The Impact of Open APIs in emerging markets

Transcription

1 The Impact of Open APIs in emerging markets Lesley-Ann 8 th November API Days Berlin

2 Most people in the world have never used the internet, either directly or indirectly 2

3 It is possible to design a scalable digital service for customers that only have a feature phone 3

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5 And we ve seem some great innovation on top of mobile money rails

6 ... That are touching all kinds of vertical markets AGRICULTURE TRANSPORTATION Other applications of relevance for poorest segments HEALTH ENERGY WATER INSURANCE MICROFINANCE Broader financial services MOBILE MONEY Source: CGAP Teams 6

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8 If you want to see more of API-led innovation to date in emerging markets, last year s API Days presentation is still online.

9 But despite progress in some areas, and some success stories.. Person-to-person transfers make up almost 69% of the total value of transactions. 61% of transactions are airtime top-ups Source: GSMA, 2016 State of the Industry Report, Mobile Money, December

10 Customers are dependent on cash still Cash In makes up 80% We are seeing increases in the no. of transactions per customer, but not if we compare to the number of transactions customers are doing in cash Cash Out makes up 73% 10

11 How do we achieve higher activity rates? INTENSIVE GROWTH number of transactions per customer Desired Actual Without change, low-income customers will likely continue to favor informal solutions to address the majority of their financial challenges EXTENSIVE GROWTH number of customers 11

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13 Financial inclusion efforts at scale will be hindered, and innovation limited, until we can unlock: 1) Cost to Access (for both parties) 2) What APIs are available 3) Cost to Use 13

14 It s not ok to create an aggregation model and assume that s enough FREEMIUM, VOLUME BASED TIERS 14

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16 Why Open APIs? "Speed is market share" Adrian Cockroft VP engineering at Netflix (1) it s not about the technology (2) it s not really about payments & banking... Its about making your value proposition relevant to the end customer in his own journey, ideally with viable business models for all parties

17 First Signs of Open APIs

18 First Signs of Open APIs

19 India stack... Fascinating! 19

20 What are CGAP working on towards Open APIs in the industry?

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22 Type of Business We are supporting 5 projects Financial Services Payments Agents Low <10% Mid 10%-30% Smartphone Penetration High >50% Smartphone penetration: Indonesia 21%; Uganda 4%; South Africa 37%; Myanmar 80%; Zambia 11% Sources: million-mobile-users-smartphone-usage-80/; 22

23 BTPN How can we generate more revenue for our agent ecosystem and retain ourselves as the centre of that relationship? 23

24 Type of Business Wave Money Financial Services Payments Agents Low <10% Mid 10%-30% High >50% Smartphone Penetration How can API-centric thinking ensure we stay relevant in a competitive smartphone centric environment? 24

25 Zoona As we transform from an OTC Remittance business, how can we use Open APIs to extend the number of reasons for both customers and agents to use Zoona? And how can we leverage fintechs from elsewhere to help us help our customers learn about money management? 25

26 As we work with our partners, we are thinking about these 3 pillars: A transition towards openness starts with strategy and API as a Product thinking It continues with well-delivered technical infrastructure It will only thrive if the business is restructured to support it well 26

27 Effectiveness The first step is Step 1 on a journey Make digital more meaningful Local Integration Only External Partner APIs only, with strategically selected providers Open the Rails Enable third parties to develop solutions without presenting a business case first. Technology strategy is developed in conjunction with the business strategy APIs initially enabled are low risk and are the developers current main painpoints, but business model innovation is low Stimulate Innovation Launch APIs that have no direct monetization strategy linked to customer pay per use current strategy Watch and Learn Drive exploration of more targeted and relevant solutions Technology is a value enabler and becomes a core part of the B2B client offering Security & Scale centrally managed, managed well Focus on customer experience is embedded in BAU New business models & strategies for monetization emerge A decreased time-to-market for new APIs & business models on the API marketplace Invisible Payments (Uber/Amazon-like experience) Past Short-Term Soon Future 27

28 CGAP Digital Wheel Self Assessment Tool 28

29 Key Elements of An Open API Service There are key foundational elements that will drive Open API Success in the Future. Developers can test their solution! Ideally the error cases as well as the positives By starting on a road to providing Business Partner support in a similar manner to customer support by measuring SLAs & using tickets, standards can be maintained as volume grows. Transition as much as possible to self-service over time! To bring excitement & awareness to the puzzle, the community need to be made aware & need inspiration to innovate. Proactive real-time monitoring tools will allow quick reactions to breaches & suspicious activity as a different risk management approach at scale Without the ability to monitor proactively, it will be difficult to transform risk mindset APIs need to be built on modern standards. SLAs on Support Requests Community Engagement Sandbox Same Day/ Real-time Analytics Deliver RESTful APIs Effective Open API platform Appropriate Security, Encryption, Consent Swift Onboarding Security mechanisms need to be standardized to Open API best practices in the industry. Good Documentation Easy Settlement The biggest barriers to entry for external innovators are tricky opaque processes, that don t separate developer and account holder Developers are problem solvers if the documentation is clear and there are code samples that are ACCURATE they won t ask for much help Best practice: an online portal, alongside the community engagement activity and sign up + self service account management If you re collecting money for a small company their cashflow depends on swift access to that money. If they can t go online and call on it themselves, then swift transparent settlement is key. Remember that settlement to a customer mobile money account is an option!! And think about businesses that are multi-account holders. 29

30 Questions our partners are asking: Developer Communities do they exist in the target markets? How do we enable fintechs from outside to participate? How do we start this mindset transformation exercise? Do we have the right staff? What s an MVP team? How do we need to plan? What is the new operating model? How do we train people in the business to think this way? What APIs do we focus on? Consumer protection is important. How do we think about this? Where are the gaps in our architecture we need to consider? How do we rethink the business model? 30

31 What APIs? Key Questions for the API Product Manager to Ask What are my business goals and how can APIs help me achieve them? Which existing funded projects could benefit from APIs? How do I ensure that the APIs I introduce enable future value? What are the gaps in my industry that can be exploited through APIs? What business model could my API potentially enable or extend? Who are the disruptors in my industry and how are they using APIs?

32 The relationship with partners doesn t have to be static, it could be a way to find future investments Buy/ License Sandbox - Free Live: 50k Free Developer Pays Invest Free/ Subsidised Revenue Share/ Negotiated Bulk Rate 32

33 Thankyou Lesley-Ann 8 th November API Days Berlin