BIMA, the Swedish InsureTech company that delivers insurance via mobile to over 24 million customers in Africa, Asia and Latin America, has published the findings of a study into the emerging financial services consumer.
The study provides insight into this little-understood segment, based on the results of a survey of over 4,000 respondents living at the ‘bottom of the pyramid’.
The report examines demographics, the effectiveness of mobile to reach previously unbanked and excluded families, and consumer preference and behaviours.
It also provides a call to action for regulators and mobile operators to address the lack of a regulatory framework for Mobile Financial Services, which constrains the ability of the microinsurance industry to deliver products effectively whilst protecting vulnerable consumers.
Demographics:
- Low-income consumers can and will pay for financial services with 93%, 54% and 22% living on less than USD $10, USD $2.50 and USD $1.25per day, respectively
- Tech-savvy consumers aged 18-35 will drive growth, with almost 1 in 4 under the age of 24
- Females still underserved, making just 36% of the base
Cynthia Gordon, CEO of Milicom Africa (Tigo)
Mobile Financial Services vs. Traditional channels
- Between 75 – 95% of respondents only able to access insurance via mobile
- The creation of a digital payment channel is game-changing innovation; 85% prefer to pay via daily deduction from PAYG airtime credit
Urgent need for regulatory clarity
- MFS oversight is unclear with services falling between multiple regulators
- Regulation designed for traditional products restricts innovation required to reach the unbanked e.g. use of mobile phone numbers
- Mobile operators have a new role as a force in financial inclusion, but must work with expert partners to ensure effective delivery to and protection of these vulnerable consumers
Mathilda Ström, deputy CEO of BIMA said: “The results of this study show that the emerging consumer will leapfrog traditional providers in favour of digital channels in order to enter the formal financial services market. Mobile operators must recognise the responsibilities of their new position as leaders in financial inclusion by working with regulators to develop an environment that supports innovation and opens up access for all, irrespective of financial profile.
“Insight into the emerging consumer remains decidedly limited, which is why we are happy to share the results of this study. We believe that data like this will spur innovation in products and distribution models that work for low-income families”.
Cynthia Gordon, CEO of Milicom Africa (Tigo), commented on the study: “Financial services represent a huge opportunity for mobile operators in emerging markets. We’ve learnt that customers need education in addition to a convenient and affordable way to register and pay for products. We believe that the innovative use of mobile technology, coupled with strong distribution partnerships, are the best way to deliver financial services responsibly”.
Comment on this article below or via Twitter: @ VanillaPlus OR @jcvplus
