> Posted by Michelle Romeu

Is mobile banking the next step on the way to 21st century financial inclusion? As someone new to the industry, I have spent much of this summer learning about microfinance; and for me, one of the most interesting developments in the industry is the use of mobile money to further financial inclusion. Earlier this month I made my way to the U.S. State Department to attend Tech@State: Mobile Money. The half-day event brought together U.S. government representatives with technology and microfinance experts to discuss mobile banking in the context of U.S. foreign policy.

Recognizing that mobile phones are altering the course of international development, the State Department is exploring new tools for 21st century statecraft and economic growth.  The event represented the State Department’s first foray into the mobile-banking space and as Under Secretary Maria Otero said, there is a hope that, “with the help of industry experts, we can help generate local political will in order to make financial inclusion a reality.”

Mobile banking is an attractive,scalable alternative channel for financial services; as Carol Realini, CEO of Obopay, stated, 5 billion people in the world possess a mobile phone. Shainoor Khojam, Director of Corporate Affairs at Roshan, spoke about financial services in Afghanistan and noted that the entire country has only 17 banks and 34 ATMs. Promoting mobile banking in Afghanistan has been noted to help decrease official corruption in addition to the broad benefits of cheaper delivery and greater convenience and safety for clients.

But the world may not be ready to take advantage of mobile banking opportunities. Jan Chipchase of frog design addressed bottlenecks to scaling mobile banking, including the importance of user literacy—both in terms of language and technological illiteracy—as a key challenge.

While mobile banking is sure to break some important ground on the way to financial inclusion, we must also be wary of putting all our eggs in one proverbial basket. Mobile banking can help bring us closer to full financial inclusion, as part of a bigger toolkit of solutions to financial exclusion.

For more information, sign up for updates from the Financial Inclusion 2020 campaign.

Flickr credit: whiteafrican