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Mobile Banking Part 3

Posted on by MSC

In this video series-3, Ignacio Mas, Senior Advisor, CGAP, discusses the role of various partners involved in making branch-less banking a sustainable business model. Ignacio talks about the numerous choices MFIs must make on various fronts such as technology, business model, product, marketing etc before adopting rolling out branchless banking channel. He emphasises on developing a practical business model where all the participants MFIs, telcos and agents work together to make branchless banking a success.

 

Pilot and Rollout Issues for Mobile Phone Banking Services

Posted on by Parul Tandon

This note explains about strategies and provides guidance in handling the challenges and issues concerning institutional issues; regulatory & compliance issues; monitoring and feedback from customers and merchants during pilot test and rollout; partnership support and coordination in pilot testing and rolling out mobile phone banking services. Institutional issues include significant training for frontline and back office staff. Regulatory compliance issues must be addressed and it is important to get the regulators on board early. Pilot testing mobile phone banking applications can also be challenging due to the potential for exponential uptake which may make controlled pilot tests more difficult so most institutions at least start with their staff and selected clients in the beginning. Testing partner relationships whether they are between banks, MFIs, MNOs, or third party service providers, or combinations of all four, are important.

Mobile Banking Part 2

Posted on by MSC

In this video series-2, Ignacio Mas, Senior Advisor, CGAP, discusses the biggest issue of m-banking sector – remuneration of an agent. He elaborates the steps needed to regularise it and further enlists the benefits global operators and banks enjoy within this business model whereas agents are struggling to fit within. Ignacio highlights security and numerous visits to the bank as the two major problems for an agent adding that the fundamental problem is the business model at the store where the transaction occurs. In addition, he talks about the challenge to increase the volume of transactions on this cheaper transaction platform.

 

Mobile Banking Part 1

Posted on by MSC

In this video series-1, Ignacio Mas, Senior Advisor, CGAP, discusses the opportunity of branch-less banking through mobile banking framework. He speaks on the need for establishment of trust in such system. He further emphasises the need to include a variety of transactions on such mobile-banking platform to make the business model viable and sustainable.

 

Incentivising 3rd Party Agents for M-Banking

Posted on by Parul Tandon

Using 3rd party agents to service customers provides a potentially low cost distribution channel for financial service providers. Noting the two basic models being followed – branchless banking servicing and mobile commerce provider models – this note examines the key factors that affect the willingness of the agents to provide m-banking services. The factors being complexity of services, expected volume of transactions, impact on the agent’s primary business, and fee generated per transaction. The role of 3rd party agents is one of the most important issues for those undertaking branchless banking initiatives. The key is to develop a straightforward system that provides enough of a value proposition for the 3rd party agents while properly controlling costs for the branchless banking operator. Critically, the importance of local conditions requires managers undertaking a branchless banking initiative to: investigate international experiences, adapt to local market conditions, balance the timing and deployment of agents vs. potential clients, and balance the amount and types of incentives in order to ensure that there are no “incentive incompatibility” issues.

Institutional Risks

Posted on by MSC

In this video, Martin Holtmann, Head of the Microfinance Unit in the IFC’s Global Financial Markets Department, discusses the kind of risks MFIs face. Elaborating on the risk factor, Martin says liquidity risk and interest rate risk is low for MFIs that are only into lending business. He further explains the risks that are important for MFIs, namely, credit risk, portfolio risk and operational risk. Martin further adds that MIS and banking software have become a necessity to deal with large amount of outstanding arrears, an area where MFIs are lagging behind.