How people pay in the USA – Fed Reserve Payments study 2016


The Federal Reserve has just reported their estimates of the total number and value of all noncash payments made in 2015 in the United States, both by consumers and businesses. The study provides insights on adoption trends for new payment methods. Main findings of the study may be considered under 3 key areas:

(1) Differences between consumer and business payment choices in 2015 and changes over the 15-year period since 2000

No surprise, check payments are being replaced with card payments and ACH transfers. In number, check payments dropped from  57.8% of non cash payments to 13.4%. By value the drop was from 66.7% to 15.4%. However this still remains high in comparison to leading European economies that have considered altogether doing away with checks.

Total noncash payments by households increased by around 94.7% over the 15 year period, again no surprise as this period from 2000 to 2015 precisely marks the growth period for electronic payments worldwide.

New methods studied included payments initiated via a mobile device (for instance mobile wallet), payments through specialized services for person-to-person payments, and the use of online or Ecommerce payment authentication services to help verify the payer and secure payment information.

(2) Adoption and intensity of use of different types of general-purpose payment cards in 2015, along with more recent changes since 2012

Consumer and Business payments differed in terms of popularity of payment type. Top four consumer payment types were non-prepaid debit cards, general-purpose credit cards, checks, and ACH debit transfers, with the first two categories substantially in the lead. The top four business payment types were ACH credit transfers, checks, general purpose credit cards, and non-prepaid debit cards. The number of checks written is still alarmingly high as compared to that in many Western economies such as the UK, that have made the transition to instant electronic payments.


The figure above, drawn from the Federal Reserve report illustrates the way in which US consumers and businesses pay and how this differs in terms of payment type.

(3) Growth in selected alternative payment initiation methods and services

Over the 15 year period there was strong growth in the number of mobile wallet payments, but online bill payment through banks increased only marginally as payments can now be made directly to billers. The figure below, extracted from the report shows the change from 2012 to 2015.


Although P2P and money transfer payments increased over the period, they remain very low by number. Online payment authentication methods on the other hand grew from 1.8 billion in 2012 to 3.4 billion in 2015.

The full study report from the Federal Reserve may be downloaded at The Federal Reserve Payments Study 2016: Recent Developments in Consumer and Business Payment Choices, June 2017.


The Florin Awards Europe 2017



I am just back from chairing the Florin Award Jury at The European Payment Summit 2017.


We were pleased to see some highly innovative products and services from the finalists.

ThreatMetrix was the winner of the Florin Award in the category “Architecture for Secure Transactions”.

ThreatMetrix eCommerce protection provides real-time fraud prevention tools to online merchants worldwide, while also offering the potential for a less-intrusive consumer experience. The jury was impressed with the innovation demonstrated by the ThreatMetrix Digital Identity Network, claimed to be the world first Digital Identity Graph. This maps associations between people and their devices, locations, account credentials and behaviour. Such a mapping of anonymized user identities could play a key role in fighting cybercrime while also respecting consumer privacy. The strong European orientation is helpful for the roll-out of PSD2. Their Cybercrime Threat map provides a live stream of fraud attempts that was also something the jury found credit-worthy.

Iredeto was the winner of the Florin Award in the category “Omni-channel Payments Security“.

The jury was impressed by the way that Irdeto has transformed itself over the years with the visionary leadership of founder Pieter den Tooner who established the company back in 1969. Today the company continues to play an important role in Europe while boasting a client base that includes customers worldwide. The jury especially valued the breadth of security solutions that spanned multiple industries including media & entertainment, automotive and payments. Their solutions in the area of cloakware and whitebox cryptography have a key role to play thanks to the importance of protecting Open APIs and the critical need for security across multiple devices.




Do read more about it, and check out all the finalists at

The conference, held at the historic Louwman Museum was very interesting.

I shall share highlights from the conference as well as our latest research on Cyber Security and Payments over the next month.




A celebration of Republic Day in the land of miracles


Simply put, this is an important day for me.  I would not have been around but for India’s Independence followed 3 years on by our Republic Day, now in it’s 68th glorious year. My Dad wanted to bring free kids into the world and only married once this was assured. Although I will never truly understand what it meant to the generation who made this happen for us in 1950, every year we celebrate this day is one more year India proves itself to be a land of miracles.

