Are There A Billion Mobile Bankers In Banking?
By Ron Shevlin
Someone recently forecast that, by 2017, there will be one billion mobile banking consumers across the globe.
Having forecast mobile banking consumers myself (just US, not globally), I’m interested in these projections as a sanity check against my own numbers.
Here’s my quick and dirty analysis to see if the 1 billion number is reasonable.
The Population Reference Bureau projects that world population will reach ~7.5 billion people by 2017, ~80% of whom will be in lesser-developed countries. The PRB also estimates that, worldwide, roughly 30% of the population is under the age of 15.
These points are relevant because: 1) the unbanked rate is much higher in lesser developed countries than developed countries (~75% vs. 10-15%), and 2) I’m assuming that people under the age of 15 don’t have checking (or prepaid) accounts.
These assumptions/projections leaves us with .95 billion banked adults in the developed countries, and 1.05 billion banked adults in the lesser-developed countries, for a total of 2 billion banked adults, worldwide. For mobile bankers to hit 1 billion, the adoption rate for mobile banking would have to be 50%.
A Change in The Unbanked Rate
There is another possible scenario where the total can more easily get to 1 billion: A change in the unbanked rate.
With the growth of prepaid accounts and other alternative types of accounts, if the unbanked rate in lesser-developed countries drops to 50%, than there would be approximately 2.1 billion banked adults in those countries, or 3.05 billion banked adults worldwide.
For mobile bankers to hit 1 billion by 2017, the adoption rate would only have to be 33%.
Bottom line:
The key variable in determining whether or not there will be 1 billion mobile bankers by the end of 2017 is the unbanked rate.
The global rate of smartphone adoption rate is high and will certainly continue to be. In addition, the demographics of some large countries — who can make or break the forecast — like China and India skew to younger consumers who are more likely to adopt and use mobile technologies.
A more important number is this: How many newly-banked people (in both developed and lesser-developed countries) will be mobile-only (or at least, predominately-mobile)?
[Note: You might be thinking, wait, shouldn’t that be "predominantly"? No, not necessarily]
