The document discusses how developing customers' financial capabilities through consumer education can help address challenges to adopting branchless banking and support building an active customer base. It explains that focusing on understanding the customer experience, identifying financial capability gaps, and designing education to build relevant knowledge, skills, attitudes and self-efficacy can help customers more successfully adopt and regularly use branchless banking services. The case study of a bank in the Philippines highlights how simply signing customers up did not translate to active use of mobile wallets, showing the importance of the missing step of financial capability development.

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2. Welcome

3. Welcome

4. Welcome

5. Welcome

6. Welcome

7. Welcome

8. 8

9. 9
Title…
1.1

10. 1.2
The Financial Inclusion Challenge…
Microfinance created new opportunities for financial
inclusion by demonstrating the feasibility of
providing financial services to the poor.
However in 2012, an estimated 2.5 billion people
across the world still remained unbanked or
underserved by formal financial services.
Source: www.gallup.com 2012

11. 1.3
Consider the Potential of Branchless Banking…
What potential does
Branchless Banking
have to accelerate
financial inclusion
for the unbanked
or underserved?

12. 1.4
The Rapid Global Expansion of Mobile Money
Source: Mobile Money for the Unbanked 2013 Global Mobile Money Adoption Survey Findings (GSMA 2014)
Branchless Banking [BB] has the potential to expand access and support financial
inclusion efforts amongst previously hard to reach consumer segments.
BB opens up new access channels able to bring unbanked households into
formal financial services for the first time.
In 2013alone …
219 Live services
84 Countries

13. 1.5
The Potential of Branchless Banking…
Source: Mobile Money for the Unbanked 2013 Global Mobile Money Adoption Survey Findings (GSMA 2014)
However, at the end of 2013 only 13 out of 219 mobile money deployments
had reached scale, defined by GSMA as having 1 million active customers.
Usage rates also tend to be low. GSMA estimated that of the 203M registered
mobile money customer accounts, only 29.9% or 61M of those registered
accounts are active clients (2013).
In 2013…
203 Million registered accounts
But only
61 Million active accounts

14. 14
Case Study… Does Signup = Active Use?
1st Valley Bank in the Philippines launched mobile or branchless
banking services one year ago. The goal was for their clients to
sign up and use their mobile wallets to perform banking
transactions, so that there was less reliance and strain on their
credit officers and bank branches.
Most of their clients signed up for this financial service but the
vast majority only used their mobile wallets to buy air-time,
send remittances and make bill payments. They were not
sending their savings or making withdrawals from their
accounts using their mobile wallets.
The bank invested a lot of time and effort in the
design and launch of these BB financial services,
so they were not clear why they were not
successful in getting clients to adopt
branchless banking.
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15. 1.7
Why did the Branchless
Banking adoption
process stall for
1st Valley Bank?
What was the
consumer adoption
experience for 1st
Valley Bank?
How did 1st Valley Bank
hope consumers would
react to Branchless
Banking?
Case Study… Does Signup = Active Use?

16. 1.8
Sign Up’s
Air Time
Remittances
Bill Payment
 No Savings
 Not used for
withdrawals
 Willing Sign Up’s
Active use of
mobile wallet for
all Banking Services
Reduce strain
on Branch
Account deposits
and withdrawals
Is this situation
familiar in your
country?
Case Study… Does Signup = Active Use?

17. 1.9
Why do you think attention has
shifted in the industry from
signing up accounts to acquiring
active customers?

18. 18
Title…
1.10

19. 1.11
What factors create an environment that supports the
adoption of BB?
Regulatory Framework: KYC requirements that are feasible for
customers to comply with.
Product Design: a clearly defined value proposition that responds to
customer’s needs, outlined fees, transaction and troubleshooting steps.
Operational Processes: established front-office and back-office processes to
make it possible for customers to access the BB service
Distribution Network: a strategy that increase penetration of merchants
near customers and incentivizes them to deliver on the value proposition
Interface with Technology Provider: an interface that has been tested, works
properly and is easy to use by customers and merchants
Marketing: an advertising campaign that promotes the BB service
and its benefits.

