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Mobile and digital banking to target the rural unbanked population

+ Official Coverage on FST Media’s website

4 March 2014
Financial Services Technology (FST) Media

Mobile and digital banking to target the rural unbanked population

Mobile and digital banking are now the drivers of rural banking. Many banks in South East Asia are intensively reaching out to the rural unbanked population. Jeffrey Bahar, Deputy Chief Executive Officer of Spire Research and Consulting, shared his views on this growing industry trend in FST Media.

Bahar observed that many banks in Indonesia are now targeting the unbanked. Only about a quarter of the Indonesian population has access to traditional banking services. Besides, with Indonesia’s mobile phone usage running at over a 100 per cent penetration rate, it is natural for banks to offer mobile financial solutions to the unbanked.

To better target this market, some banks are partnering with microfinance institutions to enable the unbanked to sign up for a bank account the paperless way. These institutions would then help users to conduct banking transactions via their mobile devices.

Indonesia’s central bank, Bank Indonesia, has launched a pilot program, ‘Mobile Payment Services’ (MPS), last year. This program brought five of the nation’s banks and telecommunications operators into a coalition to target the unbanked population; introducing another form of branchless banking.

However, many customers are still disinclined to use their mobile devices for banking transactions. There is still low customer acceptance of executing banking transactions via mobile device or computer, as many still feel more secure with cash transactions.

It is evident that the unbanked population across Asia has needs and concerns that are very different from those of mainstream banking customers. For instance, unbanked populations need frequent but small-ticket transactions. Banks need to think out of the box to better engage them; for instance, with micro-finance services.

About Spire Research and Consulting

Spire Research and Consulting is the leading research consultancy in global emerging markets. Spire's competitive advantage lies in its ability to deliver actionable intelligence on the external business environment in support of its clients’ strategic decision-making in marketing and business development. Spire's clients include 50 Global Fortune 1000 companies and government agencies in 15 countries. For more information, please visit

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Spire Research and Consulting
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