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Customer Protection in Indian Digital Financial Services: Part 1: Recourse

Posted on by MSC

There is growing concern about customer protection. This can be seen from initiatives such as Code of Conduct for mobile money players by GSMA, the update of the SMART Campaign’s client protection to create principles for DFS. These initiatives represent industry-wide commitments to build awareness, better practices, and standards that could contribute to strengthening customer risk mitigation in the financial inclusion space.

Customer protection plays a direct role in reducing risks faced by customers. It plays a major role in building and maintaining trust of customers in digital financial services.

MicroSave’s study for the Omidyar Network on customer protection, risk and financial capability in India tried to understand the extent to which customer protection practices were embedded into DFS offerings in India. The research examined the effectiveness of these customer protection practices and the ease with which customers and agents could access them.

The following sections discuss the important SMART Campaign Principles which are applicable here:

  1. Recourse: The grievance mechanisms available for customers and agents
  2. Transparency: How terms and conditions are communicated to customers and agents
  3. Data Privacy: How customers and agents safeguard their data (and money)

1. Recourse

Only 47% of customers were aware of recourse options and their primary source of information was the agent. Low awareness of customer recourse can reduce customer trust in FSPs. Furthermore, it makes customers highly vulnerable and dependent on agents.

Even though experienced users have shown that they use the call centre more often than inexperienced users, overall awareness level is still very low.

The agent is the most important source of recourse options. Evidence in the FII research and CGAP country case studies confirms that DFS customers often look to agents to resolve problems.  98% of Indian customers say that the agent will be able to support them in case they face any risk in future. When compared globally, in Ghana, for example, 61% of mobile money users say they turn to an agent, and in Rwanda 52% report doing so (InterMedia, 2015). This highlights the emerging nature of DFS in India, where awareness levels are low and dependency on the agent is extremely high.

So what happens when customers have complaints about the agents?

Only half of customers say that they know what to do if they have problems with an agent. The research showed that customers prefer to discuss agent-related issues at the bank branch or by contacting the service provider’s call centre. A small percentage of customers complained about agent-related issues to the agent himself. This phenomenon could have two possible (though inter-related) explanations:

a) the agent is from the same community or from a nearby location, which results in high level of association with him/her; and

b) the absence of a proper recourse mechanism.

88% of customers believe that the recourse mechanism is efficient enough to resolve any issue faced by them. This could be a case of misplaced belief, as instances of risk have been low and, therefore, the need to actually access recourse has been limited to date.

And what of agents’ ability to resolve problems?

While 79% of agents are aware of recourse options, only 24% of agents who faced problems actually used a recourse mechanism. This figure is disturbing since three-fourths of the agents didn’t even try to resolve problems, suggesting a broken system/process.

As a proxy, this is also corroborated by the low use of call centres. The ANA India Research shows that only 52% of agents say that they know about call centre option to resolve queries.

Call centres can and should play an important role in customer service and protection in digital finance deployments. Given India’s world leadership in call centre management, it is to be hoped that the current situation will not persist for too long. That said, the pitifully slim margins for DFS providersmean that they will always be looking for opportunities to cut costs.

In the next blog in this series, we will look at Transparency and Privacy.

 

Crafting a Visual Identity for MI4ID

Posted on by MSC

This is the story of how we created a visual identity for Market Insights for Innovation & Design (MI4ID). A signature approach to product development and innovation, MI4ID is the culmination of MicroSave’s two-decade journey to understand the lives of the low-income segment.

The MI4ID logo embraces MicroSave’s heritage while highlighting MI4ID’s vision and values. Through this story, we hope to inspire branding experts across the globe, while highlighting the pride of the teams that worked on it.

Design, Unleashed

We had to develop an instantly relatable, meaningful identity through the MI4ID logo. For this, we hired an external design consultancy. It recommended visualising the philosophy of MI4ID in a way that is impactful yet captures the values of MicroSave. At every step of the design process, we pushed ourselves until we were absolutely convinced about the visual representation of this unique approach.

At the core of MI4ID lies an openness to new ideas and new ways to tackle the persistent challenges in development. While brainstorming on the design, we discovered a single word that is at the core of MI4ID – ‘unbox’ – which links to ‘out-of-the-box’ thinking. We chose ‘unbox’ because MI4ID rises above the frames and stereotypes that colours one’s vision; because MI4ID is about free, unrestrained thinking; because MI4ID demystifies and explains things thoroughly, leaving nothing in the dark. The logo, therefore, needed to bring all these aspects to life.

