25 Oct 2016

Finance and commerce on the ‘Mobile Continent’

By Com Series staff writer Kamau Mbote, @First Communications

Over the past few years, mobile money in Africa has largely played the role usually filled by Western traditional banking institutions, with just 20% of the African population having access to mainstream financial systems in 2010. 

Sub-Saharan Africa is rated as having the lowest deposit institution penetration in the world according to a paper by the African Development Bank, Mobile Banking in Africa: Taking the Bank to the People.

Over the years, mobile money has connected millions of people with banking services especially in East Africa, where mobile money is leading other regions of the world and which initially had among the lowest financial inclusion rates globally.

In the early days of mobile money in 2007, only 30% of Kenyans had access to banking services. In other East African countries such as Ethiopia, Uganda and Tanzania AfDB showed that one branch served more than 100,000 people. In Namibia, Zimbabwe and Botswana a branch served 25,000, 33,000 and 25,000 customers respectively. During the same period in the West African nation of Gabon, only 35 branches were in place countrywide.

With the introduction of mobile money, the populace in these regions embraced this innovation much faster in comparison to areas where the mainstream or traditional financial and banking insitutions were evident.

"Sub-Saharan Africa transfers more money domestically via mobile money than any other region in the world"

More recently, the Global Findex 2015 edition estimates that the number of unbanked individuals globally dropped by 20% in the period 2011 to 2014. In Sub-Saharan Africa to be precise, where 17% remains unbanked, 13 countries have more than 10% of their adult population using mobile money and more people are using mobile accounts than bank accounts in Cote d’Ivoire, Somalia, Tanzania, Uganda, and Zimbabwe. In other countries mobile subscribers can now open bank accounts using the mobile money platform.

According to the report, Sub-Saharan Africa transfers more money domestically via mobile money than any other region in the world, with up to 28% of the population receiving a domestic remittance in 2014.

The Ericsson Regional Sub-Saharan Africa Report noted that mobile money has allowed the 70% of the unbanked and marginalized segments to start to see the promise of financial inclusion across Africa, with mobile operators becoming beneficiaries of this revolution.

The report sites that the leading operators in the region are deriving up to 20% of their revenue from mobile commerce services, improving business prospects even as voice revenue growth slows.

"63% of the total population in Sub-Saharan Africa is unbanked"

Nigeria has the largest share of unbanked currently (53%) followed by Ghana, Angola and Uganda, according to another report by Ericsson, Financial Services For Everyone . In these countries, the report identifies that the level of awareness remains low while only 33% of all respondents said they know how to use mobile money on their mobile phones.

Among consumers who were aware of the services yet chose not to use them, a large proportion commented that they didn’t think the service was necessary or that it seemed too complicated.

According to the report, mobile money services are bridging the gap between the unbanked and banked as more have access to mobile money compared to banking services. The report further shows that 63% of the total population in Sub-Saharan Africa is unbanked and 52% of the total population uses mobile money through an agent.

Connecting the financially excluded through new mobile solutions

Some of the reasons why the majority of the population of Sub-Saharan Africa has been financially excluded or that have led led to low financial inclusion include deficient infrastructure, inaccessibility or physical-geographical isolation and financial illiteracy that ultimately led to high cost of financial services, which out of reach for many potential customers. 

These problems can be solved by using mobile money as devices are now more than ever affordable and do not necessarily require smart devices to deliver these products.

This said there, other challenges still exist that will require more of education than technology as the reasons for individuals lacking banking accounts include: lack of documentation, lack of trust, family member has an account, religious reasons among others.

Building an interconnected and transparent financial ecosystem

There is a consensus that building an interconnected and transparent financial ecosystem involves telecommunication providers and banks ensuring their mobile payment services are: secure, stable, scalable, flexible and above all trustworthy.

A secure, stable, scalable, flexible and trustworthy ecosystem entices quick uptake by customers and ensures business innovation.

In this case, telcos should look to develop systems that allow mobile subscribers to access their bank accounts securely, in a timely manner in a platform that's scalable to include other services financial institutions offer, other than merely cash deposits and withdrawals. 

