Merchants and Agents - not the same at all

The industry of emerging markets are built on the back-bone of traders. It is the informal markets that distribute most goods and create most jobs. Anybody that have traveled in Africa, would be able to vouch for massive markets of informal traders selling everything conceivable. The nature of the commerce happening in emerging markets are also almost always based on cash transactions.

With the growth of mobile money initiatives throughout Africa, some of these traders have been signed up to perform a critical role; to provide cash-in and cash-out services to wallet holders. These traders are referred to as Agents in the new digital money world. They have to be formally registered, trained and must use a mobile phone to perform this function. It is also a requirement that they should have a certain level of literacy as they frequently have to keep book of transactions for audit purposes. Most of the schema's require these Agents to make a "substantial" pre-payment as a kind of float in order to manage cash flow risks.

With the growth of mobile money solutions in emerging markets, some traders are starting to accept electronic payments (in stead of cash). The incident of this is still very small and informal. It is likely that this practice will grow and will also become more formalised. Traders accepting mobile money (digital) payments can be classified as merchants (in a similar way as for Card Association merchants). It is pretty clear that these two roles (merchants and agents) are very different, and while they may be performed by the same trader in some instances, should be dealt with in totally different ways.

Where is Paypal going

Paypal recently announced that one could use a Paypal account to purchase at any Home Depot shop in the US. (Read here). The service require a Paypal App on a smarphone that generates a 2-D barcode that can be read by POS-equipment in the store. While this is a really innovative solution that takes an on-line product and turns it into a product that can be used in the physical world, it is an open question if this will lead to wide adoption for the mass market.

However, it is important to take cognisance of the following very important implications:

• It is now possible for non-traditional brands to enter the payment domain and go after the more profitable niche markets. Many other players have successfully done this in the past (consider Starbucks), using strategies that build on a wider eco-system than just providing a dependable payment experinece.
• The need for super-security mechanisms are not that critical. With niche solutions, relatively small balances and small take-up, it is just not worth the effort to break the security to steal money. It will be different when the service get to scale and really attracts large amounts.
• Consumers (as is the case with almost everything today), will be confronted with so many choices to pay that it will be difficult to decide what to select and how to manage these diverse options. It will be interesting to observe how the mass consumers react with a prolifiration of payment choices.

The underbanked market in the US may just go Boom!

I have now been writing this blog for the past six years and it is getting more difficult to write about things that I have never written about. I have previously written about the unbanked communities in the US(Read here and here), but I think is important to take another stab at it.

This was triggered by an article based on the Visa announcement of Visa Mobile Prepaid (VMP), aimed at banking the unbanked. (Read here). The author (Bryan Yurcan) makes the point that the US has an estimated 40 million un- (or under-) banked market. This makes it one of the bigger markets in the world for these types of products. While the new Visa product is relevant, it is currently not targeted at this market. This is why many other solutions are made available to this market to serve their needs, ranging from cheque-cashing services to new mobile payment solutions.

One such a service, referenced in this article is the new Boom services recently launched by m-Via. (Read here). The service is a mobile based payment solution focussed on the underbanked market with a lot of emphasis on remitting money offshore, especially to Mexico. If it was not for the ssss, m-Via could have been confused with the new Visa product.

A look at the spectacular growth in Pakistan's branchless banking industry

I have written a lot about the mobile banking revolution in Pakistan on this blog (Read here and here for some samples). It is possibly because we have done such a lot of work in this country and also because the country and its people are so close to my heart. But in fairness, one must also look at the emmense progress just on the merits of it. Pakistan is the only country with a population of more than a hundred million that have embraced branchless banking (from regulators, to banks and mobile operators) and have made a success of it.

The StateState Bank of Pakistan (SBP) recently signed a MOU with the Pakistan Tellecomunication Authority (PTA) - making it one of the first instances where the two relevant regulatory bodies governing mobile banking have formally joined forces to grow the market (Read here). During the signing ceremony, the governor of the SBPquoted some impressive statistics in terms of agent penetration and volume of transactions. At the same time the The World Economic Forum global report on Mobile Financial Services praised Pakistan for the fast growth in branchless banking in the country (Read here). The report described Pakistan as "a breeding ground of innovation for branchless banking" involving a wide range of players collaborating in this new eco-system, including MNOs, technology companies and even courier businesses.

 It therefore does not come as any surprise that one of the biggest investors in the country, the Abu Dhabi Group (ADG) recently announced that they would launch an independent mobile financial services company. (Read here). It seems that the plan is to bring branchless banking products to the market through two of its investment companies: Bank Alfalah (a leading bank) and Warid (one of the bigger operators in the country).

