What Are The Key Strategic Shifts Underway in Digital Financial Services?

I was recently asked for 2-3 strategic shifts in the DFS for development sector. I need your collective wisdom. Which of these are the most important? Or have I missed some really important ones in the below?

1. I think, knowingly or unknowingly, (with the exception of G2P-based initiatives) the focus our work has moved up-market … not least of because of the potential of the data/fintech revolution and its (large) dependence on smartphones (see "Can Fintech Really Deliver On Its Promise For Financial Inclusion?" https://bit.ly/2zsylSi). This may be no bad thing (there is no point in trying to drag the private sector into the hardest to reach segments while lower-hanging fruit needs service), but we should be aware of it and clearly articulate the strategy to eventually reach the really vulnerable (perhaps as part of a more comprehensive approach – see "The Clear Blue Water on the Other Side of the Digital Divide" https://bit.ly/2CNPW9A). This must include a strategy to actively help fintechs work towards serving the mass market, which currently they neither understand nor see as an opportunity – MicroSave is working on this in Asia, and would like to do the same in Africa where most labs are described (by those using them!) as "little more than jumped up office sharing spaces".

2. We are also seeing a convergence of G2P, financial inclusion, payments systems, and other real economy digital services like e-commerce, agricultural inputs, financial services for SME/agric etc. – eventually digital platforms will have to come together to leverage the full power and potential of data. We see growing evidence of this in India, where, of course, the Aadhaar ID provides the foundation for this – MicroSave is developing a very interesting steam of work linking G2P fertiliser subsidies with other agric inputs to financial services. We will need to see how we can get governments to play a greater role – particularly in countries where the volume and value of G2P payments are relatively limited.

3. The (long overdue) re-emergence of the understanding of the importance of agent networks (we cannot wish them away with a belief that people will magically move to user-initiated transactions - in Kenya 66% of women and 34% of men still go to agents for assistance with transactions). Tech will struggle without human touch (see "Uniting Tech and Touch: Why Centaur Products Are Better for Consumers and Providers - Evidence from Kenya" https://bit.ly/2Czx4ab). Link this with the growing recognition of the challenges presented by the “oral” segment (see "Digital Wallet Adoption for the Oral Segment in India: Concept Development for MoWo (Mobile Wallet for Oral)" https://bit.ly/2q5AwGa), and we see an important opportunity for agents to play an important and catalytic role to engage the oral segment (see attached) and integrate the real economy services (see "A Strategic Approach for Next-Generation DFS Agent Networks" https://bit.ly/2eAIVun).

4. Our ANA surveys (see www.helix-institute.com/data-and-insights) continually highlight that fraud and robbery are growing – rapidly. Similarly national IDs are proving to be honeypots for hackers. I worry that we are all so busy with our daily struggles to get DFS systems to work that we are missing the strategic importance of these trends. Many of the frauds etc. can be addressed with some relatively basic training / process analyses, but this is not a focus of many people’s work at this stage, which is unfortunate as they have the potential to undermine trust in DFS significantly. Related to this is the need to redouble the focus/emphasis on consumer protection and rights (particularly related to national IDs and the use of consumer data collected by the growing range of players). This will grow as the digital credit revolution expands (see "Where Credit Is Due - Customer Experience of Digital Credit In Kenya" https://bit.ly/2psfFKr, "Digital Credit – Have We Not Been Here Before With Microfinance?" https://bit.ly/2v5mbck, and "How Can Providers Make Digital Credit More Profitable?" https://bit.ly/2v8c62z) and the super platforms enter the fray this year and next.