Jacqueline Jumah, Digital Financial Services Market Specialist and Managing Director at Intermarc Consulting
Digital channels can drastically drive presence and scale when offering financial services, opening doors to the unbanked and underserved populations. Financial regulators around the world have realised the tremendous role that digital financial services (DFS) can play for financial inclusion and have sought to unlock this potential by creating evolving enabling environments. Financial inclusion, at its most basic level, starts with having an account (financial institution account or mobile money wallet), but it doesn’t stop there, people can only fully benefit when there is regular usage.
In recent times, we have witnessed incredible innovations in products, and initiatives to support the delivery of financial services, promoting the uptake and usage of products and services and showcasing the business case for financial inclusion. The advent of fintech has also propelled developments in the industry, where solutions have come with alluring ‘convenience’ value propositions, translated to accessibility, immediacy, affordability, security, reliability, among others.However, after closely working with low-income people it is critical to explore how comprehensible the convenience is, in the eyes of customers. The convenience perception is a key influencer in the adoption and regular usage of these solutions by customers. Perhaps, we would understand how to develop better products and services and hence experience higher customer activity rates in DFS.
My experience places me in the contextof the financial behaviour and mindsets of the low-income segment people. They are involved in multiple informal money management activities, which work for them, and which form archetypes to evaluate any new offerings by financial service providers. Reflections on the accounts of Portfolios of the Poor and What do Low-income People Know About Money?is that low income segment people have money management mechanisms that work for them and are content, even when these mechanisms could be improved, as Ignacio Mas exemplified in the Digital simulations to digitising financial access for the poor.
DFS has so far mostly achieved to replicate the traditional offerings provided by conventional institutions and the informal financial services workarounds. Here, ‘sign up with us for your convenience’ is the overarching value proposition by a good number of leading providers and which now seems somewhat imperceptible by this segment.For most providers, the inclusion effort of providing these products and services to the bottom of the pyramid customers has not been effectively considered. Providers are offering products and services in pre-determined three main categories – savings, credit and insurance which have been derived from mainstream or traditional financial services. Think about it!
In order to understand how best to address the existing pain points of typical low-income households, through providing improved digital alternatives, I set out to find typical personas and engaged one couple in Kenya on how they manage finances.
Adhis is a woman in her mid-thirties living in Kibera – a slum area in Nairobi, Kenya. She is married with five children, all of whom are still in primary school. Adhis’ husband,Mr. Obende works as a casual labourer at construction sites in the Langata area in Nairobi, while she runs a chapati (some form of local bread) and porridge business, providing meals to the construction casual labourers. Adhis earns an average revenue of USD 4 per day. Her business is involving, as she has to wake up at 3 am in the morning from Monday to Saturday to cook chapati and porridge for purposes of selling to the construction workers.
The construction site jobs are quite unpredictable, sometimes the workers are dismissed after arriving at the site, citing no work. Both Adhis and her husband are often affected by the irregularity of the construction jobs and are forced to go back home where Adhis sets up a stall to sell the chapati and porridge – experiencing lower returns. Sometimes she never clears her stock,therefore, converts the stock to the family meal of the day.
Adhis stores away some money ranging from USD 0.2 to USD 0.5 every day in an old BlueBand margarine tin in her house, for rainy days. Every Sunday, she visits her “chama” (women savings group) and contributes USD 0.5,where she from time to time borrows money for her upkeep and school fees payment. Unlike Adhis, Mr. Obende prefers borrowing funds from Mr. Otonglo the local money lender even though there are higher repayment interest amounts. On rainy days, he would pledge valuable household items,for example, the radio or Adhis’ Kitenge (african fabric) against some money from Mr. Otonglo ranging from USD 5 to USD 50.
These are basically the couple’s day to day money management mechanisms as they heavily depend on the Mr. Obende’s construction site income, profit from Adhis’ business, savings collected over time from their little BlueBand margarine jar, loans from Adhis’ chama and from the local money lender – Mr. Otonglo. Some key insights into the perceptions and challenges of this household, as regards formal financial services are as follows.
