Mobile banking adoption is growing far more rapidly in developing parts of the world, such as Africa, than it is in the US. What can US banks learn from mobile banking usage in the developing world?

Plenty, according to Steven Lewis, director of banking and capital markets at Ernst & Young.

Mobile banking is offering many convenience to US customers, including remote deposit of checks (even if it’s not free) from the comfort of home. But saving US customers that 10-minute drive to the branch pales in comparison to the effect mobile banking is having on customers that didn’t have bank accounts before mobile phones existed. Kenya, for example, has a very limited branch network that was not useful to most customers.

“Mobile banking is transforming the developing world,” Lewis told Bank Innovation. “It’s introducing life-changing conveniences to customers.”

One of the poster children of mobile banking is Kenya’s M-Pesa system, which just extended operations to parts of India. (The “m” stands for mobile and “pesa” is Swahili for money.) M-Pesa allows for the transfer of money via text message. The system processes 80 transactions per second and a massive amount of money passes through it. Estimates differ on exactly how much, but it may equal as much as 50% of Kenya’s GDP on an annualized basis.

It’s not hard to see how nations without established banking networks took to moving money over the phone. Banks in the US and Europe, with established branch networks, will need to work harder at it. “What you will see is banks paying very close attention to how they can continue to incentivize customers to use the self-service approach,” Lewis said.

Last week saw the launch of mobile-only “bank” Moven in the US. It joins various bank-like services, such as Simple and Bluebird. But while online or mobile-only banks are fine for shifting money from place to place and viewing account balances, much like M-Pesa, what about when customers need a loan? Can mobile banks survive by just offering checking accounts?

“The business model is such that banks need to sell multiple products,” Lewis said. “But if everything is done via mobile, your costs are going to be very low, which makes it essentially a new business model.” Mobile-only banks, in other words, have no legacy infrastructure to support, and can therefore run very lean.

“Eventually [mobile-only banks] will offer more advanced products and a fuller product line,” Lewis said. He pointed to the example of Brazil, where the loan process commonly takes place entirely over the smartphone. And first direct, HSBC’s direct bank, which began by offering telephone-only banking, now also performs complex loan operations entirely online.

So why isn’t this being done in the US? It’s easy to blame burdensome regulations, but current US regulations do not actually require in-branch signing of documents, as Moven’s Brett King has pointed out. Instead, it is the compliance teams within banks that compel customers to visit the branch network. Further, when papers are signed at the branch rather than online, the branch gets credit for the sale, leading bankers to believe that branches are necessary to the business model.

“Mobile is not a big revenue generator,” Lewis said. “Moving people to mobile saves costs, but mobile is not going to make banks money.” However, successfully moving complex transactions to mobile could swing more revenue over to that channel on the balance sheet.

Saving money is certainly a motivating factor for banks to send customers to mobile, but the real windfall may come with mobile wallet acceptance.

“Transactions and payments make a good margin, so banks don’t want to give that up,” Lewis said, pointing to nonbank players entering the space. “Acceptance is still not there [for mobile wallets,]” Lewis said. “But we do think we have reached a tipping point. There is enough activity that is generating momentum.” It is something of a waiting game now as standards have yet to establish themselves. Banks must keep up, Lewis said, so that when the shakeout is complete, banks are ready to deliver for their customers.

M-Pesa serves the needs of Kenyans. When mobile banking more completely meets US customers’s needs by handling a wider variety of transactions and at the point-of-sale, it will have an even greater impact on banks’ bottom lines and customers’ lives.