The Mena region’s unbanked and underbanked sectors remain a major retail banking frontier, experts said, highlighting the potential for retail banks to partner with mobile network operators (MNOs) to offer services to mobile clients.

Such partnerships could provide loans, deposits and other services to mobile clients in the context of an increasingly ‘mobile’ environment, professionals explained at the recent Lafferty International Councils held in Dubai.

The three high-profile Council Meetings, namely the International Cards and Payments Council, the International Retail Banking Council and the Global Merchant Services Council were organised by the Lafferty Group, the leading knowledge services provider for the financial industry worldwide, in conjunction with Network International, the leading payment solutions provider in the Middle East.

The opportunity for regional retail banks to explore ‘partnerships beyond payments’ with mobile network operators (MNOs) and the evolution of the prepaid card into a bank-lite core payment product were areas considered at the Lafferty Councils, where the focus of discussion was on how retail banks can use innovation to consolidate profits and reach the unbanked and underbanked sectors.

It was stressed that the MNOs need banks for their capital and risk management strengths while banks need the MNOs for their ability to deliver financial services without a physical infrastructure and because the MNOs’ client data was the most up to date and reliable.

The Councils also stated that prepaid will play a major role in banking the unbanked in India, most of Asia and Africa.  It was concluded that the prepaid card was now evolving into a bank-lite core product, sometimes linked to bank accounts and sometimes with its own line of credit attached.

It was felt that this appeals not only to the unbanked and underserved sectors, but also to those that want a product that helps them manage their financial lives. The Councils opined that prepaid could become the comprehensive payment card – the ‘bank account of the future’.

Bhairav Trivedi, chief executive officer, Network International, said: “The Lafferty Council meetings have provided timely insight into the issues facing the burgeoning payments industry in the region.  The banking and payments markets in the Mena are among the fastest growing in the world and the UAE, in particular, leads the region in the adoption of online and mobile payment systems.”

“In a highly competitive environment, banks, financial institutions across the region and solutions providers like Network International are all looking toward new growth areas to capitalise on inherent opportunities,” he added.

Network International is the largest acquirer in the United Arab Emirates. In the last three years, the company has witnessed a doubling in volume of transactions processed, reaching almost 400 million transactions in 2013, amounting to Dh70 billion ($19 billion) in volume.

Lafferty Councils are member-only meetings which were established in 1995 by Lafferty Group. The meetings, each focused on the retail banking, cards & payments and mobile money sectors respectively provide an international peer group where participants work together to identify industry best practices for mutual benefit.

Each Council meeting features thought-provoking presentations and discussions led by industry leaders and experts. – TradeArabia News Service