The central bank has refused to rule out the possibility of mobile money operators entering into the commercial banking space amidst concerns from banks about the effects such a move will have on their operations.
Second Deputy Governor of the Bank of Ghana, Dr. Johnson Asiama, speaking at the launch of the PwC 2016 Banking Survey said the guidelines on Electronic Money Issuers (EMI) which regulate the mobile money industry is being revised and it would address the issue of whether telcos can operate banks.
Dr. Asiama, who appeared as a special guest at the PwC event last week said the central bank wants to tighten its grip on the mobile money operations and is in the process of revising the EMI guidelines, changing it into law.
“This gives us the opportunity to address some of these issues when they arise. I will leave it as it is for now. We have enough platforms to engage stakeholders in that dialogue. We are still doing consultations. We are open to comments and suggestions on the matter,” he said.
The 2016 Banking Survey which was on the theme: “How to win in an era of mobile money,” assessed the impact the growing mobile money trend could have on the operations of commercial bank.
Banks’ fear
According to respondents of the survey which included CEOs, Chief Financial Officers and Heads of E-banking of commercial banks, mobile money is evolving into “banking on your phone” which provides customers with alternatives to traditional banking.
The bank executives, who are currently struggling to attract consumer deposits, fear that the Electronic Money Issuers guidelines have set the stage for a possible entry into the banking arena by telecom operators in the face of an exponential increase in mobile money deposits at the banks, referred to as the balance on the float, from GH¢19.6 million in 2012 to GH¢581.3 million at the end of the first quarter of this year.
Judging by the framework for mobile money operations as established by the central bank, the survey found out that it is possible for mobile network operators to develop to the point where they can operate mobile money services independently of banks.
“Telcos will at that point become direct competitors to banks instead of partners and service providers to the industry. To curtail this threat, most banks are quickly building the relevant infrastructure that allows them to partner with telcos to jointly deliver mobile money services. Respondents believe there is enough opportunity in mobile money for both banks and telcos,” the PwC survey said.
Mobile money exponential growth
In 2015, mobile money operators recorded a value of transaction of about GH¢35.4billion, an increment of more than 216 percent over the 2014 figure.
Last year’s transactional value was recorded on the back of more than 260 million transactions in a market that has since seen a new entrant, Vodafone Cash, powered by the namesake mobile operator.
The value of mobile money transactions when put into perspective is just GH¢5.85 billion shy of the total deposit liabilities of the 29 banks as at the end of last year, a figure that is likely to be surpassed by the mobile operators this year.
Since the introduction of mobile money to the Ghanaian market in 2009, it has played a key role in the push for financial inclusion. According to data from the World Bank, in 2010 a relatively large segment of the Ghanaian population – 44 percent, was excluded from the financial services sector altogether.
During this period, access to formal banking services hovered around 34 percent, with banks creating innovative channels to penetrate the market further. By 2015 however, the segment of the population excluded from the financial services system had dropped to 25 percent, according to the World Bank.
Source: B&FT | Ghana