The sense of pride this day invokes in a billion+ hearts is hard to describe. Let me just say I am certain it evokes a certain energy and a sense of fulfilment in every Indian around the world. The sheer diversity across so many dimensions, including language, religion, tradition, occupation puts the most glorious patchwork quilt to shame. So it is truly admirable that India has won and held the mantle of largest democracy in the world over all these years.

But the amazing story of India begins way before 1000BC, making the Constitution of India a relatively recent development. The river Indus after which our country was named was home to Harappan and Mohenjo-Daro civilisations and our two epics, the Mahabarata and the Ramayana relate to events of the Epic Age which was followed by the Maurya, Gupta, Moguls and other transitions, each leaving a unique legacy.

British Rule seems miniscule in comparison to all that went before. The date for India’ Republic Day was chosen to commemorate Purna Swaraj, the Declaration of Indian Independence on 26th January 1930. The Reserve Bank of India had already been established by 1935, and in 1938 we had the issue of the first Rupee banknotes shown below.


Thanks to the work of my father’s generation, the Rupee soon received a makeover. My generation and those to follow would enjoy the sailboat, dam, Asoka, the space craft (in 1976), the Parliament House, Mahatma Gandhi and many agricultural images. There is a nice site I found that shows a Currency Gallery of India, worth going through as it speaks volumes on how the country developed.



The Rupee had to wait until 2010 to gain it’s symbol ‘₹’. An historic demonetisation of ₹500 and ₹1,000 was achieved in November 2016, with redesigned ₹500 notes and the new ₹2000 banknote put in circulation. This and other measures are required in the rebalancing as the great country that is India asserts herself on the world stage.

India has arguably achieved one of the highest rates of progress towards digital payments over the last year. Let us not fool ourselves, working towards achieving all of this has been hard work and will continue to be so. What we have to be grateful for is that all that has been achieved has been within a democratic framework. This is nothing short of a miracle and on this Republic Day we look forward to money supporting the population so effectively that it ceases to occupy so much importance and becomes just the catalyst we can take for granted, to support over a billion livelihoods and the huge future India has ahead of her.


Jai Hind!


Openness versus Certainty of Regulations – What is more enabling?

Both openness and certainty are important to establishing what is termed as an “enabling” financial services(FS) regulatory environment.

Firstly, what is an enabling regulatory environment?

Just as plants would struggle to grow and survive without the right soil, climate and care, businesses too require the right mix to grow and thrive. For families and individuals to live full and happy lives it is important that the right kinds of businesses take root to help provide both the right kinds of products and services as well as gainful, fair employment.

This summer while caring for my Aloe Vera plant I learnt that over-watering could lead to disastrous consequences. My beautiful young plant lost it’s firm, upright disposition and adopted a slothful, “who cares” stance, until I realised all it needs is a few drops of water. Right beside it though, my Vietnamese Coriander wanted not just to be always very well-watered but also some “emergency rations” to be made available in a saucer below, to be drawn on as needed.

I had an important role as carer – I could not be over-zealous with one plant and had to force myself to leave it be, while providing the other a totally different level of care. Once I learnt my lesson peace reigned and, in the end, there was little to do to achieve happy plants.


Openness and Certainty

Regulators around the world have a considerably harder learning curve as there are a myriad of “do’s and don’ts” they must get right to do what we expect of them. So, forgive me for simplifying this but we tend to categorise regulatory stance on two main axes – Openness and Certainty.

Openne ss can spur or stifle innovation

Openness refers to the stance on who can offer financial services – just traditional players such as banks or also mobile operators, handset providers, global tech companies and others. Speaking of global companies, locality is another important aspect of openness. For the longest time, PayPal struggled to enter China, and global banks and money transfer operators had to create a complex set of partnerships to allow them to provide services across 200+ markets.

It is often critical for a regime to be relatively closed to protect fledgling local industries but there is always the danger of corrupt practices arising in an over-protected environment. The mix of products and services that become available to the population determine whether the next Facebook can be nurtured along or small enterprises are mercilessly squeezed out by providers enjoying dominant positions. In the UK, we enjoyed as open a regulatory environment as we could wish for, but the price has proved high – yet veering too far in the other direction can have equally disastrous consequences.

