Amdocs MFS: Jonathan Kaftzan's 2016 Trends

2015 was a landmark year for mobile financial services. Throughout the year, we witnessed unprecedented growth in all areas of MFS...

This saw the connecting of mature markets with the formerly untapped potential in emerging economies through the introduction of digital banks, greater volumes of international transactions, and overall growth in mobile payments.

How will 2016 build on the successes and innovations of 2015?

  • Increased NFC Adoption—Mobile wallets like Apple Pay, Samsung Pay, and Android Pay will become more popular. In addition, POS systems will increasingly become equipped with NFC terminals, making payments faster and easier.
  • More Digital Banks—By and large, millennials are not interested in making a trip to their local bank branch; they expect to be able to do it all from anywhere and everywhere with a few swipes and taps, and even older generations are following suit. With more banks following suit around the world, the trend of digital banks rising to meet the modern customer’s needs is another one to watch out for in 2016.
  • New FinTech Startups—Expect to see new players take on traditional banks by targeting specific niches of the market with user-friendly apps for trading stocks, making payments, or international money transfers. This enables them to provide their customers with a seamless tap and pay experience in real time, and offers an alternative to the traditional membership clubs aimed at increasing customer loyalty. We can expect to start seeing more innovation and/or acquisition, from the big banks as they strive to maintain their relevance in this changing landscape and improve their customer retention numbers.
  • A Rise in P2P Lending—While, P2P lending has been popular for a decade in everywhere from India to China and the U.S., the new business models evolving alongside crowdfunding ventures and other risk models are signaling a new trend for P2P lending.
  • Increased Mobile Money Adoption—Forrester predicts that 46% of the global population will use a smartphone by the end of 2016 with the most growth in Africa and Asia. This increased growth points to increased growth of MFS adoption, particularly in emerging markets, where just over half of users (53%) expect their current usage of MFS to increase.
  • Interoperability Will Become Standard—Interoperability (connecting multiple banks with MFS) is inevitable in the emerging markets. Expect to see more countries, especially in Africa and the Americas, facilitating or mandating interoperability.
  • Bank-Telco Partnerships—Banks and telcos will join together to bank the unbanked, including formerly isolated or bank-wary populations in the global market, such as the new partnership between Polish direct bank, mBank, and Orange Polska, Poland’s largest telecom company.
  • Advanced MFS—With basic MFS services like mobile payments becoming popular with the global adoption of smartphones, expect to see advanced MFS services like loans, credit, and insurance become more mainstream. This includes increased use of services like advanced mobile wallets, which allow users to make purchases via NFC contactless payments.
  • International Remittance—New companies like telcos and startups will replace more traditional players like banks and MTOs in providing international remittance, connecting mature and emerging markets by allowing foreign workers to easily transfer money to their home country.

A General Overview of the Year to Come

Commentators predict that 2016 will be a critical year for companies making the transition to mobile—or falling further behind. A few more trends to look for in the coming year are:

  • The regulatory landscape will continue to evolve, generating new business models as resource-limited governments welcome partnerships with institutions able to provide ideas, capital, and operational skills. It will also cater to FinTech and eMoney companies in the hopes of taking a cut on international remittance.
  • Social is the future of mobile commerce with social media targeting users who increasingly visit their social media pages to make purchases.
  • “Global Currencies” will rise in popularity. These PIN-based vouchers provide an alternative to geographically limited currencies. While a globalised currency is probably not on the table for 2016, Goldman Sachs recently filed a patent for their own digital currency.

Jonathan Kaftzan is the Director of Product marketing at Amdocs Mobile Financial Services.

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