Investment Banking Salaries, Jobs, Interviews…Through A Glass Door

Want to look into investment banking through a glass door? Here is an interesting website I want to share with you - GlassDoor.com
What’s interesting is that you can search by jobs, company and reviews, salaries and interviews.  For example, if you are going to interview at Morgan Stanley, then go look up Morgan Stanley and you can view salary by position and location, and the interview notes

Complying with the HR Component

At the risk of being called a shameless plugger, I am referring you to my recent book, "Human Resources Guide to Social Media Risks" as a tool for complying with the human resources related threats found on yesterday's Social Media Risk Assessment.

I think that the book is a necessary read for not only HR professionals, but any manager and employee in and around social media (e.g., everyone).  There are some very important lessons in the book that can really help organizations manage their social media risks from an HR perspective.  As I like to say, social media risks are human risks.  They are not technology risks.  A review of the risk assessment document in yesterday's post makes that very apparent.  As such, be sure to pick up a copy of the guide.  I think you'll be very happy you did and I really do believe that you will be doing your organization a great service.

Mobile World Congress is bigger than ever

There was something nostalgic about this year's mobile world congress. This was the last year for this key event in the mobile calendar to be held at these premises on Plaza Espanja. Next year the event is planned in a brand new location, but still in Barcelona. as a matter of fact Barcelona started marketing the brand "mobile capital" this year.

And everything was bigger this year: more people, more exhibitors, more flash and bling, more claims, more press releases and more new products. There is nothing like this in the world of business. Any-one attending the congress has been blown away when they experience the sheer size and scale of the event. After four days of intensity, it is almost an anti-climax to take the taxi to the airport.

The key impressions of this year's event was the contrast beween the significant and the insignificant. Many announcements were over the top significant; ranging from new phones to ground-breaking technology. From statements by Google to collaborations between the world's biggest corporations. But, this year again, the spirit and possibility of mobile was actually captured in the insignificant. I was touched by so many small entrepreneurs with great ideas and products. The initiatives of the industry to grow the contribution of women and make innovation in emerging markets more important are the examples that makes this industry special.

Social Media Risk Assessment Process - Part 5

Ahhhh. The fifth and final part of this series on the Social Media Risk Assessment Process ("SMRAP").  I hope you've enjoyed the series up to this point.  I know I've enjoyed bringing it to you.

This last segment is all about completing the SMRAP.  I've created a fairly basic yet effective social media risk assessment model.  As you will note from the graphic below, my model uses the concept of "Threat/Vulnerability" pairs to isolate weaknesses that can result in disaster.  In a nutshell, here's the deal:  there are threats and there are vulnerabilities.

Threats are actions or events that can cause harm to the organization.  For example, when it comes to social media risks, an example of a threat is the disclosure of confidential customer information over social media.

Vulnerabilities are simply weaknesses in the system.  They are the chinks in the armor.  Vulnerabilities are what enable the threats to take form.  For example, a vulnerability related to the threat above could be a lack of understanding of social media-related information security risks by employees.

Therefore, using the same threat example above, a way for the threat to manifest or occur can be due to a lack of adequate employee training.  In other words, an employee does not know that it is a bad idea to post confidential employee information on social media sites and as such, the employee post information or takes part in conversations that reveal confidential customer information.

This is what I refer to as the Threat/Vulnerability pair.  A threat creates havoc and a vulnerability permits the threat to wreak havoc.  It must be noted that threats in of themselves are fairly harmless.  Without a vulnerability threats have no life.

STEP 1:  Determine the threats that apply to the organization's social media environment.  I have created a social media risk assessment template that contains the majority of "high level" organizational threats.  You can download the social media risk assessment document here.

STEP 2: Determine the vulnerabilities (weaknesses) that can create an environment in which the threats can manifest.  In some cases a threat will have only one vulnerability associated with it.  However, in the majority of cases there will be multiple vulnerabilities associated with each threat.  If you inspect the template social media risk assessment you will see multiple vulnerabilities per threat (see graphic above).

STEP 3:  Once the threats and vulnerabilities have been identified it is time to determine the internal controls that are in place.  Internal controls are the practices and processes that will keep the vulnerability from turning the threat into a reality.  The template provided contains common controls.  It is not likely that every organization will have every control listed.  The greater the number and breadth of controls in place, the less likely the threat will take place.  Each control should be listed on the risk assessment as shown in the template document.