Certainty is established by each individual action

Certainty is something different but to my mind equally important. Every day that a company continues operations in a specific country, it is making an investment that it hopes will pay off. Investment is not one time only, but entering and leaving a country are often given more importance and we forget those who are simply making business as usual decisions on incremental investment.

If a country cannot create a level of trust in its institutions and governing bodies this can create levels of uncertainty that will destroy years of painstaking, rigorous work. Certainty makes the difference between whether a company can recoup the expenses on licensing and processes that it sets up. Certainty is also connected to fairness. If one company can get away with something, why should the next one not try? Certainty helps create level playing fields.

Charismatic regulators

Independence of regulators and cultivation of the highest calibre of professionals will ultimately, over a long period repay the people of a country.

Today digital trends facilitate an osmosis of innovation and services across jurisdictions that threaten traditional ways of protecting markets. How a country embraces and regulates the openness and certainty of their regulatory environment will impact on their position in the pecking order of tomorrow. Certainly, it will impact on GDP but more importantly it will impact on how that country is perceived by the world.

It is all too easy to find fault with our regulators. When things seem to be working it is easy for us to forget they exist. When the economy is playing up, they could be the first we turn on.

It is right and proper to be ever vigilant but we should never forget the critical role our regulators play and just how vulnerable they are. We must strive to educate ourselves to support and monitor them because the decisions they make each day do not just impact us – they determine the quality of lives of our children and grand-children.


A story of Malaysia and Singapore reflected by their coinage


Today is an important day for Malaysians, marking the creation of the Federation of Malaya back in 1957. Six years later, on this same day, North Borneo and Singapore would gain their freedom, leading to an Independent Malaysia on 16th September 1963. I therefore thought it a good time to reflect on how value transfer changed over time, to support the aspirations of its people. Life in this vibrant region dates back over 1.83 million years. As in other parts of the world barter prevailed, but as the southwest monsoon created important trade routes for the Archipelago, linking India and Arab lands of the West with China, barter and cowries soon gave way to the use of gold dust, silver and tin as payment.

Things changed soon after, with conversion to Islam in the 14th century. By the 15th century numerous states were issuing their own coins, generally conforming to Islamic standards. Thus the history of money for the people of what would come to be known as Malaysia and Singapore grew in sophistication centuries ago, with the octagonal gold kupangs, tin jokohs, silver tangas and other exotic, beautifully crafted coins.



Coins with “Malaysia” on them first made their appearance only in 1967. The smaller denomination sen coins (1,5,10, 20) were followed by the 50 sens, all featuring the parliament building and crescent and star emblem.


The 1 Ringgit coin was issued two years later, followed by the 5 Ringgitt coin in 1971, both made of copper-nickel. The term “ringgit” actually means “jagged”, and was probably inspired by the serrated edges of Spanish dollars that were in use during the Portugese colonial era. Sens and Ringgitts (100 sens) replaced the dollars and cents that previously carried images of Victoria in 1845 and George VI in 1939 – The new coins reflected the ambition and hope of new beginnings.



August 1965 also marks Singapore’s independence and by 1967 Singaporeans were using their own coinage, with the 1 cent and the $1 carrying an image of their mythical beast, the Merlion.

On the tenth anniversary of Singapore a bright new silver $10 coin bore the triumphant image of a ship, indicating the importance of the country to world trade.


South-East Asia

As the “centre of gravity” shifts towards Asia, South-East Asia continues to build thriving new communities and a unique culture. A bright new 5-dollar coin commemorates South-East Asia’s 4-yearly Games where Malaysia, Singapore, Indonesia and the Philippines participate.

Today both Singapore and Malaysia have a critical role to play in Southeast Asia, Asia and the world. Both are at the forefront of money going digital at the heart of Asia and are important Islamic banking centres. Their progress is synonymous with our progress in our complex, intertwined global economy. So we take time off today to wish our friends in each country congratulations and the very best for a bright and prosperous future, filled not just with money but with innovation, health and happiness.





Could new regulatory guidelines in Bangladesh turn MFS into “nobody’s baby”?

