Serving & Empowering Consumers in Digital Age

Your Token to the Shared Economy

noreply@blogger.com (Jaiveer Singh) — Tue, 09 Jan 2018 12:01:00 +0000

I am sure by now, you may have heard of Tokens, Crypto-Tokens, Native Tokens or Crypto-coins terms which are fuelling people aspirations to get quick rich.

Let’s see few real world concepts/ schemes which we are familiar with before we see how these tokens are very different than any of those things.

You may be familiar with rewards/ loyalty points, special passes which incentivize consumers or stakeholders for certain benefits and provide privilege rights for certain services/ actions.

Here are few well known examples

Amazon Prime Membership: Receive all the benefits of Amazon Prime including free shipping for eligible purchases, unlimited streaming of movies and TV shows with Prime Video, and the ability to borrow books from the Kindle Owners' Lending Library on discounted rates.
World of Warcraft: One can do three things with a Wow Token: Buy one with money from the in-game Shop, then sell it in the Auction House for gold. Buy one with gold from the Auction House, then use it to add 30 days of game time to your subscription.
Air Miles: Airlines reward you with points each time fly with them, and you eventually build up enough points that you can redeem for incentives, such as free or discounted tickets or ticket upgrades.

None of these provide real monetary rewards which you can en-cash and transfer to your bank or pay for services of other providers. These can be classified as closed or semi-closed rewards programmes.

On the other hand, there are many investment schemes where one can invest for capital appreciation or periodic returns like stocks, bonds, mutual funds, FX, futures & options etc.

Stocks give you a share of ownership of a company with a profit sharing right and certain stock volume allows one to participate in key decisions of the company.

Established companies launch IPO (initial public offering of stocks) to fund their market expansion & growth plans by publishing their prospectus with applicable disclosures & forward looking statements. Here is an example … Net Link Trust is the biggest IPO in Singapore in six years and is expected to raise about S$2.3 billion in fresh capital. NetLink Trust is the fibre broadband business unit of telco SingTel.

Start-ups or emerging businesses often go to Angel Investors, Venture Capital, Private Equity and crow-funding options to raise capital required to build new products or platforms.

Many Start-ups have used Kickstarter (world's largest funding platform for creative projects) to raise funding by offering special prices for their products & services. This also allows to get early adopters for their products and services before products mass rollouts.

Central bank and market regulators watch all public funding activities offering investments or regular returns. All firms engaged in activities under this category need to abide by existing capital & investment management laws of a given jurisdiction.

By now you may have noticed, key properties of reward systems & investment instruments while one is largely closed loop system offering usage while another open to trade on listed exchanges or OTC.

Now we look at Crypto-Tokens which are used by Blockchain based systems to grow their user base and to accelerate their platform operations thru network effect.

Well-known open-source systems, Bitcoin & Ethereum have used crypto-tokens successfully for their platform development & operations growth. Bitcoin, now has a total market value worth of $78B and Ethereum has a total market value worth of $36B.

While bitcoin token is used as crypto-currency allowing global money transfers peer to peer without any centralized mediator, Ether is used to pay for gas required to execute smart-contracts on Ethereum network. Ether allows owners to participate in Ethereum network operations.

Ethereum ERC20 Token Standard release allowed new firms to write smart contracts which can generate specialised tokens for their projects on Ethereum network. These token can provide access to a utility, shared ownership of digital asset or privilege rights for certain actions depending on the project objectives.

All new projects require contributors (read developers) and users to grow their base so tokens often provide usage & work contribution rights to token buyers/ holders.

ICO (Initial Coin offering) is often done by a start-up which has a base product & platform ready (not on paper alone) to make it better or grow their user base. Tokens should be thought of primarily as a product feature rather than a funding mechanism.

New platforms/ projects communities are bound together by their cryptographic tokens and transparent rules coded in software and community grows with network ownership effect. Many projects are underway to setup Exchanges Services for easy inter-change, trading & transfer of these tokens.

Start-ups launching ICO need to be completely transparent about risks involved, disclosure of vested interests & forward-looking statements. Here is the sample of White Papers released for ICO.

If you already got an invitation to participate in ICO, Pl. remember one need to carefully study these proposals & check promoters & founders credentials to recognize where an old wine is being served in a new bottle. :-)

New token base digital economy, can transform global markets forever redefining assets/service ownership, transfers & usage in much more efficient ways. Amazon, Uber, Airbnb has shown what value can be delivered thru efficient means globally. Token base economy can transform shared economy business model to next level offering these benefits to much larger user base globally thus enabling a truly inclusive world.

I would love to hear your views about tokens and potential areas which can be transformed by their use.

Feel free to drop me a note at LetsTalk@JaiveerSingh.com

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official position of firms, Author is associate with.

Digital Banking, Fintech, Blockchain, IOT and New Normal of Financial Services

noreply@blogger.com (Jaiveer Singh) — Mon, 19 Dec 2016 09:55:00 +0000

An interview with a Technology News Portal www.bigdata-madesimple.com

Tell us a little bit about yourself, and how you got into the banking industry.

During my school days, I was a student of commerce & finance stream, while studying for ICWAI course. I heard about computers in the early 90s and felt this is something that might redefine how business & life will be conducted in the future. So I joined a computer programming course, and that’s how my journey in the IT sector started. Next year, I will be completing 25 years in this sector.

During my early career, I learnt many 3GL languages and many other software applications. I also even learnt how to build personal computers. Later, I worked as ERP consultant with a Japanese company and implemented that ERP system in many business units around India.
During later years of my career, I served many large corporations such as Xerox, Honda, GE Capital, Orix Finance, National Housing Bank, Axis Capital & Deutsche Bank. Currently, I am working at DBS Bank, Singapore.

Can you tell us a little more about your job at DBS?

I essentially manage Bank’s technology product implementation programs across Asia region while collaborating with many business, operation & technology units in addition to technology companies and other partners. Currently, I am part of a core banking systems transformation program for a regional DBS entity.

What are some of the interesting and exciting trends in the banking space? And why do those trends excite you the most?

Over the last five years, a lot of digital companies have democratized information. Companies like Facebook have shown that information, transactions and data can be scaled at a global level at a very low cost while still being profitable. They have been collating and collecting data across different countries and creating many data products around aggregate datasets.

Money is in its purest form is also just a data point and therefore it is now being moved from paper form to mobile money and digital money form. Money enables commerce/ financial transactions across business & individuals just like text/picture/audio/ videos enables communication using various channels. Companies like Amazon, Facebook, and PayPal have shown how to build successful business models using digital infrastructure around information. Banking industry is an attractive place for these tech companies to extend their business reach next.

PayPal built payment service that removed friction from online commerce globally. Now it has 180+ million user base with multi-billion dollars annual revenues. PayPal motivated other players to enter the financial services industry & target many other areas of financial services such as banking, wealth mgmt., and lending, insurance, trading & capital markets. These players are quite innovative in their solutions & business models and they are growing at a good pace.

You talked about digital payment trends. Other than that what are the traditional banking practices you would like to see evolve?

Under the Banking umbrella, there are many diverse services like deposits mgmt., lending, wealth management, corporate banking, global transaction services, credit cards, merchant banking, trading & investment banking. Recently many new players have emerged who have built services that act as a substitute or an alternative to a regular service offered by banks.

If you take lending, there are lending services offered by other companies using crowdfunding & P2P business models. They are only going to grow further as more people become aware of available options & get used to their superior service experience. Robo Advisor companies’ solution are enabling financial advisors to serve more customers and also to grow business with existing customers. KYC, Credit Scoring, Cyber Security are few other areas where innovative new solutions are being developed using Bio-metric authentication, Mobile, Artificial Intelligence Big Data & Social Analytics, Cloud services and Machine learning technologies.