The feeling of discrimination and judgement
People in the low-income segments often want to manage their finances in the most comfortable way possible. They hope to do so without feeling like they would be judged in anyway, and that they will be treated with dignity. They may feel intimidated by the formal structures or even agents who are their neighbours and somewhat know them. In Adhis’ case, she prefers accessing and juggling her money without feeling the need to dress up in her ‘Sunday best’ clothes and shoes, or to remove her usual head gear (old stockings she frequently wears to protect her hair from smoke and roadside dust, as she performs her daily business operations) to go to snazzy looking buildings. She is uncomfortable with prim and proper looks which she feels is for the rich. Adhis compares the immediacy and flexibility value proposition from digital financial services to her experience saving money in the BlueBand jar at home.
While accessing her funds from the jars in the house, she does so discretely and feels that no one would judge how she looks. She also believes there is no judgement when she decides to switch her savings goals or even go against the saving period plan. Adhis admits that although she has an M-Pesa wallet, it is not her preferred financial management medium so she rarely does anything on M-Pesa. This is because she feels she would be opening herself up to the nearby agent, who happens to be a woman, and who she feels may judge her or tell other women about her money usage.
How can providers leverage technology to mimic Adhis’ savings plan and improve on it? How might technology be used to instill confidence in Adhis by creating a perception of privacy when she is depositing or withdrawing funds at the agent location? The answers to these questions would inform some design thinking for financial services propelling innovation and the development of highly usable products and services.
Money in formal systems is not multipurpose
Money in formal systems is deemed not to be as flexible as cash. At any point in time, cash can be exchanged to instantly access goods and or services as opposed to e-value which is not easily accepted. This is because to some extent,at the moment, the focus is on the interconnectivity of systems to promote functionality. Digital channels are more of bridges to money, enabling funds to move from one point to another, with high preference to conduct cash out transactions among customers. The micro level payments ecosystem has not been adequately tapped to enable the likes of Adhis to make payments digitally for their day-to-day needs, hence the perception of money in formal systems being inflexible. Adhis talks of the hurdles in having funds in her M-Pesa wallet when she wants to make payment for the chapati flour or sugar. Her supplier only accepts cash and so this means she has to find an agent to conduct a withdrawal, and at the same time gets charged for the transaction. Withdrawal charges reduce her working capital amounts, discouraging her from holding funds into her M-Pesa wallet. She argues that funds in the M-Pesa wallet are not equal to funds in her purse.
Customers should be able to access their funds whenever there is need. They compare accessing funds from their social groups and other informal borrowing avenues to the formal processes and make decisions basis the ease of access and usage. Flexibility in the availability of funds can be created by driving the acceptance of digital currency. This may be done by providing incentives for electronic transactions and waiving charges in the short-run. In the long run, when e-value is highly acceptable in the low-income segment, minimal charges could be re-introduced.
Perceived confusing, beguiling or hidden conditions pegged to formal financial solutions
The liquidity features commonly known as terms and conditions and other fees for digital financial solutions are not clear and, in many cases, not known to many households. During customer registration to digital financial services, very little information on product features is passed on to customers leading to low trust levels to formal systems. Adhis does not fully trust bank accounts or mobile wallets because she feels that she does not have adequate information regarding operating the said accounts. She reported that she is also not clear on the funds transfer pricing structure and is therefore scared of getting charged hence prefers to keep her money in the house, where she can access the money for free. She also expressed that the fees fluctuate without notice to her and that she would only realize the change upon sending funds. Despite there being measures to help in price transparency in Kenya, awareness among users is still low.
There is need for the introduction of product features that give users a sense of control over when they need the go ahead to sign up for solutions, when they want friction – not to sign up or even how best they could use the solutions. A situation where products are driven by real use cases.By so doing the perception around these solutions, their uptake and eventual regular usage would improve.
The friction in this case is critical too as it empowers users to think of the consequences, plan and make choices on the basis of how these solutions would address their daily pain points. For example, digital credit solutions are exuding a myriad of challenges mostly because the providers have focused in making them readily available and not to address real problems among users. If well considered and structured, digital credit solutions can promote financial inclusion, dignity of users and poverty alleviation. Could providers introduce digital credit solutions that mimic traditional hire purchase arrangements for both goods and services? Asset financing? Instead of easily issuing funds to users, could they identify the need for these funds and create customized impact-oriented credit solutions? Maybe, as an industry, we need the doctor and patient perspective where every patient’s symptoms and treatment prescriptions are treated as unique. Here, users’ pain points would be uniquely addressed.
