According to fintech expert Kathryn Chin See, KINGSTON, Jamaica, CMC–Regional financial institutions can reap substantial benefits by leveraging financial technology to serve them but must transition urgently.
She discounted the notion that the unbanked and underbanked are low-volume contributors to the bottom line as she opened Phoenix International’s recent webinar on Financial Inclusion in Emerging Markets, which was organized in partnership with Microsoft and TD Synnex and streamed live from the Corporate Offices of The Jamaica National (JN) Group.
Chin See, product manager at MC Systems, the JN member company that owns Phoenix International, argued that although digital transformation became necessary a decade ago, many regional institutions still need to catch up, allowing international players to tap into their market space.
She maintained that despite the benefits derived from digital transformation, including lower costs and barriers to entry in new and promising markets, as well as swifter onboarding, service delivery, credit application, and adjudication processes, adaptation in the region needs to be faster. However, some ground was gained during the COVID-19 pandemic.
Chin See underscored that regional institutions could compete effectively with larger global fintechs and big techs if they rethink their approach.
“International players have deep pockets. They are raising the bar for customer experience,” she argued. “Local financial institutions have a strength- a deep understanding of the Caribbean market. Insert any trendy P2P wallet (also known as money transfer apps) here- they don’t know us [so] it won’t stick. Capitalize on the trust and cultural knowledge that global players can’t replicate.”
She continued: “The goal is not to copy. The goal is to outsmart global disruptors in ways that resonate with your customers. The time to deliver on that goal is now.”
Emphasizing that fintech is about people, Chin See argued that regional institutions should focus on the “lifetime value” customers generate instead of focusing on immediate profit and losses. Using Maria, the farmer in need of a loan for seeds, and Joseph, an entrepreneur who relies on informal channels because of limited access to traditional financial systems, Ms. Chin-See argued that many regional financial institutions lose out on the opportunity to capitalize on the potential of the unbanked and underbanked because they have not digitally transformed their services.
“It’s not just about profit and losses, it’s about people,” she said. “We have the power to unlock the potential to build stronger communities and economies, but it starts with rethinking our institutions.”
The fintech expert said by leveraging technology, institutions can maintain a high level of engagement with customers, especially those considered underbanked, noting that the technology allows institutions to garner great insight into who their customers are.
“Let’s think about Granville, the taximan. He has a 30-year-old [Toyota] Corolla. He has maybe $100,000 in the bank. He saved it for emergencies. But suppose we engaged him? Suppose we targeted him, offered him a credit card to pay for his daily fuel and service parts, and offered him a motor loan to get an efficient new car. Suppose we offered him a mortgage,” she mused openly. “That $100,000 client is now transformed into a $30 million client.”
Engagement should also be leveraged through the experience provided to the customer, Senator Dr. Dana Morris Dixon, Minister without portfolio in the Office of the Prime Minister, with responsibility for Skills and Digital Transformation, emphasized as she delivered greetings to open Wednesday’s webinar.
“If it is not easy for people to use, then you’ve not made their lives easier,” she stated.
“People have to be at the center of it, and this is what I say to our government entities: ‘It’s nice to put new services online, but if you don’t re-engineer the process and make it easier for people, then we would have lost.’ And that is also what I say to the financial sector. It needs to be intuitive and very easy to understand, or else we’ve left people behind again,” she added.
She disclosed that the Jamaica Data Exchange platform is now in the final stages of development and that the platform will make the verification of government data seamless.
“As banks try to put more products online — account opening and other products that you deliver online — it’s going to be important that they’re able to verify the data their clients submit,” Dr. Morris Dixon underlined.
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