Branchless Banking – Scenarios for 2020: Video and Presentations

6 months + 200 technology and finance leaders from 30 countries = four scenarios of branchless banking for poor people in 2020.

Yesterday we held a special webcast discussion of the CGAP/DFID Branchless Banking Scenarios 2020 Project and Focus Note.

Watch the video – Branchless Banking Scenarios for 2020

Here’s the line up of speakers, and the scenarios:

Setting the scene: the forces shaping branchless banking

• Stephen Rasmussen, Manager, CGAP Technology Program
• Elizabeth Littlefield, CEO, CGAP

Scenario 1: Bharatia, presented by Mark Pickens

• Moderator: Robert Annibale, Global Head of Microfinance, Citigroup
• Brian Richardson, WIZZIT
• Abhishek Sinha, Eko 
• John Staley, Equity Bank

The Bharatia scenario is a story of how changing customer needs, growing competition, an evolving regulatory environment and technological innovation could combine to shape a positive business and financial inclusion outcome in 2020.

The scenario examines the impact of a new player in the market and how a competitive and crowded marketplace for bill payment services stimulates a new wave of innovation. In the case of Bharatia, the opportunity space they identify is the Self Help Group (SHG). Through the creation of a mobile phone delivered accounting system, they not only deliver significant benefits to SHG members, but also create the means to connect the informal sector with established financial institutions, providing opportunities for the SHG to access a wider choice of loan and investment products and services.

Scenario 2: Telmar, presented by Sarah Rotman

• Moderator: Peer Stein, IFC
• Abbas Sikander, Tameer Microfinance Bank
• Aishath Haifa, Maldives Monetary Authority
• Rizza Maniego-Eala, Globe Telecom

The Telmar scenario is a ten year story of how sequenced and proportionate regulatory responses along with the strong commitment and support from the government and international donors, enable two established players – a bank and MNO - to shape a positive business and financial inclusion outcome for the small post conflict society of Telmar.

Closing remarks

• Daniel Radcliffe, Bill & Melinda Gates Foundation
• Mavis Owusu Gyamfi, Head of Profession, Private Sector Development, DFID

Snapshot of branchless banking today

• Financial inclusion is growing in most countries. This is often as a result of the expansion of conventional banking channels, such as branches and automated teller machines (ATMs);
• Bricks-and-mortar growth is inherently limited by its cost. Branchless banking presents a cheaper option but has only modest reach to date in most countries;
• Where branchless banking is occurring, several of the following factors are usually at work: (i) industry belief in future profitability; (ii) enabling regulatory change; (iii) a dramatic fall in connectivity costs; (iv) the creation of cash-handling agents using existing networks; and,
• Current hype about the potential of branchless banking is running ahead of reality. Massive sustained success in reaching the poor requires more accurate insights on poor people’s financial needs and adoption behaviour. This is only now starting to become available.

Four Forces Shaping Branchless Banking for 2020

• Demographic changes—including a greater number of younger consumers coming into the market and greater mobility at least within countries—will be favourable for the adoption of branchless banking;
• Activist governments will play a greater role as regulators of the financial sector, providers of social safety nets, and providers or encouragers of the rollout of low-cost bank accounts and financial infrastructure. This expanded role may be helpful for financial inclusion;
• While security concerns about cash crime will continue to drive the adoption of electronic transaction channels, the rise of electronic crime will affect consumer confidence and test the risk management of financial providers; and,
• Internet browsing via mobile phones will reduce costs of financial transactions and enable new players to offer financial services.

The driving question that the scenarios project has sought to answer is: “How can government and private sector most affect the uptake and use of branchless banking among the un-served majority by 2020?”

-Jim Rosenberg