After discussing the crucial role of an agent network in our previous blogpost, today, we will delve into how mobile money providers can effectively utilize their existing networks to expand their services and boost revenue.

Unlocking Profitability through Scalability

The cornerstone of long-term profitability for mobile money providers hinges on achieving scale. Providers can unlock substantial benefits as network effects take hold, causing fixed costs to dwindle in relative terms. Yet, the path to scale demands substantial initial investments. Furthermore, the necessity to increase transaction values across the system to ensure overall profitability might render certain customer segments unattractive for providers if the cost of acquisition outweighs the benefits of acquiring more users.

Source: Mckinsey

Expanding Financial Services Beyond Basic Payments

As the mobile money network continues to expand, a plethora of innovative financial services is emerging. Providers can harness the wealth of risk data generated by digital payments to revolutionize their understanding of customer needs and assess credit risk more accurately, making it possible to offer credit to individuals and businesses with a history of low-risk transactions. Moreover, providers can leverage mobile technologies to facilitate the issuance, monitoring, and collection of loan payments, thereby reducing operational costs and enabling the provision of smaller loans. This opens up opportunities for data-driven financial services, micropayments, and entirely novel digital business models.

Source: Mckinsey

Providers by leveraging mobile money have the power to transform financial landscapes by offering a range of vital services like savings, credit, and insurance. These services empower individuals and small businesses to accumulate assets, mitigate risk, and maintain consistent consumption patterns. Leveraging the wealth of risk data stemming from digital transactions, providers can make more precise credit risk assessments, granting loans to those with a history of low-risk transactions. Additionally, providers can harness mobile technologies to efficiently manage loan issuance, monitoring, and payment collection, thereby trimming operational costs and making it feasible to provide smaller loans.

Unlocking the Power of Partnerships in Risk Mitigation

Partnerships play a pivotal role in risk mitigation for various mobile money providers operating at scale. Banks can strategically collaborate with mobile network operators (MNOs) to leverage their extensive distribution networks and customer bases. On the other hand, MNOs can join forces with banks to tap into their financial expertise and regulatory compliance prowess. Internet players, too, can find value in partnerships with banks or MNOs to access their distribution networks and ensure regulatory compliance.

Partnerships are also instrumental in cost and risk sharing, covering aspects like marketing, agent training, and infrastructure development. Providers can extend their reach by partnering with third-party service providers, offering complementary services such as transportation or retail solutions. Beyond this, partnerships can serve as gateways to untapped markets and previously underserved customer segments, including rural or low-income demographics.

However, it’s essential to acknowledge that partnerships aren’t without their own set of challenges. These encompass concerns related to regulatory compliance, data security, and the preservation of reputation. Hence, providers must exercise prudence when evaluating potential partners and establish well-defined agreements that outline roles, responsibilities, and mutual expectations.

Source: Mckinsey

Leveraging a cash-in-cash-out (CICO) network at scale is pivotal for mobile money providers seeking growth. Achieving this requires a strategic focus on driving transaction volumes, and harnessing the power of emerging use cases, including the ever-expanding realm of e-commerce. This approach not only scales usage but also lays the groundwork for sustainable expansion.

Providers can further bolster their journey by judiciously reducing operational costs, capitalizing on existing customer bases, and leveraging well-established distribution networks. Moreover, the diversification of services is paramount. Mobile money providers can seamlessly integrate adjacent offerings, including a range of financial products (from savings accounts and lending products to insurance) and non-financial solutions (such as e-commerce platforms). These extensions not only enrich the customer experience but also open doors to new revenue streams.

In the pursuit of comprehensive solutions, partnerships become a potent tool. Collaborating with diverse firms enables mobile money providers to offer complementary services like transportation and retail, fostering a holistic ecosystem for users. Strategic investments in the development and management of agent sales forces further enhance cost efficiency and bolster transaction volumes.

To ensure seamless growth, mobile money providers can harness cutting-edge systems and analytics. This technology empowers them to meticulously monitor and optimize key operational aspects, including customer acquisition, agent management, and product development.

In summary, scaling mobile money services to new heights requires a multifaceted approach. By focusing on transaction volumes, cost reduction, service diversification, partnerships, agent sales forces, and advanced analytics, providers can chart a course for sustainable growth in the dynamic landscape of digital finance.

Pro tip

In the dynamic world of financial services, staying ahead means embracing cutting-edge technology like the Last-Mile Banking Toolkit. This is where low-code innovation shines, offering mobile money providers a powerful edge. With this low-code marketplace solution, providers can supercharge agent revenue while carefully balancing their product mix. The magic? Empowering providers to effortlessly craft custom applications and workflows via intuitive visual interfaces and a rich library of pre-built components. The result? A rapid, efficient product development process that eliminates the need for extensive coding or development expertise.

But the true beauty of low-code technology lies in its versatility. Providers can swiftly prototype and test a wide range of new products and services. Whether it’s introducing savings accounts, pioneering lending products, or venturing into insurance offerings, the Last-Mile Banking Toolkit equips providers to bring these innovations to life. What’s more, these solutions can seamlessly integrate with agent networks, creating a powerful synergy of growth and enabling new partnerships to thrive.

Leveraging existing agent networks brings distinct advantages, including inherent cost reduction paired with a significant surge in transaction volumes. It’s also a gateway to diversifying product offerings and expanding revenue streams. The capabilities of low-code platforms extend even further by facilitating enhanced agent training and management. Real-time data and analytics on agent performance and customer behavior provide valuable insights to fine-tune operations.

In summary, embrace low-code innovation, embodied in the Last-Mile Banking Toolkit, to fuel transformation in the financial sector. This innovation streamlines development, broadens product portfolios, optimizes agent networks, and drives revenue growth.

If you’re eager to delve deeper into how low-code platforms can revolutionize mobile money providers’ operations, enabling them to innovate, scale, and simultaneously reduce costs and risks, we’re here to assist. Let’s connect and explore this transformative potential further in a dedicated meeting.