Banks can tap cellphones to serve clients

Banks can tap cellphones to serve clients

Mumbai: Indian banks and lenders can reach an additional 30 million households by pursuing the “next-billion" consumers, says a report of The Boston Consulting Group (BCG) released on Tuesday.

According to BCG, there are still a billion people across the world that are potentially profitable customers. One of the tools to reach them is through mobile phones, which have truly become a mass-market device now, with a growing subscriber base all across the world that is growing faster than the Internet.

The potential customers, according to the report, Next Billion Consumers: A Road Map for Expanding Financial Inclusion in India, are from the segment that “sits just above the poorest-of-the-poor and just below consumers who are already targeted by most banks."

Janmejaya Sinha and Arvind Subramanian, who are the authors of the report, emphasized the need to tap mobile phone services to reach customers as nearly 26 million people in the world who have a fluctuating income base possess mobile phones but no savings accounts. About an additional 10 million, despite having access to a savings account, are infrequent users of the banking system, the study revealed. Sinha and Subramanian cited the example of Kenya, where telecom firm Safaricom Ltd’s rapidly growing M-PESA account allows easy money transfers through mobile phones.

“In India, the mobile handset could do for banking exactly what the personal computer did in developed markets...," the report said.