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.