How are Fintech changing the banking industry?

For the last three years, I have been focusing a lot on Fintech space. These startup companies are building solutions for a business/ consumer problem using new innovative approach & agile methods improvising solutions by each iteration. Some Fintech firms are building products and services in partnership with banks & insurance companies (B2B) while many firms are directly into the consumer market (B2C). Some Fintech firms building white label solutions to remove friction in government services delivery to the citizens.

Lots of angel investors, private equity and venture capital firms are funding these startups companies at different business stages. Due to Fintech firms specific target market focused solutions & ability to iterate solutions fast, these companies are getting a lot of investments. Last year APAC region Fintech firms attracted $4 billion plus in investments and this continue to be a growing trend in 2016 as well.

Banking leaders are definitely keeping an eye on what is happening in the Fintech industry. Few banks are also working closely with Fintech firms. Every bank will have its own way on how they engage with Fintech firms.

DBS Bank has signed cross-referral agreements with two homegrown peer-to-peer (P2P) lending platforms, Funding Societies and MoolahSense. Bank also noted that historically, small businesses without audited accounts and personal income statements tend to be underserved as they find it difficult to credit-assess them, preferring instead to lend to companies that can provide collateral and have an established track record and at least two years of audited accounts. Bank has collaborated with Hong Kong-based Fintech firm AMP Credit Technologies earlier this year on a new way of making credit assessments for small business loans. This is one example of how banks are partnering with Fintech firms.

Banks are partnering with Fintech firms in specific customer segments where they see opportunity to grow business together or build a competence for future innovative solutions.

When we say Fintech, I am not just talking about startups. Because for example, even companies like Apple Pay are considered as Fintech. Do banks see them as threats or as partners?

Banks see them as partners because they are not offering banking services directly to consumers.
Apply Pay, Samsung Pay, Google Android Pay, PayPal, Masterpass, Visa checkout all these widely used solutions are great digital channels which need to be leveraged for distributing financial services to consumers globally. Some firms such as Amazon are building credit solutions for their merchants/ customers which is a competing financial service to what banks offers to same customer base.
If you look at the past 20 years, banks have not been very active in the consumer payments business. Banks should definitely partner with these companies because through these channels they can, not only deliver “fund transfer” services, but also deliver other banking services. They can engage with their customers more effectively.

For example, we have a mobile app for DBS. A person who uses this mobile app can integrate it with his/her Apple Watch. Even using our mobile wallet, PayLah, you can transfer money to your friends. Mobile wallet app is integrated with few e-commerce sites for making payments. You can buy things from the e-commerce store and pay via PayLah App.

A bank collects lots and lots of data from consumers. How can you derive insights about each and every consumer, and deliver an ultra-personalized experience to them?

I think with mobile apps it is very easy. Even before mobiles… let’s say somebody uses DBS debit card in a mall. The moment that person uses our Bank’s card in a POS/ATM machine, instantly we can send him the best offer in the mall available on his card. In this way, we help our partner merchants to grow their business and also deliver relevant offers to our customers.

With the mobile apps or based on card usage, we can figure out whether the customer is travelling overseas, and inform him about all the precautions he needs to take including relevant travel insurance policies. It is easier to figure out the needs of a customer based on context.

After analysing his historical data, we know what sort of offers will be relevant to him in this context. All the merchants who are using bank payment services will benefit through bank loyalty programs.
I recently spoke to Ron Shevlin and even he said that if banks want to deliver a personal experience, then they should develop and deploy mobile apps.

It is not just about the mobile app. It is about understanding customer’s lives closely. Before that you should know who the customer is, and what he does. You should have that insight. Customizing Mobile Apps look & functions based on customer preferences or most used functions is just one of the feature to improve customer experience. Access to Mobile device sensors & apps data can reveal a lot about customer daily lives to identify opportunities for show up relevant financial services. Scenario based fully integrated banking is possible thru mobile apps & other digital channels.

What exactly is “Blockchain” and where is it implemented?

There is a lot of hype about block chain. Satoshi, inventor of the bitcoin protocol, had the vision to build a currency that is not dependent on the government or any central bank/ organisation.
Currency is nothing but a legal tender. The currency is controlled by the government of a country. But, when the government is in trouble, the value of the currency drastically comes down. Satoshi vision was to create a system where people can actually lock in trust and remove any possibility of double spend. Bitcoin was introduced as a vehicle carrying transaction value across Bitcoin P2P network. As more and more people join in, the value of the cryptocurrency value should get stabilized.

Bitcoin has already crossed a billion-dollar market now, probably one of the top five payment channels. However, it is not controlled by any government. There are other implications like money laundering problems, anonymity (you don’t know who is making the payment). Bitcoin network provides pseudonymity however transactions are completely traceable to the addresses.
The only thing you need is to know the person’s linkage to the address which he/she is using. Each person is given a digital address using which you can trace the person’s activity. The technology on which the bitcoin is built is mathematically/ cryptographically secure. The system behind the bitcoin is called block chain technology.

Actually, it is a distributed decentralized technology. The prime use of this technology is to transfer value. The digital value can represent any currency form, gold form or document titles … it can be in any form. Currently, bitcoin is the biggest Blockchain network. Ethereum another Blockchain network offering smart contract implementation platform is also growing fast.
There are a lot of variations available in block chain right now. The systems that banks are currently using to transfer money is highly complicated and cost intensive. It is also very difficult to maintain these systems and scalability is limited. Now, banks are building prototypes using Blockchain and experimenting with different versions of Blockchains like private Blockchain, public Blockchain and permission based Blockchain solutions.

Tell us about an interesting project you are working on right now.

One area that is close to my heart is financial inclusion. Recently, I was speaking in a financial inclusion summit in a cards & payments conference. I often spent time with Fintech startup firms who are building digital financial products which will enable consumers to access more products and financial services through their mobile, be it savings products, insurance, or B2B services for merchants using new business models such as P2P, Shared economy etc. . This is a very interesting area that I am focusing on right now.

How can banks use Internet of Things (IOT) to improve customer experience and market share?

Probably it is too early to assess impact on the banking industry. But there is a lot of work happening in this space. There are a lot of IOT startups in Hong Kong. IOT is all about devices talking to each other. I believe Blockchain will be a big enabler here. For instance, when two devices are talking to each other, how would you know that nobody is hacking into those things?
You can even sell your car through block chain. If your car’s IOT control device has been encrypted to an address in block chain, essentially your car key, which is digital, you can sell the ownership of that key. You don’t need a physical key to sell your car, as this is a digital key. Once you sell your car on block chain, another guy with access to the digital key can access the car.
This is a simple example of IOT which can be used financing new deal. But, the role of IOT in banking is still in a very nascent stage.

External Reference

http://bigdata-madesimple.com/an-interview-with-jaiveer-singh-vp-of-technology-at-dbs-banksingapore/

How FinTech is changing Financial Services industry for better

noreply@blogger.com (Jaiveer Singh) — Mon, 04 Jan 2016 09:35:00 +0000

In Financial Industry, FinTech has been one of most talked term in 2015 along with disruption, innovation & customer experience. Financial industry covers many financial services like banking, lending, payments, remittance, insurance, investments and trading services and has been using technology in a major way to serve its retail, HNI & corporate customers for many decades.

FinTech firms are the new breed of companies which apply new innovative business models & technologies to extend financial services to larger or new consumer segment in line with digital lifestyle or offer faster & exceptionally better solutions to businesses. FinTech companies are fundamentally very different in their approach from traditional technology product / services companies as you can notice from few examples below.

