINTECH Book is due to be released in April 2016 and is available for Pre-Order on Amazon.