Saving in formal systems is deemed inoperative
The low-income segments deem formal savings as for those with surplus money. The people in this niche want to see their money working for them or to engage in animating money. Adhis prefers belonging to a savings and credit group to “help others” with the money as she feels this is a wiser way of managing finances and that she will in turn access loans whenever she is in need. She also prefers storing her money in the house to cater for the unanticipated payment for security whenever the vigilante groups from neighbourhood groups knock at her door. Basically, funds saved in formal financial systems are regarded as idle funds.
Providers may pitch savings products as futuristic payment solutions. Such that these products would be perceived as developmental milestones towards future payments. There are already a number of goal-oriented savings products across markets, maybe some repackaging and messaging customization can improve user perception and ultimately regular usage. This way they would seem favourable and aligned to working for the users to achieve their future payment needs.
My interactions with this family shed some light on some of the true perceptions and challenges they face in embracing formal financial services. It is not just about providing digital alternatives; the digital solutions would be meaningful if they are perceived as superior to informal alternatives. Understanding these perceptions and challenges will go a long way in generating daily relevant financial solutions to the low-income segments, those that seem to be better than existing alternatives to encourage regular usage. Some offerings that might seem obvious to other segments seemed imperceptible to this household. Quite some room to improve today’s solutions!
Author: Jacqueline Jumah
Digital Financial Services Market Specialist and Managing Director at Intermarc Consulting
AI Expo Africa 2021: Demand surges for 4IR tech as 4,600 register for Africa’s largest AI trade event
AI Expo Africa – the continent’s largest annual gathering of buyers and suppliers of Artificial Intelligence (AI), Robotic Process Automation (RPA) and Fourth Industrial Revolution (4IR) smart technologies – is set to have its biggest edition this year as 4 600 delegates and several international and local sponsors have already registered to attend the trade show and conference which takes place between 7 to 9 September.
AI Expo Africa 2021 ONLINE will mark the fourth edition of the annual trade event. Dr Nick Bradshaw, AI Media Group CEO and AI Expo Africa founder, pointed out that this year’s event will – like last year’s edition – also be held online to circumvent COVID-19 event restrictions. “Based on the early interest in AI Expo Africa 2021 ONLINE, we know our community likes the event’s online format and mix of content, vendors and innovators. AI Expo Africa 2020 ONLINE attracted more than 2 400 registered delegates and hosted 80 speakers and 80 exhibitors. This year we are on track to set a new benchmark as the audience grows.”
Head of Show Production Daniel Mpala stated that AI Expo Africa 2021 ONLINE is on track to host the largest mix of global vendors and cutting-edge startups for its curated audience of business practitioners. “Our event has now grown in the last three editions, starting this year, we will be dedicating Day 1 of the event to showcasing our vendors. AI Expo Africa 2021 ONLINE will again feature our specialist eZones, labs, poster wall and several country ePavilions from vendors outside the Africa region making for a truly global 4IR technology festival we think our community will really enjoy.”
Early sponsors that have signed up include US-based Future Tech, Czech-based IBA Group, UK-based Elzware, as well as South African firms Aizatron, COGO People Analytics, CompariSure, ecosystem.Ai, WizzPass, and Amathuba AI.
Premier diamond sponsor Future Tech, an Accubis company which specialises in Blockchain, AI, RPA and Digital Transformation, said it is excited to be part of this year’s edition of the expo. “We already have a range of projects underway in the Africa region and are actively looking for startups to invest in with funding partners wanting to co-invest. Africa is seeing a surge in uptake of these 4IR technologies and we see community engagement via this event a key part of our strategy for the the region in 2021,” explained Future Tech co-founder and Blockchain / AI Practice Manager Daniel Sloan.
COGO People Analytics managing partner Elmen Lamprecht commented that the COVID-19 pandemic has shown that it cannot be “business as usual”. “The world of work has changed irrevocably and People Analytics will play a huge role in the workplace going forward. We are excited to be part of the Africa’s leading AI event and to showcase how we can help organisations adapt to the new world of work by harnessing the capabilities of AI in their HR departments,” added Lamprecht.
ecosystem.AI commented that it had found new ways for businesses to understand and interact with their customers. “Through the use of of machine learning and behavioural predictions, we give businesses the tools to better engage with their customers in real-time. Exploring and understanding the behaviour behind the choices that their customers make,” the company added.
Ulrich Stark, the co-founder and executive director of WizzPass — which supplies highly configurable visitor & contractor management, employee desk booking, office capacity management, employee parcel management and Covid-19 screening services — commented, “As a returning supporter of AI Expo Africa 2021, this event is a great way to reach new business customers and we look forward to meeting the delegates and partners in September for a truly amazing experience.”