Most FinTech firms are often driven by following principles

Democratisation: FinTech is leveling the financial playing field by making high-level, top-of-market services more accessible to all kinds of customers, not just institutional clients and high-net-worth individuals. WealthFront, NutMeg & Betterment provides access to high value investment services to thousands of new customers.

Disintermediation of traditional business models: FinTech is cutting out the middle man when it comes to making a financial transaction of any kind. Prosper, LendingClub, SoFi in US, Zopa & FundingCircle in UK and Monexo in Hong Kong are already offering alternative lending options to consumers & businesses.

Customer experience: FinTech is making banking to be as user-friendly as shopping or socializing have become. Moven & Simple banking Apps empower banking customers and gives them tools to control and manage their personal finances as they want. Fidor Bank in Germany is a trailblazing example in digital banking space. Venmo & SnapCash in personal payments and Xoom & TransferWise in Remittance have redefined customer experience.

Many new innovative solutions are being developed and offered by FinTech firms even in Asia such as digital debit/ credit card by MatchMove, Bitcoin based remittance services by BitSpark and group savings & borrowing solution by KyePot. Many FinTech startups are also leveraging big data and analytics to transform insurance services such as Heartisans of Hong Kong (generating early heart failure warning using data from fitness bands, thus enriching health risks assessment for policy underwriting)

FinTech firms are disrupting financial services industry and setting new standards for trust and transparency, efficiency and connectivity between consumers and businesses alike. An alternative finance industry though currently very small to traditional financial industry size is growing fast to provide access to high quality information, product & services meeting consumers new expectations.

FinTech solutions leveraging mobile technology are also making it feasible to widen reach of financial services to billions of unbanked people and empowering local SMEs to serve them better.

2015 has been a very good year for FinTech in Asia as it attracted almost $4 billion investment largely in payments & lending startups.

Hope 2016 will also drive even larger investments in FinTech start-ups & Innovative solutions to transform financial services for better.

Cash is Still King – but freedom movement towards cashless societies has begun…

noreply@blogger.com (Jaiveer Singh) — Sat, 12 Sep 2015 06:32:00 +0000

All nations provide billion of currency notes/ bills to facilitate instant value exchange among people and businesses. With growth of economy, demand for more currency notes is also growing in addition of need to replenish old currency notes.

Below charts provides a quick view of currency notes in circulation in few regions in 2014.

Currency notes (Cash) provide instant value exchange anytime anywhere to complete transaction and considered highest form of liquidity. It offers security against double spend as each note is unique by design. Transactions in cash don’t incur any service charge and also provide anonymity for consumers. It doesn't require any intermediaries, active network connection or costly devices to complete a transaction.

Currency notes are considered symbols of nation sovereignty & pride and languages & pictures shown on currency notes provides emotional connection to people of the country.

It does have some drawbacks such as counterfeiting, friction, risk of loss or theft, need of change and only works best in close proximity of transacting people. A remote payment settlement often requires intermediaries with additional service charges to complete transaction.

Government, consumers & businesses all face various challenges in managing cash based transactions. While government spends millions of dollars in issuing, distributing and replenishing banknotes, businesses also spend huge sums for cash management in collections & operations.

Cheques & inter-bank transfers have reduced business transaction volumes in cash while person to person payments and consumers to business payments for smaller amounts largely remain in cash.

Here are some of the key hurdles in large scale adoption of electronic money

· Large illiterate population in developing nations
· Consumer behaviour and comfort with cash
· Lack of payment infrastructure in many regions and long settlement time
· Significant usage costs to consumers & merchants
· Diverse languages in different regions of country
· Few entities with banking licenses

Arrival of Digital Money in plastic forms

Plastic money (debit/ credit cards, cash cards) have been in use for last few decades for proximity (in stores, malls, theaters) & remote transactions payments (online & tele-sales). They have been quite successful in cutting down on cash transactions volumes in mainly urban areas where infrastructure to support plastic cards based transactions is available.

Plastic cards operational costs and transactions frauds & thefts have kept many consumers away from adopting plastic money even in urban areas. Segment based risks assessment and lack of swift settlement of disputes with defaulter also has been a deterrent in accelerating cards issuance rate.

Arrival of Mobile Phones acting as carrier for money transfers

Telecom and internet growth has made a very major impact on financial industry allowing them to provide services in many new innovative ways to existing and new consumers. It facilitated electronic banking access to consumers pushing bank transfers transactions volumes to new levels.

Still billions of people are unbanked or underbanked and not able to use banking & payment services in a cost effective & convenient way.

Since past few years, mobile phones are being used to transform cash payments into mobile money payments thus reducing share of cash transactions and reducing need of issuing new currency.

Millions of people have adopted this payment mode to reduce their reliance on cash alone especially for bills payments to businesses and government. Mobile wallets service has now started addressing person to person payment needs. Mobile Point of Sale devices supporting card payments and mobile to mobile payments are pushing cash usage further down.

Below graphics shows an indicative view of cash usage across different types of transactions in a developing nation.

Freedom movement from Cash has just begun in developing nations.

Over past few years, millions of people have signed up for bank accounts and majority of population in developing nations is able to afford a mobile phone causing behaviour changes suitable for digital money adoption.

Based on the MasterCard Cashless Journey study for retail payments, following countries have been deemed nearly cashless (having 80-90% transactions volume cashless) now.

Belgium, France, Canada, United Kingdom, Sweden, Denmark, Norway, Australia, Netherlands, USA

Developing nations are also building & expanding their payment infrastructure in addition of introducing various new policies and payment initiatives to promote e-payments. Financial Institutions are also accelerating their efforts to onboard merchants to their payments systems. Due to such efforts in India, cards payment market has reached $50 billion and is growing at 30% rate to get a major share from $750 billion cash market. Almost a million shops from 15 million local stores also are equipped now to accept card payments and growing further.

While retail payments in urban area are moving to electronic & mobile payments, person to person payment yet to see a major shift from cash transfers. Also electronic & Mobile payments yet to make any significant impact in rural areas so it seems cash will continue to rule in rural markets for some more time while tis territory will reduce in urban areas to negligible size in next 3-4 years.

Government & businesses should incentivise e-payments for people to move towards a cashless economy and ensure people & merchants at all points of goods & service supply chain are equipped with e-payments facilities.Acceptance of cash cards should be encouraged for bus & taxi fare and fresh food purchases.

Government should setup national level agencies to improve collaboration among telecom, banks, payment networks, payment gateway, POS & mobile device providers to ensure consumers get the service convenience at fair price to make switch to e-payments.

Declining rate of new currency notes release from central banks despite growth in overall economy will strengthen people belief that we are in fact moving towards a cashless economy. As next milestone, we should see withdrawal of large denominations notes and smaller denominations notes and finally coins.

May be it should be a ‘Mantra’ now towards a cashless new economy.

Less Cash Please!

Bill & Melinda Gates Foundation drive to expand financial inclusion net globally

noreply@blogger.com (Jaiveer Singh) — Mon, 20 Jul 2015 06:54:00 +0000

For Kosta Peric, overcoming finance's last mile means looking for ways to do so from the ground up.

As deputy director of the Financial Services for the Poor initiative for the Bill & Melinda Gates Foundation, Peric is the forefront of the organization’s efforts to build what he calls a digital financial system that, if successful, would connect everyone to financial services.

Inclusion isn’t simply a matter of opening the door to products such as microloans or insurance policies geared toward low-income families and individuals, he said in a new interview with CoinDesk. Rather, inclusion means creating channels of financial support during times when people need it the most.