With the recent release of new draft guidelines for mobile financial services (MFS) in Bangladesh, I caught up with payments expert Raihan to get his views on the state of play of the market, possible outcomes from the guidelines and how we may see Bangladesh consumer financial needs better addressed over the next 5 years.


Raihan, to set the scene could you please share a bit about your role in the Bangladesh payments scene?

When I joined Grameenphone in 2006 on completing my studies in the US, these were early days for mCommerce in Bangladesh. We designed it all from scratch - processes for financial operations, reconciliation, the channel commission, payments, fund management and more. Seeing our BillPay service so popular in Bangladesh made it all worthwhile. I then moved to airtel where even in a bank led model we have built an award-winning mCommerce portfolio with specialized products such as micro credit disbursement together DBBL, our banking partner and 13 MFS partners including bKash.

What is the current state of play of the Bangladesh MFS market?

Bangladesh MFS market is now 5 years old. The top 2 operators bKash and DBBL together accounts for an estimated 74% of the market, with bKash leading since launch in 2011. A recent cGAP study estimates that 30% of Bangladeshi adults have used bKash while 4% have used the DBBL service. bKash users are more likely to be active, with 81% account holders active, compared with 67% for DBBL users. DBBL users are more likely to be registered users with 44% registered as compared to 23% for bKash.

As of June 2016, there are 36.2 million mobile banking registered accounts but only 13.3 million are active users. However, this data does not represent the number of unique users of MFS.

What’s behind this success of bKash?

I think this is due to the awareness that bKash was able to create ever since their launch and also their extensive retail reach. In terms of transactions, bKash still leads with over 80% market share although their annual growth in revenue has come down to 50% in 2015 from 81% in 2014.

What challenges do you face regarding user identification, AML and KYC?

OTC (Over-the-counter) continues to be hugely popular in Bangladesh, with 2.5 times more users than registered mobile wallet users. Retailers often transact on behalf of customers and this could create AML/KYC issues.

In 2016 we have started National ID verification process for mobile subscribers as Instructed by our regulators. Fortunately, as 90% or more of the active users of Telecom Services registered their SIMs, this may not impact the revenue and transaction volume of MFS.

Regarding usage pattern, I notice that unregistered users are more likely to use basic money transfer services while registered users also use advanced services including bill payment and mobile top-up. Today an estimated 8% to 15% of mobile top-up is done through MFS.

How is sticking with OTC a drawback to poorer users who only need basic services?

Today almost everyone has access to a mobile phone. Hence a poor person living in the remotest corner of the country can get registered through MFS and enjoy proper financial inclusion with the kind of services that are normally only available over a banking counter. Transacting through someone else’s wallet rather than your own is almost like a “Digital Hundi” or Sending money through the courier service which was actually one of the ways to send money in Bangladesh prior to the launch of MFS.

What was the motivation for new regulatory guidelines for MFS in Bangladesh?

MFS has always been a key focus for the regulators, specially Bangladesh Bank. Despite the rapid development of MFS and the huge potential to grow and reach the remotest corners of Bangladesh to boost financial inclusion, complete financial inclusion via mobile banking has yet to reach its full potential. OTC or unregistered use of MFS is one of the biggest drawbacks of the service.

This is why the Bangladesh Bank has been working towards a revised guideline that can encourage appropriate business models that help the market reach its potential and create a win-win situation for all the entities in terms of equity shareholding. I believe that with a few minor changes, this new guideline could help boost MFS growth and ensure financial inclusion in Bangladesh

So what are the new guidelines, and do they help address the issues?

Here I’d like to discuss two of the major clauses included in the new Draft Guideline:


Clause 4.1

BB shall permit delivery of the following broad categories of financial services by scheduled commercial bank-led Mobile phone based Financial Service (MFS) platforms in Bangladesh.


The scheduled commercial bank-led MFS platforms may have both banks and non-bank entities including Mobile Network Operators (MNOs) as equity holders, subject to banks holding majority beneficial ownership in total equity, no bank or non-bank entity holding more than fifteen percent beneficial ownership in equity, and Beneficial ownership of MNOs in an MFS platform not exceeding thirty percent of its total equity.


