As local and international banks continue to roll out technologies to provide efficient and remote banking services in Africa, South Africa's First Nation Bank (FNB) has announced that it is experiencing a rapid uptake of mobile banking services across its operations in the region.

The banks' experience is a confirmation that Africa is an ideal place to offer a range of mobile banking services, according to a statement from FNB CEO Danny Zandamela this week.

Mobile banking services are helping banks in Africa reduce transaction costs and improve payment systems and also helping customers avoid time-consuming tradition banking services.

FNB, headquartered in South Africa, has operations in five African countries including Zambia, Botswana and Swaziland. The bank said it processes more than 13.5 million transactions every month to a value of 1.7 billion South African rand (US$251 million).

Outside of South Africa, the bank said Botswana has the highest number of mobile phone customers, followed by Namibia and Zambia.

However, there is growing fear that traditional banking is being overtaken by mobile banking and may scare away new investors who want to invest in the region's banking sector.

Most Africans are now using mobile financial services to buy goods, pay utility services as well as receive funds from abroad. Mobile phone banking has attracted low-income populations residing in rural areas who may not be able to afford a traditional bank account.

Africa's mobile phone banking sector is becoming heavily contested with major international banks including Standard Chartered Bank and the United Bank of Africa entering the market.

"Traditional banking is serious being threatened by mobile banking because of the cumbersome procedure of opening up an account, keeping the bank balance in the account and also paying to the bank maintenance fee every month," said Edith Mwale, telecom analyst at the African Agency for ICT Development.

"But with mobile banking, all a poor person needs is a cellphone to receive and send money," Mwale said.

Mobile banking services in the region are provided through the unstructured supplementary service data (USSD) platform, allowing customers to access their banking requirements on time.

Among other things, mobile phone banking services allow customers to view their statements, transfer funds between accounts, buy airtime for their phones and pay utility bills. The mobile-phone boom being experienced in the region has laid down a strong base for these low cost banking services, and the growth of mobile phone use in rural areas shows that mobile phone banking services are still attracting additional customers.

FNB's mobile technology is similar to that of East Africa mobile operator Safaricom's popular money transfer service, M-pesa, which has made banks uncomfortable given the shift of mobile transactions from banks to mobile phone kiosks. M-pesa is quickly spreading across Africa and has already entered the Southern African market via South Africa.