Caro Realini is a serial entrepreneur, globally recognized technology pioneer and a Co-Author of Financial Inclusion at the Bottom of the Pyramid. Carol was an opening keynote speaker at Citibank's Digital Money Symposium hosted by CitiBank and Imperial College, London on 26 Jan 2016.
Carol spoke about advances in communications that have reconfigured the ease with which we interact with our money and how these advances can provide innovative financial services to the unbanked and underserved around the world.
Half the World Are Financial Nomads
The world population is roughly seven billion. Of these, 4. 6 billion are aged twenty or older. [1] They comprise the pool of adults who could be regular customers of a financial services provider—a bank, savings and loan, credit union, or even Wal-Mart. Estimates suggest that of this eligible pool of 4. 6 billion adults, over half—2. 5 billion—do not use an established and reputable financial services provider. They are financial nomads who either have no access to financial services or use financial services on a casual basis when they need them.
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The lack of affordable and adaptable banking services is an issue that should concern everyone, not just the people who are living at the bottom of the pyramid. At its worst, a lack of banking creates a downward spiral of disenfranchisement, widens the gap between rich and poor, encourages outlaw or extralegal behavior, and inhibits the social mobility that keeps any society vibrant and open. An accessible and reliable banking system helps to create stability and overall prosperity.
We have seen the costs to living at the bottom of the steep pyramid, and the obstacles that keep many hardworking individuals and families from making the long climb to the top.
I have founded two companies within the Financial Inclusion sector and I am an active board member for several other companies working in mobility and “mass-market fintech.”
My co-author, Karl Mehta founded a global payments company which was sold to Visa. He then for a few years was a key mobility executive their. Now he is a VC investing and a CEO of EdCast - a disruptive approach to higher education.
My first company had the right idea, but the environment was challenging. Smart phones and data services were not yet widely available, making everything more difficult. In addition, regulators in most places hadn’t established rules for mobile banking which prevented growth.
Mobile phones are now a mainstay all over the world and many countries in Asia and Africa have sorted out regulations to handle incoming technologies. Smart phones are also scaling very fast, creating more space for innovation.
Later on, when the technological and regulatory landscape was primed, my second company (a US-based faster payments company) scaled quickly and was acquired in under 2 years.
I am now on the board of 5 companies all working in this space and help others wherever possible.
In a nutshell, what do we need to get right, for financial inclusion @ BoP to become a reality?
Regulations and infrastructure are key to massive change. Institutional banks and investors also need to embrace innovation. Opening our eyes to including innovation from unexpected places will create more opportunity (i.e telcos have become the last mile to the customer for banking). Finally, considering new players in the space with disruptive models can bring a new perspective, and sometimes, a better solution to a problem.
At the end of the day, the financial needs of those at the BoP will not match
those who use traditional banking. We need to create products and services that are relevant to each customer and their lifestyle. These will look and behave differently across countries, states, towns, or even villages.
The book does a great job of opening the reader’s eyes to what is possible, what is currently working, and what is not. It proves that solutions DO exist—they are just not evenly distributed.
Clarity
New actors can be “last mile” to the customer
Needs to be
clear on safety and soundness
not weigh down the provider
Don’t create complex compliance structures or force partnerships
Graduated Due Diligence
To whom do you feel this book will be most useful and why?
Two Audiences
The Traditional FinTech community
All people interested in how the world could change for the better
Financial Inclusion at the Bottom of the Pyramid entertains and informs both audiences. It delves deep enough to share new insights with the FinTech community, yet effectively explains the financial services landscape to those who are ready to learn and be inspired.
Reviews have been very positive from both groups. Having been exposed to real-life case studies that are changing the face of financial services, readers from all over are inspired by the global shift that lies in front of us.