In Clause 4.1 we see that it remains a bank-led model as specified by the previous guidelines published in 2011. However, Clause 5.2 requires that no bank or non-bank entity hold equity share more than 15% individually. Banks must have majority ownership and Telcos may not collectively hold more than 30%. This means MFS projects will become nobody’s baby! This potentially creates a huge issue in regards to ownership.

What is the alternative you recommend?

In my view, we should first study what’s happening worldwide and learn from that. We should deploy a model which will be beneficial for the people of the country and will be owned by both Telecom and Banks. Telcos are good at things like branding, marketing campaigns, product management, agent management. Banks are expected to safeguard funds. Hence a model in which each of these players can execute to the best of their capability will be a successful one. My proposal would be that there should not be any restriction on the ownership of MNOs or any other equity holders. We should follow the good examples available across the globe.

Apart from equity participation, in what other ways are Telcos held back due to the guidelines?

There are several other areas where Telcos are not allowed to participate in the current MFS services. For example, Telcos are not allowed to promote the product, brand the product or launch different campaigns to promote MFS services. Telcos are only allowed to offer Telecom Data or talk time) for MFS promotions.

How do you see the market developing as we move towards 2020?

In the next 5 years, I expect the MFS market to be more mature and more compliant. SIM verification and re-registration will be imposed on MFS as well which will eventually limit the OTC usage and encourage use of mobile wallets. More advanced services will be launched so that people start to use MFS for services other than the basic money transfer.

Government already disburses payments (G2P) through MFS. In 5 years from now, I expect P2G to increase in a big way, so that payments including fees and taxes reach the government through MFS. Mobile Top Up usage will increase even more and may reach approximately 50% of total Telecom Top Up value.

MFS providers will further pursue Omni channel strategies, with some already providing the service through apps and the web. MFS services will be offered through other mediums such as NFC and it will not be only limited to USSD, apps or web and launch of 4G services will further boost usage.

Mobile Number Portability will be introduced in the country and, the need of having more than one MFS account with different Telecom operators will gradually decrease.

As stated by Bangladesh Bank, over the last couple of years, we have found that people at the “bottom of the pyramid” have been able to greatly increase their economic activities and that volume is increasing significantly each day. This contribution directly impacts the transactions volume in mobile banking.

Overall I look forward to MFS playing a major role in the growth of GDP of our country.



Ruhullah Raihan Alhusain is a payments professional with over 12 years of work experience in Mobile Banking Field. He graduated from the University of Texas at Arlington with Honors as Bachelor in Business Administration and led the Grameenphone mCommerce Operation Finance team before moving to airtel where he is Head of mCommerce Operations


The complexity of the gold ecosystem presents quandaries for regulators


With us since times immemorial, Gold has proved to be one currency that has remained relatively stable despite turmoil in global financial markets. Universally accepted, and prized as a medium of exchange from ancient times, today it offers renewed appeal in the face of conditions and requirements from customer segments of different kinds. Yet new challenges that the world faces may pose new requirements in the way regulators look at the gold market.


The many and varying uses and facets of gold present a quandary for governments around the world when it comes to dealing with the opportunities and threats it presents. On the one hand, safeguards are essential to detect and prevent the use of gold as a tool for money laundering and terrorist financing. On the other hand, all around the world gold is intricately woven into culture and tradition in a way that transcends the value of the metal itself.

A delicate balance must be maintained to recognise the complex requirements presented due to the highly differing users and use cases. A wrong move could prove detrimental to a country, while wise management could present new opportunities at multiple levels of the ecosystem.

Instinctively governments realise that appropriate management could be a game-changer. Yet how does one go about it? Recent efforts of the Modi government in India to get the gold of the population into government approved schemes face insurmountable issues when it comes to requiring gold to be melted down first. The associations and value a woman may place for instance, on a much-loved heirloom make certain trinkets priceless – so what approach would work?


While it is imperative to respect the cultural use of gold, there are however potential links between the gold market and terrorist financing. As gold can be traded anonymously and transactions are difficult to trace and verify, cases have been uncovered that show how it is being used to place, layer and integrate illegitimate funds into the formal financial sector. Loopholes are present and may be exploited in a number of markets due to the differences in the way the gold market is regulated, for instance in terms of how cash-for-gold businesses are licensed and overseen.

