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Business Case for Digital Financial Services (DFS)

Institution Name, Country Name

[Date]

[Name of Authors/Institution]

Insert picture here

TABLE OF CONTENTSEXECUTIVE SUMMARY....................................................................................................................................1

INSTITUTIONAL OVERVIEW..........................................................................................................................1

VALUE PROPOSITION AND KEY CUSTOMER SEGMENTS....................................................................2

PRODUCT AND PRICING........................................................................................................................................3Product mix.....................................................................................................................................................3Pricing.............................................................................................................................................................3Product roadmap.............................................................................................................................................3

AGENT NETWORK MANAGEMENT.........................................................................................................................4Agent network structure..................................................................................................................................4Agent value proposition...................................................................................................................................4Agent Selection and activation........................................................................................................................4Agent Training.................................................................................................................................................4Agent Monitoring............................................................................................................................................4Liquidity management.....................................................................................................................................4Formal feedback from agents..........................................................................................................................4

FRONT-END TECHNOLOGY....................................................................................................................................5BRANDING, MARKETING AND EDUCATION..........................................................................................................6

Branding strategy............................................................................................................................................6Key Marketing and Promotion Activities........................................................................................................6Education.........................................................................................................................................................6

CUSTOMER SERVICE.............................................................................................................................................7Customer Service through Agents...................................................................................................................7Customer Service through Call Centre...........................................................................................................7Feedback from customers................................................................................................................................7

PARTNERSHIPS AND TECHNOLOGY...........................................................................................................8

PARTNER OVERVIEW............................................................................................................................................8Partner 1..........................................................................................................................................................8Partner 2..........................................................................................................................................................8Partner 3..........................................................................................................................................................8

REGULATORY ENGAGEMENT AND COMPLIANCE................................................................................9

SAFEGUARD OF FUNDS.........................................................................................................................................9E-MONEY ISSUANCE..............................................................................................................................................9KNOW YOUR CUSTOMER AND ANTI MONEY LAUNDERING...................................................................................9CUSTOMER PROTECTION.......................................................................................................................................9REPORTING TO CENTRAL BANK...........................................................................................................................9

MARKET ENTRY STRATEGY........................................................................................................................10

ORGANIZATION AND TEAM.........................................................................................................................11

HIGH LEVEL FINANCIAL ANALYSIS.........................................................................................................12

RISK MANAGEMENT.......................................................................................................................................13

NEXT STEPS.......................................................................................................................................................14

ANNEXES.............................................................................................................................................................15

ANNEX 1: [TITLE]...............................................................................................................................................15ANNEX 2: [TITLE]...............................................................................................................................................15

Business Case for MFS/BB Services, Institution Name, Country NameName of Author

ACRONYMS

API Application Programme InterfacesARPU Average Revenue per UserATL Above the Line (marketing)ATM Automated Teller MachineB2P Business-to-Person (payments)BB Branchless BankingBTL Below the line (marketing)FSP Financial Service ProviderG2P Government-to-Person (payments)KYC Know Your CustomerMFI Microfinance InstitutionMFS Mobile Financial ServicesMM4P Mobile Money for the PoorMNO Mobile Network OperatorP2P Person-to-Person (transfer)POS Electronic Funds Transfer/Point of Sale DevicePSP Payment Service ProviderUNCDF UN Capital Development Fund


EXECUTIVE SUMMARYProvide details on why is the institution ready and capable to provide BB / MFS services. What are their key strengths in the area of governance, management and operations? And, what are the key objectives of this initiative? This could be followed by specific details using the following business model / plan lay out.

Business Case for Digital Financial Services [Institution Name]

CustomerSegments

Revenue StreamsCost Structure

Channels

CustomerRelationships

Value Proposition

Key Assets

Key ActivitiesKey Partners

INSTITUTIONAL OVERVIEW

In this section, place the institution in context, particularly as it relates to branchless banking and mobile financial services.

Point out key issues and items of particular interest such as their market share, key market segments that they currently cater to.

Word on overall institutional soundness with regard to reputation, financial condition and governance that might have an overall impact on the services.

[Section should be less than 1 page in length]


Key Institutional DataTotal Customers Savings / Pre-Paid Credit / Post-PaidTotal PortfolioSavings / Pre-Paid Savings / Pre-PaidMarket ShareTotal No. of Branches / AgentsTotal No. of ATMs(Only for Bank)Total No. of PoS (Only for Bank)Total No. of Service Units(Only for Banks)Total No. of Distributors / Super Agents (For MNOs)ARPU (If available)

Sources:

VALUE PROPOSITION AND KEY CUSTOMER SEGMENTS

In this section, provide information about the key customer segments a maximum of three. Be as specific as you can in terms of providing customer segments with criteria such as urban / rural, migrants / residents, agri / business / salaried and/or a combination of these. Provide some key characteristics of each segment.

