Tag Archives: technology

Technology is only as good as the people who use it

This post is written by Veena Krishnamoorthy, an SBI Project Manager in India.

The last couple of years have seen a greater focus on reaching the underserved through the use of technology.  Alternate Delivery Channels (ADC) are considered a solution that will bring in efficiencies, bring scale and increase outreach at a relatively lower operational costs.  What we forget that ADC is nothing but a delivery mechanism!

When we talk about banking, we all know and realize that following systems, policies and procedures is extremely critical for success of banking.  While introducing a new delivery channel, such as mobile phones to provide access to savings or payment platforms, it is important that we do not forget to follow these basic rules.  It is important to bring in better control mechanisms to monitor and control the image of the bank.  The neighborhood kirana store (local retailer), which is where the banking agent is based, will become the new face of the bank.

For instance, during field visit of a partner bank branch, we were with an agent who was responsible for collecting savings.  The customer had a requirement of Rs. 200 that he wanted to withdraw from his savings account.  The field agent gave him the money without the customer signing a withdrawal slip.  The field agent was trying to keep his customer happy.  He did not realize the implications of that simple transaction and the impact on banking.  If the bank had given sufficient training and also ensured that the agent understood the implication of each transaction, then this would not have happened.

Let us not assume that the agents know what banking is or what the bank’s policies and procedures are.   This is where it is extremely critical to have a well documented policies and procedures manual for an ADC platform, a guideline and a rule book or a Bible, which can be used as reference by field staff as well as an agent.  Technology will help only if there are well trained and knowledgeable agents.  It is also important to ensure that a fraud and risk mitigation strategy and control mechanisms are in place well so that the agent does not have to worry about risks and issues.  This helps in building the agent’s confidence when he is sure that if he follows the guidelines, he will be able to serve his clientele better and thus increase his credibility.

To successfully bank beyond branches, there is a need to have well documented polices and guidelines, and a well trained agent network.  Like Warren Buffet said, “It takes 20 years to build a reputation and 5 minutes to ruin it.”

The Future of Microfinance in the New Era of Technology-Enabled Alternative Delivery Channels

SBI led a workshop at the annual SEEP conference in Washington, DC earlier this month titled “The Future of Microfinance in the New Era of Technology-Enabled Alternative Delivery Channels.”

The workshop addressed the changing realities of how microfinance institutions must consider and approach their “market,” especially with the development of technology-enabled alternative delivery channels (ADCs).  The workshop outlined the latest developments in ADCs and sought to come to an understanding of the future possibilities for MFIs.  The speakers, which included Jesse Fripp, Vice President at ShoreBank International, Jim Hokans, Director at Bankable Frontier Associates, Ryan Favley, Manager of ADC Strategy at ShoreBank International, and Syed Mohsin Ahmed, CEO of Pakistan Microfinance Network, addressed the issues around regulation and the enabling environment related to MFIs, discussed the changing market and both the challenges with technology, commercial models, and new product dynamics based on existing experiences with branchless banking.

The workshop also included a discussion with participants on current trends, considerations, and future prospects for the MFI industry in the context of ADCs.  The speakers cautioned MFIs to take time and fully understand the industry, whether the MFI would be able to sustainably benefit from ADCs, and whether it was in line with their strategy.  Technology-enabled ADCs are a promising and exciting prospect for MFIs, given the right conditions for both the institution and the market in which they operate.

Implementing ADC projects: What does it take?

Photo credit: Owens BPO

This post is written by Shital Shah, SBI Associate Consultant.

Making sure a mobile money venture is able to weather Death Valley and come out successfully while reaching clients and finding financial sustainability requires strategy, an understanding of the local context, and technical know-how.

SBI’s Alternative Delivery Channels (ADC) team works across regions and focuses on implementing innovative and sustainable projects with financial institutions and technology companies.  Across the ADC projects, SBI’s team of experts focus on any, or all, of the following components, which are really the main ingredients to any mobile banking venture:

  • Strategic guidance, including financial modeling and business planning – by working with the executive management, experts are able to provide business insights and strategic guidance on issues such as regulations and partnerships
  • Agent network management – experts that were involved in building up agent networks elsewhere in the world help figure out the nuts and bolts of channel management, from recruitment, selection, training, to management
  • Cash/float management – managing liquidity with the agents is a critical factor in making the business work, and needs the right policies and procedures
  • Technology – although technology is just one tool within the overall business, it does need to be well integrated and well functioning; the proper guidance can help secure core banking systems, integrate platforms, and meet business requirements successfully
  • Customer uptake – insights through market research, appropriate product development, pricing structures, and effective marketing are all some factors in creating rapid customer uptake Continue reading →