The Bankwatch

Tracking the consumer evolution of financial services

How much about the approach to Branchless Banking is driven by incorrect assumptions?

Johan picked up on my post about mobile loans, but interestingly pointed to an Economist article in November entitled A bank in every pocket?

Mobiles bankieren in die EU. « – was einer so denkt –

Bis jetzt hatte ich gedacht, dass das eine afrikanische Tradition wäre. Ich finde das ganz spannend.

Until now, I had thought that this would be an African tradition.
  I find this very exciting.

I have covered the African mobile phone market, and this article builds on what is happening there. 

These “branchless” schemes typically allow customers to deposit and
withdraw cash through a mobile operator’s airtime-resale agents, and
send money to other people via text messages that can be exchanged for
cash by visiting an agent. Workers can then be paid by phone;
taxi-drivers and delivery-drivers can accept payments without carrying
cash around; money can be easily sent to friends and family. A popular
use is to deposit money before making a long journey and then withdraw
it at the other end, which is safer than carrying lots of cash.

Lots going on, BUT what really struck me was this sentence.

There is no need to set up a national network of branches or cash

So, what are we saying here.  The unbanked, those “poor” folks who for whatever reason have no access to ‘real’ banking services are in fact getting true Direct Banking!!!  [emphasis and sarcasm thrown in for free]

In North America, we are insulated from true creativity in financial services, partly by how Banks’ think, but probably even more by what consumers expect.  When you live in the middle of an incredibly poor area with nominal resources, such as Africa, it seems you can get accept total creativity in Direct Banking/ Branchless Banking, that would not work in North America.  Or would it?

How much about the approach to Branchless Banking is driven by incorrect assumptions?  Maybe, just maybe, our approach to creative solutions is limited by the current environment.  If we approached Direct Banking as Africa has done, and assumed no current resources, what kind of solution might we be able to develop that might address the business case challenges. 

Written by Colin Henderson

January 24, 2008 at 02:15

One Response

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  1. I’m quite sure that our creativity is bound by the environment.

    On one side I’d like to point to Herbert Simons theory of Bounden Rationality. A good read is the Book with the same title from MIT Press, edited by Gerd Gigerenzer and Reinhard Selten.

    And on the other side you could have a look at current cognitive scientists, who clearly describe intelligent processes as interactions between the brain, the body and the environment. It’s as plain as taking pen and pencil to make a calculation. (I’d recommend ‘Being There’ by Andy Clark for a read.)

    By the way: remember Independent of Banks, and fits well in our environment, where many people have a bank account and internet access.

    johan steunenberg

    January 24, 2008 at 03:35

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