"M-PESA, the largest mobile money platform globally, has connected more than 20 million Kenyans"

Telcos and banks also need to enable the customer to understand fully all the charges that result from mobile money transactions between the two institutions, as well as challenges or deficiencies that the platform has that could lead to delays, fraud, hacking among other vulnerabilities.

A case in point is M-PESA, the largest mobile money platform globally, which has connected more than 20 million Kenyans and there are more than 100,000 agents and over 44,0000 merchants who accept M-PESA payments. There are more than 40 financial institutions that interconnect with M-PESA and other partners such as government payments, M-KOPA in energy and mTiba in Health.

According to Head of Strategy at Safaricom, Ken Okwero, by linking into M-PESA, each of these partners can tap into the more than 23 million M-PESA customers.

“The larger benefit is however on the customer’s side, where customers benefit from the convenience of different use cases, from person-to-person transfers, cashless payment of bills, or even access to new services that they did not have before, such as: instant loans, micro savings products, affordable health and crop insurance,” Ken Okwero adds.

Achieving interoperability among mobile network operators, banks, merchants and government

Pundits say the benefit of an inter-operable financial services to operators is that it can lead to a mobile money service without limits. According to Ericsson, a leading provider of mobile money solutions software, the key success of mobile money lies in a partnership between telcos and banks, as well as the right infrastructure and financial services portfolios.

“We are driving this change to make money more open by orchestrating collaboration between banks and operators and developing secure, flexible mobile commerce platforms, that help build an interconnected and transparent financial ecosystem,” says Peter Heuman, VP Deputy Head of Business Unit Support Solutions at Ericsson.

"The key success of mobile money lies in a partnership between telcos and banks, as well as the right infrastructure and financial services portfolios"

Telcos and banks must also adjoin their services and products to the needs of government and merchants to support payments, with the public and private sector reliant on each other either for supply of liquidity, goods and services, or even in the line of licensing and regulation.

Some of the ways telcos and banks could enable better and streamlined interaction between government and the private sector, as well as members of the public, is by enabling payments to various agencies by mobile money eliminating the need for cash transactions in government offices.

According to the Global Findex 2015 edition, 1.3 billion adults with an account in developing countries pay their waste removal, water, and electricity bills in cash, and over half a billion adults with an account in developing countries pay school fees in cash, thus access to digital payments through a mobile phone could create opportunities to provide more convenient and affordable payment options.

In a few other countries, the government has already teamed up with various telecommunication service providers to enable payments of licenses and other documents such as birth and death certificates, eliminating the physical need for citizens to physically go to offices.

“The benefit here has been in sealing the revenue leakage, convenience for taxpayers in the form of alternate channels and the ability to pay for services anytime. The capacity to accept electronic payments also enables the government to offer services through digital channels, as we have seen with the roll-out of the eCitizen platform in Kenya,” says Okwero.

How OTT players can collaborate with operators to refine business models

“A balanced co-operation between mobile network operators and Over-the-Top (OTT) players is required to develop a win-win ecosystem as operators cannot be in complete control of the internet ecosystem, while a broadband pipeline that lacks appealing content and applications means little to end users,” said Ahmad Farroukh, Chief Executive Officer at MTN South Africa, while addressing delegates at AfricaCom 2014.

This shows that while telco operators may have control of the mobile money platforms through their huge customer base and financial position, the broad scope of services they provide inhibits them from coming up with new innovative products, a part that can be played by OTT players. Telco operators can then provide the platform at a cost while allowing OTT app providers to own the customer and make money.

For this collaboration to work, mobile network operators and OTT players need to define access and structure a fair deal for both parties. This however does not mean exposing their customer base or revenue streams for OTT players. Such deals can be refined through forums that clearly define rules of engagement.

To this end, a number of telcos in Sub-Saharan Africa have partnered with a number of Value Added Services players that offer content around games, video and music to enable them to tap into operator billing, which facilitates service delivery in a convenient and seamless way to customers.

Above all, Farroukh thinks there can be immense benefits for both OTT players and telcos where the latter continues to invest in technology to provide best customer experience for OTT users.