“These include challenging shocks like debts, death in the family or some expense that has to be taken care of,” Peric said. “Having access to an affordable and secure, reliable financial system is very important.”

As part of its efforts, the Gates Foundation is working in a number of African and Asian countries to foster the development of digital money systems, with the overarching goal of building interconnected webs of finance that enable poor households to connect with the wider global financial system.

It’s within this context that Peric and others at the Foundation see the blockchain playing a powerful role.

He told CoinDesk:

“The very powerful thing about bitcoin in general and specially the technologies behind it, is they are essentially leapfrogging all the technology and providing a new system for processing these huge amounts of transactions for very small costs.”

The organization recently published materials for the Level One Project, an umbrella initiative for the Foundation’s various development projects around the world.

The goal, according to Peric, is to spur local private stakeholders, government agencies and everyday people to support the creation of interoperable financial pipelines.

New channels for old problems

As part of its broad research efforts, the Foundation has looked closely at how blockchain technology can be implemented to make such networks fast, simple and secure – characteristics that Peric said would align it with existing money systems like M-Pesa in Kenya and bKash in Bangladesh.

As outlined on the Level One Project website, the blockchain, within the context of the Foundation's work, could theoretically be used to provide a crucial means of settlement between payment systems being established in developing economies.

The site notes the blockchain can be "used as an alternative to current transaction switching and settlement models. In theory, it could also be used to lower the costs of providing these functions".

This fits in with what Peric described as a need for a system that can is capable of supporting large amounts of small transactions, which are typically the norm for value amounts sent by people in developing nations.

"What we try to foster is national systems that are, essentially connecting providers together in an interoperable system that can reach out to the entire population and can serve huge amounts of small value transactions every day," he continued. "That's the primary goal we are trying to achieve."

Bitcoin's utility

Peric has said in the past that he is far more interested in bitcoin the technology versus its use as an alternative currency.

When asked in interview whether his view has evolved on this question, he cited the work of the Foundation in developing digital financial systems and looking for ways to utilize innovative technologies for doing so.

Citing feedback from individuals in some of the countries that Foundation works in, Peric says that bitcoin can't quite meet the needs of those regional because people in those countries are accustomed to using local currency.

He explained:

"You receive your salary in your national currency so you can pay your schools, the bills for your house, in your national currency. So that's what is most required at this moment, and that's where bitcoin the currency cannot really help right now."

However, he went on to clarify that bitcoin "can help in other contexts like international remittances, international money flows".

Investing in the future

Peric has said that the key to jumpstarting financial inclusion isn't simply a matter of throwing money at an idea or providing support for a particular project. Most important, he said, is fostering self-sustaining ideas that can continue to grow as support mechanisms subside.

"We can help bootstrap the system, to get it over, until the scale works, so that at the end of the day, the providers have a valuable and profitable business case to bring this forward and their systems become self-sustainable," he said.

In conversation, Peric touched on the recent awarding of a $100,000 grant to Bitsoko, a Nairobi-based digital currency startup that focuses on payments and wallet provision, as part of the Foundation's Grand Challenges Exploration (GCE) initiative.

Peric framed the grant as one component of the Foundation's broader efforts to support innovation and entrepreneurship in developing companies, reiterating how the organization sees financial inclusion growing out of a diverse ecosystem of initiatives rather than one central effort or another.

This, he suggested, means providing grants to startups and initiatives that can contribute to that broader goal of bringing financial tools and services to developing communities.

"I don’t want to leave any stone unturned," he said.

Source: coindesk.com

Putting $18 billion back in the pockets of Asia’s migrants

noreply@blogger.com (Jaiveer Singh) — Tue, 14 Jul 2015 06:20:00 +0000

Money is the next most important liquidity of the world which needs clean & smooth flow to keep the world moving after Water. Stagnant money can cause major economy hazards like stagnant water can cause major environmental hazards.

With increasing globalization, millions of emigrants work in foreign countries to earn their living while supporting their families & communities back home by sending money periodically. Around 4% of world population live & work in other nations for better employment opportunities and other settlement reasons.

Considering World Bank global average remittance cost of 9%, a whopping $50+ billion are being charged for remittance services in moving money across nations. Next two paragraphs provide a quick overview of Remittance economy.

A remittance is a transfer of money by a foreign worker to an individual in his or her home country. Workers' remittances are a significant part of international capital flows, especially with regard to labour-exporting countries.

In 2014, $436 billion went to developing countries, setting a new record. Overall global remittances also totalled $583 billion. India with the world’s largest emigrant workforce of 14 million people was in top slot, attracting about $71 billion in remittances. Other large recipients are China ($64 billion), the Philippines ($28 billion), Mexico ($24 billion), Nigeria ($21 billion), Egypt ($18 billion), Pakistan ($17 billion), Bangladesh ($15 billion), Vietnam ($11 billion) and Ukraine ($9 billion). World remittance is expected to grow around 5% rate.

Remittances remain an especially important and stable source of private inflows to developing countries, as they bring in large amounts of foreign currency that help sustain the balance of payments. Still many countries have not done enough to accelerate money remittance infrastructure and individual continue to bear high costs of remittance especially for smaller volume transactions.

Asia emigrants alone are losing $18+ billion annually on account of remittance charges.

How person to person money transfer is being done currently

While banks handle 70 percent of money receiving volume globally, Money Transfer Organizations have the largest share of sending volume. One of the major problems with international person to person remittances has been at the receiving end (location coverage, communication connectivity, person identification authentication etc). Almost two billion adults globally don’t have bank accounts, they are mainly dependent on MTO services for receiving money.

Western Union with its 500,000 agent locations & Money Gram with its 334,000 agent locations provides money transfer services across 200 countries at a significant remittance costs.

New players in remittance space

Considering high friction costs and growing remittance transaction volume, many new players have emerged to offer low costs remittance solutions mostly for bank account recipients:

· WorldRemit
·         Remitly
·         TransferWise
·         Azimo
·         Xoom
· TransferFAST
·         iRemit

· eTranzact

· · HomeSend

Some of them operate on transfer fee plus fix forex spread or only on forex spread however their coverage is quite limited for unbanked persons who mainly use MTO services. Emergence of these players and their steady growth has attracted new interest in providing more efficient solutions for remittance market. Visa, MasterCard & Paypal are also offering consumer to consumer remittance services.

A significant portion of remitted money is used to offset various utility bills in recipient country. Cross-border payments processor service such as iSend where a customer can pay an overseas bill from US can help reduce remittance volume thus reducing transfer costs.

Now Digital currency aim to address high remittance costs, speed & coverage

Person to Person Cryptocurrency is also being used to provide faster and cheaper remittance solutions. Bitcoin firms such as BitPesa, PayFast, BitPagos, Coins.ph and BitSpark have built money remittance solutions using different business models in line with local regulations and compliance and offering an alternate remittance channel in few markets.

Some of them allow persons to convert their money in bitcoins at best forex rates possible and get money transferred to their bank account after converting back to local currency from a bitcoin exchange in recipient country. Some of them keep bitcoin under the hood while money agents handle money transfers (using cash-in & cash-out settlement methods) offering lowest transfer charges.

As per BitPeso, remittance transactions are “twice as fast and 75% cheaper” than competitors, because it uses bitcoin to transfer funds. They aspire to bring the transfer price (of sending remittances) as close to zero as possible.

By using such remittance platforms, MTO like Western Union & Money Gram can also reduce their operational costs significantly thus lowering remittance charges.

Many global organizations like Word Bank, FATF, OECD , IFAD, GFRD & AFI are implementing programs to coordinate various initiatives to bring security, efficiency and speed to remittance industry however developing nations must take a lead in driving these efforts as it helps to improve their economy.

