Figure 1.5 Evolution of Intervention Focus from Financial Institutions to Financial Systems (a) Strengthening supply
(d) Developing the wider market system
SUPPORTING FUNCTIONS
(b) Understanding demand
CORE DEMAND
SUPPLY
RULES
(c) Building the core market
Source: Rob Hitchins, The Springfield Centre.
already largely “branchless,” for institutional providers, branchless banking is changing the way clients and providers interact and is poised to lower the costs of delivery significantly and to reach financially excluded households that cannot be served profitably using conventional branch-based approaches—especially in remote, sparsely populated areas and urban slums (CGAP 2011). Banking without branches requires alternative access points for client transactions. These include self-serve solutions such as mobile phones or ATMs, staff-based transaction points such as mobile branches that visit underserved areas on specific days, and third-party agents including retailers (or in some cases, MFIs) using card-reading point-of-sale (POS) devices, mobile phones, or Internet-connected computing devices. Branchless product offerings range from individual money transfers and government cash
The Evolving Financial Landscape
transfers to full-service banking, allowing deposits, withdrawals, and, if relevant, loan disbursement and payments or even insurance premium payments or payouts. In providing an overview of branchless banking and the associated new business models, it is helpful to define a few terms. Mobile money refers to a type of electronic money that can be transferred over a mobile phone. The issuer of mobile money may (depending on the local law and the business model) be an MNO or a third party, including a bank (CGAP 2011). Mobile banking is the use of a mobile phone to access financial services and execute financial transactions connected to a bank account. This covers both transactional and nontransactional services, such as viewing financial information on a mobile phone (Chatain et al. 2011). An agent is any third party acting on behalf of a bank or other financial service provider (including an 39