Mobile Finance and Commerce at AfricaCom 2016:

This year's AfricaCom, taking place between the 14-18 November 2016, will be showcasing all the latest innovations in African mobile finance and digital commerce. The Mobile Finance and Commerce stream taking place over the 15 - 16 November will comprise of Key Note Panels and discussions around the latest FinTech solutions and connecting the financially excluded..

Some of the key speakers include Safaricom's Ken Okwero, Telkom's Floris Buys, African Development Bank's Maimouna Gueye, MTN's Hanlie Smuts and Equity Bank's John Staley.

To find out more about the largest tech and telco event in Africa and book you tickets, click here.

Be part of the African tech and telco conversation, here:

24 Oct 2016

Smarter mobile money through big data analytics

Approximately 2.5 quintillion bytes, or 2.3 trillion gigabytes, of data is generated every day around the world. The full potential of all this information is yet to be discovered with estimates that only 0.5% undergoes analysis, while one in three business leaders make decisions based on insufficient data.

The volume of data available to service providers today is an enormous resource for better understanding the customer base. Data analytics helps overcome potential issues, promotes faster adoption of new services and increases transactions.

Big data and mobile money

The mobile service provider’s access to big data offers a huge advantage over formal financial institutions, who cannot easily tap into their client’s daily life. In defining patterns, trends and links occurring over time, the mobile money ecosystem can unlock hidden value, such as fraud management and credit scoring for financial services.

Graph: How is big data used?

Fraud management

Suspicious behaviour manifests in different ways. Big data analytics link heterogeneous information from transaction data, which enables the service provider to pick up on this behaviour. For example, a series of cash-in transactions to the same account, from different locations, might be an attempt to avoid paying for domestic transfers, or several cash-ins immediately followed by a cash-out could indicate money laundering. There are two methods of reporting for suspicious behaviour. The first is system generated in real time upon anomaly detection, which is then approved or rejected by the fraud analyst. The second requires the fraud analyst to generate a daily report for post-analysis. Best practice states that no actions are purely automated, the fraud analyst always has the final say. This prevents unjustified automatic rejection cases.

Machine learning further complements fraud management processes. In using the past to predict the future, fraud analysts define detection parameters based on normal behavioural patterns from transaction history. As a population’s behaviour evolves over time, the parameters must adapt to remain optimal. In response to this, machine learning predicts a natural evolution of behaviour based on historical data as well as previous actions taken by fraud managers in decision making. It then proposes modifications to the detection model for future anomaly detection.

Credit scoring

Limited access to financial services in emerging countries means that some people aren’t able to generate a financial diary to produce a credit score. This is problematic for a lender needing to rate an individual’s loan repayment capacity. Big data supports credit scoring technology for mobile financial services through in-depth analysis of a subscriber’s records. Here, credit scoring is employed in two ways.

  1. A subscriber wants to receive a loan. Once approached, the agent uses transaction data to decide whether to accept or decline the request.
  2. A service provider wants to offer a credit lending service to a broad section of society. The population’s data is scanned, and categorised according to a given credit score used to evaluate the viability of offering this service to certain categories.

For example, a local farmer needs to invest in crop fertiliser to increase his income, but has insufficient funds to make the purchase. The service provider identifies this common problem as an opportunity to provide a mobile loan service tied to the provision of a product. Before targeting farmers for a new campaign, the service provider uses credit scoring analytics extracted from several sources to determine lending eligibility.

Firstly, the service provider looks at their own data for indicators of trustworthiness, starting with a subscriber’s mobile money transactions and electronic recharge records as these may demonstrate behavioural similarities to a bank account. A responsible borrower may keep their phone topped up to a minimum threshold so they have credit in case of emergency. They may also search information previously provided to comply with customer due diligence. Know Your Customer (KYC) details a subscriber’s age range, noteworthy as those between 30-50 years old are considered mature and healthy enough for responsible lending. When this information is not available, the service provider can obtain additional data from third parties such as financial institutions to complete a thorough assessment.

About eServGlobal

eServGlobal offers mobile money solutions which put feature-rich services at the fingertips of users worldwide, covering the full spectrum of mobile financial services, consulting, mobile wallet, recharge, promotions and agent management. In addition, eServGlobal’s Apeiron tool facilitates data analytics and machine learning for business and liquidity management, including fraud management and credit scoring. For more information please go to eservglobal.com to organise a meeting at Africa Com in hall 4, stand 4G.

