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> Posted by Sonja Kelly, Director, CFI
I’m thrilled to announce that we are now accepting proposals for 2016-2017 CFI Fellows! Maybe this is your year to consider having a little funding and space to take on a big financial inclusion question that could have a major impact on the industry.
We’re looking for researchers who are willing to undertake ambitious work that will advance financial inclusion. We’ve assembled a set of five questions that we think represent some of the most pressing concerns facing the industry, and we will be funding the most promising proposals that set out a plan for answering these questions. The topics we selected are ones that have been well-vetted. They were sourced from an internal Accion-wide exercise, discussions with the CFI Advisory Council, consultation with our friends across the financial inclusion space, and the solicitation of your comments on our “shortlist” of questions here on the blog (thank you so much for your input!).
The research questions this year cover a range of topics:
What does effective human touch look like in our digital age? Although financial services are rapidly going digital, some customers, especially those new to the formal financial system or with lower levels of education may still desire to interface with people—to build trust, to troubleshoot problems, and to receive advice on their financial lives. How are financial services providers integrating human touch into digital products? Is it working? Where is human touch critical throughout the delivery process? Who within the target population is going to want and need that human touch more than others? And how should financial service providers build it into their process?
> Posted by Monique Maddy, President & CEO, Ezuza
The following post was originally published on The Huffington Post.
The Institute of International Finance (IIF) and the Center for Financial Inclusion (CFI) issued a timely report earlier this month: “The Business of Financial Inclusion: Insights from Banks in Emerging Markets.” This report is notable because its release comes at a time of expected – some would even argue inevitable – disruption within the financial services industry, specifically in the banking sector.
The report incorporates the key messages gleaned through in-depth interviews with 24 global, national, and regional institutions in 19 countries. The takeaways from these institutions are representative of the current state of banking in these markets and reveal how banks perceive both the opportunity and the challenge of achieving financial inclusion.
Currently, most, if not all, of the talk in the banking industry is about would-be disruptors—that is, the predators, not the prey. The report gives the prey’s perspective and outlines how they plan to confront the potential threat to their business in emerging markets.
I am the CEO of Ezuza, a mobile money company. Ezuza is a predator, one of those would-be disruptors that are all the rage these days. More and more companies, both large and small, are entering the financial services fray, looking to shake things up and grab a share of what has mostly been the exclusive domain of well-established and deep-pocketed financial institutions serving an equally well-established and predictable market.
> Posted by Hannah Sherman, Project Associate, CFI
In a world of rapid change, few organizations have all the capabilities needed to accomplish every aspect of their business. This is true for commercial banks, which often find success in adapting to new opportunities through partnering. CFI’s most recent publication, The Business of Financial Inclusion: Insights from Banks in Emerging Markets, a joint publication with the Institute of International Finance (IIF), illustrates how banks use partners to adopt new technologies and reach previously underserved markets.
The report, based on interviews with the financial inclusion leads at 24 banks, shines a spotlight on the role of banks as leaders in financial inclusion and discusses their specific strategies related to technology, data, financial capability, partnerships, and other issues.
The report found that banks create a variety of partnerships. The banks in our survey partner with telcos, payments companies, insurance companies, microfinance institutions, retailers, and consumer-goods companies. They work closely with governments for G2P payments and with international development agencies and donors that provide start-up capital for new financial inclusion initiatives. They also contract with digital technology providers such as data analytics companies, back-office systems providers, digital channel providers, financial capability providers, and other fintech firms.
Among many other areas, banks often use partnerships to improve on the following:
Read the rest of this entry »
> Posted by Danielle Piskadlo, Manager, Investing in Inclusive Finance, CFI
#Allinforimpact was the hashtag at “Investing for Impact”, a socially responsible investing (SRI) conference in Boston. Maybe not “all” quite yet but certainly “more” investors are going in for impact, as indicated by the growth in attendance at the conference over the years. Investing for Impact was sponsored by socially responsible investors, such as Calvert Investment and Trillium Asset Management, who not only screen potential investee companies in terms of meeting certain environmental, social, and governance (ESG) criteria – but also serve as watchdogs for the sector and advocates for impactful companies.
A Few Top SRI Trends (from the conference)
Allowing Sinners to Repent: Some companies with bad names in the 1970’s such as General Electric and Ford have changed enough internally to now qualify within some investors’ ESG criteria. As one speaker put it, “What kind of church would we be if we didn’t allow sinners to repent?”
Shades of Grey: Tobacco, firearms, and carbon were across the board clear divestments. But the jury was still out on some companies and business models. For instance, Nestlé, which in the 1970’s came under fire for promoting baby formula in developing countries, has since done a lot to accelerate research on diabetes. Peapod, and other grocery delivery services, are making a pitch to be included as impact investments because the energy saved by not storing food, and the associated reduction in food waste, are positive externalities to consider.
> Posted by Michael Schlein, President and CEO, Accion
Over the last few years, we’ve made great progress in expanding financial access for those left out of the economic mainstream. From 2011-2014, more than 700 million people gained access to new financial accounts. If you’ve just been reading the headlines, you might assume that telcos and fintech start-ups are the primary forces driving that progress.
But the newest study from the Center for Financial Inclusion at Accion and the Institute of International Finance, “The Business of Financial Inclusion: Insights from Banks in Emerging Markets”, found that of the 721 million adults who gained access to new financial accounts between 2011-2014, 90 percent of them did so at more traditional financial institutions.
Telcos and fintech start-ups have been getting the headlines; the banks have been getting the job done. That’s important, exciting news.
This report shows that, for the first time, banks, all around the world, are seeing financial inclusion as a core business function. The Business of Financial Inclusion report shows that banks are creating lean, viable business models to reach customers they have never reached before. Digital payments are the main gateway for commercial banks to reach underbanked customers. They take many forms – transactional accounts, salaries and bill payments, G2P, and P2P. This means cheaper, more secure, and more convenient payments. Instead of spending hours traveling to make a single utility payment, mobile money allows you to push a button.
> Posted by Hannah Sherman, Project Associate, CFI
Commercial banks that are pursuing financial inclusion strategies are increasingly focused on designing a positive customer experience when targeting underbanked customers in emerging markets. CFI’s most recent publication, The Business of Financial Inclusion: Insights from Banks in Emerging Markets, a joint publication with the Institute of International Finance (IIF), illustrates how this aspect of bank activities has emerged.
Based on in-depth interviews with 24 banks in emerging markets, the report examines the challenges and opportunities banks face in reaching unbanked and underbanked customers. It shines a spotlight on banks as leaders in advancing financial inclusion and discusses specific strategies related to technology, data, partnerships, financial capability, and other key issues.
> Posted by Amelia Kuklewicz, Bobbi Gray, Gabriela Salvador, Freedom from Hunger
It’s a scene many can identify with: rushing to an emergency room at 1 a.m. with a young child whose fever has spiked and cannot be controlled with over-the-counter medicine. We generally feel helpless and our mind leaps into worst-case scenarios.
While we’re considering the financial implications, they are secondary to ensuring our loved one receives immediate medical attention.
For many of us with health insurance, we already know what the visit is likely to cost us but we’re still mentally considering what financial resources we’re going to draw on to cover the emergency room co-pay.
Now imagine you are a mother that lives in Ecuador. Since neither you nor your spouse has formal employment with a consistent salary, you are ineligible for state health insurance. Private health insurance is out of the question with monthly premiums in the hundreds of dollars. To top it off, the first question you receive from the attending nurse in reception isn’t about your child’s condition but rather, “Cash or credit?” Many people are known to die during triage, simply from the requirement of having to show payment up front.