Aizatron said it looks forward to demonstrating its latest smart IoT and edge solutions. “We will be showcasing our latest computer vision technology, smart agri-tech, and intelligent safety and security systems. We will also demonstrate how we have coupled AI with RPA technology to create smart self-healing operations, that react quickly to alerts and deal with them quickly and effectively improving SLAs and reducing business outage due to system failures. Large companies attending the expo will also be shown how they can easily access our technology through our secure APIs”.
Amathuba AI Chief Commercial Official Nomsa Nteleko said the firm’s vision is to advance African culture and humanity through the assimilation of Artificial Intelligence technology. ” We hope to achieve this by changing the African narrative through our progressive technology. We believe AI can be a collaborative partner to humans. Our solutions include; Medical, Healthcare, Manufacturing, Auditing, Data Enhancement & Cyber Risk. There has never been a better time to embrace the 4IR technology opportunity and as a returning supporter of AI Expo Africa we look forward to meeting new clients and partners at the show,” she added.
Matt Kloos, CFO at South Africa based CompariSure, stated, “At CompariSure, we aim to connect consumers with premium product providers, while using our proprietary chatbot technology to build the “automated insurance agent” of tomorrow. We see AI Expo Africa as a great way to reach new business customers and showcase our conversational technology to new users who are perhaps considering this kind of technology for the first time. We are really happy to be joining over 4 000+ delegates who are keen to see what Africa has to offer in this rapidly growing segment of the market”.
IBA South Africa managing director Dimitri Denissiouk said the company is excited to be involved in the high-profile event, and about what it can bring to African businesses in terms of automation and digital transformation. ” Intelligent automation has been the company’s focus since 2013. The IBA Group’s Center of Excellence has implemented 500+ RPA solutions and our developers have been working for years with a variety of RPA platforms, including WorkFusion, UIPath, Automation Anywhere, and Blue Prism. Based on this expertise, we built our EasyRPA platform. We look forward to seeing you at AI Expo Africa and invite you to attend our presentation on EasyRPA,” said Denissiouk.
Elzware founder and managing director Phil D Hall said he was excited to have engaged with AI Expo 2021 ONLINE. “We are looking forward to the event where we will be bringing our long experience in conversational AI into the sight of the leading hearts and minds in the African AI ecosystem,” he added.
AI Expo Africa 2021 ONLINE delegates can expect to hear from 80 thought leaders in AI, Data Science and Robotic Process Automation on the 8th and 9th of September. In addition, delegates will this year be treated to unique online experiences that will form part of the social programme on Day 2 and Day 3 of the expo. Like last year, the 2021 edition will also include a 30-day OnDemand Show archive which will be accessible from the 10th of September.
Bradshaw concluded, “We are going to market with a tried and tested format that will negate all the problems the world is experiencing because of the pandemic, while at the same time broadens the buyer audience and makes the event more accessible and diverse as our reach is essentially global and the tickets are free. We again hope to deliver on our promise of curating the best business trade event go its kind on the continent and look forward to showcasing the best of Africa 4IR innovation.”
Those interested in attending AI Expo Africa 2021 can register to claim free tickets here.
Swvl ex-founder launches Telda, Egypt’s First of its kind Money App
Telda ATM Card (Source: Ahmed Sabbah)
Swvl co-founder and former CTO; Ahmed Sabbah and Youssef Sholqamy; former Uber engineer alongside a Silicon Valley team from Facebook, Uber, Amazon and Noon are building this next generation payment app “Telda” known as “The Money App”.
Telda is the easiest and fastest way to send, spend and save money. It’s the first digital banking experience app in Egypt moving it one giant step closer to achieving the vision of digital transformation in the economy offering various features to ease the daily payment pains.
The Fintech company is officially launching in Egypt providing locals with a digital banking experience platform enabling customers to create a free account by only using their phone numbers and national IDs. By signing-up; they receive a free Mastercard to their door steps with zero hassle. They can use it everywhere for online payments, in-store purchases and cash withdrawals from any ATM worldwide.
Through Telda, sending money to family and friends is as easy as sending a whatsapp message. By syncing their contact list; users will be able to send & request money instantly. They will also be able to control their spending with the most iconic money management features helping them to stay on top of their finances with simplicity and ease.