As Asia cannot be described as a single market due to significant differences among sub-regions and even between urban and rural markets in the same country, Remittance to Asia often moves at slow pace with high remittance costs.

To put $18b back in the pockets of Asia’s migrants, Government policy making & regulation bodies need to work with global organizations and industry leaders (finance & technology) to remove hurdles in bringing down remittance costs.

The Money Returns

noreply@blogger.com (Jaiveer Singh) — Tue, 26 May 2015 00:40:00 +0000

The Money Returns in new form of Cryptocurrency.

For last few years, there is a constant effort to build an alternate currency which can become new money for the whole world.

For any currency to become money, it must function as a medium of exchange, a unit of account and a store of value for a large community.

Above all, People trust is fundamental for a currency to be used as money.

Looking back at history of Money, we know that First recorded monetary system appeared in Mesopotamia, modern day Iraq around 3000 B.C. when Babylonians began using silver & barley as universal mediums of exchange and unit of value. Debts/ Payment settlements guidelines were laid out known as “Code of Hammurabi”.

Fiat money (Fiat - a Latin word for "let it be done") which derives its value from government regulation or law was first used in around 1000 AD in China. It differs from Commodity or representative money. Fiat money has no intrinsic value of its own.

Initially Federal Banks of each nation printed paper money & coins for their economies mostly holding some % of gold reserves behind however now a days, most countries have switched to IOU or legal tender model. Basically legal tender means business or person is required to accept payment of the debt in Federal currency.

International Monetary Fund (IMF) was setup to oversee the international monetary and financial system, foster global monetary cooperation, secure financial stability and monitor the economic and financial policies across its member countries.

Government has been at the center of currency ensuring people trust is maintained in legal tenders while Banks managed money exchange and support economic development of the country. Countries which failed to maintain this trust have faced currency crisis impacting million of people savings and halting economic development of country.

This centralized system comes with its own operational costs and multiple intermediaries who support money exchange/ payments at their own pace in exchange of certain fees.

To enable peer to peer value exchange globally, decentralized digital currencies have been developed which enforces trust for transactions and offers transparency using it global ledgers digitally. These are not tied to any centralised party or servers.

These currencies systems are capable of avoiding double spending of same money and storing value securely using cryptography technologies. Users base of these currencies are slowly growing for payments, remittances & ecommerce transactions however they are far from being accepted as another global currency like leading fiat currencies.

Top 2 leading Crypto currencies are mentioned here to show how their acceptance is growing…

In 2009, Satoshi Nakamoto launched bitcoin as the world's first crypto currency. Bitcoin is an open source, global payment network that is fully decentralized without any central authorities. The code is open source, which means it can be modified by anyone and freely used for other projects. Mathematics secures the network and empowers individuals to control their own finances. Bitcoin coin limit is 21 million bitcoins and 14 millions coins already in circulation with current exchange rate of $236 per bitcoin.

Litecoin launched in 2011 by Charles Lee is a peer-to-peer Internet currency that enables instant, near-zero cost payments to anyone in the world. Litecoin network will produce 84 million litecoins, or four times as many currency units as will be issued by the Bitcoin network. Currently 40 millions Litecoins are in circulation with current exchange rate of $ 1.461 per Litecoin.

Merchants accepting these currencies for payments can get confirmation within 10 mins without any add-on charges for payment settlement.

Recently New York Stock Exchange premiered a bitcoin index, giving an important endorsement to the digital currency that could help give it more mainstream credibility.

There are hundreds of bitcoin exchanges already operational which are making buying & selling bitcoins easier for people globally.

These are early days of digital currency and it is yet to be seen whether it will stand people trust and replace fiat currency in long run.

A new era of currency has begun..

A new patron of Customer Empowerment- it’s called Digital Banking

noreply@blogger.com (Jaiveer Singh) — Thu, 26 Mar 2015 02:50:00 +0000

In past 2-3 years, many Retail Banks have accelerated their efforts to move from customer satisfaction & loyalty to customer empowerment.

With the advent of many digital first banks like mBank, Moven, Metro, Simple, Atom & Fidor Bank, consumer banking business landscape is being redefined fast. Customer acquisition costs of these banks are much less than traditional banks and they are more aggressive to realize revenues from customer lifetime value projections.

They follow their customers wherever they are and truly offer anytime anywhere banking. Their services are designed to ensure every customers interactions (even non-transactional) adds to customer stickiness to bank.

Additionally many new players have emerged in forex, online payments, mobile wallets & remittances space like Remitly, WorldRemit, TransferWise, Venmo, Google Wallet, Alipay, Facebook P2P Payments which have started impacting banks existing revenue streams & growth prospects.

Customers have now opportunity to experience these services and expect similar or better experience from their banks. Traditional retail banks earn their major revenues from one of these banking services and many of these will face decline as customers switch their loyalty or shift gravity center of their financial transactions to new players.

Traditional Retail Banks Revenue Streams

Checking and savings accounts (Service charges apply)
Deposits (Domestic & Foreign Currency)
Lending/ Mortgages (Home, Car Loans)
Credit Cards (Service charges apply)
Lines of credit (Personal Loans, Overdrafts Limits)
Forex, Payments and remittance services

I recently got to see Fidor Bank banking demo and was delightedly amazed to see how smartly they have integrated collective wisdom of community and collaborated with their customers to design new products.

Fidor Bank take their services wherever their customers are, be it Facebook, Twitter, Mobile Devices or Online Games. They created a banking operating system which allows them to create new applications in partnership with 3rd parties & partners. Developers Community is creating mobile payments, wallets and eWallets to integrate Fidor banking services into various eCommerce and Online games (be it Steam, Skype, Xbox One, PSP4) covering proximity and remote payment services.

Fidor Bank Account is a fully integrated universal account for multiple products, commodities, currencies including virtual gaming currencies and crypto currencies accessible from multiple channels at customer convenience.

Many traditional but smart banks have also started offering services to suit customer digital life style and giving them self-service power to do what they wish to do and when they wish to do. Kotak Mahindra Bank from India is another such example who are leveraging all channels to empower their customers (See more details here)

"All the data now tell me the highest levels of customer satisfaction are coming from those customers who self-serve", Anthony Thomson. Founder of Atom & Metro Bank, UK.

“Treat your customers as co-managers” Matthias Kröner, CEO & Founder, Fidor Bank, Germany.

Focus of digital banking has been to not only expand the reach of Banks but more to empower existing customers to perform transactions at their convenience.

Online Banking, Mobile Banking, Mobile Wallets, e-Wallets, Mobile Payments, Payments via FB, email, SMS & Cash withdrawal using Mobile are just some of the ways of empowering banking customers. Digital Banking solutions must consider that “One size doesn’t fit all” and all solutions should be uniquely designed for target customers to deliver exceptional customer experience.

Banks using Digital Banking to engage & empower their customers will not only reduce customer acquisition costs but are more likely to realize revenues from customers lifetime value and sustain business growth.

Experts predictions of growing decline in Retail Banking revenues in next few years can be dismissed.

It’s possible with Customer Empowerment & Digital Banking!!!.

Digital Banking vs. Payment Banks and the winner is?

noreply@blogger.com (Jaiveer Singh) — Wed, 25 Feb 2015 13:51:00 +0000

Significant market frictions have been present in financial markets for new players to offer new or improved services. Most of existing players had high transaction costs or limited reach in their respective key markets.

From past few years, leading Banks in India have been busy in executing their digital strategy to allow banking services access from new digital channels be it web, mobile (WAP, SMS & Apps), email, Facebook or Twitter. Some have even setup dedicated business units/ subsidiaries to incarnate their new avatar to compete in digital age.

