One presentation that perked my ears at the recent Columbia Institute for Tele-Information’s Mobile Money II Conference was by Judith Mariscal of CIDE, a Mexican social science research centre. In examining literature on mobile money vis-a-vis data from select deployments, Mariscal and research partner Ernesto M Flores-Roux found that many of mobile banking’s accepted maxims don’t always hold. Their resulting “The Enigma of Mobile Money” [presentation and paper], which Mariscal presented at Mobile Money II, thus tempers the oft breathless enthusiasm for mobile as holy grail for the poor and unbanked.
To date, we’ve seen relatively few mobile banking success stories — currently, of nearly 100 deployments worldwide, only 10 can claim over one million users. Thus, Mariscal noted, our understanding of what it takes to succeed in mobile banking is patchy at best and a more critical eye towards industry truths is warranted. Some common myths addressed by Mariscal and Flores-Roux:
Mariscal and Flores-Roux’s conclusion? With the exception of basic wireless penetration, the enabling factors we so often speak of neither explain the existence nor the success of mobile money systems. Market variables, they conclude, thus need not be enabling, they only need to be non-hindering. While the researchers only examined three mature deployments (Kenya, the Philippines, and Brazil) at depth, they pepper their investigation with evidence from Tanzania, Afghanistan, Rwanda, Colombia, South Africa, and Mexico.
Mobile money systems, Mariscal noted, are simple in concept, but highly complex in execution. Take infrastructure development. Beyond physical locations, operators must also have a network of people to serve as cash-in, cash-out agents. And while it may seem redundant to emphasize that mobile agents are indeed human beings, I’m consistently surprised by how often this fact is overlooked in the design of services and business models.
Effective systems respect and play to the unique characteristics/constraints of the human ‘nodes’ that operate within them — mobile finance is no different. An established network of cash-in and cash-out points does not equate a productive network of cash-in and cash-out agents; the latter must be nurtured through shrewd recruitment, training, incentives, management, and support. This takes careful research, planning, and design. Further, though many speak of the need for agent ubiquity (both wide and dense penetration), I rarely hear talk of the need for reasonable standardization in agent processes. The former leads to usage—agent ubiquity is easy enough, it just takes time and money. The latter encourages loyalty—but ensuring your users can get their money each and every time is not so easy, and it requires a system design that understands human (agent) motivations and limitations.
But I digress. In short, it appears that some of the more sympathetic narratives around mobile banking have been liberally generalized and even conveniently hyperbolized. We need to reexamine industry adages using actual data, not opportune anecdotes. Mariscal and Flores-Roux show that mobile banking outcomes, like most everything else, depend on unique factors for each context. Thus, rather than trying to identify easy wins and replicable formulae, service providers would be wise to roll up their sleeves and get down to work. (Hint: Good design starts with good research.) Clone deployments have a long shot at success, but custom solutions informed by rich contextual understanding stand a fair chance.
Image: Ken Banks, kiwanja.net