Day Two Wrap-Up
Day two of #SoFI2014 has just finished and once again, there’s a lot to report from the day’s keynotes, panels and, of course, practical, hands-on workshops.
The Foundation’s own Ann Miles and Iqbal Nadir of MIT announced the launch of a new competition to encourage innovative practices that encourage further customer-centricity in the world of financial inclusion.
We began with a fascinating keynote from Strive Masiyiwa, founder of Econet Wireless, and an influential figure in Africa’s development and business circles. Strive discussed how his company’s mobile and financial inclusion products and services emerged to directly address the needs of poor clients living through post-war Burundi and during Zimbabwe’s inflation crisis. He shared how Econet tirelessly worked with regulators, invested in agent networks and technology, and engaged young people directly in guerilla marketing activities to help build trust in Econet’s services. Most importantly, he discussed the business decisions Econet made, such as paying interest on all money held in its system for longer than 30 days, and simplifying how fees are calculated. Strive noted that these client-centric decisions were essential to the explosive success of the company in tough markets.
The morning’s workshops again delved into some of the practical issues for financial service providers seeking to become truly client-centric. Discussions covered implementation issues around micro-insurance, keys to delivering digital services, how to track client over-indebtedness, how to use behavioural design concepts to design products, how to think about financial service needs of smallholder farmers, and how to improve customer service through better data analytics.
We reconvened in the afternoon for a lively and timely debate moderated by Kim Wilson of Tufts University about whether the poor are better served by high-touch interventions or by the new, low-touch and highly automated models now emerging largely through mobile telephony and application-based services. It’s a debate that’s central to the millions of poor clients we intend to reach in this sector.
Arguing in favour of low-touch, Eric Muriuki Njagi of Commercial Bank of Africa, and Katie Nienow of Juntos Finanzas explained how the automated, technology-driven products have achieved tremendous scale over a short period of time. Eric challenged the audience to consider that customers may well be agnostic about who is delivering products and services, and to consider what solutions new and old financial products offer – at the low cost needed to reach the 2.5 billion people who are unbanked. Eric quoted Bill Gates who said, “banking is necessary – but banks are not.” Katie compared the relative costs of these different approaches and insisted that the central issue is around reaching scale and providing the unbanked with services – and that this can only be done with technology. She also emphasized that low-touch models can be highly effective at generating insights about the poor.
Arguing for the value and cost of human interaction, One Acre Fund’s Andrew Youn and Bindu Ananth of IFMR Trust, urged the attendees to think beyond the impressive outreach targets of new technologies, and to consider what the real impact these large scale technologies are delivering. Bindu noted that “the moment of truth is not the sale of the service, it’s what the service is providing people” that’s important. She argued that while payments can and should be automated, specialized products like credit and insurance require a deep understanding of what clients face. “The cult of low-touch providers are going to take us down the path of very simple products,” that don’t solve real problems. Andrew acknowledged that mobile systems have achieved impressive numbers, but argued that the goal is not just scale, but scale with impact. “For the majority of the world’s poor people – farmers – I don’t think low touch models will make much of a difference, at least not yet,” due to the urgent needs to develop value chains and infrastructure needed to support more sustainable forms of agriculture.” Andrew compared the infrastructure that supports flying and noted that the cost that supports it requires extensive subsidy.
In response, attendees wondered if the two positions were necessarily mutually exclusive, and whether better segmentation would help the sector allocate different resources to different types of clients– some of whom may need and benefit from high-touch services, and those for whom low-touch interventions might meet a more basic need for financial inclusion.
The program ended with a panel discussion on the two vital phases of the client journey that the world of financial inclusion is struggling with – how to ensure that financial services and products become adopted and effectively used by the people they are intended for. Drawing upon experiences from beyond the financial inclusion sector, the discussion focused on understanding what combination of intensity, timing, and simplicity is needed to ensure poor clients can actively use financial services so that they can improve their lives.
The day concluded with a celebration of our Symposium partner – the Boulder Institute of Microfinance. This year, celebrates the 20th anniversary of its industry-standard Microfinance Training Program.
And that, again, is today’s wrap-up from here in Turin. Be sure to visit and contribute to the robust discussion emerging on Twitter @ #SoFI2014 and be sure you come back for more videos, liveblogs and reflections.
Also, be sure to keep your browser pointed here: https://storify.com/MCFoundation for interactive summaries of tweets, videos, and commentary we’ve curated using Storify.
