Designing a mobile money product that meets client needs while bringing tangible benefits to the financial institution

> Posted by Habiba Balogun, Habiba Balogun Consulting

The following is part of a blog series spotlighting views from participants in the Africa Board Fellowship (ABF). For more from Habiba, an interview with her can be found here.

With over 160 million mobile phones in use in Nigeria out of a population of 180 million, high mobile penetration is a major factor in the country in achieving seamless payments.

In 2016, at Accion Microfinance Bank (AMfB) in Nigeria, where I serve as a board member, we introduced a mobile banking product called Brighta 143. The product is USSD (unstructured supplementary service data), so it runs on both basic and smart phones, and it has shown great potential to expand financial inclusion as well as bring benefits to our institution.

But of course, rolling out a successful mobile money product is hardly straightforward.

The inspiration for Brighta 143 was to provide clients with more convenient access to their bank accounts. It’s aligned with AMfB’s Digital Financial Strategy to provide the financially excluded with easy financial access. Since its introduction, the new mobile channel has enabled our clients to carry out basic banking transactions such as fund transfer, bill pay, airtime top-up, and more.

The USSD solution was identified as an alternative to traditional banking that can meet the needs of clients with either basic phones or smartphones. CFI Fellow Leon Perlman’s recent research, Technology Inequality: Opportunities and Challenges for Mobile Financial Services, found that feature phones, with USSD or STK platforms, are well-adapted to low-end conditions, especially in rural areas in developing countries because they operate reliably with inexpensive handsets in areas with poor connectivity. The widespread coverage, low cost, and reliability of these “traditional” mobile financial service systems make them essential for reaching financial inclusion target populations for the foreseeable future.

Impact on Clients

In the near term, the major impact of Brighta 143 is simplicity and convenience for our clients. They are now able to perform an array of transaction types without having to access the internet or a smartphone app. This flexibility ensures the customer is in full control of his or her account 24/7.

In the longer term, we expect Brighta 143 to expand financial inclusion amongst new and existing clients. Digital financial services (DFS) make AMfB more attractive to customers as they enable customers to access their accounts and transact business right from the convenience of their phones, without the loss of time and the cost of having to travel to a bank branch or ATM. Our DFS have wide acceptance amongst those previously financially excluded. They already know how to use SMS to send messages so sending money using a platform they are already familiar with makes adoption faster.

Impact on AMfB

Within three months of launching, 1,600 customers had signed up for the service and carried out over 9,600 transactions worth N73 million ($239,344). These transactions would have otherwise been done in our bank branches with a cost to serve impact of N600 ($1.96) per client. We expect the long-term impact of this new USSD channel to be a dramatic improvement in the cost effectiveness of servicing clients from N600 ($1.96) to N10 ($0.03) per transaction.

Brighta 143 increases AMfB’s level of penetration in existing areas of operation, and facilitates easier acquisition of customers in new and remote areas. This expansion is key for meeting our growth targets and achieving scale.

Impact on Financial Inclusion in Nigeria

The Central Bank of Nigeria’s Financial Inclusion Strategy aims to increase use of formal financial services from the current level of 36 percent of the adult population up to 70 percent. AMfB’s use of technology has helped improve financial access for the underserved where we operate.  Financial technologies such as debit cards, in-branch PoS, digital field applications, branchless banking, and Brighta 143 directly impact the National Financial Inclusion Strategy targets. Through Brighta 143 we have helped to educate our clients in using technology channels as an alternative to cash and managing their accounts remotely.

Image credit: Accion

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