Growing middle class, urbanization, increasing access to better internet & mobile access, all these have been changing social interactions, consumer expectations & market dynamics be it retail, airlines, telecom or financial sector.

On one side, we have urban population covered by major banks & non-banking financial companies (NBFC), on the other side we have rural population which have been deprived of banking & financial services for many decades. To serve needs of unbanked consumers, many NBFC and telecom companies have now started offering bill payments, pre-paid cash cards, money transfers & mobile wallet services. They are building crucial distribution channels while acquiring customers thru their prime services.

Most Banks digital strategy has been focusing to engage existing customers across various digital channels as well as reaching out to new urban customers. E.g. Leading private bank of India, ICICI bank, now have 2.8 million registered mobile banking users and 15 million Internet banking users thus shifting major transactions & interactions over digital channels.

So far new players offering payments & transfer services were required to have a tie up with a bank for KYC and other regulatory needs however now Reserve Bank of India (RBI) is offering a new type of banking license referred as “Payment Banks”.

These Payment banks will provide savings, deposits, payments and domestic remittance services to people who do not have a bank account, including millions of migrant workers. Currently Payments banks are restricted to holding a maximum balance of Rs. 1 lakh (INR 100,000) per individual customer. They can issue ATM/debit cards, but not credit cards or loans. They can also distribute simple financial products such as mutual fund units and insurance products.

Recently non-banking financial services companies such as IDFC & Bandhan Financial services got Banking license while India Post (having 150,000+ post offices across country) is under RBI consideration. Now with Payment banks arrival, competition for acquiring new customers may intensify in banking sector.

Few leading banks have started revamping their payments & transfer services reach & customer experience to get ahead of expected competition from Payment banks like ICICI Bank launching their Digital Banking Service – POCKETS & HDFC Digital Wallet.

eCommerce and mobile Commerce is growing in India ($100 bn market by 2019 as estimated by Assocham) along with overall growth in retail & airlines sectors. This will present a significant opportunity for Payments Banks.

Are Payment Banks & Digital Banking going to operate in largely separate market segments or target same set of customers to expand their customer base? Will they complement or compete for similar services?

What do you think , how this change will reshape banking & financial sector?

One thing is sure, it’s a good sign for financial services reach & customer experience.

Extending Financial Services Reach to the World which has been left behind !!!

noreply@blogger.com (Jaiveer Singh) — Wed, 11 Feb 2015 05:06:00 +0000

While progress has been made in increasing financial inclusion in some countries, meaningful scale has not yet been achieved. An estimated 2.5 billion adults worldwide still lack access to formal financial services, 90 per cent of whom live in developing and emerging countries. The need for greater financial inclusion – in terms of access, usage and quality of services – remains significant.

In 2008, Alliance for Financial Inclusion (AFI) established itself as the world’s first peer-to-peer learning and knowledge sharing platform for financial inclusion.

For financial inclusion to meet its full potential, it must be truly inclusive, bringing together the expertise of a broad cross-section of partners beyond AFI. This effort to expand knowledge exchanges among all financial inclusion stakeholders will be an important focus in the coming months.

Making a public commitment is a means to champion financial inclusion

Our commitment compels us to move beyond our introspection and individual action. It effectively enables us to share our experiences to other stakeholders. As none of us know the holy grail that will financially include all people, knowledge sharing is ultimately beneficial for all.

Making a public commitment is a call for actionIt does not stop with making others cognizant of the importance of financially including people. There will be an inevitable changing of mindsets to take on a proactive attitude toward inclusion.

Our commitment to financial inclusion is about the 2.5 billion that are still left unbanked around the globe up to this day.

Banks followed by non banking financial companies (NBFC) & regulators have significant knowledge around various challenges in extending financial services reach to left-out world. Therefore it is important that they play their part & partner with others to change this situation.

Source: http://blogs.afi-global.org

Making Instant Cash Transfers Possible to Unbanked People

noreply@blogger.com (Jaiveer Singh) — Mon, 10 Nov 2014 22:55:00 +0000

Emulating Startrek Teleporting Technology for Instant Cash Transfers to unbanked people

As per World Bank estimates nearly 50% or 2.5bn adults are currently ‘unbanked’, most of them living in developing countries in South Asia, Africa and the Middle East and North Africa (MENA) region. World Bank Global Findex shows 3/4 of the world’s poor do not have a bank account, not only because of poverty, but also due to costs, travel distance and paper work involved. There are five main barriers to financial inclusion – ‘natural’ barriers such as the distance to a bank; lack of financial infrastructure; restrictive regulations; governance failures; and lack of suitable products.

75% population in Asia (3.3 billion) lives in China, India, Indonesia, Philippines, Pakistan & Bangladesh and on average 50% people in Asia lives in rural areas and mostly are unbanked with very limited access to means to receive or transfer money. India has the largest rural population with 857 million (about 70 percent of India’s population lives in some 600,000 rural villages), followed by China with 635 million.

India has 11 bank branches, 9 ATMs and 58 Point of Sale terminal for every 100,000 people while it has got 155,000 post offices and 900 millions mobile phones including 377 millions mobile phones in rural areas.

World desperately needs an effective & efficient way to distribute International aid, philanthropy funds & global remittances directly to their recipients mostly living in rural areas.

Mobile Money has transformed money exchange in Kenya (A country of 46 million people & 75% rural population) and getting good acceptance for payments at retail & daily conveniences stores. M-PESA IMT allows anybody living in the United Kingdom to transfer money through selected agents to persons in Kenya using a mobile phone.

While an estimated 240 million people across India hold bank accounts, more than 90% of country’s population uses cash to pay for its daily needs. In India, M-Pesa is now available through 60,000 agent outlets across India and serves over 1.2 million customers while Airtel Money serves 1.4 millions customers. MoneyOnMobile has over 82.5 million unique phone number customers-to-date and over 186,000 retail partners offering the service in India. MoneyOnMobile, Vodaphone, Airtel and other players in Money-on-Mobile market are expanding their reach to million of rural people to use mobile money and even cash out whenever needed.

Still there is long way to go to cover 800+ million Indian people living in rural areas.

There is a greater need of convergence of existing branches, Post Office, ATMs, Digital Banking & Mobile money to provide means to all unbanked rural people to receive cash as that is what works in their world.

Existing money transfer/ dispensing channels needs to be leveraging while connecting new digital channels to enable money transfers to unbanked people.

Some ideas to enable cash teleportation to unbanked people from anywhere.

Dispense Cash via ATMs to recipients with no bank accounts

People withdraw cash from nearest ATMs up to certain threshold using Access Code sent to their Mobile Phones.
Higher amounts require use of Voice Biometrics Enabled ATMs & Telecom Servers (ATMs operating on Wifi Network can be provided to avoid high leased lines setup costs)

Post Offices can dispense cash upto a certain threshold once transfer is available on Mobile with ID proof.
Local Retail Stores can also be engaged to dispense cash against Mobile money & ID proofs.
Mobile Money Agents providing cash out & deposit service with instant updates to Mobile Money Balance.

As water is essential to keep people alive, similarly cash accessibility is important to people to manage their lives and lead their own & country growth.

Would love to hear your thoughts/ideas to enable direct cash transfers to millions of unbanked people in Asia from anywhere.

Will innovation succeed in changing Banks DNA

noreply@blogger.com (Jaiveer Singh) — Tue, 28 Oct 2014 14:04:00 +0000

Media, Broadcasting & Publishing industry has gone thru significant disruptive innovations over last decade to meet their customers’ expectations providing easy of access, on demand anytime anywhere content availability, personalized contextual and engaging experiences.

