Our team often writes on this blog about the role of mobile network operators (MNOs) in providing mobile financial services. But what about the role of banks? Are they to be replaced by MNOs and their branches discarded? No, says Claire Alexandre, Ignacio Mas and Dan Radcliffe of the Bill & Melinda Gates Foundation, who suggest instead that in many cases, banks play a critical role in the value-chain.

Today we are pleased to share a new paper written by Alexandre, Mas and Radcliffe titled ‘Regulating New Banking Models that Can Bring Financial Services to All’. The paper argues that “branchless banking” is misleading as it implies that we can do away with bank branches altogether. Rather, they advocate for branch specialisation where the branch role is higher-level, meeting more sophisticated needs such as complex credit services, liquidity, and customer redress. Basic services — those which reach the poor directly, are often better provided by non-bank retail outlets — not unlike those that mobile network operators already use to provide mobile money.

Banks and their branches have an important role to play in the mobile money ecosystem. We believe this paper gives a good analysis of how banks are best positioned to participate by banking beyond branches. Stay tuned for more on issues about banks in mobile money and bank partnerships in the coming months.