TRUST & CONFIDENCE
Mobile Banking holds great promise for the Pacific Financial Inclusion challenge, however to work, mobile money operators must invest deeply into two things (1) understanding the rural market; and (2) building the coverage, liquidity reliability and capacity of the cash agent network.
A high-quality, convenient, reliable cash agent network is crucial for building trust and confidence across rural communities in both mobile banking and the formal financial sector, and is a driver of adoption. The global experience showcases many examples of the negative impact of mobile money providers who push hard to build out the cash agent network quickly, where sign up of new customers get ahead of the necessary infrastructure, connectivity, access, consumer awareness and capability. In the focus group discussions across Ulawa and Isabel, trust emerged as a more important consideration compared to accessibility, for communities wanting to adopt branchless or mobile banking. As one agricultural laborer from Isabel commented…
Materials without having a person come deliver to us an explanation are undesirable – The current materials are not relevant for ‘us fella’ as they are in English not Pijin, it is for city fella not farmer, and the Bank fella would not ‘give out’ materials to us.
Trust and confidence is built upon relationship. Rural communities draw heavily on the cultural value of reciprocal obligation. For the unbanked or under banked, an early bad experience with mobile money can have a far longer lasting negative impact.
36% of respondents who had used or managed a bank account expressed a concern with the level of trust in the bank / financial service provider.
However, a positive experience of even a few early adopters within a community can motivate many to trust the offerings and have confidence in the service provider.
TRUST emerged as a major theme during focus group discussions –
- How could Village Chiefs check the credibility of Bank sales staff who appear in their communities – How do we know these people are not fraudsters?
- Could the community have a voice in who Banks approach to be agents?
- Can the Bank be clearer and less confusing about the process for appointing community banking agents?
- Where can the community go to get information about the fees?
- The only reason they come is to sell not to listen to what we need!
- Who can show us how this mobile banking idea works?
For those consumers who are engaging with either mobile banking or formal financial services for the very first time, a high touch approach over the first 7-10 transactions (which for consumers in rural communities usually span over more than a year) is particularly important to build capacity.
Given positive developments emanating from Commercial Banks participating in the Financial Inclusion initiatives, and being successful at signing up new customers…
To what extent has the existing efforts by commercial banks to expand branchless or mobile banking (rural community experience to date) influenced rural community perceptions and expectations of the relevance of the formal financial sector?
To what extent are commercial banks & telecommunication providers open follow guidance geared toward more effectively building out the cash agent network so as to promote products and services for selected smallholder farmers and small rural businesses in a responsible manner (does no harm)?
The need to build, invest into and adequately monitor agent network quality cannot be underestimated. Furthermore, consumer testing of promotional or marketing material would strengthen confidence in the relevance and benefits of Mobile Banking for Rural Communities.