Gold is covered by the Financial Action Task Force (FATF) under Recommendation 23, treating the gold sector as DNFBPs (Designated Non-Financial Businesses and Professions), but national policies must work together to create the global network that allows people to continue to enjoy the benefits while weeding out the unsavoury aspects of the gold market.

Over the coming months I will share more about my research into this fascinating topic – approaches that are being taken in different parts of the world, the changing position of gold as a currency and how it relates to money going digital, both in traditional ways as well as in terms of virtual currencies such as bitcoin.


Amazon’s new Subscribe & Save Offer: Could prove sticky?


As I report that Amazon has been making further inroads into the UK online shopping market, I realise it is probably an under-statement. As it was our go-to provider long before the holiday season it is no wonder we got most of our gifts from them, availing of the great selection of offers during November/December. Free home delivery, the peace-of-mind from trouble-free returns and refunds and a most reliable service has made Amazon the darling of many Brits over the recent past, as can be seen from the volume of reviews pouring into the site.

I was interested therefore to notice today that their “Subscribe&Save” offer earlier launched in the US is now available in UK. The offer claims to provide regular users the ability to save up to 15% as well as gain free shipping on recurring deliveries. To me this seems to be yet another step in the evolution of Amazon from book supplier to online provider of the first resort. For UK shoppers who are now spoilt for choice of online retailer with most grocery stores offering great home delivery options, this appears to be designed to tempt us away, for purchases of a wide range of household shopping items, of which a vast array has now appeared on the site. With its legendary knack of mind-reading Amazon quickly suggested a few items that I had already bought on a number of occasions, while I was checking out the offer.


I must admit this looks promising but also from my past experience from launching digital content services in the UK, I recall the “Crazy Frog” incident where junior mobile subscribers unwittingly found themselves with costly subscriptions, I am sure there could be a number of issues that must be navigated by the marketing team to ensure that people don’t end up with deliveries they did not expect and suppliers don’t have to contend with higher levels of refund.

Within an overall great experience, I found one particularly irritating feature. Introduced over 2015, their “Add 0.01 p to get free home delivery” never fail to irritate our household, and probably a lot of UK online shoppers. A number of desirable products are priced at £19.99 (Why?). However, one needs £20 of “applicable items” for home delivery and finding out what is applicable is quite a chore. For people who would like to save around£4 delivery cost this means a thankless job of looking through “Add-on items”. The concept of Add-on is itself an admirable one as it is a way for sellers to offer small items online. However, believe me it can be most irritating to find an item that qualifies for the 0.01p required, heave a sigh of release and lug it into your online basket only to find that it’s not made your delivery cost go away.

Not to mention the additional time you are forced to spend trying to save money on Amazon must come with a health warning as one can end up buying so much more than one planned – the shopping experience is so slick that it can be quite addictive! I think the same will soon be said of a number of the online stores that are burgeoning in the UK market, and as a delighted consumer I am not complaining (yet?).

PS: For full disclosure, I am not connected with Amazon in any way, apart from being a shopper and a passionate observer of the way money is going digital, to power payments and commerce around the world.


Global Payments – Looking back, looking forwards


Celebrating our achievements, strategizing for the future

1910 Happy New Year PostCard 4230867631_74bd04dc8a_o web It is easy to find fault in company launches, but as a former product manager I fully understand the courage it takes to even get to the market in the face of uncertainty, and the myriad factors that stand between you and success.

So I invite you to take a few minutes to reflect with me on some of the things that went right last year. This is by no means a comprehensive list as I am aware I would need reams of E-space to cover what I see happening in each market. I am hoping you will add your thoughts, to help create a more comprehensive picture, for all to enjoy.





