Innovating Beyond Tech: What This Year’s Trends at Mobile World Congress Mean for Financial Inclusion
Innovation is about more than just technology. Yes, technology turns new ideas into tomorrow’s products and services, but it’s how we think about technology that truly brings about scalable solutions for social challenges. What kinds of solutions can Internet access unlock in small businesses in emerging markets? When will smartphones reach the rural poor living on less than $2 a day – and more importantly, will it improve their lives?
This year’s Mobile World Congress highlighted exciting innovations that hint a new wave of positive change is coming to emerging markets and sooner than we might expect. Fascinating unveilings such as virtual reality headsets, connected cars, and smart sensors give us a glimpse into the future of mobile technology and its potential to add powerful new platforms to address the issues faced by low- and emerging middle-class populations around the world.
While attending this year’s Mobile World Congress to share a bit of the work Omidyar Network is doing in financial inclusion, I was taken by several new trends that hold great potential for entrepreneurs, innovators, and investors seeking to expand opportunities for the 2.5 billion people worldwide with no or limited access to financial services.
Cheaper smartphones as a gateway to the underserved
Cheaper smartphones generated a lot of buzz in Barcelona. The debut of Mozilla’s $25 Firefox OS prototype – a relatively powerful device for the price – is the latest in a growing list of inexpensive devices including Microsoft’s $29 Nokia 215 and MTN’s $44 Steppa.
A steady decline in the cost of smartphones means more people will have access to these devices than ever before. The step-change power of these handsets provides a new and richer gateway to the financially underserved – helping establish a critical two-way medium to build lasting relationships, expand understanding around this new set of clients, share useful information, and ultimately deliver better products and services to them.
As the smartphone subscriber base expands to include more low- and middle-class consumers, more app developers will be motivated to design “over the top” products and services that are relevant to them – that means broader FinTech services for a broader scale. This is happening already. Mozilla’s Firefox has gone a step further by integrating an open API that empowers local entrepreneurs to create locally relevant apps and content for their communities – bridging the last mile gap.
Unleashing unparalleled amounts of data
Driving Internet access was front and center at MWC, as evidenced by Mark Zuckerberg’s keynote at Mobile World Congress. Internet.org, the Facebook-led initiative whose objective is to bring online the two-thirds of the world without Internet access, joins a series of initiatives led by Google and Elon Musk aimed at connecting developing world consumers and their devices to information and services.
With Internet access and smartphones now becoming more accessible in developing markets, underserved consumers can have access to financial literacy information, money management services, and the convenience of eCommerce we have long enjoyed in developed markets – many for the first time.
As these users expand their online presence, service providers will have more access to data and be able to better understand the habits and needs of this segment of the population and design products more tailored to them – think Lenddo and Cignifi, who are using mobile phones, Internet access, and social media data as alternative pathways to determining creditworthiness for emerging market consumers.
Mobile money continues its steady advance
One of the biggest payments announcements out of Barcelona was Samsung’s launch of Samsung Pay, which will work with traditional credit card magnetic stripe readers, unlike competitor Apple Pay. Additional announcements, like PayPal’s acquisition of Paydiant and advancements in contactless payments, show continued momentum in mobile-enabled payments.
In the developing world, mobile money continues to scale beyond M-Pesa and is becoming a growing success story in several other markets. Today, over 250 mobile money deployments serve nearly 300 million users in 89 countries – representing 61 percent of developing markets. More exciting is the growth of products beyond money transfers, including merchant payments, bulk disbursements, and remittances. This demonstrates the ability to leverage mobile money as a platform to offer true financial access to the underbanked.
Going forward, with increasing smartphone penetration for the underbanked, there is an opportunity to further evolve existing services. It will be exciting to see what payment innovations are developed over the next few years using, for example, contactless technology and two-factor authentication.
Unlocking the Internet of Things
From tennis rackets to tooth brushes, Mobile World Congress showed us that we’re entering “the age of smart everything”. Connected cars, smart sensors, and other connected devices are generating more real-time data, seamless interactions, and access to eCommerce for consumers. Service providers are also gaining greater access to real-time data and insights into consumers’ lives, critical to making sure products and services are getting ahead of demand trends.
This story is extending to emerging markets. Companies like Off Grid Electric and M-Kopa Solar use machine-to-machine connectivity to understand how their off grid systems are being used, creating opportunities to learn real-time how consumers interact with their services and better predict demand. They are also leveraging on mobile money to conduct fully cashless businesses.
Machine-to-machine connectivity and the Internet of Things offer the potential to disrupt many industries – think mobile-enabled pay for washing machines, utilities, and many others I cannot yet fathom.
Together, these four trends show us technological innovations that provide exciting platforms to build real, effective, and exciting solutions for the underserved. Smartphones and data will spark transformative apps. Mobile wallets will enable groundbreaking financial inclusion products. The Internet of Things will unlock new business models in other industries.
We’re at a tipping point in innovation, where we now have the technology at our fingertips. It’s up to us to figure out how we will use this knowledge and tools to build scalable models to address social issues in developing markets.