3 big predictions for mobile money, FinTech and financial inclusion in 2016

As with so many things in human history, the evolution of money has been characterised by slow and steady progress, interspersed with periods of rapid technological advancement.

Even so, we live an age of unprecedented change when it comes to both money and the financial sector as a whole. You only have to look at the strides being made in financial inclusion, fintech, and mobile-to-mobile payments to see that.

Here are three big predictions for each of those fields in 2016.

1. Financial inclusion will mean big business

Making serious money and reaching the unbanked have not always gone hand-in-hand. We’re now witnessing a major shift in thinking as big name players in payments and other industries are talking openly about the huge opportunity in reaching unbanked customers – and not just as a corporate social responsibility gimmick.

PayPal, Walmart and Coca Cola are just a few companies to pursue innovative financing for small businesses and products targeted towards underserved consumers, while a swathe of new payments start-ups have taken on financial inclusion as a goal. What’s more, digital payments are now being actively promoted by global policymakers as critical to economic stability and financial inclusion for the world’s poorest.

2. 2016’s biggest fintech innovations will come from the developing world

Forget about contactless payments apps and challenger banks: The real life-changing innovation is not happening in the developed world but in emerging market economies. FinTech heavyweights in areas like m-Insurance, microloans and Mobile Money – a financial service for unbanked people using just a basic mobile phone – are transforming lives, businesses and whole economies across Africa, Asia and Latin America.

Mobile Money in particular has become the foundation for a range of other innovative financial products like life and health insurance coverage paid for by topping up prepaid airtime, interest-bearing savings accounts for non-banked customers, instant personal and small-business micro-loans, and even investment bonds bought through a mobile phone. 2016 will bring wider acknowledgement among fintech companies in Europe and North America of the lessons and experience to be gleaned from their peers in the developing world.

3. Mobile-to-mobile will be the benchmark for international money transfers

In 2016, international remittances are expected to rise to over US$600-billion, but most are still sent in cash informally or via risky high-street agents. As Mobile Money continues to gain popularity in the developing world, instant mobile-to-mobile transfers will become the global standard for sending money from person to person across distances. 2015 saw a series of ground-breaking partnerships between Africa’s largest telcos, banks and global money transfer apps.

This trend will continue through 2016 as consumer expectations settle on instant mobile-to-mobile transfers as the benchmark for international remittance.