Mobile Banking Innovation: Consumer Behavior in Ghana

Mobile device ownership continues to rise exponentially. These devices are having a great impact on consumers’ habits and banking behavior; there is, in fact, a dramatic increase in the use of mobile devices for financial transactions and services. Mobile banking is on its way to becoming the "new norm,” said Bob Neuhaus, global finance sector head at TNS (News - Alert). Lately, the focus has been on creating cutting-edge mobile technology to help the financial clients gain access effortlessly to a complete set of banking services and to prompt customer service.

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Many banks offer a proprietary app that can be downloaded (normally at no charge) by clients interested in accessing some of the services remotely. Consumers can carry out various functions through the apps safely thanks to a number of security layers and protections (PINsentry, for example, a device to generate an authentication code for logging into a system). This ensures the ability for a bank to interact with its clients in a variety of ways, with no need for a face-to-face relationship.

Mobile has become the most used channel in banking for its convenience. Banking through the mobile handsets has created a gateway for 24/7 access of clients to their financial information. Banks have been heavily investing to adopt the needed technology to ensure that consumers using all major mobile app platforms can have access to financial management, payments, and banking products, directly through the mobile phone; there are, however, concerns especially in the terms of privacy and security.

Nonetheless, the escalation in the use of mobile banking continues for smartphone and tablet users. An EIN News recent post looked into the “correlation established between mobile phone usage and banking behavior.” The post reports on the savings and mobile phone usage habits of individual consumers in Ghana. It noted Ghana's Digital Dilemma of being “a country where nearly one hundred percent of the adult population uses mobile phones, but only sixteen percent of those over fifteen years old save money at a financial institution.”

Brussels-based WSBI (World Savings and Retail Banking Institute) worked together with Home Finance Company (HFC) Bank, a commercial bank in Ghana, along with telecommunications company Airtel Ghana, a subsidiary of Bharti Airtel (News - Alert) Limited, in analyzing the transaction history and savings behavior of 180,000 HFC customers over a five-month period. Additionally, the project involved using significant data analytics coming from Cignifi, a renowned mobile data analytics and scoring company, to come up with their findings. Options were identified to better the savings and mobile phone usage habits of individual consumers in Ghana.

The research that studied the correlation established between mobile phone usage and banking behavior found there was a “high level of engagement (demonstrating the importance of financial services in their lives) but low average savings balance.” Such a project was not meant to classify mobile services in poor countries but rather to understand, reach, and serve a potentially large and untapped group of  low-income customer that could benefit, through their mobile phone, from mobile banking and its convenience in service delivery, said Chris De Noose, Managing Director of WSBI. Results showed that mobile banking in Ghana is widely adopted, but growth is slower than expected as shown from looking at the number of savings accounts.

More of the results of the project are summarized in a White Paper entitled Mobile Phone (News - Alert) Data as the Key to Promoting Financial Inclusion, available on the WSBI and Cignifi Web sites.