LIVE FROM MOBILE 360 LATIN AMERICA: “A real, deep understanding” of customer needs is crucial for the success of mobile money services, rather than attempting to use a template to deploy the same solutions across different markets, Greg Reeve, COO Mobile Financial Services at Millicom, advised.
“The most important lesson for Tigo in Latin America has been that we have not taken the African model and said ‘have the same model’. What we’ve said is that we need to understand the situation of our customers in each one of our markets, so we can deliver solutions for their pain points, the things that make it difficult for them, so that when we deliver our services they are grabbing them out of our hands,” he said.
While customers are obviously key to the success of a proposition, Reeve also said that it requires a mindset-shift from that commonly found among operators.
“One of the key messages that I had to tell boards was, first things first, this is a financial product that happens to run on mobile, not a mobile product that happens to be financial. It really does need a different set of thinking – if you come at this as a strictly mobile product, you probably won’t get very far,” he said.
In line with this, operators need to get used to the fact that the service they are delivering will be held to different – more stringent – standards. “If I’m making a call and it drops, I might phone back the person and say ‘it’s a bad network, never mind, let’s carry on.’ But if I lose your money, you will tell every single friend never to use my service ever again,” Reeve said.
And due to the nature of the market, operators cannot go it alone. “We do a lot of this in partnership with banks. We have an expression we use in our office, which is ‘what we do is complete, not compete’. We say that together we can do more. There are some services which we can’t offer, for example we don’t offer loans, that’s a banking service. But what we can do is work together so that we can access customers which might be traditionally hard for banks to reach,” he observed.
But despite the challenges, there are rewards for operators to reap. “If you look at mobile money with a very blinkered, P&L approach, you might say to yourself ‘when am I going to make money on this service?’ If you look at it wider, and particularly as a telco, you have the opportunity to see other savings,” the executive observed.
In addition to direct revenue benefits, he mooted savings on airtime sales commissions where prepaid recharge is integrated into a service, a substantial reduction in churn among mobile money service users, and the fact that mobile financial service users often have a more positive attitude to their operators.
Speaking here in Rio this week, Reeve said that for Millicom, last year saw mobile money services growing faster in Latin America than Africa. “For too long, people have thought that mobile money is about Africa, and actually it’s not,” he said.
Millicom has more than 1 million active mobile money subscribers in Paraguay and Honduras, and is also active in Guatemala, Bolivia and El Salvador (where Tigo Money has a 22 per cent population penetration).
“Paraguay is probably the most successful market in Latin America. But as I tell some of the other guys in Central America, they are catching up very fast. A bit of competition always helps,” Reeve said.