Do you really believe that simply providing cheap and efficient access will make poor, self- or informally employed people flock to banks? Can you honestly hope for a shortlist of silver bullet financial products that, once discovered, can unleash demand for formal financial services amongst hundreds of millions who presently don’t get how banks can help them?
Surely to need financial planning you need to have enough money with which to plan…
The “one size fits all” solution provided by cash is still the major stumbling block of all financial inclusion programmes. For mobile money to begin to make an impact on the ubiquity of cash, the electronic impulses that support it must be within reach of all concerned.
While Financial Services providers fight to compete rather than collaborate, they place the cost of marketing before the delivery of consumer satisfaction – it seems with shouts of “Our electronic impulse is better than theirs!”
In a market where the ability to collect and spend money are critical issues to well-being and even to life, that competitive battle passes over the heads of the average consumer, who has more pressing needs.
They trust cash… until we build a trust in electronic impulses that matches that trust in cash, the mobile money revolution is just spinning wheels.
Access is essential, low cost is essential, a portfolio of services can grow, so long as person to person, cross-network transactions take place, successfully.
It may be a right, it may be a necessity, it may become a tsunami of financial inclusion but it will be stillborn until it becomes “legal tender” in a way that matches cash.
At Rainbow Interchange we have long believed that local financial businesses have the finger on the pulse of their customers needs, but in reality they must collaborate to deliver value and to develop their market penetration.
For example: The Tin Box Micro-finance solution works for a village and enables a degree of financial planning, but it excludes so many other financial services.
Single network mobile money works when you have a substantial market share as Mpesa have shown in Kenya.
Banks deliver value in markets where their catchment areas support their infrastructure and the services and planning capabilities they provide.
A network that enables consumer facing registered financial services providers to compete on the basis of their consumer solutions is what Rainbow Interchange is creating. The belief is that success will be in providing the tramlines that enables bank customers to pay money to mobile users and that employers pay wages through multiple platforms to consumers who choose what works for them in their purchasing, saving and borrowing … and then a financial planning can take place.
After all cash flow is a moving target and you can not plan with what you do not have…!
Dear Ignacio and Jonathan,
What you are advocating is possible and doable and its simplicity makes one wonder why it isn’t in place already, especially now that financial inclusion it touted as a poverty eradication panacea.
Your mass customization framework sounds like a supermarket framework. You want the poor to enter a financial products supermarket well stocked with a wide variety of products in terms of size, quantity, quality, assortment and all specs that fit the needs of the poor.
You visualize the poor man walking into the supermarket uninhibited, picking a trolly and enjoying the shopping experience with nobody disturbing him as he picks what he thinks in suitable. The supermarket aisles, you reckon, are wide, products attractively displayed, enough lighting and attendants unintrusively conspicuous just in case needed.
You want the poor to saunter to the financial juices parlour corner within the supermarket and feel free to construct a cocktail of financial juice from the wide variety displayed, as per taste and preference, walk to the teller, pay and walk away fulfilled. As a matter of fact, you want the poor customer to go to the financial bread corner, pick a loaf, go to the butter and jam corner, scoop as much as she wants, spread on the bread slices, walk to the teller and get charged for the bread and the quantity and quality of jam and butter applied.
What you are saying is that the financial products supermarket owner should invest in understanding what the poor customers want, stock it and display it in a way that is easy to choose and pick. And as the attendants watch the customer behaviour from a distance, they are able to discover the customers preferences and therefore stock more of what is moving. Indeed, the frequency of restocking would inform the owner of customers’ preferences. But just incase a customer misses something, a few attendants are placed at the exit to ask customers if there is anything they wanted but didn’t find in the supermarket. The response would guide further understanding of the customers’ needs.
If that parallel fits what you are talking about, then why do financial services providers find it difficult to create financial products supermarkets where self service is the order and restocking is as per what is fast moving, an indication of preferences?
If we reflect on what was before supermarkets-the stand-alone shops with scanty stocks and compare with how much convenience supermarkets and hypermarkets provide today, then we can confidently say the financial products supermarkets and hypermarkets for the over 2.5 billion unbanked customers in the world, are inevitable and long overdue.
Jonathan would you rather we compare your idea to an elaborate lunch buffet for the poor where they construct their plates with the food as per their appetite, preference, pockets, gentleness and such considerations? And the interface being the enticing display and easy to pick curtlery and comfortable seats?
In the era of technology and using the above parallel and Ignacio and jonathan’s content and context, it appears the mobile phone is the supermarket infrastructure. The diverse financial products for the poor to populate the infrastructure would be the relevant products that financial services providers must design. The interfaces would be represented by the whole range of smooth gliding trollies, excellent display, wide isles, easy to read and well displayed signages, startegically located unintrusive attendants, friendly tellers, speedy teller computers and all that goes with the process of buying. In the context of financial services infrastructure,the same is represented by user friendly navigational tools and delivery mechanisms as well as the friendly and helpful personnel.
I believe that the success of supermarket business model in the world is based on what you are saying. And it gets better the more supermarkets chain understand their customer’s preferences, tastes and conveniences.
This posting is great and an usher to the new inevitable financial inclusion dawn. Forgive me if by using the parallel I have missed the idea or even oversimplified it. Please correct me. With this kind of thinking from the duo, poverty stands endangered!
I am i total agreement with you. To add few comments, many of the executors of these programs sit at the comfort of their offices and assume all is well. without coming out to the client to solicit for their complaints. This generation is making finance too cumbersome instead of simple. it is not the beautiful ties and dresses we wear that attract customers but the appealing nature of delivery with the right attitude. I think that MDs and CEO must descend into the waters with their representatives and ascertain for themselves the right situation.