Redefining the boundaries of traditional financial services
With more than a 14-year track record of ensuring service providers’ and financial institutions’ mobile money success and embracing their biggest challenges, Amdocs has identified mobile financial services as a growth engine for the company. “We have been focusing on expanding the portfolio of our Mobile Financial Services (MFS) solution to deliver software systems and services to telcos and financial institutions who are interested in providing financial inclusion solutions to their consumer base,” says Sharath Dorbala, Head of Sales, Marketing and Product- Amdocs (Mobile Financial Services). In conversation with Ankush Kumar.
Edited Excerpts:
Give us an overview of Amdocs presence in India? What is the company’s expansion plan in this geography?
Amdocs is the leading provider of customer experience solutions including BSS/OSS systems, managed services, serving telecom service providers worldwide. We have about 24,000 people with a strong engineering delivery team and also have a strong presence in India. Over the last few years, we have been focused on our business on helping solving ”experience” based problems from two angles. One is how do we help our customers, which is the telecom customers in establishing new relationships with their consumer base, that is long-standing and much more sticky. And at the same time from a consumer angle, we solve this problem of financial inclusion especially in emerging markets.
If you look at India, we have a large population that do not have access to banking services – a combination of under-banked and unbanked. To address such markets, we acquired a company called Utiba in 2014, and since then we have been focusing on expanding the portfolio of our Mobile Financial Services (MFS) solution to deliver software systems and services to telcos and financial institutions who are interested in providing financial inclusion solutions to their consumer base. We identified mobile financial services as a growth engine for the company and the acquisition of Utiba was the best way to establish our capabilities and footprint in this high-growth market. Whoever is interested in having a payment banks like initiative, we have a platform to serve them. India is an important market for us. It is brimming with opportunity, given the focus our Indian government has on financial inclusion through the Jan-Dhan Yojana initiative. The fact that they want to improve financial inclusion and give bank accounts to everybody will not only make them financially inclusive, but at some level even economically inclusive.
Tell us about your Globe GCash solution that you have launched in 2004, how is the solution doing?
The Philippines operator Globe started GCash in 2004 in their country. The country faces a similar problem like that in India of a huge unbanked and under-banked population. Globe is interested in solving the problem of financial inclusion in the Philippines. So they’ve been using a platform, that helps Globe run their agent distribution network. They can do cash in, cash out operations, bill payments and maintain simple checking accounts or current accounts. They use Amdocs MFS solution to provide all these very basic banking services, which they offer to their consumers. In India, what we are doing is that we are focusing on telecom operators, financial institutions, non-financial institutions, payment banks,etc. and firmly believes that these models will work. Once payments bank initiatives take off, providers in India who are going to be payments bank will operate like GCash or add even advanced services. And to do this, they can use Amdocs MFS platform to serve their consumers.
With so many mobile wallets being launched in the recent past, what is your go-to-market strategy for the Indian market?
It’s great that there are a lot of mobile wallets coming up in the Indian market as everybody has caught on to the bandwagon. But these wallets are not going to be successful if there is not a good ecosystem. It’s a two-sided market. We need consumer adoption where we need somebody who can reach out to the masses in a rapid way, and we need an ecosystem of agents and distribution, point of sale, retailers, bill payments, direct benefits transfer (subsidy transfer, for example) capability, and salary disbursement capabilities. Though, there are a number of wallets that have already been launched and are being launched, it is within their little ecosystem. More than 80% of the people in India are still under-banked, unbanked. So it also depends upon which target population that they want to proactively target. And if you really want to address the problem of financial inclusion, you just don’t stop with the urban population. You need to go pan-India including both the urban and rural population, where there is the maximum number of under-banked and unbanked.
From a strategy perspective, we are very interested in working with payment banks, especially given that the payment bank licenses have been awarded to a number of the telecom service providers (SP) in India. There is a good reason why SPs have been awarded the licenses; they have a faster reach to the distribution because they have an existing consumer base. Everybody has over 100 million subscribers on their network already and they have an existing distribution network, which also works as the agent network, this is one of the most important pieces that are needed to do branchless banking. These distribution agents can qualify themselves and become the payment bank agents. Amdocs can work seamlessly with SPs, because we understand and know how this market works with extensive experience in developing markets, and we have a MFS (Mobile Financial Services) platform that can serve their needs.
What are the major obstacle facing the mobile wallet market in India?
In my view interoperability is extremely important for mobile wallets to work. For example, if you are an Airtel subscriber, and I’m an Idea subscriber. Assuming, there was a situation where I cannot send you an SMS, because you are an Airtel subscriber, how would the world be? It would be very different. Networks must talk to each other. Similarly, the wallets must talk to each other. Just because I have a certain wallet doesn’t mean that I cannot give you money in a peer-to-peer use case. So we must have these wallets talking to each other. That’s when the acceleration of adoption will go through a hyper growth phase. Thus interoperability is extremely important for this market to boom. Though there are a lot of wallets but the winner in this market is going to be somebody who works with the agility of a telecom but the governance of bank, understands distribution network, builds an ecosystem and focuses on interoperability. This is the reason we feel telecoms who have won the payment banks licenses are very well-suited to win in this market.
Tell us more about your top up card business? How is it doing in India as now customers are able to top up online?
For us top ups can happen in any way. What we are more interested in is the top up happening irrespective of the channels. It can either happen through a dealer, a self top-up through a wallet or through online payments. But when it hits the system behind-the-scenes to actually perform the top ups, we play a role even there. Our concern is not so much about the shift in the channel. What we are really interested in is how we use this consumer behavior to actually drive banking services. That’s why the payments bank plays a beautiful role, because now the electronic top up model was only a means to the end because now the consumers are aware. The electronic top up has improved awareness, and it has helped to build the distribution network in the industry but it doesn’t get the credit that it deserves. And now it is basically unlocking that potential for providing banking services.
