Cost vs. Tech

 As part of NextBillion Financial Innovation‘s launch, we invited a number of top innovators and leaders to contribute their views on financial innovation – what’s driving it, where momentum is heading, and what obstacles remain. Today, Anurag Agrawal, CEO of Intellecap, lays out the core isssues involved in bringing low-cost financial products to customers at the base of the pyramid.

Over the last two decades, with the widespread adoption of technology in the financial services domain, we have seen a fair amount of innovation in the way different financial products and services are delivered. During the same period, we have also seen rising income disparities across the world and therefore a greater thrust towards more inclusive growth, particularly in the developing world where there still exist large sections of unbanked populations that do not have access to basic financial services.

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Innovation and the global financial crisis – systemic consequences of incompetence

The article applies the concept of incompetence by Polanyi (1962) and the concept of unintended consequences by Merton (1936) to explore the development of a radical financial innovation, securitisation. This innovation changed the context for all actors in the financial industry to such a degree that even the highest regarded experts repeatedly made prediction errors. Read more

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Open up the Space: Leveraging Mobile Tech for Financial Inclusion

An M-Pesa Agent in Kenya. (Credit: Emilsjoblom, Flickr Creative Commons)The internet did not grow by having established old media companies jumping at the fantastic new opportunities offered by the new medium. For a long time they resisted giving their customers the convenience of immediate online access to their products; they resisted letting their customers tinker with the format (the newspaper, the CD, the TV series) when all they wanted was a component of it (an article, a song, a sketch); they were loathe to trade off lower margins for higher volumes. Read more

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