Increased consumer mobility has presented an opportunity to financial institutions in the Middle East and Africa (MEA), with current banking services estimated to penetrate less than 35% of the population in the region, according to IDC research.
“Increased device capacity and faster Internet speeds have boosted the adoption of mobility among consumers. Most financial institutions across MEA have adopted some form of mobile technology, which will be pivotal in capturing a large share of the unbanked market and adding to the banking experience for existing customers,” says Bijen Ramdas, senior research analyst at IDC Financial Insights Middle East, Turkey and Africa.
Ramdas adds that regulation in the MEA mobile banking market is yet to reach an advanced state of maturity, which should be viewed as an opportunity to create solid security policies and develop trust in mobile banking technology.
IDC says security authentication standards on mobile devices are strict and include features like two-factor authentication, which are usually the norm.
A lack of consumer knowledge was commonly cited as the reason for security breaches via mobile channels, rather than the actual hacking of devices, IDC says, adding that, in response to these security breaches, there has been a strong trend from financial institutions to focus on increasing customer awareness and security education.
Meanwhile, SMS usage is growing faster than Web-based and downloadable applications. While the overall trend may be minimal, it continues to drive home the fact that SMSes are far more appealing, since they can be used by consumers without purchasing expensive data plans. This is particularly true in the MEA region, where penetration of lower-end mobile phones is high.
IDC says financial institutions should continue to embrace all the features of mobile phones, as this will facilitate transactions and provide superior customer service.
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