STEP: 4:  Based upon the internal controls in place and the nature of the threat and vulnerability, the organization must determine the likelihood that the threat will take place.  A sample Likelihood Matrix is such as the one shown below is contained in the template.

STEP 5:  Next, the organization must determine the severity of the effect of the threat if it were to manifest based upon the existing controls.  Similar to the Likelihood Matrix, the template contains a Severity Matrix such as the one below.

STEP 6: Finally, the organization uses both the Likelihood of Occurrence and the Impact of Severity to determine the Risk Level.  The template also contains a matrix to assist in the determination of risk.

STEP 7:  After completing the social media risk assessment it should be reviewed.  Considerations in the review include a risk level that is too high relative to the organization's risk appetite.  For example, it may be the policy that all "moderate" and "high" risk areas be reviewed with senior management to discuss further internal controls that can be implemented to reduce the risks. It is generally a good idea to summarize the risk assessment process and deliver a report to the organization's Audit Committee and possibly the Board of Directors.  Along with the report may be recommendations or action items that will be taken to increase the number of internal controls to reduce the overall risk.  Once such action items are completed the organization can again perform the risk assessment to determine if the internal controls have been effective in reducing the risk level.

It must be noted that there are many ways to conduct a risk assessment.  This method is just one.  There is no right or wrong methodology as long as the end result provides an assessment of the residual risk and considers all of the practical threats.

I encourage you to take this template and turn it into your own.  I also ask that you return to this post with you recommended revisions/enhancements to the template so that others may also benefit.

Enjoy.

The One Big Interviewing Mistake That's on the Rise

In searching for senior bankers, I seldom use social media websites.  However I’ve been receiving a great number of LinkedIn invitations and therefore decided to give it a try. Though it is not a perfect source to look for senior investment banker candidates, but I find some of their articles interesting, such as this one.  

The One Big Interviewing Mistake That's on the Rise By Jessica Liebman

Social Media Risk Assessment Process - Part 4

The Social Media Risk Assessment Process ("SMRAP") should be incorporated as a component of the organization’s overall risk management strategy.  

Generally, a revised social media risk assessment should be conducted on an annual basis.  The fundamental basis of the SMRAP is to balance the Bank’s desire and need to utilize social media with other factors associated with doing business.  The organization must recognize that some risk must be accepted to make use of social media business.  The organization must also recognize that some social media risks exist regardless of the organization's social media strategy.  As such, the risk assessment program provides a practical approach to efficiently and cost-effectively identifying risks associated with social media use - regardless of the look and feel of the organization's social media strategy.

Risk assessments help ensure that employees comply with the organization's requirements as outlined in its  social media policy, code of conduct and other related policies.  The SMRAP also raises employee awareness regarding social media risks associated with their business unit’s use of social media.  Additionally, the SMRAP assists the organization in making informed decisions about the need for additional risk mitigation controls. 

The SMRAP can be conducted by a centralized department or rolled out to departments and sites on a decentralized basis.  Each organization must determine how to best disseminate the SMRAP.  The goal of the SMRAP is to identify threats and vulnerabilities posed by social media.  This may be difficult to do through a centralized approach if the organization is large and/or spread out geographically.


Those responsible for performing the SMRAP must determine each threat and associated vulnerabilities.  For each vulnerability the manager must determine the controls in place to prevent the vulnerability from exploiting severity of impact upon the organization and determine the likelihood of the vulnerability exploit occurring given existing internal controls.  It is important to note that this process requires a certain level of subjectivity.  As such, the success or failure of the SMRAP hinges upon the knowledge and understanding of the individual(s) performing the SMRAP.  As such, the organization should select individuals with experience in assessing risks and business impact.  The use of junior staff to conduct the SMRAP may under- or overestimate the conclusions - unless the staff are well supervised.  Part 5 of this series will describe an easy manner to document the SMRAP.

Once the risk level is determined for each threat/vulnerability pair, organizations may consider additional controls for moderate- and high-risk levels.  After the control enhancements have been incorporated, the risk threat/vulnerability pair is re-evaluated to determine the residual risk after the  control is implemented. 

The outcome of the SMRAP process is the mitigation of risk to acceptable levels, thereby providing adequate protection to the organization.  As such, to the extent that moderate- and high-risk levels exist after the implementation of mitigating controls, a discussion of the threat should be elevated to senior management for further discussion.  It is important to note that operating under moderate- or high-risk levels is not uncommon.  However, under such circumstances it is important to ensure that the appropriate parties are aware of the risks in order to ensure that all options have been considered as well as to ensure that all parties are aware of the risks.  This awareness is crucial for line units - particularly during periods of duress.  Consider it a form of CYA!

