Using Digital Technology for Financial Inclusion

Financial DNA

The way to financial inclusion lies through better strategies of engagement, especially, through leveraging the potential of data analysis based insight into customer behaviour patterns. Mobilizing already available customer data to provide a personalized degree of service that accurately reflects a customer’s actual needs and potential activities is a way of using their ‘financial DNA’ to provide services that matter. Instead of an impersonal organization that a customer would need to prod into action, a digitally integrated financial service would anticipate their needs and retain emotional currency among an increasingly loyal customer base. An ideal customer-centric digital financial solution sees greater levels of financial inclusion, but this requires a significant internal transformation on the part of most financial institutions, especially given the strong presence of legacy systems. In such an environment, banking needs fintech to overhaul their approach to customer support, because innovations in the fields of social media and wearables provide a more organic way into digital technology-based restructuring of financial institutions.

The future of inclusion is digital

The future of the financial ecosystem is shaping up to be a cashless one where smartphones or wearable banking apps dominate the conversation; in an age where things are getting increasingly virtual, both user experience and product quality needs to reflect the changing needs of a digital lifestyle. Financial inclusion for more high risk customers means capitalizing on the act of being able to make payments with the least amount of effort, given the existence of financial technologies such as MasterCard, which offers contactless and mobile payment solutions to make shopping a more compelling experience for customers. While broadening the space for innovation in digital finance does not mean that. fintech exclusively targets at-risk customers, the implications of an entirely virtual delivery model can be extended towards providing financial services that integrate themselves meaningfully with the lives of people. This opens up an exciting window of opportunity for financial institutions to make themselves an integral part of the lives of their customers. Digital banking is often a compromise between offering a new and improved customer experience and a revamped operating model, and the first steps in digital banking have included services such as mobile apps, e-wallets, and personal finance management tools. The next step in this digital journey will be more complex, by capitalizing on delivering an insight-based service using social networks, mobile devices, apps, and internal data calibrated across all vectors of customer interaction. There is M-PESA created by Vodafone and Safaricom to integrate the section of the population that is not being served by any financial institutions; this allows users to pay cash into their accounts at an agent, and then use their mobile devices to pay retailers. This service becomes an alternative to credit cards or even bank accounts, and is a useful tool of financial inclusion. One of the industry players capitalizing on this reinvented landscape of digital commerce is MasterCard, with its MasterCard Labs for Financial Inclusion attempting to expand innovation in East Africa. Its goal is to provide alternatives to the constraints of cash-only economies by changing the way that people exchange money.

Automating finance

Providing your customers with a better mobile banking service is vital if the market opportunity of organic customer engagement is anything to go by. Considering that customers already interact with banks online, making their banking even more dependent on the functionality of a mobile app can drive up consumer engagement; banks are already using technological innovations such as gamification to provide a more rewarding digital experience that takes a proactive approach to changing digital trends. Another area of focus is the omni-channel experience that replaces the traditional branch-based model and allows for seamless banking across various channels. The presence of multiple channels has also become crucial in an environment where banks have an opportunity as well as a need to offer advice and recommend products during a purchase. The universal availability of digital services mean that banks must rethink advisory concepts and strive to offer these digital services when customers are active on digital channels. Additionally, customers rely on a vast network of peer-based information before they make a purchasing decision, so social networks are actually posing a challenge to the advisory services offered by financial institutions. More banks are speeding innovation towards automated systems that allow customers to spend less time waiting in lines, and perhaps do away with wallets. They have also expanded their service by capitalizing on the use of video to help customer interaction; this provides an opportunity for the customer to receive financial advice from bankers when making important financial decisions on the go. Wells Fargo has been experimenting with Oculus Rift to enable customer access to a virtual branch, as well as with drive-through banking.

Braving new digital frontiers

However, our cashless future is already underway, with biometrics, artificial intelligence, and even bio-implants being deployed to ensure that payments are a thing of the past. Fingerprints, handprints, and voiceprints allow customers to authenticate themselves before engaging in any financial transaction, with the help of alm-scanning ATMs. While the wearables market is still in its infancy, Barclays has already capitalized on wearable banking apps, in the form of their bPay wristbands, which eliminate the need for a wallet. Emirates NDB Bank has a biometrics log-in capability, which allows customers to use a touch ID on their mobile banking app to log into their account. Merging digital inclusion with a focus on offering a better customer experience, fintech also capitalizes on mining social media for actionable business insights. This is a facet of social media intelligence (SMI), which offers an opportunity to go beyond basic market research. When it comes to integrating technology with SMI, the financial industry has an opportunity to use their newfound access to digital information for improvement. This is why enterprises are turning to Natural Language Processing (NLP) in order to extract value from the available social media data provided by their customers. NLP analyzes this vast sea of unstructured data and allows a company understand public perception that surrounds them. Mining this data allows financial institutions to gain actionable insights from their digital sources to gather real-time intelligence on client concerns. Increasingly, staying technologically relevant as financial institutions mean using technological tools such as gamification to engage people digitally. The demand for more intuitive digital products and services require the opening of platforms and Application Programming Interfaces in order to augment financial inclusion by capitalizing on a pre-existing customer base. Digitally collected data can complement this with new strategies of client identification, and this can lead to more customization in dealing with consumers. The implementation of financial inclusion using fintech is already underway, and financial services are in desperate need of an overhaul when it comes to providing technologically relevant customer service in the new age of digital integration.

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