20. 1.12
What other less obvious factors are required to create a
supportive environment for BB adoption?
Regulatory Framework
Product Design
Operational Processes
 Distribution Network
Interface with Technology Provider
Marketing
What else might
impact consumer
adoption of
Branchless
Banking?

21. 1.13
What is the Missing Step?
In our work we have identified that institutions tend to focus the preparations for
their BB deployment around the design of the BB service; as well as the Operational
aspects of BB that make it possible for customers to access that service.
However there is a significant step missing, which exposes a critical gap…

22. 1.14
What is the Missing Step?
The significant step that needs to be prioritized is
identifying your customer’s experience with the
BB service. This involves putting yourself in your
customer’s shoes to identify what perceptions
and expectations they have with regards to the BB
service. This will enable you to identify potential
challenges that customers encounter when they
access the service (impacted by both back office
and front office operations) and when they use
the product.
This analysis is important in order to then identify
what Financial Capabilities customers need to be
able to effectively use the BB service.

24. 1.16
What are Financial Capabilities?
Financial Capabilities are the combination of:
ATTITUDES which refer to a person’s positive or negative evaluation of the value of
managing money proactively including the value of trying a new technology such as BB.
KNOWLEDGE that enables customers to make informed decisions, by being able to:
Evaluate the cost-benefits of a money management decision, including the use of a
financial product or service; and determine how the decision will impact their overall
financial well-being.
SKILLS that enable customers to put that knowledge into practice, by being able to:
Manage their money, including the use a financial service, in ways that are
advantageous to them; and address problems that they could face while managing their
money or transacting with a financial service.
SELF EFFICACY confidence or belief in themselves, to put into action their
financial decisions.

25. 1.17
Financial Capability Development…The Missing Step!
Customers must rely on their
Financial Capabilities as they
journey through the adoption
process for Branchless Banking.

26. 1.18
Financial Capability Development…The Missing Step!

27. 1.19
Whatdo you think is the missing
step required to build an active BB
customer base?
What are some of the key factors
that create an environment that
support the adoption of BB?

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1.20

29. 1.21
The Customer’s adoption process for BB…
Based on research conducted in 3 countries (Zambia, Philippines and India),
as customers journey through the adoption process, they often face challenges related to
their financial capabilities: Not seeing the value of using BB; gaps in knowledge of the BB
service and its relevance to their lives; the skills to transact effectively with BB;
and the confidence to transact on their own.

30. 1.22
The Customer’s adoption process for BB…
Trust should be progressively built throughout the adoption process
…is when the
customer
realizes the
benefits of the
financial
service and
makes use of
the BB
products on a
regular basis…
…is when the
customer
decides to try
the financial
service to
determine
whether the BB
experience
matches their
expectations…
…is when the
customer
comprehends
the potential
advantages &
disadvantages
of the financial
service; then
considers if
they should
use BB or not…
…is when the
customer
becomes
familiar with
the financial
service and
what the
various BB
products can
do…

31. 1.23
How customers express their BB adoption challenges…
What other challenges
related to adoption of
BB have you heard
customers express?

32. 1.24
CE builds Financial Capabilities and supports BB adoption
Consumer Education ‘unpacks’ the BB service for the
customer and helps them have a more effective and satisfying
trial experience.
Financial capabilities can empower customers to become
capable successful users of BB by helping them to:
 Tear down misconceptions that can impede a fair
assessment of the potential benefits of BB.
 Make informed decisions as they evaluate the value of the
BB service.
Supporting customers in this way increases the likelihood
they will more successfully navigate challenges and sustain
regular use of the BB service.