Further to that, provide value proposition for each segment including for agents and other partners / stakeholders.


Product and pricing

Focus on product, pricing and other aspects give a competitive edge and add substantial value for the clients. Provide more details about any market research conducted and provide the logic for deciding / choosing product mix.

Product mix

Product portfolio and added value for customers. Key partners involved to develop launch these products

Pricing

Value proposition for customers/ partners

Product roadmap

Propose product implementation road map

[Section should be no more than 2 pages in length]


Agent network management

Describe the agent network management strategy specifying the following aspects

Agent network structure

Organization of the agent network with key partners involved (agent, super agent, agent network managers, MFS provider agent team)

Agent value proposition

Benefits for agent

Agent Selection and activation

Criteria, high-level process

Agent Training

Training frequency, duration, location, staff, training material to agents, etc.

Agent Monitoring

Frequency, process, team, monitoring reports etc.

Liquidity management

Rules, processes and organization in place to insure right level of liquidity at all agent locations.

Feedback from agents

Feedback process, frequency, team, etc.



Front-end technology

Describe the technology used by customers, agents and partners. Include a note on soundness, security, reputation, service, etc.


Branding, Marketing and Education

Provide a high level overview about the branding and marketing strategy keeping the pilot phase and expansion strategy in mind.

Branding strategy

Provide information about the branding use for these new services and for agents.

Key Marketing and Promotion Activities

Provide specific details on the key above the line activities and below the line activities. Support with details around marketing messages and there focus, outlined across customer and agents.

Education

Share about education required to customers, agents and partners to be able to use and promote the services.



Customer serviceDescribe the customer service plan and strategy – overall and specific for each customer segment

Customer Service through Agents

Customer Service through Call Centre

Provide details about the call centre strategy (in house, outsourced), training details, how will the issues be recorded, escalated and addressed and by whom / team involved...

Feedback from customers

Feedback process, frequency, team, etc.



PARTNERSHIPS AND TECHNOLOGY

Provide details about each partner, their key strengths and what they bring to the partnership. Include details about MNO / Bank, technology, distribution and any other partners / parties involved

Partner overview

Partner 1

Partner 2

Partner 3



REGULATORY ENGAGEMENT AND COMPLIANCE

Share rules and processes that your institution will implement to make sure you carefully monitor your services and limits risks. This section will be included in the application request to the Central Bank.

Safeguard of fundsTrust account and relationship with financial institutions if needed.

e-money issuanceCreate and delete e-money

Know your customer and anti-money launderingKYC requirementAccount and transaction limitsControl to check transactions in the systemEtc.

Customer protectionCustomer receipt or smsDisplay of agent numberDisplay of tariffsEtc.

Reporting to Central BankProposed or mandatory information provided to the Central Bank to follow-up the development of your services.


NOTE: Detailed information regarding regulations that impact branchless banking and mobile financial services could be included in the Annex. This could include name of regulations, dates issued, and regulatory agency responsible for the regulation.


MARKET ENTRY STRATEGY

Provide a year wise, product wise, area wise implementation road map and planning for the institution, including a pilot phase.



ORGANIZATION AND TEAM

Provide details about the team that will be involved during the project and for the launch of the activities. Explain the expected growth of the team after the pilot and according to the development of the services. Link this team with the existing organization. Comment on set up, if it is conducive to delivering BB or MFSProvide details around senior management commitment, while providing linkage to the existing organizational structure. If possible provide details on allocated staff, budget, understanding of time frame with regard to BB and MFS deployment and its success. Provide a word on management capacity, experience, understanding with regard to BB and MFS.


HIGH LEVEL FINANCIAL ANALYSIS

Focus on the value proposition, key costs and potential revenue lines to provide a very high level overview about the cost-benefit analysis. Provide estimation of the cash flow required to launch and develop the business.



RISK MANAGEMENT

Describe key risks involved and mitigation strategies that the institution wishes to adopt. Think about KYC / AML, Agent Fraud, Staff Fraud, Technology Issues, Cash Management, Liquidity Management, Customer Service etc. and provide a brief on the risk management strategy that the institution plans to adopt



NEXT STEPS

Describe the main activates to be undertaken by the institution with people responsible and timeline. Include specific activities to be done to finalise partnerships, technology, marketing, agent management, risk management, product design, concept testing, processes, trainings - both staff and agents



ANNEXES

Annex 1: [Title]

Annex 2: [Title]


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