Mobile financial services poised for surge in users and revenue, says new report
A new report by Ericsson, in collaboration with Juniper Research, predicts significant growth in the mobile financial services (MFS) market. Titled “What Will Drive Mobile Financial Services’ Growth?”, the report offers insights from industry leaders and forecasts a major shift in the MFS landscape.
The report surveyed 46 senior decision-makers from mobile network operators (MNOs) across 35 countries. It projects a 40% user adoption rate and an 80% increase in transaction value within the next five years. This growth positions MFS as a key driver for Telcos transitioning into digital service providers, with a projected 45% growth in their MFS revenue alone.
The report identifies several factors fueling MFS’s success. These include customer incentives, extensive mobile network reach, and the accelerated adoption of digital payments due to COVID-19. These elements contribute to broader financial inclusion and access to financial services. However, regulatory hurdles, a persistent preference for cash, and security concerns remain significant challenges that require strategic solutions from industry stakeholders.
A key trend highlighted in the report is the evolution of MFS offerings towards more advanced services like micro-finance and investment options. This shift promises to reshape revenue models while enhancing user experiences, marking a turning point for the industry. MFS providers are strategically pivoting towards these advanced services to foster innovation and drive financial empowerment across diverse demographics.
“Mobile Financial Services are transformative for Telcos,” said Michael Wallis-Brown, Head of Mobile Financial Services at Ericsson. “They position Telcos as digital innovators and unlock new revenue streams. Integrating MFS enables Telcos to anticipate consumer demands, adapt to market trends, and stay competitive.”
Nick Maynard, VP of Fintech Market Research at Juniper Research, added, “What is striking is the scale of change coming for mobile financial services. MNOs we surveyed see advanced services as transformative for both their service portfolios and revenue. We expect this to have a significant impact over the next five years.”