Beyond Banking

Technology is a strong driving force of the economy and the society at large. The technological foundations of the “Bank of the Future” are already in the works in the global digital ecosystem today. API Banking, Cloud-based services and Artificial Intelligence are fast becoming the building blocks of banking services across the world.

The future of banking in Ethiopia is most definitely predicated on the use of these accelerating and converging technologies. The current dynamics in the Ethiopian economy makes it important for financial institutions to proactively adopt sustainable business models that take into account the ever evolving digital space.

Financial Institution of the Future

The technology driven shift in the banking space prompted OneMfi to redesign its entire business process in collaboration with renowned Fintech companies, to the extent of rethinking the current core banking system.

“Banking as a Service will empower everyone’s business” Zewdu Assefa – Co-Founder and Board member OneMfi

OneMfi balances its investments across the scope of available technology platforms to deliver services with high return on investments.

OneMfi has integrated technology allowing it to render a service layer on top of the goods and services that require financial transactions. Traditionally, financial institutions exclusively owned end-to-end service delivery by tightly integrating product, process and experience. 

However, innovative consumer-centric firms are now able to effectively compete for customers by leveraging data across value chains to customize application services and deliver superior user experience., this has accelerated the shift from traditional Bank Services to Banking-as-a-Service accessible anytime-anywhere.

This change in paradigm coupled with the openness of incumbent organizations to embrace the benefits of by digital technology, has led to a tipping point in the rendering of financial services.

OneMfi has long moved away from traditional conservative mindset, to align its strategies with the current trend through strong and sustainable partnerships with Fintech players in the payments space. OneMfi is currently in a multimodal collaboration with BelCash Technology Solutions PLC a leading Ethiopian Fintech, accelerator/incubator programs (LI-WAY), innovation labs and strategic partnerships with providers of complementary technology such as data-driven credit scoring platforms Ethio-score PLC to provide non-collateralized micro/mezzo credits, social financing and crowdfunding.

Ethiopian start-ups are on their way to go in better understanding these segments and create viable solutions. Therefore, high impact and high return sectors such as credit schemes geared towards women and young entrepreneurs, are areas that are still prone for large-scale disruptions

Technology & Innovation

OneMfi his in the forefront of innovation by pioneering the implementation of digital technologies within the Ethiopian banking sector. OneMfi recognizes the need for continued access to State-of-the-Art technologies to provide superior product and service offerings to its clientele.

“Optimize existing Infrastructure”  Vince Mountaga DIOP – Founder & CEO BeCash Group

Towards this objective, OneMfi has adopted innovations led as its guiding principle. This consists in forging ‘partnerships’ with well-established Fintech companies as well as with leading technology startups to prioritize collaboration rather than competition.

Laser focused on delivering superior service to its customers, OneMfi is pioneering historic ‘partnerships with innovative and disruptive Fintech startups predominantly in Payment, Consumer & SME lending.

Additionally, the micro-finance has been at the forefront in identifying gaps across Business Units & Product verticals, and bridging them with innovative solutions coming from creative entrepreneurs and innovative startups across the globe.

Key Factors of Success

“The GIG Industry should provide more than 1/3 of the Future Jobs, to young Ethiopia woman and man” are ” Ezana Raswork – Founder & CEO TaskMoby -Africa-118 

The difference in models is driven by the market needs and regulations, but in such a crowded space, which FI’s will succeed? Before digging into specifics, there is one overarching factor — the most successful FI’s are those that are the most impactful, particularly to underserved customers.

Despite popular beliefs, the rise in digital banks is not a product of preference by the younger digital-native generations (e.g. millennials), but from reaching a broader set of customers that have historically been overlooked by incumbent banks. It is customers earning lower income considered to be unprofitable for most banks.

OneMfi financial services are targeting the FROG Industry (Free Lancers

Outsourcing and GIG workers) and the Rural Sector via the Green Connectivity Initiative (providing connectivity, energy, supplier credit and e-market access to the rural population).

OneMfi represents a paradigm shift in the Ethiopian financial services, having a core customer-centric approach by offering services that are cheaper, simplified, more useful and better targeted to the ones that have been left out of the traditional system. But beyond impact, there are three key elements that will guarantee the success of the microfinance:

Strong stand-alone unit economics: A key driver to long-term success is having strong standalone unit economics with the core bank account product. For example, an interchange model can bring significant value to customers, particularly those in the middle class who benefit from lower costs.

The digital bank account strengthens the core offering: Another factor is the ability to provide core improvements to the larger offering. The OneCash case is striking by having customers leverage its bank account from a wallet (no interest apply) to a regular bank account, OneMfi benefits from a lower cost of funds from deposits. Importantly, by deepening the customer relationship, it also gleans more insights into the customer’s credit worthiness and spending potential.

Massive acquisition subsidization generated externally: OneMfi is leveraging a strong existing customer base, and have a customer acquisition cost (CAC) distribution advantage, the microfinance is able to scale more challenging unit economics more successfully. In a space that is still largely dominated by incumbents with CACs steadily increasing over the last years, a big challenge for the banks is customer adoption and retention. This is why product extensions such as Solar Home Systems, Smart Phones & Connectivity, etc. work well.

OneMfi have strengthen the existing core offering, by enjoying a distribution advantage it struggle the microfinance capacity to scale.