What Factors Are Driving Mobile Financial Services in 2024

Introduction

Users today crave convenience and accessibility while completing financial transactions via mobile phones. Whether completing a transaction late at night or seeking help with a stuck payment, they rely heavily on 24/7 chat assistants.

To meet these needs, businesses are turning to omnichannel messaging platforms like WhatsApp. These platforms make it easy for customers to communicate at any time.

Conversational AI tools, such as chatbots and virtual assistants, allow companies to stay available around the clock. According to Statista, WhatsApp is an ideal platform for integrating these tools into financial services, with over two billion monthly users. Using the WhatsApp API for the fintech industry, you can streamline payments and offer real-time customer support, significantly enhancing user experience.

Several other factors contribute to the rise in popularity of mobile banking in the fintech industry. This blog will explore some of them in detail. 

Factors That are Influencing the Evolution of Mobile Financial Services

Gone are the days when people carried cash wherever they went. Today, mobile financial services have transformed how people manage and access money. The rise in demand for convenience and advancements in security have caused customers to opt for real-time financial transactions that comply with their fast-paced lifestyles. 

What drives the change?

Let us discuss some of the factors contributing to the surging popularity of mobile banking in the fintech industry:

1. Evolution of Payments System by Integrating AI

The use of technology in finance opens endless opportunities for modernization and innovation. The integration of artificial intelligence in the field of payments has enabled businesses to improve payment collection systems through innovative solutions like the 1-click bill payment system. 

Banks and Financial Institutions can leverage platforms like WhatsApp Business API for the fintech industry to simplify communication and payment processes. The AI algorithm automatically extracts information related to a payment from a message sent to the customer by the business. A payment link is embedded in the message itself, and customers only have to authorize the payments through a one-click biometric process. 

Let us say that a person wants to make a purchase worth xx, xxx INR. The business can send a message payment on WhatsApp stating:

Clicking on the button or link automatically redirects customers to the payment portal. The process is secure and can alleviate any risk that might be associated with offline transactions.

2. Personalized Financial Services

According to CNBC’s research, 45.5%- 53% of millennials and Gen Z carry out payments using their mobile phones. 18%- 27.5% of them rely on online chat services to ask questions about online transactions. This trend also extends to older generations due to convenience and hassle-free processes. 

However, financial requirements vary from person to person. The financial plans of someone who has just started a career will not be the same as those of retiring employees. To match these trends of mobile banking, you need to understand an individual’s preferences, and then provide personalized services. 

But how can this be done? 

AI chatbots emerge as a key solution to this idea. Conversational AI chatbots offer omnichannel finance through integration with messaging platforms. These chatbots gather relevant information about a customer’s preferences from text messages, use ML algorithms to analyze them, and deliver personalized financial recommendations to customers.

3. The Rise of Digital Currencies

We’ve come a long way from bartering goods to using paper money, and now to digital currencies. For finance industry leaders like you, embracing digital currencies with blockchain technology is the latest trend of mobile banking. This allows for quick and easy transactions across borders.

Blockchain works like a shared digital ledger where everyone agrees on changes. This means transactions are secure, traceable, and verified every step of the way, which can help build trust with your customers.

By adding digital currencies to your mobile banking services, you’re offering safer transactions and boosting user confidence. Plus, with countries exploring Central Bank Digital Currencies (CBDCs), digital currencies are gaining even more credibility. This is a great opportunity to attract more users to your mobile banking services, keeping your institution ahead in the fintech game.

By joining the digital currency trend, you can offer your customers a smoother, more secure financial experience. This will further solidify your position in mobile banking in the fintech industry.

4. Ensuring Data Security and Regulatory Compliance in Online Transactions 

When we conduct transactions via electronic channels, collecting real-time, accurate data becomes crucial. 

But what’s more important? Assuring customers that their data and financial transactions are absolutely secure.

Since we are transitioning from brick-and-mortar banking institutions to carrying out transactions through mobile financial services, the traditional modes of supervision are slowly becoming obsolete. 

The customer data protection regulations help ensure that no party gets unauthorized access to an individual’s data. This is done by implementing measures like multi-factor authentication and biometric verification, which help protect user data. 

This instills a sense of security and confidence in customers, who remain assured that transacting with your brand is safe.

In addition, KYC and AML compliance help establish procedures for easily identifying and verifying customers’ authenticity. These measures help prevent terrorist financing and money laundering activities, thereby enhancing the security of online payments. 

5. Making MFS Accessible to All- An Inclusive Approach

Inclusivity is now a key focus for businesses in the financial sector. While fintech companies use advanced technologies to provide financial services, it’s crucial to ensure these services are accessible to everyone.

Globally, nearly one-third of the population still lacks internet access, and many rely on basic feature phones. By creating solutions that work offline or through SMS, you can bridge this digital divide.

This inclusive approach not only makes financial services more accessible but also boosts economic growth. According to the World Bank, financial inclusion can increase GDP by up to 14% in developing countries. By ensuring everyone can participate in the digital economy, we can create a more equitable and inclusive financial future.

6. Open Banking and Collaboration

In 2024, open banking has become a game-changer for mobile financial services, offering industry leaders a powerful way to better serve their customers. By enabling secure, consent-driven data sharing between banks and fintech companies, open banking sets the stage for innovation and personalization in financial services.

Take WhatsApp Business APIs for the fintech industry, for instance—they allow data to be shared securely without users giving up their account details. This makes mobile banking safer and more trustworthy, encouraging more people to use these services.

As industry experts, partnering with third-party providers through open banking APIs can open up opportunities. These APIs give your customers greater control over their finances and data, helping them find the best financial products, switch to higher-interest savings accounts, or choose credit cards with lower interest rates based on their needs.

Open banking isn’t just about better personalization—it’s about making mobile financial services more accessible and user-friendly. Using these technologies, you can offer tailored financial solutions that boost customer satisfaction and drive the growth of mobile financial services.

Conclusion

Advanced technologies like WhatsApp API for the fintech industry, chatbots, 1-click payment options, etc., use AI and ML to help secure payments, enhance users’ credibility, and prompt them to complete payments instantly!

Gupshup, a leading conversational AI platform, has solutions that simplify the mobile financial system by enabling customers to perform vital tasks like paying premiums and EMIs, buying stocks, and making deposits simply over chat. 

Therefore, get ready to offer your users a transformational experience with Gupshup. Get in touch with us to embark on a journey of automation. 

FAQs

1. What is the role of AI ML in the banking sector?

Ans: AI and ML are used in the banking sector for financial monitoring, marketing, retention, risk management, process automation, and many more.

2. What are the challenges of mobile financial services?

Ans: Mobile financial services (MFS) face several challenges. Ensuring application security, offering personalized services, and achieving compatibility across different devices are crucial. Additionally, bridging the technology gap in rural areas, managing high costs, and enhancing security are significant concerns. Building a strong agent network and addressing issues with siloed ecosystems and manual processes are also vital.