MAJURO Marshall Islands – On the heels of the April launch of a high-speed submarine fiber-optic cable linking the Marshall Islands to Guam and the world on June 16 Bank of Marshall Islands was to have rolled out the first cell phone banking services for the country.
With about 15 000 cell phones in use in this remote western Pacific nation of 54 000 the bank sees the business opportunity of using technology to create thousands of "mobile ATMs" in the country.
The new service is expected to positively impact distant outer islands where the transfer of money can be problematic. "This will be good for the outer islands that have never had access to banking services " Patrick Chen president of Bank of Marshall Islands said just before the launch. Only two outer islands have had regular banking services while some of the others receive occasional "mobile banking" service when bank staff island hop on government ships.
In addition to transferring money to and from outer island locations users of the new service will be able to buy cell phone airtime recharge electric meters and pay phone and power bills.
Currently many outer island stores have arrangements with sister businesses or agents in Majuro to receive cash deposits that an outer islander can use at the local store for purchases. After a deposit is made in Majuro announcements on the government’s AM radio station are frequently heard throughout the country advising a cousin or parent on a remote outer island that $20 is available for them at a local store. Others simply hand an envelope of cash to a person flying to a remote island with instructions – and hope – for it to be delivered.
"The advantage of the new Bank of Marshall Islands service is security " said Mayor Alson Kelen of Bikini. "It will help people on the outer islands and is something that local governments can use to transfer donor funding directly to the outer islands."
He said that communities of Bikini islanders on Ejit and Kili islands have already established stores as agents that will handle Bank of Marshall Islands cell phone money transfers. He and others also see the benefit of cell phone money transfers for the families of the hundreds of students who attend boarding schools on Wotje and Jaluit islands.
Cell phones offer a new and better opportunity than the Internet for banks and other businesses said James McLean chief information officer of Bank of Marshall Islands. The convergence of technology – the cell phone and the high-tech fiber-optic cable – means "a hand-held mobile device is the future of banking " McLean said. Majuro the capital accounts for about two-thirds of the cell phones in use in the country. "That’s a huge market " McLean said saying these are "potentially 10 000 ATMs moving around."
Bank of Marshall Islands has been at the leading edge of technology pushing other businesses to see the opportunities offered since the government’s National Telecommunications Authority’s submarine cable went online April 1. "If others look at themselves in the same light they will see more opportunities to improve efficiency or generate more revenue " McLean said. "Seemingly separate things – water electricity taxes – are suddenly not so separate anymore." He pointed to timesaving opportunities that can be provided to pay bills or for services in this manner.
"The cable is more than just a cable " he said. "Broadband is technology on steroids. It enables different business models we’ve never had before."
Chen said the bank has spent $200 000 to prepare for the service and has involved business and government information technology experts from Taiwan to develop the software interface to link the cell phone system with the bank.
"We see the need to develop the outer islands and to help communities such as Laura (a rural village 30 miles from "downtown" on Majuro Atoll) " said Chen. "Because of mobile banking they can save time and access banking services."
David Paul general manager of Marshalls Energy Co. is equally enthusiastic about mobile banking with which his company will be linked. The government utility will soon be installing prepaid electric meters in Majuro and the mobile banking system will allow bank customers to recharge their meters at any time. "This will help MEC and NTA save on labor costs " Chen said. "They won’t have to provide services on a 24/7 basis."
In the future Chen said he sees the advent of mobile banking opening the possibility of loans to remote islands that will now have a way of transferring payments to the bank.