Many players in Technology, Media, Telecom, Retail and e-Commerce space like Amazon, NETFLIX, Apple, M-Pessa, Walmart, Starbucks & Alibaba have used innovations to create new business models & new markets to grow further. Now some of them have started offering better financial services traditionally offered by Banks (such as Payments, Remittances, Lending, Trading & Investments).

While new players have disrupted some aspects of financial eco-system, some banks still confident (Over confidence - 1^st stage of classic disruption cycle) that threat is not real for their core business as regulators will slow them down when they become large players. This may turn out to be just wishful thinking on an assumption that they are going to follow existing business models as theirs requiring compliance to existing regulations.

UBER business model has skipped government regulations for running taxi services business and become real threat for existing operators. Funding Circle has provided $600m loans to small businesses while Prosper has extended $1.6b in personal loans. Could mortgage, leasing, auto loans, cash line, credit cards & corporate loans be next… Will these players with new business models will be able to find ways to work around entry & operational barriers. It may take few years but threat to banks is real… very real.

Banks have operated long on blind trust and lock-in schemes with very little transparency, customer engagement & service excellence. Customer was seldom a King in their business. Therefore for some Banks it is extremely hard to see thru what’s coming. A survey in USA which covered 10,000 Millennials asking about their brand love among 75 companies spanning 15 industries, it is noted that all four leading banks were the least loved brands for Millennials.

NEW NORMAL & FUTURE GROWTH

However some smart banks have now realized NEW NORMAL of consumer & business world and focusing to change their DNA to respond to this real threat.

In this NEW NORMAL, consumer’s expectations and behaviors are getting redefined by rise of social media, e-Commerce and personalized engaging mobile experiences. New business players equipped with design & technology weaponry are also converging their digital & physical world to offer best service experience to their customers. (UBER – A new ecosystem delivering reliable Taxi service with frictionless payment leverages digital & physical convergence very well).

Industry leaders believe that 80% business growth will come from organic growth and rest from mergers & acquisitions. Innovation will play lead role in organic growth of business by creating new radically different value propositions.

INNOVATION & APPETITE FOR FAILURES

Innovation demands experiments which inherently come with failures. Complex operating environments of banks full of decades old systems & processes adds further to failures probabilities.

Success may have many fathers but failure is often left as orphan. Embracing deep understanding of art of failures and failing smart & fast way is the key to change organization DNA & to get close to moving targets. One need to understand that failure is a necessary part of growth.

In the 1960s, IBM CEO Tom Watson called an executive into his office after his venture lost $10 million. The man assumed he was being fired. Watson told him, “Fired? Hell, I spent $10 million educating you. I just want to be sure you learned the right lessons.”

Banks need to build this reassuring environment that even if the ideas fail; the intrapreneur will not lose his or her job or be “punished”.

Innovation needs to be institutionalized as a dynamic system not only as a guiding principle to reap real benefits from collective wisdom of employees, customers & partners. Innovation System may sound like an Oxymoron as Innovation demands out of box creative thinking and systems defines process structures. A right balance needs to be found to be efficient when turning ideas into concepts & prototypes and innovating new products, business models, customer experience, operations, processes & technology.

Successful innovative companies have used various innovation principles however almost all have used following four

Think Big

Start Small

Fail Quickly

Scale Fast

Smart Banks have recognized seismic waves emerged from NEW NORMAL world and this underlying current is getting stronger to disrupt all business segments in near future. Smart Banks have started work to change their DNA and transform themselves to be seen around by another decade.

Would love to hear your thoughts about what may help Banks to become truly customer centric business.

Disruption in Banking and using Innovation to change Banks DNA

noreply@blogger.com (Jaiveer Singh) — Sun, 19 Oct 2014 14:09:00 +0000

NEW NORMAL & FUTURE GROWTH

However some smart banks have now realized NEW NORMAL of consumer & business world and focusing to change their DNA to respond to this real threat.

INNOVATION & APPETITE FOR FAILURES

Innovation demands experiments which inherently come with failures. Complex operating environments of banks full of decades old systems & processes adds further to failures probabilities.

Banks need to build this reassuring environment that even if the ideas fail; the intrapreneur will not lose his or her job or be “punished”.

Successful innovative companies have used various innovation principles however almost all have used following four

1. Think Big

2. Start Small

3. Fail Quickly

4. Scale Fast

Would love to hear your thoughts about business segments which will experience disruption next.

Banks Role in creation of new markets at the bottom of poverty

noreply@blogger.com (Jaiveer Singh) — Tue, 02 Sep 2014 04:46:00 +0000

Probably a million dollar question for millions of people living life at few dollars a day. As per World Bank recent data, 900 million people live below poverty line and India alone has 180 million people under poverty. Estimated 3 billion people worldwide live their lives on $2 or less income per day.

While some may say Poverty is a state of Mind and few dollars a day income may not necessary be reflective of poverty in all parts of the world however no one can deny the fact that millions of people’s inability to afford even basic life necessities can certainly be classified as state of poverty.
Why most businesses didn’t try to reach out to this segment to provide product & services which they need (I guess desperately), may be companies assumed poor are not their target customers as with their current cost structures they can’t generate any meaningful returns on their investments.

Late Prof. C.K. Prahalad, in his book “The Fortune at the Bottom of the Pyramid” says that low-income markets present a prodigious opportunity for the business. He stresses that these markets need low cost products & services designed for consumer needs and a different business strategy & execution model to succeed.

Nobel Laureate Professor Muhammad Yunus (who believes that the right to credit should be recognized as a fundamental human right) took this business challenge and founded Grameen Bank in 1983 which introduced Microfinance programs offering loans of $50 and above that enable the poor to start or expand small businesses and provide other financial services such as savings and micro-insurance products.

In Bangladesh today, Grameen Bank has 1,084 branches, with 12,500 staff serving 2.1 million borrowers in 37,000 villages. Grameen Bank Micro Finance programs helped 10+ million Bangladeshis to move above poverty line. Bank reported 1.3b Takka ($17m) as Net Profit for 2013.
Bandhan Financial Services, the first microfinance institution in India which won a bank licence, is also one of the youngest entities to be allowed to enter the banking space. Bandhan under the leadership of Mr. Chandra Shekhar Ghosh has expanded its service network to 2,016 branches across 22 states and Union territories, Bandhan had over 5.23 million borrowers as of Feb, 2014.
With recent digital revolution in Banking industry, Banks are re-designing & overhauling their systems in a major way to get ready for serving millions of new customers with very low cost banking service.

Banks who wish to be at the fore-front of "future of banking" are remodeling their organization structure, re-engineering business processes and re-defining their costs structures.
Banks need to take lead to define new business models to reach out to everyone at the bottom of the poverty. Banks “Digital Avatar” riding on social media, telecom & retail industry eco-system will soon be ready to expand its reach to much wider consumer base.

As Chris Anderson once said “The future of business is selling less of more” so banks needs to start offering products & services on very low margins but target volume in millions.
Amazon, NetFlix are already reaping benefits of implementing “The Long Tail” business model and it’s now Banks turn to experience it.

Going back to key point, there is a huge opportunity to create new markets at the bottom of poverty and Banks have a key role to play in creating these new markets.
World will forever be thankful to banks in eradicating poverty from this planet by leading this initiative.

Amen.

Banking Service - a must have fundamental human right

noreply@blogger.com (Jaiveer Singh) — Tue, 02 Sep 2014 04:46:00 +0000

Banking service as a new fundamental human right.

It seems not many countries really believe in this that’s why we have 2/3 of world population unbanked even after more than seven centuries of modern form of banking. Banking promotes economic activities while keeping money in circulation where it is needed for good.

