Eleven Tips to Help Ensure that Your Mobile Financial Services Program Is Successful

In the following post, guest bloggers and researchers from the Grameen Foundation offer best practices for microfinance institutions operating mobile financial services programs.

While “mobile money” is a common term, the reality is that money programs vary across regions and between implementing partners, mobile money products are not all the same, and the clients who use them vary. That said, we have found a number of “dos” and “don’ts” that apply for all microfinance-related mobile financial services (MFS) programs. Microfinance institutions (MFIs) should consider the following tips as they roll out and tweak their mobile financial services programs.

1. Be prepared. As a general rule, business models are not easily transferable, because no two markets are identical. Therefore, before launching any services, MFIs should carry out all the necessary research, including a cost/benefit analysis, client-focused market research, assessments of internal structure, processes and IT capacities, business models and market environments. 
2. Communicate. It is just as important for an MFI to proactively communicate to their staff about strategy as it is for it to externally brand the new product and/or service. Without buy-in from the staff, especially loan officers, the chances of success are significantly reduced.
3. Establish a change-leadership plan. Implementing mobile financial services can have a significant effect on an organization’s internal structure and processes. Therefore, it is important to ensure that the new applications are fully understood by your staff as well as your clients. Staff may need to acquire and develop new skill sets.
4. Seek partnerships. Although it is possible for an MFI to develop mobile financial services from scratch, given the state of the MFS market today, it usually is easier and cheaper to seek partnership with a mobile network operator (MNO), a bank or third party. 
5. Test and monitor services. Because the MFS market is still relatively new, it is constantly changing, with new technologies and developments occurring every day. An MFI must regularly test and monitor its market environment and be prepared to make necessary changes to re-adjust their strategy.
6. Timing is key. An MFI should take its time in developing its MFS strategy in line with the market environment. However, once the decision is made and the business case exists, it should act decisively, to ensure that it doesn’t miss out on market opportunities as new, non-traditional entrants compete in the space.
7. Innovation is needed around products. As more MFIs offer repayment and disbursement services, and MFS becomes more commonplace, there is a need to be more creative about the use of the mobile phone for new product innovation to remain competitive.  This could involve bundling products, creating tools to increase savings, combining data sources for alternative credit scoring, or partnering with other channels, to name a few options.
8. Take a customer-centric approach. Mobile phones offer a unique opportunity to provide a tailored touch for clients and improve customer service.  Listening to customers can lead to keen insights on potential products or services. In addition, keep in mind that once adoption of mobile financial services takes place, customers begin to have higher expectations about services.
9. Develop an integrated system. An MFS that is integrated to an MFI’s management information system is crucial to the success of its implementation. Manual reconciliation should be avoided at all costs.
10. Develop or leverage an extensive agent footprint. Without a channel and well-designed distribution network, an MFS will only have a limited reach.
11. Collaborate with regulators. In addition to analyzing the regulatory environment, it is important to build relationships with regulators and provide them with insights about the market. Remember – mobile financial payments are still relatively new for most players, supervisory authorities included.

To learn more about Grameen Foundation’s Best Practices in Mobile Microfinance study and download the complete document, please visit http://www.grameenfoundation.org/resource/best-practices-mobile-microfinance. This study was supported by IMTFI.

Disclaimer: Any opinions, findings, and conclusions or recommendations expressed in this material are those of the author and do not necessarily reflect the views of IMTFI.

(updated--previous post contained broken link)