Mobile financial services critical for future MNO growth

Ericsson has released a new report providing insights into the dynamics of Mobile Financial Services (MFS) and transformative opportunities for Mobile Network Operators (MNOs) globally.

The What Will Drive Mobile Financial Services’ Growth? report consolidates insights from 46 senior decision-makers from Mobile Network Operators (MNOs) across 35 countries and projects a paradigm shift with an expected 40% user adoption rate and an 80% growth in transaction value over the next five years.

This signals a substantial transformation, positioning MFS as a key element in the shift among Telcos to become digital service providers, foreseeing an impressive 45% growth specifically in their MFS revenue.

Key accelerators identified in the report include customer incentives, extensive last-mile networks, and the surge in COVID-19 digital payments.

These factors propel MFS success and enable broader financial inclusion and access.

However, regulatory challenges, enduring cash preferences, and security concerns pose significant obstacles, demanding strategic navigation from industry stakeholders.

Key findings:

Africa has the highest usage of mobile subscribers using MFS than any region, but the Americas are expected to grow by 72% penetration over the next 5 years
Financial education and interoperability with other MFS providers/banks ranked low in accelerating MFS
Advanced services like loans, overdrafts and BNPL offerings were named as key drivers behind MFS’ future growth
Merchant losses from online payment fraud will exceed $362 billion globally between 2023 to 2028, with losses of $91 billion alone in 2028

A pivotal aspect highlighted in the report is the evolution of service portfolios towards advanced offerings like micro-finance and investments.

This shift not only reshapes revenue models but enhances user experiences, marking a turning point in the industry’s trajectory.

MFS providers are strategically pivoting towards these advanced services, fostering innovation and driving economic empowerment across diverse demographics.

“Mobile Financial Services are transformative for Telcos, positioning them as digital innovators and unlocking invaluable new revenue streams,” comments Michael Wallis-Brown, Head of Mobile Financial Services at Ericsson.

“Integrating MFS enables Telcos to anticipate consumer demands, adapt to market trends, and stay competitive.”

“What is striking is how massive the changes coming for mobile financial services are,” continues Nick Maynard, VP of Fintech Market Research at Juniper Research.

“MNOs we surveyed are expecting advanced services to be transformative, both for their service portfolios and for their revenue, and we expect this to have an enormous impact over the next five years.”


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