We’ve come a long way over 2015

  • Online payments fuelled E-commerce in such a big way over 2015 – I did most of my holiday shopping online for the first time this year, along with millions of others around the world
  • New business models have found incredible ways to leverage new ways to pay – Uber, AirBnB and others, have grown at unforeseen speed and become part of daily life
  • Fintech has grown substantially and has attracted some of our brightest talent – what a great achievement from start-ups around the world
  • Payments is disappearing and getting embedded on the one hand, but is also rising in public awareness through mainstream adverts– PayPal, Apple Pay and other ads have regularly hit the UK TV, but this is small considering the kinds of campaigns in India with Bollywood heartthrobs roped in to support emerging mobile wallets, for instance
  • Apple Pay did manage to launch in multiple markets, with an intuitive user experience and helped ignite re-interest in NFC, and investment in many more services
  • Huge strides were made in biometrics with payment by face, voice, fingerprints and more
  • Millions of people received identity and connectivity for the first time, thanks to cheaper mobiles, smart phones and data becoming available opening the door to mobile money services that can help lift themselves and their families out of poverty
  • Wearables took big strides forward, with the ability to pay using your watch hitting markets for the first time ever
  • Banks have had to wake up and smell the coffee – I’m hoping for better, cheaper and more down-to-earth, back-to-the-people banking, now we have alternatives
  • Faster Payments took strides forward. Kudos to Vocalink for their work in Singapore and now the US, certainly living in the UK I daily benefit from their systems here

But there is so much more to achieve!

  • So much more needs to be done in Biometrics before it can truly become effective for mainstream use – let’s hope we see progress in standardisation as pioneering providers start to work together
  • Small value payments are the Holy Grail of payments and despite work of over a decade on this, I don’t think we are there yet – so much more scope for cheaper, faster and more secure ‘tiny’ payments
  • Cyber security is an area in which one can never do enough. With the increasingly connected systems, weakest-link analysis is critical, and end-to-end testing must be effectively managed across platforms of multiple providers
  • Opening up banking to make it more competitive is a journey that has only just begun. Can banks really be allowed to make our data available to third parties, have we been consulted about who will have access to our data?
  • It is time to revisit an age-old area of customer loyalty and how to get, gain and keep it - as the digital age introduces so much of cross-channel complexity
  • As we enjoy the huge benefits of online services, our data privacy assumes critical importance. We are leaving trails behind that if connected could have great impacts on our well-being, this again is an area of work that is still at the starting line

How will we get there?

In all the projects I’ve been a part of over the last decade, the key success factor has been top management action. Enlightened top management can wield enormous power in making things happen, while they can also be thoroughly destructive, casting asunder years of team effort in the time it takes to write a single email.

Fortunately, whether we will get there or not is no longer in the hands of large corporations. Born with mobile phones and tablet PCs as their personal toys, and brought up on a diet of computer games, social media and connectivity in a shrinking world, I see our youth taking us into bold new frontiers in terms of the way we pay in the coming years. The question is whether our regulators will also dig deep into this pool of emerging talent to keep things competitive and yet safe for us all.

Have a Great New Year 2016! Thanks for reading our blogs and do share our journey in 2016 and beyond.

Join community discussions on this topic at LinkedIn and Finextra.


Bridging the Digital Divide between Banks & Micro, Small and Medium Enterprises


In today’s guest post Sonum Puri of Accenture shares her thoughts on the opportunity in the MSME sector in developing countries and the gap in servicing their needs, reflecting on further work required for financial institutions to address these needs.


image Micro, small and medium enterprises (MSMEs) in developing countries face an estimated financing gap of $2.1 to $2.6 trillion ($3.2 to $3.9 trillion globally)[1]. MSMEs contribute to economic growth and job creation but inadequate access to finance, limits their impact in society.

MSMEs are impeded from accessing formal financial services due to cumbersome KYC and onboarding procedures, poor credit histories and lack of time to travel and queue at bank branches.

Some banks would argue that the processes applied to MSMEs are justified to mitigate high risks (creditworthiness is hard to denote) and as these customers are typically perceived as less profitable, no concerted effort is made to reduce constraints.

However, by failing to address the financial needs of this underserved segment, service providers are potentially missing out on a US$380 billion revenue opportunity[2].


Although microfinance institutions (MFIs) have helped close the credit gap, especially for women entrepreneurs, many do not have the resources, financing capacity and products beyond microfinance to meet the evolving needs of MSMEs (savings/deposits, insurance, pensions, remittances etc.)[3]. In fact some MFIs such as miBanco (Peru) and Bandhan (India) have turned into banks in order to diversify product offerings.