In cases in which additional controls must be implemented to mitigate moderate and high risks, the organization should consider the development of a formal written action plan that documents the controls.  The action plan should include the steps to be taken, the time frame for completion and the individuals responsible for implementation of the controls.

It is highly recommended that the SMRAP be evaluated by the appropriate parties within the organization.  This may include the CEO, CIO, IT Steering Committee, Compliance Committee, Audit Committee and the Board of Directors.  The purpose of the review should be to share the strengths and weaknesses of the organization’s social media strategy from a risk perspective.  Identified organizational vulnerabilities should be addressed with the appropriate personnel for the purpose of implementing corrective actions.

The SMRAP focuses on strategic and operational issues.  Organizational vulnerabilities are weaknesses related to the organization’s policies or practices that can result in the manifestation of a threat.  Part 5 of this series will drill down into specific threats and vulnerabilities.  Part 5 of this series will provide as a template  the most common threats and vulnerabilities.  However, the framework that will be introduced in Part 5 provides sufficient flexibility to allow the user of the SMRAP to customize the  process with organization-specific threats and vulnerabilities.

Social Media Risk Assessment Process - Part 3

Risk is the possibility of an act or event occurring that would have an adverse effect on the organization.  Risk can also be the potential that a given threat will exploit vulnerabilities to cause loss of, or damage to, the organization.  Risk is generally measured by a combination of severity and likelihood of occurrence.

A threat is an action or event that might jeopardize the organization.  It is a sequence of circumstances and events that allow a human (disgruntled employee, etc.) or other agent (virus, Trojan horse, etc.) to cause a misfortune by exploiting vulnerabilities.  A vulnerability is a weakness that allows a threat to manifest itself. 

Considerations to keep in mind when determining threats:

• Determining the legal implications and contingent liability associated with any identified risks.  For example, if hackers successfully access the organization’s Facebook account and use it to subsequently attack followers/friends, the organization may be liable for damages incurred by the party that is attacked.
• Capability and motivation are important attributes of threats.  Threats need both attributes (capability and motivation) to be credible.  For example, a skilled hacker seeking access to a Facebook account is considered a credible threat because the hacker has the capability (skills) and motivation (financial/ideological gain from the use of the organization's Facebook account).
• Interested parties.  Serious hackers, interested computer novices, dishonest vendors or competitors, disgruntled current or former employees, organized crime rings or even agents of espionage pose a potential threat.
• Poor security program/poor employee security awareness.  Hackers often exploit well-known weaknesses in creating secure passwords.

Internal controls are mechanisms that enable the organization to achieve its business objectives.  With appropriate controls in place the organization is able to effectively mitigate the risk posed by a threat.  With respect to social media, internal controls are designed to meet three main objectives:

• Confidentiality:  Preventing the disclosure of sensitive information;
• Integrity:  Preventing unauthorized modifications to information and maintaining internal and external consistency; and,
• Availability:  Ensuring that the systems are working and that the data is accessible to users as required.

In addition to requiring the documentation of threats and vulnerabilities, the SMRAP also requires the documentation of associated controls.  To maintain an effective social media risk assessment process the organization must ensure that the organization has adequately considered the implementation of the following types of controls:

• Preventative Controls:  These controls are established to avoid occurrences of unwanted events.  This type of control may include passwords, policies, procedures, security awareness program, etc.  These controls are considered “proactive.”
• Detective Controls:  These controls alert and identify violations after the fact.  These controls can include social media monitoring and other information that provides notification after the event has occurred.  These controls are considered “reactive.”
• Corrective Controls:  These controls are intended to remedy unauthorized events and to restore the original controls.  For example, the ability to reset the custodian of a social media account that has been locked-out due to some adverse event is considered a corrective control.
• Deterrent Controls:  These controls discourage violations. For example, a policy statement that states that violators may be terminated for non-compliance with the social media policy is considered a deterrent control.

Part 4 of this series will begin discussion on the risk assessment process.

Social Media Risk Assessment Process - Part 2

The first step in the Social Media Risk Assessment Process ("SMRAP") is to identify the social media-related threats that can adversely affect the organization.  While these threats can be technology-based, they are most dangerous when they originate from human acts.

