Digital Finance Frontiers
Emerging digital payments platforms enable providers to deliver powerful financial solutions to poor people at scale.
Millions of poor people today access basic payments services through their mobile. Features such as graphic interfaces, interactive messaging, and social networking offer new, richer ways for providers to interact with customers and enable powerful value propositions. “Big data” and advanced data analytics are opening new ways to more effectively identify and attract new clients, tailor product offerings, identify opportunities to bundle and cross-sell other products, and manage credit risk.
Materializing this opportunity, however, requires significant experimentation. Providers need to effectively transition to an environment where the primary means to serve customers is through remote interactions. Although emerging technologies expand the potential for new solutions, developing new value propositions requires significant investment of effort and resources that providers often deprioritize given the uncertainty of outcomes. Innovators in the fintech space that offer promising tools often struggle to prove the value of their applications. As the digital ecosystem grows, solutions often require complex partnerships for data-sharing arrangements.
Photo Credit: Alland DharmawanCGAP’s Digital Finance Frontiers Initiative works with providers to expand the range of solutions that can be delivered on top of the “rails” of digital payments. It seeks to demonstrate through experimentation and real examples the potential of new technologies and new solutions to deliver more value to customers, in a sustainable and scalable way. It seeks to achieve this by:
- Producing the evidence that shows the potential of Fintech innovations to support effective digital delivery models.
- Demonstrating cases where digital innovations deliver powerful new value propositions, addressing key needs and pain points of poor people.
- Facilitating provider and funder engagement with opportunities in the digital finance space.
We expect that the combination of these efforts will reduce the risk in research and development and collectively inspire providers to replicate early successes or experiment further to develop new solutions.
FY2015 Highlights/Outputs
“Global Landscape of Digital Finance Innovations” (March 2015) characterizes the space where Fintech start-ups are exploring different aspects of mobile channels to enhance the value proposition of existing financial services.View Publication
“The Potential of Digital Data: How Far Can It Advance Financial Inclusion?” (January 2015) discusses the use of digital data and the growing role it is playing in financial services in low-income countries.View Publication
Established three partnerships to explore the potential of innovative applications of digital financial services technologies and new digital financial solutions to deliver more value to poor customers. Partners are BanKO/Philippines (drive savings and improved use of loans), Tigo Paraguay (drive higher take up and use of wallets from over-the-counter transactions), and Telenor Myanmar (test effect of graphic user interface on use).