If you are interested in the opportunities for big data in Africa why not attend AfricaCom 2016? AfricaCom has a dedicated big data stream looking at data analytics, how data can spur better customer insights and financial inclusion, as well as how data can continue to build Africa's digital future. Find out what's on the agenda here.

Africa's biggest tech and telco event is taking place between the 14th - 18th November at the Cape Town ICC, find out more here.

You can sign up for a free visitor pass to the event here.

You can book your silver, gold and platinum AfricaCom tickets to all sessions here.

Be part of the African tech and telco conversation, here:

21 Oct 2016

The AFEST | AfricaCom News - Episode 3

In this latest episode of AfricaCom TV, we take a look at the AfricaCom's newest feature - The AFEST.

The AFEST is a night celebrating African tech and innovation, an unmissable live music event at one of South Africa's most spectacular beach-side venues.

On the bill is a selection of world-renowned, chart topping musicians - all hailing from the African continent.

Find out more about the AFEST here.

The all-African line-up includes:
Mi Casa
Black Coffee

Date: 15 November 2016
Time: 7:30pm - Midnight
Place: Shimmy Beach Club, V&A Waterfront, Cape Town

Free entrance:
If you are one of the lucky people below, you gain automatic access to the AFEST: 
  • Silver, gold or platinum delegates to AfricaCom
  • AfricaCom VIPs
  • AfricaCom Speakers
  • AfricaCom sponsors and exhibitors with delegate passes

Special offer for delegates and exhibition staff:
Tickets are also available for purchase by visitors with a free pass, as well as all exhibition stand staff - the first 100 people to grab tickets to the AFEST get theirs for £30.

To register for your pass, click here.
You can purchase your AFEST tickets here.

The AFEST is part of this year's AfricaCom, the biggest tech and telco event on the continent. AfricaCom is taking place between the 14-18 November at the Cape Town ICC. Find out more about the event here.

Be part of the African tech and telco conversation, here:

"Smart cities in Africa are inevitable" - Full interview with Nigel Bruin, Huawei

By Amy Turner - KNect354 Staff Writer 

Here it is, the full interview with Huawei's Principal Consultant, Nigel Bruin.

We held an exclusive interview with Nigel following his Industry Keynote Address at this year's East Africa Com in Nairobi, Kenya.

We spoke about how National Broadband Networks are going to be the major linchpin for connectivity development on the African continent, including access to Cloud and IoT services.

Nigel discussed some international examples of National Broadband Network roll outs, in the continents of Asia and Australasia and how they have been successful in delivering ultra-fast broadband at affordable prices.

We went on to discuss whether a fully-realised, African smart city would arise in the near future. Nigel explained that this is almost a certainty as all cities will naturally become smart as they all face very similar challenges with regards to traffic congestion, as well as security and environmental concerns.

If you are interested in how tech and telco is enabling socioeconomic development and and innovation on the African continent, from the major players like Huawei, why not attend AfricaCom 2016?

Africa's biggest tech and telco event is taking place between the 14th - 18th November at the Cape Town ICC, find out more here.

You can sign up for a free visitor pass to the event here.

You can book your silver, gold and platinum AfricaCom tickets to all sessions here.

Be part of the African tech and telco conversation, here:

19 Oct 2016

Mission Afrique - SES Industry Days

Business leaders and professionals from all over Africa and the globe are headed to Cape Town for a week-long festival of tech and telco events, as part of this year's AfricaCom.

World-leading satellite operator and AfricaCom 2016 gold sponsors SES, will be holding their hugely popular, one-of-a-kind Africa Industry Day on Monday 14th November.

 "Get inspired to take your business to new levels"

The SES Industry Days is an exciting opportunity to network with other leaders in the industry, get inspired to take your business to new levels and also build your business. This SES event provides the industry with a neutral platform to discuss and debate the latest in technological and communication development.

Last year’s event, brought together many business leaders from various spheres, and sparked many interesting and thought provoking conversations in the form of panel discussions and speaker sessions, which were both informative and entertaining.

