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The future of financial inclusion in this country and across the world will depend squarely on how efficiently and effectively the financial industry collects data from the millions of people who need financial services.
In the last year, we at PostBank have had the honour of supporting the government’s disbursement of money for the Parish Development Model (PDM). We have disbursed about UGX 600 billion via our Wendi mobile wallet platform and are on track to disburse one trillion shillings by the end of the financial year.
That is all very well, and these funds have assisted thousands of families and enterprises around the country, but even more important are the lessons we have gained from the experience. These have brought new revelations and concretised our and the industry’s thinking about the future of financial inclusion and how Artificial Intelligence (AI) and machine learning will be key in this endeavour going forward.
Financial inclusion is important, even critical, for any country, especially a developing one like our own, to mobilise its resources for growth and development.
At the heart of the government’s PDM is a plan to improve the livelihoods of about 3.5 million households or 17.5 million Ugandans, using the parish as a unit for planning, development, and implementation. The widespread adoption of mobile phones in the country—about 33 million mobile phone users—means technology can make this happen effectively and efficiently.
Partly, in response to this challenge we created the Wendi mobile wallet, meant to help clients save, borrow and consume all other services the bank provides. More importantly, Wendi is serving as a data collection tool that will prove invaluable to the bank and the economy as a whole.
Contrary to initial expectations, we were pleasantly surprised to discover that the adoption of technology is very high in the rural populations that PDM targets. Since we rolled out in 2023, we have logged in a million new accounts on the Wendi platform, which may not seem like much until you realise that the bank has barely 700,000 clients.
Of course, it helps that our platform works both with smartphones and with the USSD code we use to send text messages, as barely a third of all mobile phone users have smartphones. This situation will change quite quickly as the cost of smartphones falls, making more people able to afford them.
These new technology adopters are providing a lot of data that is moving planning decisions away from opinion and guesswork into the realm of fact. With this information, we can now have serious conversations and make more impactful decisions.
Our experience has also shown that meaningful and sustainable financial inclusion can only become a reality with the use of technology. People do not bank primarily because they have nothing or little to bank but because banking in the way we know is not convenient.
We have heard stories of village groups saving tens of millions in a hole in the ground, with ingenious ways of keeping it safe and secure from thieves. So, these people are not poor; it is just that they are not well integrated into the formal financial system, which would offer them more leverage. There are districts in this country without a bank branch, but there is no district, parish, or village without a mobile phone user.
While the human element is still necessary in banking, the bank branch of the future will serve a different role. People may come to branches for access to technology, customer service, or mere human interaction, but the more mundane tasks of opening an account, depositing, and borrowing will very well be catered for by online platforms.
With the increased access to data that online financial platforms offer, this is happening already but will accelerate in the coming years. With the integration of AI and machine learning, people’s banking experiences will be so customised that customers will have totally different experiences.
Imagine you have a smartphone and upload various apps, and your neighbour has the exact same phone and uploads apps of their choice. At the end of it all, you will have the same phone but very different experiences. That is where the financial industry is heading.
For us at PostBank, it is quite exciting to experience that not only are more and more people getting into the money economy, but also that for the first time, we will have visibility into how the rural majority consumes and, therefore, can make meaningful decisions that will positively impact their lives.
The possibilities are immense and transformational.