> Posted by Susy Cheston
This post is part of the Center for Financial Inclusion’s Expert Exchange: Building A Movement Toward Financial Inclusion by 2020, cultivating conversation around the goal of reaching full financial inclusion by 2020. For further questions about this series, write to Sonja E. Kelly, Fellow, Center for Financial Inclusion at Accion.
The television comedy survived only a few months in the sixties, but it had a catchy theme song: “It’s about time, it’s about space, about two men in the strangest place.” In the show, a couple of astronauts travelled at the speed of light and accidentally went back in time instead of space. Talk about disruptive technology! The two men ended up in prehistoric times trying to make sense of life with a cave community, with predictably inane results.
The theme song came to me as I was thinking about the ways both technology and new approaches to product design are blurring the lines between time and space. It’s a neat concept to say that financial services move resources across time (credit and savings) or across space (payments). But just as those astronauts thought they were traveling in space and ended up traveling in time, technology is disrupting financial services, stripping financial services down to their basic elements and allowing those elements to be re-combined in new ways. The quartet of products we can rattle off in our sleep—credit, savings, insurance, payments—no longer have sharp boundaries as technology gives us new ways to store value and as financial services enter new markets. Susan Johnson’s recent research in Kenya showed that we sometimes don’t even know what we’re talking about when we use the words savings and payments. In Kenya, a so-called savings account turned out to serve as merely a payment device for payroll transfers. And she points out the ways experts are grappling with language as financial services encounter mobile phones, e.g. “savings” defined as “keeping money in the phone for at least 24 hours.” (Hey, I can save lots of money by that definition!)
Into this mix comes innovation. Grameen Foundation did market research to design an insurance product to help poor farmers in Uganda manage risk, and learned that the product that best met farmer needs was a commitment savings product instead. They are partnering with CGAP and MTN to move mobile phone banking beyond the payments space. Jipange KuSave (JKS) is a mobile phone service that brings a new approach to liquidity and savings in Kenya, building on SafeSave’s P9 savings and loan product in Bangladesh with mobile-enabled technology that folds savings and credit into a single tool. Ignacio Mas has proposed a new use of cell phones that goes beyond simple payments and prepay products to allow clients to manage future and past income. He envisions people sending money over time to others (delayed payments) as well as a wonderfully named Me2Me product that enables users to “send” money over time to themselves. In a context in which planning for the future is very challenging, his vision to expand “PayNow” to “PayPlan” is especially compelling.
As we continue to address barriers of access, relevance and usability, what other new combinations might emerge? And how might the design of financial services be informed by concepts of time—what is my “future,” and how do I plan for it?
After a few months, the network executives of the studio producing “It’s About Time” realized that no one was watching, other than my sister Jenny, so they switched the premise from two astronauts trapped in prehistoric times, and instead brought cave people to modern-day New York. Which was funnier, people bringing technology into a setting that hadn’t experienced it before, or prehistoric people reacting to the strange culture of modern times? Apparently neither, as the show folded in less than a year. Let’s hope the translation of new products and technology for financial services has a more successful run!
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Video Credit: theophrastos56
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