Universal Financial Access 2020: Goal and WBG Target 1 Goal: By 2020, adults globally have access to a transaction account or electronic instrument to store money, send and receive payments as the basic building block to manage their financial lives As of 2015: still 2 billion adults to reach. WBG Target: to contribute to 1 billion new accountholders by 2020

unserved served Broader Inclusion Customer-centered product innovation Financial capability Strong consumer protection Better financial infrastructure More and interoperable access points From unserved to served: Digital technologies hold key to gateway, through solutions to costs, risks, data, outreach constraints

1. Disaggregation of the Value Chain 2. Application Program Interfaces and the Opening of Platforms 3. Use of Alternative Information 4. Customization Four Innovative Developments to highlight: 3

4 1. Disaggregation of the Value Chain “Horizontalization” Comparative Advantage Participation of a greater range of actors Agent networks Cooperatives Mobile Network Operators Technology Companies Linkages with informal schemes Outsourcing Hypothesis regarding potential benefits for financial inclusion: Fostering competition by providing greater range of alternative actors, channels, etc. Leveraging comparative advantages to provide targeted, appropriate products while lowering costs Reaching new customers previously unserved or underserved Verticalization Horizontalization

2. Application Program Interfaces and the Opening of Platforms Application programming interfaces (APIs) Innovate and build new applications on top of pre-existing products (e.g. M- Shwari) (including by third parties) Aggregate and host a variety of functions on a single client interaction channel Open platforms Enabling third parties to add features or functionalities to an existing digital program or platform (e.g. PesaDroid) Hypothesis regarding potential benefits for financial inclusion: Increased range of product offerings and increased ease of access and delivery Increased competition, improving product quality 21 Source: GSMA. “Smart Phones and Mobile Money: The Next Generation of Digital Financial Inclusion”. Source: CGAP. “How M-Shwari Works: The Story So Far”.

3. Use of Alternative Information Digital data can act as a substitute to traditional means of authentication for Account opening Credit worthiness assessments Address verification Digital data trails and big data can be leveraged (e.g. transaction histories, social media for credit worthiness or identification) Biometric identification (e.g. electronic thumbprints, voice identification, facial recognition) Hypothesis regarding potential benefits for financial inclusion: Addressing information asymmetry, particularly for underserved consumers, enabling access to products Substitute for formal IDs/data sources 22

4. Customization 23 Digital technologies can be used to customize product features through data and analytics Client segmentation Human-centered product designs Appropriate user functions Use of images Voice recognition Ensuring ease of use Client data insights and big data analytics can be used to target products in design and delivery Hypothesis regarding potential benefits for financial inclusion: Fosters more appropriate, targeted products to the unserved and underserved Tailored to fit needs of clients, leading to greater uptake and usage Specialized delivery, products and interactions Easier Interfaces Segmentation and Targeting Human Centered Design