African banks roll out mobile phone services to compete

The mobile phone boom and competition in the banking sector in Africa has pushed major banks to launch mobile-phone banking services across the region to provide remote banking services to customers.

Standards Chartered Bank Zambia launched a mobile banking service last week while Standard Chartered Bank Kenya launched the service last year. In addition, the United Bank of Africa, Zambia National Commercial Bank (Zanaco) and the regional First National Bank operating in more than three countries have all launched mobile banking services.

Pan-African mobile service provider Mobile Telecommunication Network (MTN) has already partnered with Standard Chartered Bank to provide mobile banking service to all the countries in Africa where MTN and Standard Chartered Bank have a presence, while Zanaco has partnered with Zain.

The mobile banking services will help the banks reduce transaction costs, improve payment systems and also help customers avoid time-consuming traditional banking services that, for example, require customers to queue.

The services were launched amid growing fears that traditional banking was being overtaken by offerings from mobile service providers.

Standard Chartered Bank Zambia Managing Director Mizinga Melu said, "With the mobile phone transaction, the bank was breaking the barriers of traditional banking to make it more convenient, accessible, fun and cheaper."

Mobile phone banking services will allow customers, among others things, to view their statements, transfer funds between accounts, buy air time for their phones and pay utility and other bills.

Mobile banking services are provided through the unstructured supplementary service data (USSD) platform, which allows bank customers to access their banking requirements in real time. USSD is a capability built into the GSM (Global System for Mobile Communications) standard.