Rangoon — Local bankers are concerned as traditional financial services face competition from mobile financial service providers, following the approval of industry regulations by the Central Bank of Myanmar (CBM).
The Central Bank announced in April that any interested party could apply for a mobile financial service license under the Financial Institution Law.
Proponents of mobile banking trumpet the move as a means to dramatically expand the financial services industry in Myanmar, by assisting mobile operators to partner with local banks in an effort to reach Burma’s millions who live in rural areas with limited access to physical bank branches.
One such license was given to a joint venture between Norway-based telecom company Telenor and Yoma Bank for a mobile money transfer service app called Wave Money.
Mobile financial service providers allow customers to open mobile accounts and deposit, transfer and withdraw money directly between people without having to go through a traditional bank.
People-to-people, people-to-government, people-to-business and business-to-business money transfers will be permitted under CMB regulations, which critics say undermines the traditional banking sector.
“It is a threat for us. If we can’t compete with them [mobile financial service providers] we will lose in the market,” said Thein Tun, chairman of the Tun Foundation.
He added that while banks cannot reach the majority of Burma’s rural population, about 75 percent of the country’s people use mobile phones, allowing mobile financial services a greater reach than traditional bank branches.
“They have massive investment, which we can’t compete with. The government should make sure that local investors don’t lose in the game,” he said.
Soe Thein, executive director of Asian Green Development Bank, said the competition from mobile banking services will only continue to grow and banks have been forced to find new strategies to compete.
“Some banks can’t open branches in small cities where mobile financial services can reach, but they can offer other banking service products to attract customers,” Soe Thein said.
Zaw Lin Htut, chief executive officer of the Myanmar Payment Union, said that while the number of mobile phone users in Burma continues to increase, local banks have a chance to survive if fair regulations are implemented.
“Telecoms companies have a bigger network here than banks. I think that the government should standardize it so that there is a level playing field. We are in the early stages of the banking sector here, and there should be fair competition,” he said.
Recently, 22 private lenders were awarded banking licenses.
Norway’s Telenor, Qatar’s Ooredoo, Vietnam’s Viettel and state-owned Myanma Posts and Telecommunications (MPT) currently hold the country’s four telecom licenses.