A tribute to Pakistan

This week we saw the announcement if the MMT Award Winners at the MMT Conference in Dubai. Despite the event's global coverage I was amazed at the countries that made up the majority of the short listed nominations. In the majority of cases Pakistan and Bangladesh were represented, in some cases by two MMT operations. Given my belief in the South Asian markets, I found this quite pleasing.


Bangladesh and Pakistan both share similar population, mobile subscriber and banked statistics, both have 150 million plus population. Both share historical similarities for rural and poorer economic innovation. All this pointing to ideal markets for Mobile Money to thrive and show the world that Mobile Money doesn't only work in Kenya.


My connection with the markets run deeper, as I frequently visit the countries, continually encouraged by their understanding of the market and ability to innovate with entrepreneurial flair and a genuine enthusiasm for doing good for their country. Something that their common neighbor has struggled with for years.


Hence it warms my heart to see two of Fundamo's quiet achievers receive public recognition for their efforts. MCB Mobile and easypaisa, both in Pakistan have shown the world that Mobile Money can work even with domestic competition. Amaar Ikhas, formerly from MCB and his team always welcomed me with open arms, and encouraged me to try 'real' local cuisine.


In my opinion, the team at Telenor(easypaisa) have driven the accelerated maturation of Mobile Money Technology, pushing Solutions providers to raise the bar on the previously experimental state of the market.


A huge congratulations goes to MCB Mobile and easypaisa on their recent awards. But not forgetting Access Group, a local Pakistani Solutions company that has been the driver the success of these two and more in Pakistan.


Congratulations




- Posted using BlogPress from my iPad

Cowboy's in the mist...

While Mobile Money has been around for nearly 10 years, the industry is still fairly new. Most business cases I see are exploratory that are adverse to the risks of investing in new lines of business. For this reason I spend great deals of time guiding potential new market entrants on maturing their business case and aligning their vision with the realities of Mobile Money. But over the years the industry has seen several cowboy attempts to enter the market that due to a lack of market understanding or blind arrogance, drive themselves towards poor performance or failed businesses. Such examples are a continual burden on the industry as potential new entrants see these as examples of failures in Mobile Money, creating hesitation and nervousness.

I am not going to finger point at the businesses that have created these burdens, but know that Asia has several. These businesses have two common themes:

1. Re-applying Value Added Service models. Mobile Money is NOT ring tones. It is not a simple service a Mobile Operator plugs into the side of their business and is a huge success overnight. This is very similar to those eCommerce businesses that thought “built it and they will come.” VAS services are traditionally short-term focused as the industry goes from fad to fad. Mobile Money players need to understand that the service they are putting into the market is not a short-term play that can build critical mass through intermittent promotions. Mobile Money as a product is like banking, it takes a longer term commitment to slowly build a realistic customer base. In the Mobile Operator world this segment is usual identified by the low SAC (Subscriber Acquisition Cost) and low churn. Remember banking customers very rarely change their banking service provider, unlike Mobile Operator customers.

2. Blind Arrogance. After 10 years of industry development, there are some brilliant minds in the industry all willing to help guide businesses through the journey of establishing new services. Which I can tell you from experience, is a tough journey. Players need to be open to listening to the experiences of others such as Consultants, Established Business, Vendors and Industry Bodies. Too often have I seen companies say “We know what we’re doing,” when the reality is they have no one on staff that has done this before.

One example that is close to me has been the recent approach by Cambodia’s Number 1 Mobile Operator, who despite established competition in the market that all worked with industry regulators and advisory boards, launched a Mobile Money services without engaging the country’s banking regulator. Blindly assuming “We don’t think what we are doing is banking.” This comes after they were given financial assistance from the GSMA’s Mobile Money for the Unbanked Fund. A fund specifically targeted at assisting organizations get access to the appropriate support mechanisms and advice required to launch successful financial inclusion services. The Phnom Penh post has been covering the story:

(http://www.phnompenhpost.com/index.php/2010101343973/Business/nbc-puts-mobitel-on-notice-over-cash-service.html)

(http://www.phnompenhpost.com/index.php/2010101844101/Business/plug-pulled-on-mobitel-money-transfers.html)

As the articles point out, both the Cambodian’s Banking regulator and the GSMA are somewhat confused as to why an organization would take such an approach to launching a service when the country’s two prior Mobile Money launches were done with full co-operation with the regulator. Ex-WING CEO Brad Jones has also been quoted as welcoming healthy competition to Cambodian market. He saw competition as a means to creating broader acceptance of Mobile Money services and great for Cambodian’s large percentage of unbanked citizens.

The Phnom Penh post now suggests that the GSMA has indicated they will stop grant payments to the Mobile Operator until the situation is resolved. 

So will this be positive lesson learned, or another scar on the face of an industry still battling to establish its place in society? My hope is that the GSMA and other players can take this as a clear lesson in what not to do and seek the guidance of those that have a wealth of knowledge to share. Mobile Money stands to benefit so many in countries like Cambodia, let’s all work together to ensure its success.

Social Financial Services… can they work?

Over the past few months I have watched with keen interest, the story of UBank, a bank lead by innovators with the aim of creating tomorrow banking model for the Gen-Y market. The bank shed’s the formalities of a big bank and opts for a more connected, casual and innovative business model. Printed statements are a rarity and twitter is the preferred method of customer service.

