In the Fast Lane: Innovations in Digital Finance

This paper describes the trends in the growing number of innovations in the mobile money and digital payments space. It specially focuses on innovations that have practical applications for financial inclusion in Africa. The paper also tries to understand how these simple systems are evolving to deliver a more effective and diverse portfolio of financial services. Key innovation trends as summarized in the paper:

• Finger and voice biometrics as additional options for customer authentication are opening up the spectrum of solutions available;
• Distribution is being optimized by using field-force management tools to track field staff, agents, and/or merchants;
• Third-party agent aggregators offering provider-agnostic agent services are emerging;
• Application developers are supporting financial institutions with mobile money integration- connecting the lenders and owners of the payment platform;
• Technology companies are enabling merchant acceptance of digital payments in-store;
• Payment aggregators are enabling online payments and e-commerce;
• Alternative data sources are being leveraged for making credit decisions and for business intelligence;
• On-demand microcredit on mobile is in demand;
• Formal products are building on or leveraging observed informal behaviors and group capabilities;
• Index-based insurance is dominating the agricultural microinsurance space;
• Collective purchasing and selling in agribusinesses is being made possible through mobile apps.