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Impact of Digital Financial Services: Myth or Reality


With the advent of mobile phones, connectivity is no more an issue even in places where previously your regular telephone line was unable to foster connection. New access to customers has helped to break down barriers which not only hindered access to customers but also has greatly reduced the cost of establishing connections.

Mobile technology offered great potential in connecting low-income families to the formal banking system, yet even with an increasing number of digital deployments aimed at small-holders the benefits for both the digital financial providers and the small families have yet to materialize as one hoped.

Lack of success can be clearly attributed to the fact that digital financial providers clearly overlooked the existing obstacles that were limiting the use of these financial services. Secondly, even if there has been a realization of the issues at hand, the financial providers have so far been unable to provide viable solutions to the satisfaction of their targeted customers.

Some of the obstacles hindering the use of digital financial services have been poor rural mobile network connection penetration, to low rates of mobile literacy and access to phones particularly smartphones, furthermore smallholder families often find it uncomfortable to use the existing mode and form of financial services.

These obstacles can only be overcome once the digital financial solutions are specifically designed to meet the needs of smallholder families. A specific focus in designing solutions for the difficult to serve customers will help in evolving workable solutions for this previously unbaked segment.

The design process has to ensure that the following key design principles are kept in mind while formulating future solutions:

  • Design around Smallholder Needs and Aspirations
  • Design to Drive Adoption
  • Design for Continuous Engagement
  • Design for Customer Growth

By incorporating these principles it will help to identify next steps in the design process, opportunities for further research, and potential challenges to bringing innovative DFS to market.

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