Guest Editorial: Targeting the Next Billion Digital Consumers

February 17, 2021

By Albrecht von der Recke, CCO & Founder, fonYou

As mobile networks continue to evolve, they are arguably becoming less and less about the connectivity itself, and more and more about the services that access that connectivity.  The days when a mobile phone was a device for texting and talking are now almost a distant memory. 

Of course, in some emerging markets of the world, mobile technology did initially serve to connect the otherwise unconnected.  But the important part of that personal connection was the world it opened up – internet access in the palm of their hand for the first time for billions of people. But the story of mobile keeps evolving. In the last few years mobile network operators have been partnering with financial institutions to deliver banking services to millions of users who otherwise would have no access to a traditional banking system.

This is the path that mobile connectivity and mobile operators are following as we transition from 3&4G towards 5G and onwards to a 6G world. Whether you are in the developed or developing markets, what started as a network connection is now becoming a connection to a network of services.

Low-Cost Analytics Reshapes Emerging Market Business Cases  

This is especially true for financial services. Orange Money has more than 48 million customers while Orange Bank in France and Spain has one million customers for its developing services around payments, finance and insurance.

In developing markets, the numbers are perhaps even more impressive.  Vodacom’s M-Pesa mobile money service operates across many African countries. It now has around one billion accounts and processes upwards of $20bn every month.  And of course, the ability of a mobile device to act as a contactless payment system has proven to be highly valuable during a global pandemic that has increased the appeal of touch free payments.

But there is still a long way to go not only in delivering those basic financial services, but also in creating the next one billion digital consumers able to pay for goods and services online, over counters, in-stores, and make payments to other mobiles. Focusing on finding those potential users of digital financial services by examining the data in the mobile network is ‘needle in a haystack’ time. 

To give an indication of the scale involved, on one typical South American network we were seeing two billion data events every day.  Somewhere in that stream of data would be events that could be a trigger to convert a typical pre-pay cash customer, into a modern digital subscriber.

This scale of data can only be analysed using AI and machine learning techniques.  To reduce costs, it is also vital to run this type of analysis within a cloud solution.  Harnessing this amount of data through an AI cloud-based solution produces results that no marketing team acting independently can produce no matter how strong their market knowledge or how good their tools are for customer segmentation.    

With predictive analytics you can determine the likely actions of your customers based on their past behaviour, and also integrate feedback and responses to past interactions to build a much more rounded view of each customer. Used intelligently, this data helps operators to increase the lifetime value of the customer, but also increase the value of the services being provided – in particular helping and encouraging these customers to adopt a digital wallet for payments.

In emerging markets, some of the transaction values you can generate from this analysis are very low by western world standards – often the equivalent of just a few dollars.  Therefore, it is vital that you can find and action this data economically.  Using AI and cloud-based analytics to identify potential trigger points we have been able to reduce the cost per customer interaction to a little less than one-millionth of a dollar.  That makes the model of contacting customers with offers and incentives to switch to digital payments commercially viable.

Privacy vs Benefits: Not a Competition

Underpinning the data analysis must be a financial technology platform and a range of services that can be offered. These two elements need to work hand-in-glove with full integration to ensure that the offers being made and conversion solutions available match the profile of the customer and are delivered through the preferred communications channel.

Of course, when handling and analysing all this data it is important to protect the security of the data to ensure that you abide by all the local and international regulations, but on top of that you also have to respect the privacy of the customer. In the case of customer data, security and privacy are two different requirements – especially with respect to many pre-pay customers in emerging markets where the operator may have very little customer information on a phone that is regularly topped-up using cash at a roadside kiosk.

However, it is possible to build a behavioural profile based on activities and interests that does not violate privacy laws, and to use that profile to build a relationship with the customer that further increases the operator’s data set and eventually completely personalises the relationship and greatly improves the services offered and accepted.

Another benefit of this approach is that the use of digital customer engagement techniques reduces the cost of managing a customer for the operator and can therefore contribute to the bottom-line performance both by reducing costs and increasing revenues through the use of additional services.

Today’s world is increasingly based on connectivity and the services it supports.  The global pandemic has shown that networks – especially cloud based ones – can support that massive switch to working from home and using cloud-based collaboration tools such as Zoom and Microsoft teams. 

But if we are to continue to narrow the digital divide, we must continue to convert more users to a digital relationship and to ensure they have access to digital and online payments.  That goldmine of data the operators are said to sit on does indeed contain all the information that is needed to help make that conversion.

We must and will focus firmly on the tools and techniques required to access and analyse that data at a commercially viable cost; and then to have the platforms and financial technology solutions to make the change a reality.

Image courtesy of Benjamin Dada on Unsplash

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