The poor have traditionally used financial services that are extremely inefficient, such as cash and commodities that lose value… But the mobile revolution will give these people more control over their assets.
Bill Gates, January 2015
Just as the availability of mobile phones made a huge difference to the lives of the poor by providing access to specialist knowledge like healthcare where it was not previously possible, Microsoft founder Bill Gates predicts that mobile payment technology will change the lives of the very poorest in the next 15 years.
Access to banking services
Through near-zero administration costs and simple services, he believes that access to credit, savings and insurance products will be made available to the types of users that have previously been locked out of using traditional banking services by proximity or cost.
Not only will those with very small requirements be able to use services to which access was previously too costly to manage, but also the need to have multiple identification systems in place will be eliminated. Money can be held against digital wallets instead of in bank accounts and transferred by SMS or self-service apps.
Access to many new services
We’re already seeing that services that can be rolled out over cellular networks, with automated administration and minimal cost to providers will become game-changers. As over the counter services are becoming increasingly unnecessary and costly, innovation and investment in these services is already part of strategy for banks with a large presence in Africa and Asia. As technologies develop and the need for face to face interaction lessens, it’s not just financial services that open up for poor communities.
Other sectors such as healthcare have also started to invest in self-service innovations, which can make huge differences to the lives of thousands via existing networks. By empowering individuals to manage chronic and long-term conditions like diabetes and high blood pressure, there are improvements to quality of life and the efficiency of state healthcare. The link between technology and improved socio-economic development is therefore relevant in more than just financial services innovation.
Self-service via mobile technology
At Tobias & Tobias, we’ve already been looking at the way that technology can be used to improve access to services for the poor, through simple reminders and updates, requiring little additional equipment or knowledge from the user.
Gates mentions the benefits of independence and self-sufficiency arising from the ability to control your finances, making special reference to the empowerment of women. Giving women control of money and access to information about health and welfare are recognised as a key method for enhancing development in poor nations.