mobile money product innovation: driving financial inclusion through product development
DESCRIPTION
Presented as part of the Mobile Money Inclusion Summit in Dar es Salaam, Tanzania, November 10, 2011.TRANSCRIPT
Mobile Money Product InnovationDriving financial inclusion through product development
Lisa KienzleOperations & Strategy Manager
Mobile Financial Services, Grameen Foundation’s AppLab
November 10, 2011
There is incredible untapped potential in mobile money
“Fewer than 1 in 10 mobile phone banking
customers are poor, new to banking, and doing anything more than
payments and transfers.”
-Consultative Group Assisting the Poor (CGAP)
…yet outside Kenya, few
services have realized the same customer uptake
Safaricom’s M-PESA has proven that the mobile channel can reach poor consumers…M-PESA in Kenya is a “resounding technological innovation.”
-IMF, regional economic outlook for Sub-Saharan Africa
Traditional Payments
(Transfer, Bill Pay, and/or Airtime)
Other Payment
s
Bank Linkag
e
Credit Insurance
4%offer
insurance
11%facilitate
loans
29%enable interaction
with financialinstitutions
~100%offer standard
payments
38%provide other payment types
# o
pera
tors
off
eri
ng
the p
rod
uct
type
Source: GSMA deployment tracker.
When it comes to product, the industry is facing a crisis of innovation
Few providers have moved beyond
payments in their product offering
Payments Beyond Payments
0
20
40
60
80
100
120
So why aren’t we seeing more innovation?
TimeNot a sudden “stroke of genius” – but the result of significant time and
effort
ResourcesRequires an institutional
investment – both financial and human
capital
Appetite for Risk
Must be prepared to celebrate failure
R&D ProcessMust have capacity for research, development
and design that involves a deep engagement with
the consumer
How do we drive innovation?
Successful ideas are derived from an analysis of consumers’ current practices
• Must fit into existing behaviors rather than changing or displacing them
• Requires an understanding unmet needs, which yields key insights that drive product ideas
Insights arise from close studies of the end-user
“I save in a box, I want it locked away.”
QUESTION INSIGHT
“I’m paid when I
sell crops – a few times
a year.”
“When I’m not working, I like
to play [games] with friends.”
“I make a little money each day –
but not enough to
save.”
“If I have money in my
pocket I spend.”
Q1: How do you use informal financial services today?
Q2: What are your cash inflows/outflows?
Q3: What do you do in your free time?
Example 1: Culling insights from current practices - savings
1
2
3
4
5
6
Example 1: Informal practices yield product ideas
PRODUCT: Savings “Goal”
Accounts
Need an illiquid device
Want to partition money to save for different
goals
INSIGHTS:
You have deposited 2,000 UGX in your “School Fees” account Your balance is 78,000 UGX.
Set up multiple sub-wallets
Each named for a goal (“School;”
“Emergency,” etc.)
Deposit to or withdraw from a
specific e-wallet as
desired
Example 2: Following the money
Example 2: Cash flow patterns can drive product ideas
PRODUCT: Automatic Savings
Sub-Wallet
Small increments
– barely noticeable
An already embedded cash flow behavior
You have saved 34,000 UGX this month with AutoSave. Your savings balance is 64,000 UGX.
Create a primary wallet and a sub-
wallet
At each transaction (e.g., airtime top-up) cash diverted to
sub-wallet
Small amounts saved, almost
without knowing
INSIGHTS:
Example 3: Building on what people want with what they need
People love gaming…
…but they need protection from
“shocks”
Example 3: Juxtaposition of wants/needs yields new ideas
PRODUCT: Lottery Health Insurance
Want the sensation
of gambling
Need protection
from shocks
You have enrolled into MM lottery insurance and are covered for 2 million UGX for illness and eligible for the 100M UGX grand prize.
INSIGHTS:
Each month, small amount deducted from
wallet as premium
Insurance protects against
health issues
Lottery pays cash prizes via mobile money
Conclusion
Successful innovation requires a deep understanding of the consumer
New product ideas tailored to specific needs can increase financial inclusion
These new products will help operators identify the next “resounding technological innovation”
Thank You.