In India – a country of 1.27 billion people, 600 million people do not even have a bank account. 87% of the people do not have access to formal bank credit while 95% of the villages still do not have banking facilities.

Currently India top 5 banks have 35,000 branches and opening more every year. There are about 27 nationalized banks, 19 private sector banks, 32 foreign banks and various co-operative banks, regional rural banks operating in India.

In today’s world, money is just data which can flow over various types of mediums so why banking industry lag way behind in providing basic banking services to all. Probably Governments failed to set right priorities for them in many countries and there, Banks purpose has changed to a pure business entity merely focussed on profit making opportunities rather than meeting their first obligation of connecting everyone to banking services.

For years, banking has been a privileged service but time has now come to make it part of everybody’s life.

In recent years, some new players have completely revamped business models around some key banking services like payments, fund transfers and lending.

New banks like mBank in Poland, Fidor bank in Germany, Metro Bank in UK, BforBank in France and Simple Bank in US are offering banking services to consumers in completely new user friendly simple ways or offering tools to let them manage their own funds using banks different products themselves.

The M-Pesa mobile payment service is used by a staggering 70 percent of the country’s adult population while M-Shwari, a mobile-only banking service there offers account opening to savings and lending services. Customers initiate their accounts from their phones, triggering automated processes to verify KYC information in a few seconds.

Dwalla offers a new payment network much more cost efficient than Paypal, Visa or Master Card. Alipay in China now overtakes PayPal as The Largest Mobile Payments Platform in the world. In 2013, Alipay announced that it processed nearly $150 billion in mobile transactions triggered by its 100 millions mobile customers.

Kiva has transformed micro-lending and its reach globally while Lending Club & Prosper is taking lead in peer to peer lending.

These innovative & disruptive ways leveraging digital infrastructure are good signs for ensuring banking finally reaches to everyone.

Governments need to invest in digital infrastructure & improve regulatory frameworks to allow Banks & financial institutions to extend their services reach to everyone.

Banks need to build long term strategy to benefit from the fortune at the bottom of the pyramid.

Wishing everyone a ubiquitous & joyful Future of Banking.

Getting Business Intelligence in real time before its value gets expired

noreply@blogger.com (Jaiveer Singh) — Sat, 15 Jun 2013 13:30:00 +0000

Business Intelligence too becomes irrelevant or its value diminishes with time (every seconds minute/ by next hour/ by next day)

In this era of BIG Data which is growing at an exponential rate, getting timely data driven insights is getting highly difficult and costly.... BIG data is often defined using Volume, Variety & Velocity dimensions.

While industry has provided many solutions to address large data storage, fast data retrieval & processing issues in form of hardware appliance, efficient integrated enterprise data warehouse data models, in-memory processing engines, massive parallel processing algorithms, getting relevant insights in a time when it holds business value continue to be a challenge.

Many BI & Data Analytics solutions have delivered capabilities for custom data visualization, self service business intelligence and outcome based problem simulation modeling. Most of these solutions provides post mortem like analysis to tell why it happened and how it was correlated to many other events happened in past which you can use to prevent future problems or design new more effective products/ services

Large part of BI solutions provides reporting & data analysis capabilities. There is a need of solutions which can help business to know what risks & opportunities are presented by transactions happening at this hour. Business can then take actions to prevent or to accelerate certain transactions to safeguard their interests.

Business operating on digital infrastructure globally manage millions of transactions every hour from customers across the globe and a batch mode post mortem intelligence solution can't help for decisions/ actions which need to be taken now manually or system triggered.

CEP (Complex Events Processing) Technology (enabling real time operational intelligence) is providing solutions which can deliver Real Time Business Insights & help triggers actions which are needed NOW. CEP is often referred as new best friend of BIG data solutions.

Business transactions are streaming data packets flowing all across the organization and among multiple organizations which need to be correlated to spot exceptional business situations (posing threats or offering opportunities) to trigger required actions in real time. Sequence of events may even provide predictive analytics what may likely happen in next few seconds/minutes thus allowing business to act proactively.

Not all decisions demands Real Time Business Insights but ones which needs should be evaluated for business values against solution costs. Industries such as Banking, Healthcare, Transportation have many opportunities to deploy Real Time Business Insights solutions.

Ability to identify business situations which require instant decisions can provide competitive advantage for any business to sustain and grow their business in real time.

Linked Data and World Knowledge Platform

noreply@blogger.com (Jaiveer Singh) — Wed, 04 Jul 2012 22:59:00 +0000

While many countries publish some of their data to public, it is mostly in document, web page, reports format. This is not linked to even other data set coming from same source next time.

What is needed that this is provided as raw data having linkages to other known data sets at least in ministry/ department with a provision of adding new linkages by other departments/ ministeries/ public at large.

This has power to trigger new questions connecting different fields of studies and allowing us to see how new solutions can be built with combined knowledge of many.

Dr. APJ Kalam (Ex-President of India) has proposed to buld a World Knowledge Platform to leverage combined knowledge of all nations to solve world most challenging problems.

Tim Berners Lee explains how Linked Data can give us a more powerful WWW World.

http://www.ted.com/talks/tim_berners_lee_the_year_open_data_went_worldwide.html?source=google_plusone

Prespective may change everything

noreply@blogger.com (Jaiveer Singh) — Wed, 16 May 2012 07:51:00 +0000

The circumstances of our lives may matter less than how we see them, says Rory Sutherland. At TEDxAthens, he makes a compelling case for how reframing is the key to happiness.

http://www.ted.com/talks/rory_sutherland_perspective_is_everything.html

Are YOU Socially Intelligent? Daniel Goleman - Social Intelligence

noreply@blogger.com (Jaiveer Singh) — Fri, 27 May 2011 08:54:00 +0000

Social Media and the Airline Industry

noreply@blogger.com (Jaiveer Singh) — Fri, 27 May 2011 08:51:00 +0000

Business Intelligence to Analytics

noreply@blogger.com (Jaiveer Singh) — Fri, 27 May 2011 08:21:00 +0000

Just returned after attending a SAS event sharing views about Business Analytics from people who have used it in Banks, Hotels, Exchanges, Plants, NGO etc.

It was interesting to hear how people are using it from campaign mgmt, consumer intelligence, revenue & operations optimization, quality control and in many more functions.

They touched upon topics like

What is Business Analytics? How it is different than Business Intelligence

Why Now? What's the Payoff?

What Info, Skills, Resources & Technology is needed?

Experience sharing by people who have used it in their respective organisations

Events Video available on FaceBook SAS page

Seeds of Innovation

noreply@blogger.com (Jaiveer Singh) — Wed, 16 Mar 2011 04:55:00 +0000

Coinnovation is going to bring fundamental change how business will operate in future. understanding innovation is key for all stakeholders/ partners.

Seeds of Innovation

View more presentations from ericw01.

Cloud Computing - Disruptive Innovation & Enabling Technology

noreply@blogger.com (Jaiveer Singh) — Tue, 21 Sep 2010 14:55:00 +0000

Check out this SlideShare Presentation:

Cloud Computing - Disruptive Innovation & Enabling Technology

View more presentations from GoGrid Cloud Hosting.

IT-Enabled Business Transformation

noreply@blogger.com (Jaiveer Singh) — Tue, 21 Sep 2010 14:49:00 +0000

Check out this SlideShare Presentation:

IT-Enabled Business Transformation

View more presentations from Solomon Baba.

View on Project Management & Collaboration

noreply@blogger.com (Jaiveer Singh) — Mon, 20 Sep 2010 10:00:00 +0000

www.project-management-practice.blogspot.com
www.collaboration2010.blogspot.com