I have just read an article on the Economist linked to by Finextra: "The bank of SMS" - talking about mobile banking across Africa.
Even more interesting than the article were the comments, of which one leapt out at me more than others. It was criticising the investment being made in mobile banking, when there should be so many other priorities: "You also need substantial investment programs
(sic) to give access to water in ... drought-stricken areas"
Of course, being in the middle of a drought here in the UK, despite it being the wettest April on record, resonated somewhat.
But what has this got to do with (mobile) banking?
One of the problems that we have in the UK at the moment is that some parts of the country have more than enough water, whilst other parts do not. Unlike electricity, there is no "National Grid" system for the movement of water from where it is in surplus to
where it is in deficit. The water network is very localised, with no efficient means of transferring from one network to the other. I could fill a barrow up with water and physically move it to where I wanted it myself, but that is not very efficient - either
in time or effort.
This is reminiscent to me of a problem that we have in moving funds around. Note that I didn't add "in banking" to the end of that sentence. This is because consumers don't think of moving money as "banking", they just want it to be as easy (and low cost) as
possible. If we take particular note of workers remittance, the actual act of getting money from point X to point Y can be far more difficult than it should be.
I particularly enjoy travelling to Tanzania, yet if I wanted to send money to a friend there could I do that through my bank? Of course I can, but only if my friend also has a bank account. If they don't have a bank account, or perhaps they don't want to make
the journey to their nearest branch or ATM, how do I get money to them? Fortunately, there are numerous methods I can use, that utilise widespread agent networks across the globe; I could also send direct to my friend's mobile phone within Tanzania, as they
happen to subscribe to M-Pesa.
But I can't do this from my bank.
The act of transferring from one network to the other is far more difficult than it should be - the equivalent of my water barrow. Why am I not able to make a payment to a beneficiary on any one of multiple payment networks via my trusted financial partner?
Surely it's as important to have our pipes well-engineered as it is to have a nicely polished chrome tap?