Many Paths – One Goal

Based on our inputs, the consultant proposed 12 logos across three design themes. Each design comprised the logo unit, the baseline that explained the acronym, and a colour palette that linked MI4ID to its mother brand – MicroSave. One of the initial design themes positioned MI4ID as a creative thinker and used soft curves and a fluid, playful style to reflect the iterative yet flexible nature of the product. This theme saw a heavy use of interlinking elements and a modern, rounded aesthetic, as seen below.

While this was a great start, the design theme mimicked a style often seen in other creative logos. It needed to better reflect the mother brand and communicate experience, authority, and reliability. The design team, therefore, adopted a more conservative approach in the second theme. It envisioned an air of reliability and authority, yielding a handful of variations, as illustrated below.


This slightly formal theme, built on solid, vertical lines, spelt form and rigidity. This, however, did not work because while MI4ID is a rigorous approach, it is flexible and not prescriptive or dogmatic. The logo needed to communicate the harmonious tension between our founding pillars of market insights and innovations – distinct yet balanced perfectly. The designers developed a third theme based on the idea of modularity. Each element had equal weight and showed things in perfect balance. Two variations under this theme are listed below.

We selected the first option from this theme for further refinement.

Decoding the Logo

The design team provided a number of variants, from which we chose 2.2a. This variation combined rounded elements with solid geometrical lines. The combination of rectangles and circles added a subtle human element to the logo. This was especially important for us, as we have built MI4ID around human impulses and desires.

Yet the spacing and shapes in the logo needed fluidity. The designers acted on our cues and made subtle changes to the final shape of the logo, equalising the spaces between elements to arrive at the final design.

In this logo variant, the two ‘I’s mimic pillars and are in perfect symmetry at the top-right and the bottom-left. These identical pillars bring balance to the logo, representing a deep knowledge of empirical facts (insight) and the unleashing of creativity (innovation) – the two hallmarks of MI4ID. The logo represents the coming together of diverse elements in a cohesive whole.

The MI4ID logo uses just two colours. The blue hue reflects MicroSave and depicts trust, dependability, experience, and wisdom. The hints of yellow add a spark of energy and optimism. The consistent size and spacing of each element help guide the movement of the eye.

The dynamic curve of the letter D mirrors our in-house process of rapidly transforming ideas to market-ready prototypes. The spaces between the elements reveal the distinct, multidisciplinary phases in the MI4ID process. While each phase can exist independently, they can combine and be adapted to suit our clients’ needs. Each element contributes to the final outcome, and nothing is left out.

The flow of the elements shows the seamless way in which our process can shift from research to design for our clients. Seen from left to right, the MI4ID logo charts the journey from insights to action, which forms the beating heart of our signature approach.

Where Does It Take Us?

The MI4ID logo represents our dynamism to bring about positive change. It showcases the seriousness with which we regard every assignment. While we are meticulous and systematic in everything we do, we retain creativity and encourage out-of-the-box ideas from everyone involved in an assignment.

For us, the MI4ID logo is more than just an elegant marque. It is a symbol of our rigorous research methods, perfected over many years. It reinforces MicroSave’s position as an organisation that is poised to play a leading role in solving the persistent development challenges facing millions worldwide – from designing digital financial services for the mass market to optimising agricultural value chains; from helping refugees to addressing the enormous challenges posed by climate change; and much more.

Crafting a visual identity for MI4ID

Posted on by MSC

This is the story of how we created a visual identity for Market Insights for Innovation & Design (MI4ID). A signature approach to product development and innovation, MI4ID is the culmination of MicroSave’s two-decade journey to understand the lives of the low-income segment.

The MI4ID logo embraces MicroSave’s heritage while highlighting MI4ID’s vision and values. Through this story, we hope to inspire branding experts across the globe, while highlighting the pride of the teams that worked on it.

Design, Unleashed

We had to develop an instantly relatable, meaningful identity through the MI4ID logo. For this, we hired an external design consultancy. It recommended visualising the philosophy of MI4ID in a way that is impactful yet captures the values of MicroSave. At every step of the design process, we pushed ourselves until we were absolutely convinced about the visual representation of this unique approach.

At the core of MI4ID lies an openness to new ideas and new ways to tackle the persistent challenges in development. While brainstorming on the design, we discovered a single word that is at the core of MI4ID – ‘unbox’ – which links to ‘out-of-the-box’ thinking. We chose ‘unbox’ because MI4ID rises above the frames and stereotypes that colours one’s vision; because MI4ID is about free, unrestrained thinking; because MI4ID demystifies and explains things thoroughly, leaving nothing in the dark. The logo, therefore, needed to bring all these aspects to life.

