Mobile money and digital payments have opened the door to a new generation of products that have lowered costs and made serving unbanked and underbanked consumers a promising business proposition. But in spite of continuous innovations and a steady growth in digital financial services, take-up of these products remains low and usage rates are often disappointing. Many financial service providers are struggling to make these digital products live up to their full potential for businesses and consumers.
Often financial providers are so involved in running their financial institution in a cost-effective and efficient way that they hardly get time to improve upon their offerings; resulting in low take-up and usage rates. Most of the microfinance institutions are in a catch-22 situation where they would like to take the road leading to innovative solutions that are also attractive for the consumers resulting in high usage rates but are often dissuaded by the fact that the operating mess that they find themselves in hardly lends to an innovative environment.
The most viable solution for microfinance institutions is to partner up with a RIGHT TECHNOLOGY PARTNER, which can help them sort out their current operations, meanwhile allowing the financial institution to devote more time and resources in perfecting innovative digital financial services that address the needs of those desperately in need of financial access. With the digital financial services industry growing at a break neck speed it is vital to develop an understanding of clients’ needs, which is critical for serving low-income households more broadly. In some ways, the financial lives of the poor are more complicated and mentally taxing than those of more well-off households. While the wealthy can often absorb a small miscalculation, for the poor it can be catastrophic. Add to that irregular or unpredictable income, and financial decisions quickly become difficult to manage. Well-designed products that help individuals successfully navigate the difficulties of daily financial life may be able generate new demand for financial products.
Partnerships with technology partner and by leveraging their expertise will help service providers understand what works and what doesn’t as they continue to increase access to products designed for the world’s poor. What they learn will help them build strong businesses while providing better services to those who need them most.