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Mobile Money Product Innovation: Driving Financial Inclusion through Product Development


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Presented as part of the Mobile Money Inclusion Summit in Dar es Salaam, Tanzania, November 10, 2011.

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Mobile Money Product Innovation: Driving Financial Inclusion through Product Development

  1. 1. Lisa KienzleOperations &Strategy ManagerMobile FinancialServices,GrameenFoundation’sAppLabNovember 10,2011 Mobile Money Product Innovation Driving financial inclusion through product development
  2. 2. There is incredible untapped potential in mobile moneySafaricom’s M-PESA …yet outsidehas proven that the Kenya, few servicesmobile channel can have realized thereach poor same customerconsumers… uptakeM-PESA in Kenya is a “Fewer than 1 in 10 mobile“resounding phone banking customerstechnological innovation.” are poor, new to banking, and doing anything more-IMF,regional economic outlook than payments andfor Sub-Saharan Africa transfers.” -Consultative Group Assisting the Poor (CGAP)
  3. 3. When it comes to product, the industry is facing a crisis of innovation ~100% Few providers have offer standard payments moved beyond 120 38% payments in their # operators offering the 100 provide other payment types product offering 29% product type 80 enable interaction with financial 60 institutions 11% facilitate 40 loans 4% offer 20 insurance 0 Traditional Other Bank Credit Insuran Payments Payments Linkage ce (Transfer, Bill Pay, and/or Airtime) Payments Beyond PaymentsSource: GSMA deployment tracker.
  4. 4. So why aren’t we seeing more innovation? Time Resources Not a sudden “stroke of Requires an institutional genius” – but the result of investment – both financial significant time and effort and human capital R&D Process Appetite for Risk Must have capacity for research, development and Must be prepared to design that involves a deep celebrate failure engagement with the consumer
  5. 5. 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
  6. 6. Insights arise from close studies of the end-userQUESTION INSIGHT “If I have money in my “I save in a box,Q1: How do you pocket I I want it lockeduse informal spend.” away.”financial servicestoday? “I make a little “I’m paid money each when IQ2: What are your day – but not sell crops –cash enough to a few times ainflows/outflows? save.” year.” “When I’m not working, I like toQ3: What do you do play [games] within your free time? friends.”
  7. 7. Example 1: Culling insights from current practices - savings1 3 52 4 6
  8. 8. Example 1: Informal practices yield product ideasINSIGHTS: PRODUCT: Savings “Goal” Accounts Set up multipleNeed an sub-wallets illiquid You have device deposited Each named for a 2,000 UGX inWant to goal (“School;” your “School Fees” “Emergency,” etc.)partition account Your balance ismoney to 78,000 UGX. Deposit to orsave fordifferent withdraw from a specific goals e-wallet as desired
  9. 9. Example 2: Following the money
  10. 10. Example 2: Cash flow patterns can drive product ideas INSIGHTS: PRODUCT: Automatic Savings Sub- Wallet Create a primary Small wallet and a sub-increments – wallet You have barely saved 34,000 UGX this noticeable At each transaction month with AutoSave. (e.g., airtime top-up) Your savingsAn already cash diverted to balance isembedded sub-wallet 64,000 flow behavior Small amounts saved, almost without knowing
  11. 11. Example 3: Building on what people want with what theyneedPeople lovegaming… …but they need protection from “shocks”
  12. 12. Example 3: Juxtaposition of wants/needs yields new ideasINSIGHTS: PRODUCT: Lottery Health Insurance Each month, smallWant the amount deductedsensation You have enrolled from wallet as into MM lottery of premium insurance and aregambling covered for 2 million UGX for Insurance protects illness and eligible Need for the 100M UGX against health grand issues from shocks Lottery pays cash prizes via mobile money
  13. 13. ConclusionSuccessful innovation requires a deepunderstanding of the consumerNew product ideas tailored to specific needscan increase financial inclusionThese new products will help operatorsidentify the next “resounding technologicalinnovation”
  14. 14. Thank You.