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Mobile banking will play a crucial role in boosting financial inclusion in the coming years given the high level of cell phone penetration compared to banking penetration throughout Latin America, according to a report by the regional association of development banks, Alide.
Today, mobile phone coverage of Latin America's financially active population is almost absolute, yet only a fraction of the population has access to banking services, a phenomenon common to many countries with low per capita income, according to the report.
Uruguay would seem to be best positioned to take advantage of mobile banking (m-banking), as mobile penetration stands at 132% but only 16.9% of the population uses banking services, the biggest disparity in the region, said Alide citing World Bank figures.
Similarly, in Argentina cell phone penetration is 142% while only 24.4% of the population is banked, and in Brazil mobile penetration is 104% while the banked population represents just 21.1% of the total.
In Mexico, meanwhile, only 25.7 % of the population makes use of banking services, while cell phone penetration is 98.4%.
Bolivia would appear to be taking the lead in the use of m-banking technology in Latin America, according to the World Bank figures, as 6.8% of the Bolivian population uses cell phones to receive money, followed by Mexico with 3.1 %, Peru with 1.8 % and Colombia with 1.4 %.
In Latin America as a whole, just 1.8% of the population uses cell phones to receive money, demonstrating the enormous growth potential for m-banking solutions.
In Uruguay, meanwhile, just 0.4% of the population uses cell phones to receive payments, while in Brazil that figure stands at 0.8% and in Argentina its 0.0%, according to the World Bank.
In Peru, banks are predicting an m-banking boom in 2015, with 10 banks in the country reportedly readying mobile banking services, said state news agency Andina last week.
The benefits of using mobile technology for financial transactions are not limited to financial inclusion gains, however, as the technology would also reduce transaction costs, open up the financial sector to new competitors and generate new methods of service delivery, said Alide.
For more on the opportunities and challenges of m-banking in Latin America, see today's guest column by NovoPayment CEO Anabel Pérez, "Challenges of digital money & mobile wallets in Latin America."