Mobile banking for the unbanked

Monese is one of many new startups revolutionizing banking through innovative app-based accounts. As consumers become more transient, traditional models of banking are being challenged by these digital alternatives.

Paytm, India’s largest mobile wallet service, works in a similar way to Monese, bringing digital banking to people in rural areas who may not be signed up to traditional banking services. It is proving to be popular, with over 170 million active users.

Governments are also seeing the virtues of mobile banking. The U. S. Treasury Department has created an app to offer basic services to the unbanked, allowing them to check their balances and find places they can withdraw cash.

These digital models appeal to tech-savvy younger generations, and can offer a more tailored, familiar experience than traditional banking services. Banking app Loot, for example, is aimed at students. It offers a debit card and allows users to set budgets and groups transactions into categories such as restaurants, entertainment and travel so that spending can be monitored. With young adults spending as much as a third of their waking hours on their devices, there is a real opportunity for mobile devices to be their gateway to banking.

Fintech is reinventing banking, offering expanded access, personalization and convenience. In a world where the number of migrants is growing and technology dominates, traditional models don’t serve everyone. Fintech is reaching groups of consumers, particularly those of lower incomes, that have previously been overlooked. Traditional banks and financial institutions should take note.