"Be the first to experience the latest trends and innovations"

This year, SES will showcase all the latest in satellite technology, so you’ll be the first to experience the latest trends and innovations. This year, SES welcomes two thought-leaders in their respective fields as key speakers: Michael Jordaan and Chris Wilson. 

Banking stalwart Michael Jordaan now heads up a private investment company, Montegray Capital, and gives strategic insights to other businesses while also holding the position of director at the Johannesburg Stock Exchange. 

Craig Wilson is the editor of Stuff Magazine and all-round tech-spert. Both will be giving thought-provoking talks to inspire and enlighten you. 

SES looks forward to welcoming you to this one-of-a-kind event. 

SES Industry Day Africa:
Date: 14 November 2016
Time: 08:30 - 17:00
Venue: The Lookout, V& A Waterfront, Cape Town

Register for the SES Industry Day Africa here.

SES are gold sponsors and exhibitors at this year's AfricaCom - the continent's largest tech and telco event. AfricaCom will be taking place between the 14-18th November at the Cape Town ICC and will be host three key speakers from SES. These satellite and telco thought-leaders will be taking part in the following sessions:

17 Oct 2016

"There's going to be a digital revolution in the coming years" - Nigel Bruin, Huawei

By Amy Turner - KNect354 Staff Writer 

Coming soon to the Com Series blog and YouTube channel...

Here is a sneak preview of our interview with Huawei's Principal Consultant, Nigel Bruin.

We sat down with Nigel following his Industry Keynote Address at East Africa Com to discuss the socioeconomic benefits of the National Broadband Network in the region, as well as how this will enable Cloud and IoT industries to thrive on the continent.

We also spoke about the key challenges which are still to be overcome on the continent, as well as Huawei's key priorities in Africa in the coming years.

If you are interested in how tech and telco is enabling socioeconomic development and social empowerment on the African continent, from the major players like Huawei, why not attend AfricaCom 2016?

Africa's biggest tech and telco event is taking place between the 14th - 18th November at the Cape Town ICC, find out more here.

You can book your AfricaCom tickets here.

Be part of the African tech and telco conversation, here:

12 Oct 2016

An AFEST shout-out from Freshlyground

By Amy Turner - KNect354 Staff Writer

Freshlyground frontwoman Zolani Mahola has a message for all attendees of this year's AfricaCom and the AFEST.

Brand new for 2016, the AFEST will be taking place at Shimmy Beach Club, V&A Waterfront, Cape Town as part of this year’s AfricaCom on the 15 November.

The all-African lineup for this year's event includes:

The AFEST is an unmissable African live music event at one of Cape Town's most spectacular beach-side venues - a night which is set to spread AfricaCom vibes across the city.

To grab your tickets to the AFEST click here.

All silver, gold and platinum tickets to this year's AfricaCom includes entrance to the AFEST.

Africa's biggest tech and telco event is taking place between the 14th - 18th November at the Cape Town ICC, find out more here.

You can book your AfricaCom tickets here.

Be part of the African tech and telco conversation, here:

11 Oct 2016

Infographic: The Digital Entertainment Explosion in Sub-Saharan Africa

Last week, we published an in-depth piece on the digital entertainment boom gaining momentum on the continent. Africa has over 300 million internet users and counting and with the decreasing price of smartphones, the increase in data consumption has been immense - enter the digital entertainment explosion.

From gaming and social media to music and video streaming, we take a look at the digital entertainment boom in Africa and the local content and unique applications that have arisen as a result:

Digital Entertainment at AfricaCom 2016:

This year's AfricaCom, taking place between the 14-18 November 2016, will be showcasing all the latest trends in African digital entertainment. The Digital Entertainment stream on the 15 November will comprise of Key Note Panels and discussions around the explosion in digital entertainment services, looking at the sectors of gaming, music and video streaming.

Some of the key speakers include MTN's Vikash Barath, PWC's Vicki Myburgh, Deezer's Gillian Ezra, Tuluntulu's Pierre van der Hoven and Nichestreem's Catherine Luckhoff.

To find out more about the largest tech and telco event in Africa and book you tickets, click here.

