USSD and Mobile Banking: Why it Works So Well
At Strategix, we often address the topic of hyper-connectedness in today’s modern business world. It’s a truly fascinating global state – a zeitgeist the likes and impact of which the world hasn’t witnessed before. And why? Because it’s effectively brought us together as a consuming society. Business has become a worldwide property, with any enterprise in any country able to tap into a myriad international markets and sectors.
Let’s move from the macro to the micro here, though, because South Africa is experiencing a hyper-connectedness of its own. And there’s one particular business sector that’s especially benefitting from it – banking.
In 2021, statista.com recorded a whopping 60.71% mobile phone internet user penetration in South Africa, with those numbers projected to reach just under 70% in 2026. Simply, in 2021, we saw around 32 million phones pinging to network towers all across the land. Now that’s connectivity that we can safely deem ‘hyper’.
What can be deduced by this collective acceptance of the power of mobile, is that the greater population has disregarded the distrust it once harboured for conducting daily tasks on cell phones. Now, that device has become an extra vital personal accessory – joining the ranks of glasses, handbags and wallets. A must-have at all times.
Because of this, mobile banking has now become the go-to when managing personal finances. But why? Well, firstly, no one wants to go into a branch, so the convenience of getting it done remotely, without queues, is very appealing. Secondly, it’s mostly because of a simple, yet highly effective technology – unstructured supplementary service data (USSD).
Here’s why it works so well.
USSD technology is easy to understand and easy to use
The best example of USSD technology, is that interaction you enter into when buying airtime, data or SMSs with your cell service provider. It’s that list that comes up with numbered options, from which you make your selection, and send back for instant top-ups.
It’s a quick and very simple way to engage directly with customers in real-time, offering them fast self-service in:
- Various product purchases
- Account balance requests
- The updating of accounts and personal information
- Marketing and up-sales
- Customer service – feedback, account requests, issue resolution and complaint management
- Marketing activities
USSD technology offers a safe and secure browsing experience
While it’s easy to see that security in SMS banking can be tenuous – messages with sensitive financial or banking information can be forgotten about, discovered by nefarious parties, or simply lost – USSD technology steps in as a much more secure option. And that’s because it’s a data-free method for real-time communication with clients, that allows for immediate engagement, and thus fast resolution
USSD technology works on feature phones
We mentioned earlier, the burgeoning increase of mobile internet users in South Africa, and the trend of the collective shift toward entirely mobile banking. This would obviously mostly entail a smartphone penetration.
However, there’s much to be said about the steady presence of basic – or feature phones – in that same market. The number there is currently sitting at a 40% presence in the population – a significant chunk. The wonder, then, of USSD technology, is that it can tap right into that contingent too. There is no need for the internet or data – USSD is a far-reaching, all-permeating technology that puts your clients in direct contact with you no matter what device they use.
USSD technology works across all mobile operators
And that reach extends further. All networks comply seamlessly with USSD technology, so, on set up, banking businesses can avail themselves to the mobile phone-using masses and enjoy an almost unlimited number of eyes that can be drawn to their marketing strategies, new products and services, anywhere, anytime.
And, in turn, it’s a way for said financial institutions
to offer the always-on services that attract and
retain business.
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