From Financial Inclusion to Financial Health: Addressing the Fundamental Barriers to Financial Inclusion – Part 2

Customers should have tools and an offline network that enable them to connect to an online financial services platform in an affordable way. They should also respond to a fundamental requirement: legally exist.

Tools

Mobile ownership is widespread among most markets – from 82% in Mexico and 87% in the Philippines to a staggering 93% in Nigeria – and they can be great tools to distribute financial services, as the 270+ mobile money services currently live globally show.

Smartphones in their turn present an opportunity to increase the scope of services offered and improve user experience. Their penetration vary massively across emerging economies though, and is much lower – say, 45% in Venezuela or only 4% in Uganda.

To tackle this issue, a hybrid model could be built. Simple transactions could still be SMS-based, while more complex operations would require access to a smartphone or tablet that the offline network would provide.

As smartphone adoption picks up – it is set to reach 63% of the population of emerging economies in 2020 – the need (and cost) to provide hardware to the offline network will gradually decrease. The migration from an O2O model to a purely (or mostly) online will improve its economics, which will, in turn, attract more competitors, which will contribute to a more efficient market and reasonable pricing for customers in the long run.

Offline network

In cash intensive markets, a network of offline agents is necessary to build the interface between the physical and digital worlds. Banks can be part of the network but, in most markets, sufficient capillarity will only be achieved with non-banks’ support.

Emerging markets showcase several success cases of effective offline networks. M-Pesa, with its >100k cash-in/cash-out agent network (mostly composed of airtime resellers), is a good example. Ayannah from the Philippines has built software to enable >7k retail outlets to become multi-product agents, selling dental and health insurance, but also airtime and online game pins.

Governments have a key role to play to enable other successful offline networks to flourish, by reviewing regulations that might limit the role of non-banks in the distribution of financial products, while maintaining adequate levels of risk management and oversight. Companies should provide their agents with a minimum level of financial literacy as part of their agency force onboarding process to ensure customer protection and transparency on product features and pricing.

Whereas offline networks will remain essential in the coming years, their importance is likely to decrease over time as transactions increasingly migrate from cash-based to electronic, naturally (as economies develop and formalize) or forcefully (as governments implement demonetization plans, such as the recent case in India shows).

Connectivity

MOST POPULAR

To read this article, create a free account

Already a member? Log in


Annual Subscription

12-month access to 10,000+ insights, research reports, a database of 13,000+ FinTech companies, and a live global community.

$26/mo

TRY FREE FOR 7 DAYS

SKIP TRIAL

instant access to reports and global community along with donation to COVID-19 fund.

Quarterly Subscription

12-month access to 10,000+ insights, research reports, a database of 13,000+ FinTech companies, and a live global community.

$49/mo

TRY FREE FOR 7 DAYS

SKIP TRIAL

instant access to reports and global community

--------------- Reasons to buy ---------------

Understand the “Why” Behind the “What”

MEDICI offers data-driven, original, unique, and forward-thinking content to understand the “why” behind the “what”

10,000+ insights, 100+ research reports, and 1,000+ videos based on data, collected and processed by top-in-class researchers with over seven years of experience in the financial service industry.

Actionable Insights

We do not stop at the data; we analyze it and extrapolate actionable insights that shape and forecast market trends. All of our pieces are neutral, authentic, and unique – this means that you can’t read them anywhere else!

Data Visualization

We do also care about design. It’s why our infographics are the most-used ones in company reports and the most shared ones on social media.

Growing Proprietary Database of 13,000+ FinTech Companies

We have one of the largest databases with more than 13,000 company profiles listed across 60+ verticals! The database contains primary data collected in two ways:

Through our Global Listening Engine – a proprietary algorithm able to extrapolate and collect data across numerous sources

Directly from FinTechs – thanks to the onboarding flow through which companies can list themselves on the most used database for venture capital in the industry

Join the Largest Global FinTech Community

You will be added to our private WhatsApp Channel with more than 200 FinTech leaders across the globe, where we engage in discussions around various financial services topics daily. After a few clicks, you’ll get to know the whole community, including the MEDICI team – you can ask questions, suggest topics, and get behind-the-scenes insights

Q&A

What is MEDICI Inner Circle™?

MEDICI Inner Circle™ is the membership you need to freely access all MEDICI content, which includes insights, research reports, videos, startup knowledgebase, and the members-only community for live engagement.

What topics do you cover?

We cover more than 60+ sub-segments in FinTech – but we do not stop there; we also cover topics beyond FinTech, such as InsurTech, RegTech, PropTech, WealthTech, BankTech, AgriTech, and the enabling technologies enabling innovation such as AI, Blockchain, etc.

What do I get if I buy the membership? Is there a difference between being a free subscriber and being a member?

By becoming a member, you will unlock all the content on our website. A free subscriber gets access to only 5% of what we publish on the web-site. Paid members also get preferred access to our live events, and exclusive access to the members-only community for live digital engagement.

Do you have a discounted plan for students?

Yes. Please write to us at innercircle@goMEDICI.com.

Do you have an enterprise plan for corporates or groups?

Yes. Please write to us at innercircle@goMEDICI.com.

Do you offer refunds?

We offer a 7-day free trial during which you can access all of our data, insights, and analyses. You can cancel the subscription any time before the end of the free trial period. However, we do not offer refunds.

Unlock this article by signing up for MEDICI Inner Circle

--------------- OR ---------------