Mobile Money Poses No Threat To The Banking Sector-Beige Boss

The Chief Executive Officer of BEIGE Capital, Mike Nyinaku, asserts that the Mobile Money service poses no threat to the future of the banking sector in Ghana.

This assertion was made during a pre-event interview he granted to the media at the Ghana Economic Forum, where Mr. Nyinaku was a guest speaker.

It would be recalled that the recent surge in Mobile Money usage has caught the attention of all Ghanaians, and many are those apprehensive about the position of the Mobile Money service, as against the future of the banking sector.  

A report carried out in the B&FT in one of its May 2016 edition paints a glowing picture of the growth of Mobile Money service in Ghana. The report states, “The penetration of mobile money in the country has seen an astronomical rise for the fourth year running with last year’s value of transaction reaching GHC35.4billion, an increment of more than 216 percent over the previous year.” This was according to data seen by the B&FT.

The report states further that “…in 2014 the three telecom operators (Airtel, Tigo and MTN) engaged in Mobile Money were able to do transactions worth about GHS11.2billion across the country.”

As if this was not enough, a 2016 banking survey conducted by Pricewaterhouse Coopers, (PwC) in collaboration with the Ghana Association of Bankers, and launched in Accra recently on the theme, “How to win in an era of Mobile Money,” further heightens the apprehensions and thus extending the debate on the future and the direction of the Mobile Money service as against the traditional role of the banking sector.  

The survey, as reported by the Daily Graphic, “added a survey of chief executive officers and chief finance officers of banks to pick their perspectives on the emerging mobile money explosion.”

According Mr. Thomas Kyei-Boateng, who presented the findings of the CEO and CFOs’ survey, a total of 71.4 per cent of the respondents in the survey saw the mobile money revolution as both a threat and an opportunity depending on how the banking institution responded to it.

The threat, on the part of the banks, was also because of the potential for telcos and other mobile money operators to enter into the banking space.   Mr Kyei-Boateng also pointed out that almost 30 per cent of the respondents saw it as an opportunity only without any threat.

Adding his voice to the on-going discussion, a Deputy Governor of the Bank of Ghana, Dr Johnson Asiama, said: “the total value and volume of mobile money transactions have outstripped all other non-cash transactions, except cheques, with total money float balances at the end of June this year reaching about GH¢680 million ($172 million), compared to about GH¢341 million over the same period last year. 

Registered agents also reached 108,000 within the period, compared to about 36,000 for the same period last year.” (Daily Graphic,26/08/2016) This, he said, confirms the growing acceptance of mobile money across the country. He added that the BoG was committed to facilitating the evolution with the enabling regulatory environment for mobile money to promote financial inclusion without risking the general safety and soundness of the financial system.

It was on the back of these apprehensions expressed by players in the financial sector on the feats chalked up by Mobile Money service that the B&FT sought the opinion of BEIGE Capital boss, Mike Nyinaku.  

Mr. Nyinaku was however of the view that notwithstanding the successes chalked by mobile money service there is no way the role of the banking sector will be overtaken by mobile money service.

He asserts, “Mobile Money service is a transaction enabler, it is not banking so the traditional importance of banking will not be replaced by the upsurge of the use of mobile money service.” He however believes that mobile money service will increasingly become transaction process enabler in the delivery of goods and services; and thus, complementing the effort of the traditional role of the banking sector. It will however not replace the traditional role of the banking

sector,” he emphasized.