Opportunities with no real barrier to entry attract many players eager to make abnormal returns on the upward curve of a trend once it has become apparent.
Such is the state of the local fintech ecosystem and more specifically the micro lending space with over 20 legitimate digital anglers on the Android mobile operating system alone.
Banks have borne the brunt of the disruptor’s deadly charge, first from the ubiquity of mobile money and second from the growing adoption of smart enough, data enabled devices.
However, in the classic kiosk model mentality many of these anglers are simply replicating what first, fast movers did, without the attendant network effects due to market saturation, often paddocked around short-term loans, bill payments and airtime purchases.
I looked at Loop, the recently relaunched digital banking service by 56-year- old Commercial Bank of Africa that debuted in March 2017, and it is clear that some work has gone into rethinking the core value proposition for their target customer. While the stock features that I mentioned are available, basic aspirations dictate that consumers push daily towards esteem and self-actualisation. Financial inclusion should be more about visibility and empowerment, not “assistance” in the defeatist connotation that the latter carries.
CBA is smart to build for a long-term relationship that compounds in shared value. This means that consumers start to view the service as trusted side-kick with a different and more relatable loans and personal finance offering.
Money wants to be free, and the reduction in tariffs and charges is a sure way to drive stickability and usage.
The leverage of certain mobile money relationships to build seamless payment integrations and reduce the number of steps to fulfilment is welcome and could over time lend a certain je ne sais quoi value.
When it comes to matters finance, one is forever curious about how they stack up. Social media, a key source of fodder is a bad barometer, often manipulated and skewed to present a certain narrative or position.
The community feature, using anonymised spend and category data, is a great start to full blown gamification that can lead to transformative behaviour change — that all important reassurance or subtle nudge on the personal finance journey.
The need for storage and movement of value will always remain. It is just the form that changes, never the function. Loop has the makings of a habit forming product that is balanced on service provider returns and consumer value.