Many Paths – One Goal

Based on our inputs, the consultant proposed 12 logos across three design themes. Each design comprised the logo unit, the baseline that explained the acronym, and a colour palette that linked MI4ID to its mother brand – MicroSave. One of the initial design themes positioned MI4ID as a creative thinker and used soft curves and a fluid, playful style to reflect the iterative yet flexible nature of the product. This theme saw a heavy use of interlinking elements and a modern, rounded aesthetic, as seen below.

While this was a great start, the design theme mimicked a style often seen in other creative logos. It needed to better reflect the mother brand and communicate experience, authority, and reliability. The design team, therefore, adopted a more conservative approach in the second theme. It envisioned an air of reliability and authority, yielding a handful of variations, as illustrated below.

This slightly formal theme, built on solid, vertical lines, spelt form and rigidity. This, however, did not work because while MI4ID is a rigorous approach, it is flexible and not prescriptive or dogmatic. The logo needed to communicate the harmonious tension between our founding pillars of market insights and innovations – distinct yet balanced perfectly. The designers developed a third theme based on the idea of modularity. Each element had equal weight and showed things in perfect balance. Two variations under this theme are listed below.

We selected the first option from this theme for further refinement.

Decoding the Logo

The design team provided a number of variants, from which we chose 2.2a. This variation combined rounded elements with solid geometrical lines. The combination of rectangles and circles added a subtle human element to the logo. This was especially important for us, as we have built MI4ID around human impulses and desires.

Yet the spacing and shapes in the logo needed fluidity. The designers acted on our cues and made subtle changes to the final shape of the logo, equalising the spaces between elements to arrive at the final design.

In this logo variant, the two ‘I’s mimic pillars and are in perfect symmetry at the top-right and the bottom-left. These identical pillars bring balance to the logo, representing a deep knowledge of empirical facts (insight) and the unleashing of creativity (innovation) – the two hallmarks of MI4ID. The logo represents the coming together of diverse elements in a cohesive whole.

The MI4ID logo uses just two colours. The blue hue reflects MicroSave and depicts trust, dependability, experience, and wisdom. The hints of yellow add a spark of energy and optimism. The consistent size and spacing of each element help guide the movement of the eye.
The dynamic curve of the letter D mirrors our in-house process of rapidly transforming ideas to market-ready prototypes. The spaces between the elements reveal the distinct, multidisciplinary phases in the MI4ID process. While each phase can exist independently, they can combine and be adapted to suit our clients’ needs. Each element contributes to the final outcome, and nothing is left out.

The flow of the elements shows the seamless way in which our process can shift from research to design for our clients. Seen from left to right, the MI4ID logo charts the journey from insights to action, which forms the beating heart of our signature approach.

Where Does It Take Us?

The MI4ID logo represents our dynamism to bring about positive change. It showcases the seriousness with which we regard every assignment. While we are meticulous and systematic in everything we do, we retain creativity and encourage out-of-the-box ideas from everyone involved in an assignment.

For us, the MI4ID logo is more than just an elegant marque. It is a symbol of our rigorous research methods, perfected over many years. It reinforces MicroSave’s position as an organisation that is poised to play a leading role in solving the persistent development challenges facing millions worldwide – from designing digital financial services for the mass market to optimising agricultural value chains; from helping refugees to addressing the enormous challenges posed by climate change; and much more.

 

Benchmarking Training and Support by Agent Network Management Model

Posted on by MSC

Adequate training (induction and refreshers) and on-going support are crucial to the success of an agent network. This is the third paper in the Agent Network Accelerator (ANA) Capstone Paper series and analyses the three Agent Network Management (ANM) models and their efficiency for agents’ training and support. Also read the first paper on Liquidty Management and the second paper on Measuring Risk in Agent Networks.

 

Catalysing Digital Financial Services Through School Fees Payments

Posted on by MSC

With a big smile on his face, Timothy can’t help but show his friends and family, the newest feature of his mobile phone. When people ask him the reason, he proudly says “You know what I have done using this? I have paid school fees for my daughter Jessy, right from the comfort of my home!”

Timothy works as a Supervisor at a Hotel in Honiara, the capital of the Solomon Islands. Due to the demanding nature of working in the tourism industry six days a week, Timothy is unable to leave work to carry out personal errands during work hours.

Previously, he had to take time off work to travel to an ATM or the bank where he must stand in a long que to withdraw money, then que in line at his daughter’s school awaiting his turn to pay her school fees.  Carrying out a simple task as paying school fees can cost a considerable amount of money on public transport and a good portion of the day is lost traveling.

Another father that is thankful for the digital service is Jonathan whose son Wilson studies at King George VI School in Honiara.  Jonathan lives in Auki town in Malaita province and earns a living by selling fruits at the local market. Malaita province is located 117 km from Honiara and across the Pacific Ocean, hence travel is often by boat.

