Leveraging digital to unlock the base of the pyramid market in Africa has been saved
Leveraging digital to unlock the base of the pyramid market in Africa
Waves of digital innovation in financial services
The level of formal banking and insurance penetration across Africa remains low due to the fact that consumer spending power for the majority of the population is low and unsteady. This has been seen as a hindrance to providing products and services through traditional distribution models, even though this market represents the majority of spending power in Africa. This represents an opportunity – particularly for products that are tailored to the needs of the low-income segment– that remains largely untapped.
Our research shows that providing financial products and services to low income consumers require models that focus on:
New market entrants have started to disrupt traditional business models by introducing digital technology at various parts of the value chain. They leverage mobile technology to bring down costs, achieve reach and increase trust. This is a game changer for the financial services industry and is helping to unlock Africa’s mass market.
This report looks at how these new entrants, through partnerships, mobile, data analytics and cloud technology, have made financial products and services available for previously excluded markets.
Key takeouts from this report
A number of common factors have contributed to the success of unlocking the base of the pyramid market in Africa, by leveraging digital innovations. These include:
- Partnerships: By developing partnerships companies can tap into the partners’ existing customer base and quickly and efficiently increase reach, trust, access, customer insights.
- Mobile: Mobile technology contributes to the simplification of the user interface and is device and network agnostic. Consumers are familiar with basic mobile technology, and hence the use of it can increase trust and open new avenues of customer engagement.
- Data analytics: Data analytics allows companies to create a better picture of the customer and to tailor products to the customers’ needs.
- Cloud computing: Companies that embrace digital technology are able to scale their operations quickly and efficiently by leveraging cloud technology. Cloud technology also allows companies to replicate their business models in new markets at low cost.
What our experts say
“Leveraging digital technology is a game changer for the financial services industry and is helping to unlock Africa’s mass market, as it reduces costs, improves reach and accessibility.”
How can Deloitte help
Through an extensive African network, Deloitte offers services across all industries, with unique capabilities and services to partner with you to help your organization leverage digital innovation to unlock new markets.
We can help you in the following ways:
- Develop your digital strategy
- Help you understand your digital customer
- Tailor your products and services through advanced analytics to meet the needs of the consumer