34. 1.26
CE increased understanding of how BB works
Zambia
• Surveys tested customers' knowledge on the use
of Zoona's system and on money management concepts,
before and after receiving CE.
• Results showed improvement on all of the five questions
related to Zoona’s system. Two of these five questions
showed statistically significant improvement.
As a result of the CEBB program:
• Customers’ anxiety and dissatisfaction with service
decreased.
• Fewer questions and faster transactions occurred at
Agent locations.
• The number of complaints regarding the BB service
received by branch mangers decreased.

35. 1.27
CE increased trust and customer’s confidence
Trust
• India: Business correspondents reported increased
customer trust of the FINO service, following the CE
program.
• Philippines: Clients that received CE cited more reasons
why their BB transactions were safe than clients who had
not received CE. They volunteered that transactions were
safe because they received an SMS confirmation.
Behavior Change
• Philippines: Data from a small pilot suggests that consumers
exposed to CE increased their use of BB services more
generally than they might have otherwise.
Confidence
• Philippines: Customers exposed to CE reported increased confidence in being
able to conduct transactions on their own, instead of relying on merchants.

36. © Microfinance Opportunities 2013 36
CE increased effectiveness of frontline staff and agents
CE increased frontline staff and agents’ self-efficacy and capacity to educate customers on
the BB service in a clear, accurate, and engaging manner.
As a result:
• Frontline staff and agents felt more prepared and confident to approach and educate
potential customers.
• Institutions had a more systematic and structured way to promote the BB service. CEBB
training and tools provided a template that was still flexible enough for staff and agents
to customize to the needs of their individual customers.
CE increased accountability among business correspondents to visit their customers on a
more regular basis.
• India: MFO’s analysis of hundreds of thousands of transactions
records show that in areas where CEBB was offered, there were
more FINO clients transacting on any given day of the month.
This data indicates that, in these areas, business correspondents
circulated more in their assigned communities, giving
customers more opportunities to transact.
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37. 1.29
CE also had a positive impact on money management
• Zambia: The survey used also tested customer’s knowledge on money
management issues, before and after receiving CE. Results showed
improvement on six of these seven questions related to money
management issues. The improvement was statistically significant on
four of these seven questions.
• India: Our Financial Diaries data suggest that
women who received consumer education may
have become more effective money managers. In
the weeks immediately after the education, they
showed an increase in remittance receipts which
they then used to decrease their debt obligations.

38. 1.30
How important is the investment
into, and progressive development
of trust between financial service
provider and consumer in the
adoption of BB?

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1.31

40. 1.32
Ensuring CE is most effective…
The adoption of your BB service could be influenced
by BB ecosystem constraints, i.e. your BB system
experiences frequent outages, limited availability of
agents nearby, etc.
Your CE strategy can help set realistic expectations
within your institution of what CE alone can achieve.
CE is always most effective when it is implemented within a BB service that is working
well!
As you define in this section your CEBB objectives, take into account that people’s
financial behaviors are also strongly influenced by other external factors. The impact of
CE on BB uptake and use is closely tied to customers' regular and successful access to
the BB service.

41. 1.33
Ensuring CE is most effective…
CE is not a silver bullet. CE alone is not enough to solve
all problems with BB.
CE can enhance the environment that enables the
sustained use of BB by building Financial Capabilities.
But customers need to have the opportunity to apply
the new Attitudes, Knowledge, Skills and Belief in
Themselves acquired and have a positive experience
with the product.
If customer’s do not have a positive experience
accessing and using your BB service, their expectations
could get dashed and customers become dormant.

42. 1.34
Ensuring CE is most effective…

43. 1.35
What do you hope to achieve from your CEBB program?
What are the challenges that
your BB deployment is likely to
our currently facing?
•Regulatory Challenges…
•Product Design Challenges…
•Operational Challenges…
What is your customer’s
experience with BB?
What challenges are likely to
impact their adoption of BB?
By the end of the implementation
of a CEBB program:
•Our Customers would have…
•Our Front Line Staff would have…
•Our Institution would have…

44. 1.36
Defining the Objectives of your CEBB Program
Use Module One Tool to define the objectives
for your Consumer Education for Branchless
Banking (CEBB) Program.