Paying his son’s school fees takes extensive travel planning and saving. He must catch a boat to Honiara, which takes around six to eight hours depending on weather conditions and costs him USD 25 one way. Jonathan must also keep aside extra money for lodgings and meals to stay overnight in the capital.  Jonathan explains that if he has not saved enough for the journey, he must delay paying the fees which incurs him additional charges and the possibility of his son being expelled from the school rolls.

Proposed Solution to Address Pain-points

ANZ Bank, the Pacific Financial Inclusion Programme (PFIP) and MicroSave designed, developed and tested a digital solution to address the many challenges related to school fees payments. Parents can now pay school fees conveniently using ANZ goMoney, the mobile banking platform of ANZ Bank. The platform is presently active in select schools in Honiara. Parents do not have to go to the schools to pay the fees any more. This reduces the efforts required to arrange cash or take a day off from work. They find the value proposition for digital fees payment compelling.

Another great feature that this digital platform allows is payments in instalments at their convenience. They can now plan and save to pay the fees and avoid late payment charges. Though there have been similar such experiments for digitising school fees in other geographies, it is the first time that school fees payments have been digitised in the Pacific region.

Schools issue unique IDs to identify each student to track payments efficiently. Parents and schools use this student ID for each digital transaction. This will help schools in tracking the student fee payments efficiently.

Approach and Lessons Learnt

The project team, consisting of relevant stakeholders- ANZ Bank, PFIP, Microsave and the Premier Group, met authorities of various schools in Honiara to explain to them the value proposition of the digitised system. Once the school authorities were convinced of the merit of the system, approvals were sought from school’s boards.

To prepare schools for the transition, ANZ Bank started teaching the schools about the goMoney platform and how to use it. The bank then added schools to the Pay Bill menu of the platform and activated Internet Banking for the school bank accounts. Simultaneously, the project team spoke to the parents from these schools. The value proposition of the digitised system instantly resonated with the parents too, as it addressed their pain-points satisfactorily. ANZ Bank supported the parents to become platform-ready by opening their ANZ goMoney accounts or activating dormant accounts.

 

Once the schools went live on the ANZ goMoney platform, the bank trained the parents in making fees payment transactions through it. The school authorities also received training to reconcile transactions made through ANZ goMoney and how to settle amounts in the manual record books of the schools. The team provided constant handholding support to the school authorities and parents during the entire process to build their skills and confidence to use the platform.

As stakeholders are in early stages of this digital learning journey, intensive handholding support is essential. However, as stakeholders become acquainted with the new system, their comfort level increases and a demonstration effect takes root, the handholding and support required will go down significantly. Creative approaches such as developing points of contact at schools to facilitate the process, and educating and training parents during parent-teacher interactions will accelerate the process of building trust and learning.

Process standardisation and training have also enhanced the capabilities of agency banking staff members. Project champions have been identified and provided with tools such as documents to discuss the value proposition and simple guides to enable them to educate, build trust, and on-board additional schools and parents, to assist in scale up.

In due course, we will explore avenues for the automation of several processes with the active involvement of stakeholders, including the Ministry of Education. Automation of alerts and reconciliation of data for schools will lower barriers, enhance utility, and catalyse adoption.

Success Stories from the Pilot

Parents who tried the new system expressed great satisfaction and excitement in using mobile banking to pay for school fees.

 

This digital school fees payment solution has created a win-win situation for parents and school authorities alike. David, the accountant at King George VI School, does not need to manage cash now. He feels this system will significantly ease his life by simplifying the process as he does not need to visit the bank branch to deposit the collected cash or to get a bank statement for reconciliation. The fees go directly into the school bank account and he can now reconcile bank statements sitting at his office. Evelyn, the accountant at St Nicholas School, also echoes the same sentiments about the new system and process.

School fees are an expense for almost every household in developing countries around the world. It can be a flagship use case for digital payments, with a significant potential to accelerate adoption of additional digital financial products. Digital school fees payments can be catalytic for parents, as it forms their first experience of digital payments. This would, therefore, open the door for them to gradually learn and adopt additional use cases for digital finance. It is also an easier use-case to drive adoption, as school authorities and wards can play a vitally influential role to bring about a behavioural change to move away from cash to digital modes of payments. Moreover, it can have widespread impact, as it is relevant to nearly every family in any country, where parents, and not the state, pays school fees.

The blog was originally published by PFIP in Jan 2018.

Measuring Risk in Agent Networks – What Risks Are Inherent in Agency Business and How to Track Them

Posted on by MSC

The second paper from the Agent Network Accelerator Capstone Paper series describes the types of risks inherent in agent networks based on research conducted over two waves of the ANA surveys in 11 countries.