Trust of the financial eco system is central to mass adoption and deepening financial inclusion. Concerns of fraud and loss of customers` funds more so funds for the poor can lead to deep hesitation to use digital financial platforms and tools.
Mobile money has largely been delivered with more traditionally secure telecom channels such as USSD and STK. While these have their know vulnerabilities, their technical exploitation has been less perpetrated but a lot of social engineering through communication and persuasion of unsuspecting customers to share PIN, OTP and send money to fraudsters has been a very regular occurrence in the leading mobile money markets.
The era of interoperability fueled by leading platforms such as Majoloop will potentially increase the scale of possibility to fraud with fraudsters on one network targeting those on another network or bank to transfer funds over the interoperable Majoloop powered switch.
As thus, the industry stakeholders and players including telecoms, banks and regulators that handle KYC, need to collaborate more to share information of sim card centered frauds that fuel mobile social engineering fraud.
HiPipo Foundation Include Everyone program will take extra effort in our research, education and advocacy campaigns to ensure stakeholders appreciate the increased scale of social engineering fraud and collectively collaborate for information sharing. This will also supplement efforts to combat AML and CFT.
Another dimension of growing risk is increased transactions over new generation digital channels i.e Apps, Web and social banking. Cybercrime that was initially Internet IP centric will hence forth increase as we see channel advances. Similarly, effort from tech and regulatory fronts will have to be boosted to hasten cyber protection of unsuspecting and naive consumers of which majority would likely be the poor, women and youth that a newly banking or semi banking citizens.
Join HiPipo Foundation during the Include Everyone advocacy events series to discuss these issues and provide best practice recommendation to addresses these financial inclusion challenges.
Digital Saving and Loans is offering quick small loans/saving remotely over digital channels such as for M-Shwari in Kenya, Mokash and Wewole in Uganda. Digital saving and loans can benefit borrowers as an alternative to informal lending sources to meet emergency liquidity needs of poor households and provide a first step into formal financial services. In promoting financial services for the poor, banking and telecom organization should enable digital driven means for developing saving culture which would spur better and less risk lending trends and decisions. P2P lending, SACCO lending can all be digitized if small Fintechs and developers are given the right tools and APIs to integrate into the financial platform of big Telecoms and banks. The data available already for customer GSM and Mobile Money transactions is a starting ground to help in offering well-tailored products to key segments of the poor, youth and women that we need to be more included in formal financial services.
“Open APIs will Advance Digital Saving and Loans Innovations. Under Include Everyone program, we believe that the more we promote OPEN API for identify (KYC), Data and Transaction use cases, the more we shall propel innovation to delivered financial services for the poor” remarks Innocent Kawooya CEO HiPipo.
In all Africa countries that have adopted digital financial services, Digital and mobile technologies make it possible to reach new customers with innovative, low-cost financial services. While this interconnection is feasible, the lack of a shared platform connecting all financial services players, means that financial providers have to build everything on their own which this raises costs.
Mojaloop as an open-source software for creating digital payments platforms that connect all customers, merchants, banks, and other financial providers in a country’s economy will make it cheaper for interoperability realization in all markets.
Being opensource, mojaloop is expected to grow robust and stable with community contributions while financial services players use the open-source software to help build digital, interoperable payments platforms that drive financial inclusion on a national, regional and continental scales.
Majoolop based platforms will enable seamless, low-cost transactions between individual users, merchants, banks, providers, and even government offices – helping connect poor customers with everyone else in the digital economy.
Mojaloop grew out of principles set forth by the Financial Services for the Poor team at the Bill & Melinda Gates Foundation. With support and funding from the Bill & Melinda Gates Foundation, Mojaloop was designed by a team of leading tech and fintech companies: Ripple, Dwolla, ModusBox, Software Group and Crosslake Technologies.
As part of our Include Everyone Program and as contributors in the open source community. HiPipo will spearhead outreach programs to popularize Mojaloop and promote its adoption at different national levels. Innocent Kayoowa CEO of HiPipo noted that unless individuals, fintechs and all concerned parties on the African continent take on the challenge and mantle of promoting practical projects and product such as Mojaloop that promote interoperability, the cost of financial services will remain on the higher side hindering many of the poor to actively participate and be financially included.
An estimated 2 billion working-age adults – more than half of the world’s total adult population – do not have an account at a formal financial institution. Financial inclusion efforts seek to ensure that all individuals households and businesses, regardless of income level, have access to and can effectively use the appropriate financial services they need to improve their lives. The benefits of financial inclusion are not only significant for individuals but for economies as well. Financial inclusion is linked to a country’s economic and social development and plays a role in reducing extreme poverty.