In 2004 if you told the Banks in Uganda that Telecom companies that had started penetrating the Ugandan Market where going to take out most of their business, the Banks would say that would never happen but 10 years down the road Mobile Money is King, and more people prefer it as a form of money transfer.
We send and receive money Instantly, there are mobile money kiosk almost everywhere you go and millions of shillings are transferred and received across all mobile networks via MTN Mobile money or Airtel Money transfers daily, but if I was to ask, where exactly do you think the banks went wrong, what would you tell me?
10 years ago, the banks saw a trend of feature phones raising and all they saw was people making phone calls and sending SMS, and while they were not bothered to think of how this device would help them to do more businesses, Telecom companies like MTN Uganda where busy shifting their business Model to help their customers to easily transfer money using these small feature phones and look how successful this has been to the Telecoms.
Today I believe we are having another Window of opportunity for banks to take back their business because I believe the same way Telecoms innovated around the banking systems and introduced Mobile money, Banks can innovate around Smartphones and start eating the Telecom company’s lunch.
My 10 year Insights:
10 years from today, I believe we shall have a bigger percentage of smartphone penetration in Uganda, this is not rocket science and I also believe people will be shopping and paying most of their bills online, I also believe though am not very certain that the Internet 10 years from now will be much more cheaper, reason being there will be better systems available and a lot of consumption of the Internet bundles.
How Telecoms are Failing:
The way I see Telecoms in Uganda today is the same way I look at banks 10 years ago, that is companies that are on the peak of their glory and which are doing little innovations around the system just to keep them going. When I see a telecom company making a deal with a movie cinema to have customers paying for cinema tickets using Mobile money I feel very happy partly because I love movies but on the other part it’s because as a customer these companies are thinking about me and some of the challenges I face to book a movie ticket which is very good but when I try to use their system to pay for the movie I find this very inconveniencing, all those steps of authentication and saving codes Hmmmmm, this reminds me of the bank systems years and I would rather go to the cinema and pay my bills there.
How Banks Can Rethink The System:
Well it’s not even about
rethinking the system, its about having the winning system. If I was the MD of any top bank in Uganda today my answer to this problem would already lie in my hands “a smartphone and an ATM card” and all I would need is a system that made online payment so fast and so easy people wouldn’t notice they have even paid money when they hit the BUY Button, then I would push my API to as many E-Commerce services and billing system in my market with high traffic as possible. I would then make all these transactions free because I know I can charge the owners of these systems when they come withdraw their money.
It’s that simple and I know all banks in Uganda can do this but well, you don’t have to listen to me and keep being on the losing side no one cares about losers anyway except me, and maybe Telecoms will wake up and use my advice to take more customers from you who knows.
If you have anything to add to this story please do in the comments section or tweet me some of your reactions @nickle_las.