The new social money app gives its users all the insights about their spending habits to better manage their expenses. The app displays all users’ transactions and divides them into smart sub-categories making saving easier than ever. Telda tackles all the daily payment pains; from splitting cheques, trips, birthday gift shares to paying bills, topping up phone credits and using the telda card for all online and in-store payments.
As Egypt is approaching a digital transformation in the economy focusing on the adoption of technology and the need for tech-savvy solutions, Telda is aiming to make life easier and quicker for consumers to open an account, make instant payments and real-time transfers from the comfort of their homes.
Download App from App Store and Google Play or click to visit their website Telda app
Binance Smart Chain (BSC) to be launched on Vertex P2P Market
Binance Smart Chain (BSC) will be launched on Vertex, the first and only p2p platform to implement the fastest growing blockchain.
“The most important thing for users to note is that BTCB and USDT issued on Binance Smart Chain will be available for exchange on the Vertex peer-to-peer market. An added advantage for traders on our platform is that they can boost profits due to the lower fees.” – Alessandro Pecorelli, CTO of Vertex.
BTCB, a BEP2 token pegged to Bitcoin. Pegged tokens such as BTCB, are 100% backed by the native coin in reserve, which is Bitcoin (BTC) in BTCB’s case. Tether (USDT) is a stablecoin intended to make digital currencies a viable form of payment as it is pegged in values equivalent to traditional currencies like the US dollar.
What is Binance Smart Chain?
Binance Smart Chain, also called BSC is a blockchain issued by Binance. It is not to be confused with Binance Chain, which is a different blockchain! Even though it is issued by Binance, BSC runs independently from Binance. BSC has been launched late 2020 and has since then at times conducted more transactions than Ethereum and was the reason for the price jump of the BNB coin as BNB is required to pay for gas and demand soared. BSC is 100% compatible with Ethereum, meaning the same smart contracts work on both blockchains and most wallets start to support both blockchains.
What are the benefits for users?
Some of the benefits of Binance Smart Chain include:
- Participating in a growing digital asset ecosystem powered by Binance DEX, the leading decentralized exchange
- Cheap transaction fees that reach as low as 1 cent
- High performance with a network capable of producing a block every 3 seconds
- Cross-chain DeFi mechanisms that increase DeFi interoperability
- A supportive Binance ecosystem that funds and bootstraps many DeFi projects
- A growing ecosystem of millions of users across Binance.com and Binance DEX
- A network of major crypto projects already collaborating with BSC
Why is Vertex launching Binance Smart Chain on Vertex?
To put it simply, BSC is fast and cheap. Much faster and cheaper than Ethereum at time of writing. This is not limited to BNB (Binance Coin) transactions only as almost every major coin is issued by Binance on the BSC as a wrapped coin as well. This means, you can easily transfer Bitcoin, Ethereum, USDT or any other major crypto from and to Vertex almost instantly for less than $1.
What is a Wrapped coin (token)?
Wrapped coins are tokens issued on a certain Blockchain, that represent a token on another Blockchain. Binance for example has issued over 21,000 Bitcoins (BTC) on the Binance Smart Chain called BTCB. To not create money out of thin air, those 21,000 Bitcoins are owned on the “real” bitcoin blockchain by Binance and held in custody. Meaning, every BTCB is backed 100% by a real BTC. It is the same concept as for stable coins such as USDT and USDC but in case of Binance they transparently show the Bitcoins they hold in custody on their website for everyone to see. Wrapped coins also exist on Ethereum (wrapped Bitcoin) but those are rather useless by now, as Ethereum is more expensive than Bitcoin to send around (Thank you, Uniswap).
Difference BTC and BTCB Explained
There is none, at least not for Vertex and Binance. If you buy or sell Bitcoin on Vertex, it is Bitcoin! You can deposit 1 BTC and withdraw 1 BTCB without any conversion. You will not see BTCB as a new coin on Vertex but when withdrawing, you can chose between a Bitcoin blockchain transaction or a Binance smart chain transaction, giving you the option to decide.
How can you profit as a crypto trader?
With the high network fees out of the way, Vertex Market has solved a big problem and removes a huge burden from you, the traders, by offering a cheap alternative that improves the profitability of your business operations and trading activities. If you want to know more about how BSC will make things a lot easier and cheaper for you, join the official Vertex Telegram group.
You can trade a range of cryptos on Vertex including Bitcoin, Ethereum, Litecoin, USDT, Bitcoin Cash, and USDC.
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