In fact, the standard definition of mobile banking is yet to be finalized! We need to differentiate mobile banking with mobile money service business. Telco should not be allowed to do mobile banking for the sake of our economy itself. The banking business is not a part of business industry rather it is an extended part of our nation-state system to control the monetary subsystem. Banks are created from the necessity of state itself; it is an integral part of our modern economic system. Banks create money through credits & deposits and central bank regulates the amount of money (more specifically narrow money) in the market to comply with our economic policy. Telcos may have their own bank to provide innovative customer service through their distribution channel. From a consumer perspective, Telco may be allowed to do very limited amount money transferring business (MSB) with the help of banks but here is a big question of efficiency! Like any other financial institution, identity confirmation is mandatory for the Telcos. However, Telcos have the advantage for identity confirmation than banks but in reality, banks are doing this job far better than Telcos. In our coming days, identity confirmation will incur cost and risk increasingly. In terms of antimony laundering, Telcos are completely incapable to comply at their present model. Allowing Telcos in the banking business is not a question of losing business share of traditional banks only, it is seriously noncompliant with our economic system.
I think giving mobile banking permission to telcos is worse than giving judicial power to police! However, I am afraid of hearing the example of Pakistan by the Telinor CEO. It's a clear message that they are not ready but also doing and will do anything to capture the business opportunities of emerging mobile banking business. I must end by saying, the views expressed are personal and does not belong to nor endorsed by the organization I work for.
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