The fourth report in the Africa Dig- ital Banking Experience Series, African Mobile Banking: Intelli- gence, inclusion and new com- petitive realities, makes clear that mobile banking has moved from the margins to the mainstream of Africa’s financial system.

Drawing on a survey of senior banking executives across 40 countries, the study shows that as mobile penetration rises and smartphones become more afford- able, the handset has become the most important gateway to financial services.

For millions of Africans, banking now begins and often ends on a mobile de- vice, reshaping how banks design prod- ucts, engage customers and compete in an increasingly crowded digital mar- ketplace.

According to the report, mobile bank- ing adoption in Africa is high by global standards. Physical bank branches remain scarce in many rural areas and even in some low-income urban districts, while limited fixed broadband infrastructure constrains access to web-based services. As a result, mobile phones account for at least three quarters of all online traffic on the continent.

Banks responding to the survey over- whelmingly reported that this reality has pushed them towards mobile-first strate- gies, developing applications designed primarily for handsets rather than adapting desktop platforms. Regulatory change has reinforced this shift. The report notes that reforms in many markets have opened the door to greater competition in payments and digital finance, enabling non-bank providers to challenge traditional institu- tions more directly.

Faced with pressure from fintech firms, mobile money operators and telecoms companies, banks are increasingly placing mobile apps at the centre of their digital strategies. What began as a supplemen- tary channel has become the main inter- face between banks and their customers.

From cash to code

The report also highlights the scale of the opportunity that still lies ahead. Despite rapid growth in mobile services, McKin- sey estimates, cited in the study, suggest that only around five to seven percent of payments in Africa are currently made by digital or electronic means.

Cash remains dominant across most markets, while card usage is relatively limited. The authors argue that app pay- ments are therefore the most likely route to displacing cash transactions, improving security and extending formal financial services to previously excluded users.

The report underlines how central mo- bile platforms have already become. More than half of participating banks say that over 40% of their customers use digital banking services, with only a slightly lower proportion reporting similar levels of mobile banking usage.

A further group report that between 20 and 40% of customers use mobile banking, leaving only a small minority with very low uptake. This suggests that while overall digital penetration remains below half of the population, those who do engage with digital banking overwhelmingly do so via mobile devices.

The report charts the rapid expansion in the range of services offered through bank- ing apps. Early platforms focused on basic transactions such as person-to-person transfers, bill payments, internal account transfers and in-store payments. Today, many apps support transactions in multiple local currencies, offer real-time exchange rates and facilitate cross-border transfers, reflecting the growing integration of African economies.

Localisation features prominently in the findings. Banks report increasing use of lo- cal languages and simplified interfaces to broaden access.

At the same time, mobile platforms are becoming an important channel for credit. Customers can apply for loans and overdrafts directly through apps, reducing labour costs and making it commercially viable to offer smaller loans to individuals and micro enterprises that were previously excluded from formal credit markets.

Savings and insurance services are also evolving. The report notes growing flexibility in savings management and the expan- sion of micro insurance products delivered through mobile channels.

While individual transactions may gen- erate modest revenue, the report argues that their cumulative impact across mil- lions of users can be transformative for both household finances and bank profit- ability.

Competition and constraints

Small and medium-sized enterprises emerge as a key battleground. The report finds that digital platforms are making it more attractive for banks to serve sole traders, micro businesses and SMEs with tailored services such as merchant pay- ments, payroll tools, budgeting support and customised financial recommendations.

This marks a shift from earlier assump- tions that the segment was not commer- cially viable at scale.

Banks participating in the survey identify improving operational efficiency as their top motivation for adopting digital banking technologies, followed by expanding finan- cial access and increasing market share.

The report emphasises the close rela- tionship between these objectives, not- ing that efficiency gains enable banks to reach new customers profitably while better digital experiences can drive loyalty and growth.

The study is also candid about the ob- stacles that continue to deter customers from using mobile banking services. Con- nectivity issues are the most frequently cited challenge, with almost two thirds of banks pointing to unreliable network connections, data costs and technical problems.

While mobile network coverage reached around 83% of the population by the end of 2021, large rural areas remain unserved and service quality can be inconsistent, particularly in Central Africa.

Access to electricity and device afford- ability are also highlighted as structural constraints that banks have a limited ability to address directly.

However, the report stresses that other challenges are firmly within banks’ control. Security concerns, cited by half of respond- ents, remain a major barrier, with malware, phishing and SIM swap fraud undermining trust in mobile services.

User interface complexity, limited func- tionality and lack of customer support are also identified as deterrents. The re- port points to examples such as Ethiopia’s Cooperative Bank of Oromia, which has invested in innovative delivery models and digital training to reach rural communities, as evidence that banks can overcome some of these barriers through targeted investment and education.

Despite these challenges, banks rate their own digital performance relatively positively. Nearly two thirds of respondents describe their efforts to meet customer expectations as good or excellent, while a similar proportion express confidence in their response to competitive pressures.

The strongest self-ratings relate to regulatory compliance and innovation, although responsiveness to competition scores lower, reflecting the intensity of ri- valry in the mobile-first era.

The report places this competition in a broader context dominated by mobile money. Africa accounts for almost half of the world’s mobile money accounts and two thirds of global transactions.

These platforms, which began as simple wallets, now offer savings, credit, insurance and SME services, often in partnership with banks. They are therefore both competi- tors and collaborators, blurring traditional boundaries in the financial sector.

At the same time, the report notes that banks are expanding across borders through acquisitions and new licences, bringing technology, capital and new busi- ness models into multiple markets. Institu- tions from South Africa, Kenya and Morocco are among the most active, raising the prospect of increasingly integrated pan- African banking groups.

The Africa Digital Banking Experience Series report concludes that mobile bank- ing has already transformed access to finance across the continent, but that its evolution is far from complete.

The next phase will depend on banks’ ability to turn mobile apps into secure, intuitive and comprehensive financial hubs that can compete effectively while extending inclusion. For African banks, the handset is no longer just another channel. As the report makes clear, it is now the front door to the future of banking. n

Banks identify improving operational efficiency as their top motivation for adopting digital banking technologies, followed by expanding financial access and increasing market share.

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