Page 163 - Special Topic Session (STS) - Volume 1

STS422 Robin G. et al.
Enhance digital financial literacy and savings product awareness among
customers: Fintech firms such as Juntos increase savings mobilization by
sending personalized messages on mobile phones and social media to
depositors with dormant accounts, either reminding them or making them
aware of their dormant savings account. Another cost-effective approach to
increase product usage is through digital financial literacy applications. For
example, Wave Money in Myanmar is designing a financial gaming application
where people can learn about savings, interest payments and insurance. There
are even digital education tools tailored to children, including mobile piggy
banks such as Ernit and Bankaroo. Another option is to design commitment
savings accounts, whereby savings are held by the bank until a predetermined
goal, set by the customer, has been met which have been effective in
improving savings mobilization for women (Buvinic and O’Donnel, 2016)

Improve customer assessment and reward customer loyalty: Design
customer loyalty programmes and reduce interest rates for long-term
customers that take follow-up loans and mobilize deposits. Retained
customers are more costeffective and take up larger loans and savings than
new customers, yet the pricing models of banks do not always reflect this
pattern. For example, although women and youth in Cambodia had longer
customer journeys, they were offered similar pricing and received lower loan
amounts than men. Customer data can be leveraged to develop alternative
credit scoring models using mobile phone and transaction data not only to
reduce collateral requirements, but also to improve on customer retention.
Examples of fintech firms working on customer loyalty improvements include
Retentionscience, Feedzai, and ZestFinance. Given that borrower exit is partly
under the control of FSPs, good customer assessment matters. In addition to
using insights from management information reports and exit surveys, FSPs
can also use low-cost software such as R-Studio and Tableau to generate
customer insights to develop more appropriate products.

Policy recommendations for regulators
Establish digital identity database: Harmonizing the use of national ID cards
in the MDI sector can greatly reduce the time and cost of delivering financial
services in Cambodia, where 95 percent of adults are reported to have such a
card (FinScope, 2015). As an example, Aadhar in India was established to target
delivery of financial services and government to-person payments such as
subsidies, wages and pensions, combining these services with an “all-in-one”
proof of national identity. Other countries such as Malaysia and Singapore also
have multi-functional digital national identification cards for citizens (which
serve the purpose of a driver’s licence, an ID card, a health document and can
serve as a digital wallet and a means of payment, amongst other functions),

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