I just came back from the recent 6th Mobile Commerce Summit Asia held in Singapore where I presented on using “Financial Inclusion through Mobile Money: Lessons Learned.” The turnout for the summit was better than I had expected and was a good mix of banks, telecom operators, third-party providers, all three major credit card operators (MasterCard, Visa, American Express), Google and some key government and industry regulators. Most of the participants actually came from or work in developing markets so there was quite a bit of discussion about mobile money and mobile commerce initiatives in the developing world.
My presentation focused on the lessons learned in using mobile money to promote and support financial inclusion. Based on my experiences and the observations of several initiatives in the field, I presented 10 lessons learned over the past eight years. I will be following up this post with 10 articles that detail the lessons learned and some tips for others to follow going forward.
I hope that these thoughts and ideas will be useful for mobile money providers including banks, mobile network operators, third party operators as well as others looking to support the use of mobile money for financial inclusion. So, for those who are interested, please feel free to subscribe to this blog for updates.
Lesson #1: Develop a Road Map
There was a lot of discussion about the importance of carefully planning your mobile money implementation – I like to call it developing a road map. The most important thing is start from the customer perspective and take a customer-centric approach. In addition, mobile money providers must take into account the unique market conditions that exist in each country and even within different regions within a particular country. While there are lessons to be learned from others, the unique aspects of the environment in which you will operate in will be key to take into account. The overall regulatory and policy framework for mobile financial services is also one of the most important aspects that everyone using mobile money in a country will need to understand. The next factor to take into account is the institutional perspective, which is especially important for strategic partners wanting to make use of mobile money to support financial inclusion. The fifth step in developing your road map is the product development phase, followed by proper product testing and then, if everything is successful with the pilot, a full product launch of the services you plan to offer.
Lesson #2: Strategic Partnerships Are Key
Building strategic partnerships is key to promote financial inclusion. Mobile money alone, without a significant value proposition from multiple partners, will hold limited value for customers and will not provide true financial inclusion. I will discuss some examples of key partnerships and how these can be properly structured to create a win-win situation in my follow-up post on this lesson.
Lesson #3: Focus on Building Trust
When providing any financial service, especially one built on a technology platform, trust is essential. Helping to develop this trust by ensuring safeguards and excellent customer service are crucial.
Lesson #4: Convenience & Availability
When you are dealing with people’s money, having rapid, reliable, and convenient access to money when and where you need it is also very important. This includes the need to have an extensive and properly managed agent network and potential integration in other platforms such as linking the mobile wallet to a debit/ATM card and/or allowing cardless ATM withdrawals. I will discuss this in detail and provide concrete examples from several markets around the world.
Lesson #5: Simplicity
The standard “Keep It Simple” rule is also very important especially when it comes to getting people to start using a new technology. Most under-banked and unbanked clients still use feature phones and will for the next few years. In some markets, literacy rates may be an issue so Interactive Voice Response (IVR) technology is now being used in some markets to address these issues.
Lesson #6: Marketing
A proper marketing budget and plan for offering mobile money services is one of the steps that many underestimate but ultimately is one of the most important factors in the take-up of mobile money. This includes above-the-line, below-the-line, and direct marketing efforts. The important thing is to be able to market and address the needs of various target groups and segments so often multiple approaches and messages need to be used.
Lesson #7: Client Education
Properly educating customers how to make use of mobile money is one of the most challenging aspects of most mobile money deployments. Educating clients takes time but, if done properly and if focused on influencers in society, those wanting to make use of mobile money to support financial inclusion can be successful.
Lesson #8: Expand the Value Proposition – Start with the Banked First
It may seem a bit of an oxymoron but to provide services to the unbanked or under-banked, you need to start with banked customers. To provide financial inclusion to the unbanked using mobile money, you need to establish appropriate value propositions. Creating a mobile money service and offering a wallet to people is just that – a wallet. Mobile money in and of itself does not provide financial inclusion. People will not keep much money in their mobile wallet or not even use it that much if there are not many options to spend or use it for. The real value of mobile money is in the various use cases that are developed around providing this service. You need to find where clients transact, whom they pay and who sends them money? Who buys their goods or services? Most of the places and people where low-income households will spend money or receive money from will be banked people and/or businesses. You need to make sure that they can also accept, send, and make use of mobile money before you promote these services to the under-banked or unbanked.
Lesson # 9: Use it Internally First
Any mobile money provider and especially partner institutions promoting the use of mobile money for financial inclusion need to learn how to use mobile money first internally. I always say that you need to eat your own dog food. Wikipedia defines Eating your own dog food, also called dogfooding, as a scenario in which a company uses its own product to demonstrate the quality and capabilities of the product. The idea is that if the company expects customers to buy its products, it should also be willing to use those products.
In terms of promoting mobile money, it is important to also learn the daily experiences of your own customers. You and your staff should also start by using mobile phone models that your clients would carry. For example, I always carry a feature phone with me in each market I travel to check out a mobile money service and to better understand the user experience. There are also other important reasons to make use of mobile money first by your staff internally, which I will discuss in an upcoming post on this lesson.
Lesson #10: Get Money into the System
Getting money into the mobile money system is also crucial. Payroll, government benefits, bulk payments, remittances, or supporting mass transportation systems via mobile money are all important ways to get money into the system. Examples from several markets will be discussed in the blog post for lesson #10.