At the end of 2014, 2.5 billion people worldwide lacked a traditional bank account. They’re unbanked consumers. Many of these, in fact, have never set foot in a bank branch, used an ATM or experienced debit card convenience.
Whether in Brazil, the United States, Kenya or elsewhere, a typical day in the lives of the unbanked is only improved through mobile money services, if available.
The GSMA, which tracks all telco-led mobile money projects, reports this problem through a website that gives data about consumer activity rates. A GSMA study showed that outbound call centers may improve mobile money transactions and customer satisfaction, but call centers by themselves can’t scale to meet potential customer service needs and expectations.
Even simple accounts for unbanked consumers in this demographic challenge banks in many markets to drive consistent account usage. Between sixty and ninety percent of accounts opened by new banking customers fall dormant almost immediately without a single transaction.
This could result from customer confusion about how to best use and benefit from checking, savings and other financial services. Banks need to better understand unbanked consumers’ needs, expectations and demographic differences, especially age and cultural backgrounds.
Unbanked Consumers Transition to Digital Services
Most customers prefer using affordable SMS and apps on their phones, which enhance engagement and create warmer relationships with financial firms. This heightened engagement produces an ongoing dialogue between new bank customers, mobile money users and service providers. Using mobile, banks encourage, advise, remind, and coach customers how to benefit from their services.
Stanford Entrepreneurship Program Helps Newly Banked
Juntos Finanzas, founded by Ben Knelman while at the Stanford d.School, enables low income people in emerging markets to effectively use banking services. By working with banks, Juntos helps mobile money providers and prepaid issuers in the Americas and Africa create a win-win situation. Providers become more relevant in a digital age and customers benefit from regular use of modern financial services.
Benefits to financial service providers include:
- Higher active customer rates of 33% or more
- Customers can easily locate bank branches, agents and ATMs
- Increased customer interactions and satisfaction
- Channel offloading – Juntos drives customer adoption of cheaper transaction channels (digital instead of branch transactions, for example)
Juntos Finanzas impressed American Express, which funded the video shown below: