• Susan Craig, at Content Creator


• 06.07.2023 05:00 pm
undisclosed

The correlation between mobile services expansion and fintech cannot be denied in today's increasingly technologically-driven society. As global mobile adoption continues to increase, this time penetrating even the least developed areas of the world, it paves the way for a new ecosystem of fintech software and solutions that address consumers’ evolving needs.

Moreover, the convergence of increasingly sophisticated telecom infrastructure—technologies such as 4G and 5G—and the continuous improvement of hardware, such as smartphones, has further boosted the impact of mobile services on the fintech industry. 

Telecom infrastructure is a significant catalyst for eventual fintech adoption. It lets users have access to different financial services. The ITU, or International Telecommunication Union, reported that by the end of 2021, global internet penetration reached 59.5 percent. 

In 2022, the number increased further. By then, about 5.3 billion people—66 percent of the worldwide population—were connected to the Internet. This recent statistic represents a growth rate of 6.1 percent from 2021. Notably, the pandemic-era growth was even more remarkable. Worldwide, Internet users jumped by double digits to 11 percent.

Individual Internet Users in the Billions. Source: ITU

Apart from improving infrastructure, affordability is a significant driver of mobile adoption and, thus, fintech adoption. Affordability becomes even more critical in expanding mobile services and fintech in developing regions or areas with lower incomes or fewer resources. 

Even in prosperous and developed regions of the world, the delivery of inclusive and accessible plans helps expand the mobile network further and thus democratize fintech services among various demographics. 

One example is the Consumer Cellular family share plan, a product offering flexible, bundled, and cost-effective services for families. When telecoms leverage innovative and inclusive connectivity products, consumers have greater access to internet services. 

Furthermore, connectivity boosts the fintech network worldwide, increasing the potential market for technology-driven financial services. Once connected to the Internet, consumers can access a wide range of fintech products, services, and applications without making a dent in their budgets. 

They can even replace traditional finance or banking services with these fintech products on mobile devices. Many already use fintech apps for digital banking, investment, money transfer, remittance, payroll, tax reports, or online payments. 

The State of Mobile Adoption

According to the GSMA report “The Mobile Economy 2023,” over 5.4 billion people worldwide were mobile service subscribers by the end of 2022. The figure includes 4.4 billion global internet users. 

The gap between mobile and Internet usage has narrowed from 50 percent in 2017 to 41 percent in 2022. However, the figure is still significant and needs attention from stakeholders. The smaller the gap, the more likely people can access fintech services and other critical internet-driven technologies.

The same report predicts that 5G will underpin most future mobile growth. Moreover, 5G adoption is expected to rise 17 percent this year and reach 54 percent by 2030. Given its potential to transform internet speed, cut lag time drastically, and give rise to super-fast internet services, 5G will also change how fintech apps work. As a driver of industries, 5G is expected to contribute $1 trillion more to the global economy by 2030, including financial services.

The goal is for more people to have easy and affordable access to fintech services. This will be achieved by providing cheaper products, more choices, and better technology. Such services will enable people to manage their money, access credit, invest, do their banking, send payments, and even run entire businesses at the convenience of a touchscreen. 

Mobile Expansion and the Proliferation of Fintech Services

Let’s examine how mobile penetration has influenced the growth and adoption of fintech services in major markets worldwide.

Mobile adoption has influenced the rapid uptake of fintech apps in the US. According to a report published by the Statista Research Department in March 2023, 65.3 percent of the US population uses digital banking services. 

In other words, most Americans already use mobile apps to perform financial transactions. Known for its aggressive innovation and startup culture, as exemplified and led by Silicon Valley, the US is one of the significant countries moving forward toward greater adoption of digital finance. 

China, on the other hand, has already become a mobile-first nation. The race to digitize payments is hot and even encouraged. Essentially a cashless society, China is one of the largest markets for fintech apps, given its population and culture. The success of platforms like WeChat Pay and Alipay exemplifies the massive market for financial transactions. 

Mobile payments are already second nature to the Chinese. By the end of 2021, about 903.6 million people used mobile payments in China. This figure is approximately 64 percent of the country’s population. Year-end statistics in 2021 showed that the People’s Bank of China (PBOC) processed 275 billion electronic payment transactions. The figure is a 16.9 percent growth over 2020. Hence, fintech apps tremendously impact the country’s daily activities.

In India, where most of the population remains unbanked, mobile connectivity paved the way for greater fintech adoption, opening essential financial services to millions. About 8 out of 10 bank account holders in India’s Metro cities now use mobile banking apps. The COVID-19 pandemic changed how Indian customers engage with banks. Moreover, ATM use is decreasing as digital payments become more popular. 

In Africa, fintech platforms are revolutionizing payments, credit, and money transfer services. Data from Global Findex 2021 shows that 33 percent of adults in Sub-Saharan Africa have a mobile money account. This number is higher than the global average of 10 percent. However, the region lags in terms of account access overall. Fifty-five percent of adults have an account with a mobile money service or any financial institution, less than the average of 71 percent in developing economies.

To Empower People Financially, Get Them Online

According to the ITU, 2.9 billion people are still offline, or an estimated 37 percent of the world’s population. This statistic shows how much work remains to achieve universal and meaningful digital connectivity—a 2030 target set by the UN and the ITU. 

To enjoy the benefits of fintech, we must expand internet and connectivity services, create affordable hardware, and offer accessible plans to reach a broader and more diverse market. We are all familiar with Metcalfe’s Law—the value of any network exponentially increases proportionally to the square of its nodes—and to that, we can add, so do the financial advantages. 

More mobile users mean potentially more affordable fintech services, more significant markets, and a more connected world with better opportunities.