Cash displacement consulting in Sub-Saharan Africa

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Background

Incline was hired for its consulting and analytical expertise to advise two of Kenya’s market-leading banks on how to drive revenue through cash displacement.

Previous practice

Kenya’s population is well positioned in financial inclusion, with 9 out of 10 citizens being financially included. This is mainly due to Safaricom’s M-Pesa (mobile money) platform which has 93% of Kenya’s population registered with its services*. In contrast, only 75% of Kenyan’s have a bank account.  However, despite this financial inclusion Kenya is still has heavy cash usage with only 60% of M-Pesa users using their accounts.

Incline Solution

Engaging with M-Pesa formed an integral component of our strategy to integrate consumers onto the bank’s system; displacing both cash, and M-Pesa usage.

The analytical solution detailed across an extensive set of documents described a 4-stage approach to cash displacement.

  1. Segmentation: Identification of patterns across constructed behaviour variables, grouping based on similarity using regression outcome
  2. Targeting: Spend displacement forecasting made on the assumption of similarity within segments
  3. Campaigns: Construct key messaging, and optimise channels by segment
  4. Execution: Files sent to bank with prioritised strategies, and associated individuals, recommended messaging, and expected displacement value

Benefit to client

  • Segmentation of customer base into 8 disjoint segments by behaviour
  • Identification and benefit-analysis of 9 strategies, rank-ordered in priority per individual customer by maximising joint M-Pesa and cash displacement
  • Tailored approach to lead to migration of an estimated 2% of customer base
  • Implementation of these strategies forecasted to lead to +13.5% lift of annual spend

* https://www.rfigroup.com/global-retail-banker/news/kenya-9-10-kenyans-are-financially-included-largely-thanks-m-pesa