Scenarios for Branchless Banking in 2020

By Mark Pickens, David Porteous and Sarah Rotman

The growing use of branchless banking channels over the coming years is inevitable in most countries. But it’s far less certain whether large numbers of the unbanked poor will use these alternative channels for financial services beyond payments, such as savings and credit. CGAP and DFID undertook a six-month scenario-building project in which almost 200 experts from more than 30 countries helped answer the question “How can government and private sector most affect the uptake and usage of branchless banking among the unserved majority by 2020?”

We identified four forces most likely to shape the answers:

  1. The changing demographics of users
  2. The actions of increasingly activist governments
  3. Rising crime
  4. The spread of Internet access via data-enabled phones even in poor countries and communities

We also isolated four key uncertainties with important effects but uncertain outcomes:

  • Which types of entities will be allowed to provide branchless financial services?
  • Will providers craft viable business models for services beyond payments?
  • How will competition play out?
  • How will consumer, business, and regulator confidence be affected by the inevitable failures that will happen?

We created four scenarios that interweave these forces and uncertainties in different settings to produce very different trajectories over the next 10 years.

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