Sustaining financial inclusion: Overcoming the challenges in mobile banking

Financial inclusion has increased in Ghana over the past decade. The rise of mobile money system plays a significant role in the rise of financial inclusion by tapping into the unbanked population. Ghana has recorded increasing number of subscribers for mobile money system.

This is as a result of traditional banks and businesses accepting mobile money as means for business transactions. Mobile money system has created employment for many who work as mobile money agents for the various telecom companies (MTN, Vodafone Ghana and Artel-Tigo).

Among these three companies, MTN holds the largest share of the market. The agents register with the telecom companies to obtain the accreditation to operate at the location they stated during the registration.

Unfortunately, the locations where some of these agents operate are simple set-ups (usually less costly structures called kiosk). The fact that most agents do not operate in a secure environment in itself becomes an issue. One of the challenges is robbery.

Another challenge is fraudulent activities associated with the use of customers' national ID cards. National ID cards are very important and are required by several institutions.

Most often than not the ID card numbers are recorded and serves as a track-record of events that took place.

As such, the mobile money agents can coordinate with institutions in need of ID card numbers for fraudulent activities they plan to engage in. Since these ID card numbers are mixed with that of legit ID card numbers for a record of events that took place, it may become difficult to trace such fraudulent activities.

Moreover, anyone with the ID card information of these customers can as well use them for fraudulent activities.

The planned roll-out of the re-registration of mobile sim cards beginning from June 2021 as stated by the vice president of Ghana (Dr. Mahamudu Bawumia) is prone to effect a positive change on how mobile money transactions are conducted.

Although the National Financial Inclusion and Development Strategy (NFIDS) has put in place measures for financial consumer protection, there is a lot more that needs to be done to secure the identity of mobile money customers in order to sustain financial inclusion. Below are three suggestions to rectify the challenges discussed above.

In summary, I suggest three measures that can be considered by the NFIDS and the associated institutions.

Firstly, a suggestive measure to rectify the issue of robbery is for agents to locate in an open environment with frequent passers-by who in turn serves as watchmen.

Aside this, agents can operate during broad day light and hold less amount of cash-in-hand after sunset.

Secondly, telecom companies can setup a database (accessible by only agents) with a unique ID number for each customer.

The ID can then be used by the mobile money agent to pull out the basic but unique information (including a picture) for each customer from the directory in order to verify the customers’ identity during a transaction.

This will help prevent the national ID cards of customers from falling in vulnerable hands. Moreover, finger-print authentication can be introduced for mobile money applications.

This will make customers feel secured when approving transactions from mobile money application in a crowded or insecure environment. Finally, money-deposit systems can be set up at vantage points for agents (especially setting up ATMs that accept deposits).

This will help agents to reload their accounts easily and serve a lot of customers.