In his blog post, Great Strategy, a Gen Y blogger wrote, we like Ubank because they:

• Offer 24 hour support for customers
• Allow customers to contact them via Skype
• Tweet regularly not just to broadcast updates but also personally replying to queries 
• Sends SMS and email to customers immediately when a transaction takes place on their account. 
• Signs off on all their correspondences with "Speak soon", implying customer loyalty

Essentially they are doing everything that fits with the nature and behaviour of the tech savvy Gen-Y and in a recent move, they will allow customer to check their account balance through social media platforms such as Facebook. Cause let’s face it, Gen-Y tend to check their Facebook every day, creating an ideal spot for customer’s to get other network updates such as their financial balance. Some time ago ANZ experimented with the Smarty Pig platform. Which creates a public visualisation of savings goals, so friends and family can not only see your progress, but also contribute. Although little has been heard on it progress.

Which leads us to the question, can Social Financial Services work? First we have to qualify, what is Social Networking, other than buzz words like Facebook, Twitter, MySpace and foursquare. Social Network creates a web of ‘relevance’ in a hyper connected world. As more and more connections are able to us, we have to have a way to manage what connections are relevant to me? Or as some of the more innovative marketers will say “The Segment of One.” To summarize Social Networks, I have found three common themes that all the offerings being:

• Connection: An established link to those around us in a virtual world
• Contact: manages the back-system contact details that make service linkages difficult. More and more we are seeing the Integrated Contact management approach to Social Networks
• Communication: Two ways channels for broadcast and listening to messages in your network

Imagine a world that your mobile handset not only makes calls, sends emails, connects you to facebook, but also enables a host of services through your world, your network. Groups can coordinate virtually to share not only information, but also money.

How does this apply to financial services? Today’s world of payments and banking shares the same three core concepts, but implement them in very different ways. Here is how I would see Social Financial Services working:

• Relativeness: You social network manages your social network just as it does today, but through the use of technologies that identifying the physical location of you, it can create relevant services. Such as using GSM location information to know you are near your friend John to give him $20. Or know that you’re in a certain retail store so you can ‘check-out’ easily.
• Connection Framework: One of the challenges of the current financial networks is it’s up to the payer and payee needs to know the address/routing details to get money from one point to another. For example, giving your friend your bank code, branch code and account number to send you the $20. Given that you’re already connected on something like Facebook, why can you just use that to pay to John and Facebook works out the routing?
• Behavioral Dynamics: I am impressed with the dynamics theory’s of Seth at SCVNGR, a social network gaming company. The theory talks about the use of seven game dynamics that exercise degrees of persuasion of the network to perform tasks at preferred times, or grow the network. Many of which have existed for decades in the physical world, like Happy Hour persuades people to drink more during a certain time. At SCVNGR they call this the appointment dynamics. Check out Seth’s TED Talk at (http://www.ted.com/talks/seth_priebatsch_the_game_layer_on_top_of_the_world.html)

Over the past decades we have seen the emergence of several technologies and converged technologies that prime the market for a hyper connected world, something that easily extends to Financial Services. Social Networks such as Facebook have built the framework. Mobile Money has built the services. Let’s work together to overlay them and release the awesome power of these new world tools.

Return to the Penh

I recently travelled back to my favourite city, Phnom Penh, to catch-up with old friends and relax for a weekend. But being my usual self I was unable to resist the temptation to just relax, instead opting to explore the success of WING Money in and around the various eco-systems that make up Phnom Penh.

One of my local Khmer friends picked us up from the airport early on the Saturday morning and first impressions were strong, WING Cash Express signs were everywhere on the road between the airport and the city’s tourist centre, River Front. WING was been strong enough that they’ve managed to sign six of the eight Mobile Operators as channel partners, a task no other bank in the world has managed. Leaving off the country’s number one operator; Mobitel who recently launched their own Mobile Money service after receiving a Mobile Money for the unbanked grant from the GSMA MMU Fund. However Mobitel’s number one position is quickly coming under threat as new comer metfone (Viettel) continues to take large chunks of market share right across Cambodia. Mobitel has seen some interesting coverage in the press after self-electing that their service was not banking and did not need oversight from Cambodia’s central bank.

WING has been live now for almost a year and half, and it doesn’t take long to gain and understanding of just how successful their growth has been. While enjoying one of my old favourite food places in street 278, I got talking to Chantou (named changed for privacy), a waitress in an expat distract of Phnom Penh, whose family live in a province a few hours out of Phnom Penh called Kampong Cham. Chantou works two waitressing jobs doing an average of 12 to 14 hours work six days a week to earn enough money to support herself and her family. As the family’s sole bread winner she carries a huge responsibility. She loves working as a waitress mainly because she gets to meet lots of western people (barrangs) who she can practise her English and she likes English men. Until recently Chantou would either travel herself or send money home through Cambodia’s ‘private’ bus system, which on occasions wouldn’t make it to her mother. She tells me WING has been a great help, as she can now send money home directly from her phone. She can also be certain that money is being spent appropriately by directly paying for services, such as pre-paid airtime or electricity bills. Small stories like this warm my heart, as I hear directly from those that benefit from the availability of Mobile FS.

I also had the pleasure of catching up with WING acting Managing Director, David Kleiman, and I was pleased to hear of the progress WING has made over time. WING is now present in all 27 provinces of Cambodia, bringing services to people that previously paid a premium for basic financial services. David welcomes Mobitel’s competition, and feels it will further develop the adoption rates of the country and hopes that Mobitel’s size will help persuade the Central Bank to allowed US Dollar transactions, a key sticking point in an economy dominated by the presence of the Dollar.

If I had more time I would have loved to jump on a dirt bike and head out into the provinces to see WING first had in rural communities, but that that will have to wait for my next trip once I have brushed up on my Khmer language skills. WING will always hold a special place in my heart and I wish the team there all the best for the future.