Banks, Big Tech have mobile banking edge in EMs

Singapore

THERE is a viable business for financial firms which want to expand into emerging markets through the use of mobile banking, a fresh McKinsey study on Tuesday suggested.

But the caveat is that this approach seems more compelling for large companies than it is for smaller firms, the report suggested. These large companies would include banks, telcos, and Big Tech.

The benefit of economies of scale applies not only to decreasing fixed costs from technology spending, but also higher efficiency in handling cash, which remains prevalent in emerging markets.

The McKinsey study showed that a mobile banking business in emerging markets can hit a 35 per cent margin once it reaches optimal scale. But th…