In developing countries, rising affordability of devices is encouraging growth in smartphone adoption, reaching 63% (2.9 billion) by 2020, with the majority running on mobile broadband[4]. Increasing smartphone and internet penetration will enable MSMEs ranging from a small business owner in the Philippines to a garment producer in Indonesia and a smallholder farmer in India to connect to a variety of online digital products and services by clicking a button.

Leveraging digital channels and operations will allow banks to also reduce the cost to serve the MSME market, whilst acquiring new customers and increasing profitability. Yet banks need a compelling digital value proposition, incorporating financial and non-financial needs that will help customers grow their businesses and improve their own welfare and that of their families.

The concept of the ‘Every Day Bank’[5] goes far beyond a transactional relationship to one in which banks will offer a variety of digital services that will increase the daily interactions of MSMEs. But to get to the ‘honey pot’ the sign up procedure needs to be online, fast and simple. Credit decisions need to take minutes, not days. Customers need to be able to conduct their business as efficiently and productively as possible.

Employing a low cost distribution model (using brick and mortar and digital infrastructures) will benefit both banks and MSME clients. Virtual contact centres, loan disbursements and repayments through mobile phones and point of sale (POS) equipped bank staff in addition to using retailers to expand distribution and perform basic banking/customer services, are some of the available options.

Social media platforms can assist banks to prove identity and make better informed credit decisions on customers who may not be regular banking users or have much of a financial track record, but are likely to be on Facebook and have a social media history. Based on the data generated, loan approvals can be turned around very quickly. Similarly mobile phone behavioural data can be utilized to assess credit worthiness.

Digital Services that can help address customer pain points include:

  • Faster onboarding and KYC procedures (online forms, analytics/social media platforms, biometrics, digital signatures and electronic document transmission)
  • Personalised financial services and reporting (pre-approved offers, third party lending analytics, online portal/digital relationship manager, digital supply chain financing and mobile cash pick up)
  • Business administration tools (virtual CFO, single view of customer accounts, cash flow and expense management capabilities and analytical platforms for forecasting)
  • Integrated banking experiences (ability to access services from any device, anytime and switch from one channel to another for account opening, banking products origination and servicing)
  • Connecting to a broader ecosystem (B2B network hub, P2P collaboration tools and access to alternative financing)
  • Solutions to improve products and services (business services and Ecommerce enablement and virtual platforms to gain industry insights and advice)
  • Financial literacy programmes (mobile phone delivered education and training and videos)

The threat of competition from challenger banks, telcos and other disruptive players has led to some banks responding including:

  • ANZ - mobile app to monitor real-time account balances, view current and prior-day transactions and approve or reject payments
  • Maybank - mobile POS service that enables MSMEs to benefit from wireless payment to save time going to bank branches
  • Barclays – remote account opening through an app on smartphones and tablet devices on which customers apply for a personal loan and receive funds in less than 10 minutes
  • CBA – online balance statement, cash flow report and business insights that customers can use to benchmark with competitors

The more innovative banks are even joining forces with the new competition, take for example India’s ICICI bank working with Chinese Ecommerce firm Alibaba to establish an online trade facilitation centre or RBS who is partnering with Funding Circle (online lending marketplace) and Assetz Capital (peer-to-peer lending platform) to provide alternative financing sources.

Neither banks nor any other stakeholders can go it alone. To get to scale and truly build long standing relationships with the MSME segment, collaboration with a range of ecosystem partners is absolutely critical. Cross industry partnerships present an opportunity to offer complementary financial and non-financial products which service providers might not have been able to offer otherwise.

FullSizeRender Sonum Puri is a manager within Accenture's ASEAN digital team. Sonum is committed to helping banks, MFIs, other FIs, telcos, governments and donors use digital solutions to improve front to back end processes, increase operational efficiency and expand financial services in developing countries.

Prior to joining Accenture, Sonum worked as a digital financial services consultant to the UN, providing advisory services to stakeholders creating new product innovations in digital financial services. She has conducted research and analysis, strategy development, agent/staff training and service implementations in the Philippines, Papua New Guinea, Timor-Leste, Sierra Leone, India and Kenya.

Sonum may be reached at