Be part of the African tech and telco conversation, here:

10 Oct 2016

The power of OSS/BSS integration

By Richard Pappalardo - VP Business Development, Enghouse Networks

The rapid growth of today’s data-centric mobile market is driving forward-looking operators to improve the user experience of their customers by taking a more integrated approach to their Operational Support Systems and Business Support Systems platforms. 

As the telecoms industry evolves, operators have begun to pursue integrated OSS/BSS solutions. These provide them with a real-time understanding and end-to-end visibility of their networks and associated services, enabling them to optimise networks and rapidly deliver new services, while enhancing service quality and customer experience. 

However, operators are not just in business to provide services to their customers, they also need to increase profitability and effectively manage revenue streams. Operators’ billing and charging functions need to ensure that customers pay correctly for the various services they have used in different locations, at different times, and with optimised interconnect agreements.

The more efficiently network and customer data can be represented in real-time, the more effective network planning and operations processes become. A service provider using an integrated OSS/BSS will have access to real time network events, combined with an accurate network model for highly automated service quality management and network resource planning. This not only improves profitability, but it also plays a large part in keeping customers satisfied. 

Transformation through OSS/BSS automation

The sheer scale and complexity of today’s multi-vendor networks and their service offerings is astonishing. The handling and processing of data that needs to be analysed and converted into business intelligence that improves customer satisfaction levels and business performance crosses the expanse of both OSS and BSS for operators. 

Five to ten years ago, network operations and engineering centers were manned by a large number of staff who used extensive manual processes to undertake network management and planning functions. Today, advanced software applications have enabled the automation of many of these processes and substantially reduced the number of staff required. 

This has resulted in organisational change, so staff now focus on the services delivered by the network. Network operations centres have evolved into service operations centres and this transformation has enabled service providers to become much more customer-centric, with free flow of service and customer information throughout the relevant departments of their companies. 

For example, customer care agents are now able to be fully informed of service issues, anticipate customer enquiries before they happen, and be armed with the right answers to ensure customer satisfaction and reduction in the propensity of customers to churn. In fact, the merger of real-time OSS/BSS intelligence enables network operators to be much more proactive in their customer care initiatives. 

Choosing a well-planned OSS-to-BSS integration strategy is worth serious consideration. Contemporary architectures can include: 

  • Network discovery by fault management systems
  • Delivery of discovered elements and links into an asset/inventory management system
  • Holding customer and service information from the customer relationship management (CRM) system
  • Network planning tools that are tightly integrated with the inventory database, 
  • GIS system holding service coverage
  • Usage and event information
  • Correlation tools that overlay these systems and pinpoint real time service and customer impacts
  • Interfaces to billing systems to issue credits for SLA violations
  • Dashboards to display KPIs that let executives know how well the business is running

Expected benefits to be realized by service providers include:

  • Reduced costs to operate and maintain the network
  • Improved service quality & customer experience
  • Increased profitability

About Enghouse Networks:

Enghouse Networks integrated OSS/BSS solutions enable a complete and highly automated approach for service providers, helping them to meet today’s business challenges through the implementation of agile and tailored solutions that focus on a customer-centric and inherently profitable approach to building their business.

With analysts predicting that we will see over 50 billion connected devices around the world by 2020, now is the perfect time for operators to seek out solutions that will help them build their business using a customer centric model.

The Enghouse Networks OSS/BSS portfolio has been delivering these improved services to operators for more than 20 years.

Download the OSS/BSS integration whitepaper here.

Enghouse Networks is exhibiting at this year's AfricaCom between 15 - 17 November at the Cape Town International Convention Centre. You can visit them at stand P14B.

AfricaCom is Africa's biggest tech and telco event with a week long festival of events running from the 14th - 18th November, with the conference and exhibition taking place between the 15th - 17th November at the Cape Town ICC. Book your tickets here.

About the author:

Richard has a breadth of knowledge and deep understanding of OSS/BSS systems. During his time with NetBoss (now an Enghouse Networks company) he was involved with the successful deployment of hundreds of OSS/BSS projects in over 70 countries, using the most experienced engineering teams in the industry.