The ubiquitous use of social media has brought social media-related threats to the forefront.  Among the threats associated with social media are:

• Disclosure of Confidential Customer Information by Employees;
• Disclosure of Confidential Company Information by Employees;
• Systems Outages Due to Social Media-Based Virus/Malware Infections;
• Remediation Expenses Related to Social Media-Based Virus/Malware Infections;
• Loss of Branding Content Contained on Social Media Platforms;
• Lawsuits Related to Alleged Improper Use of Social Media in the Hiring Process;
• Lawsuits Related to Alleged Improper Use of Social Media in the Termination Process;
• Loss of Opportunity to Hire Star Employees Due to Information Contained on Social Media Platforms;
• Spam/Malware/Virus Attacks Against Social Media Platform Friends/Followers; and, 
• Excessive/Inappropriate Use of Social Media by Employees.

The SMRAP in and of itself does not assure adequate protection against social media-related risks.  Rather, the SMRAP is part of the organization’s overall Risk Management Program that includes the written policies, guidelines, employee awareness/training and an independent review of the organization’s social media practices.


The SMRAP concludes with a determination of the adequacy of existing controls relative to the identified threats and vulnerabilities.  The SMRAP allows management to determine the need for additional controls to reduce the Bank’s risk exposure. 

Since threats and vulnerabilities change over time, the SMRAP must be updated and reviewed on a regular basis to ensure the appropriateness and effectiveness of the controls in place.  Updates are minor changes to the existing risk profile.  These include changes resulting from the implementation and/or removal of a control, or when the effectiveness of a control changes.  Updates occur when the following events take place:

• New control is implemented;
• An incident highlights a minor discrepancy in the current risk profile (i.e., the likelihood or severity of a threat requires minor adjusting or the effectiveness of a control requires adjustment);
• A risk is no longer applicable; and,
• A new risk emerges.

The SMRAP should generally occur on an annual basis.  The SMRAP should also take place when the following occurs:

• Increase in security risks/exposures due to an event or series of events (i.e., significant change in organization's social media strategy, development/implementation of in-house social network, etc.);
• Cumulative updates indicate the need for a review;
• Changes in regulatory requirements; and,
• Serious social media-related incident.

The results of the initial SMRAP and periodic SMRAP updates should be provided to the appropriate party within the organization such as the organization's Audit Committee and Board of Directors. 


Part 3 of this series will discuss risks, threats and vulnerabilities.


Series:
Social Media Risk Assessment Process - Part 1

Social Media Risk Assessment Process - Part 1

Do you hear that?  There it is again.  Did you hear it that time?!  Oh man, it's worse than I thought.  The bank examiners are updating their examination procedures to include "social media" and the industry is not ready for it.  What does that mean?  Low Hanging Fruit Time.  Noooooooooo....   

This post is about the development of a Social Media Risk Assessment Process (“SMRAP”).  The SMRAP provides organizations with a systematic approach to evaluating exposure to social media-related risks.  The SMRAP focuses on five components: Threats, Vulnerabilities, Controls, Likelihood of Occurrence and Impact.

Social Media Risk Assessment Matrix

The SMRAP is intended to achieve one basic goal: the protection of the organization's reputation.

Management is responsible for ensuring that systems and data are adequately protected.  Historically this has related to the systems and data maintained within the organization's walls.  Unfortunately, as an organizations are increasingly moving to third-party social media platforms such as Facebook, Twitter and LinkedIn (and for good reasons), management must now take measures to adequately controls risks related to external systems.

Management is also responsible for protecting the organization's reputation from intentional and unintentional acts that may cause harm to the organization.  Unfortunately, reputational harm can come from many directions, including public outcry (think Bank of America's debit card debacle or Occupy Wall Street).

An organizational key business objective is to maintain a set of policies and procedures that protect and mitigate against risks related to day-to-day operations.  Social media risks have become part of the day-to-day risks of any organization.  As has been previously stated, organizations cannot determine whether or not to participate in social media.  Social media happens.  And it has been happening for some time.  The question is whether or not management has realized this fact and has moved to mitigate the risks before the risks mitigate the organization.

The SMRAP is used to identify, evaluate, document, monitor and manage social media risks.  Through the SMRAP the organization is able to identify and prioritize social media-related risks and develop appropriate risk management strategies.  Such strategies include the establishment of appropriate policies and the selection of cost-effective controls that implement the policies.

Part 2 of this series will begin the process of identifying the social media threats that must be evaluated as part of a risk assessment process.

Buy an Investment Banker Bag

Just read this short but interesting article from Street of Walls and would like to share with you.

First made popular by E.F. Hutton, “banker bags” have been the hottest thing on Wall Street since the first Credit Default Swap. These duffel bags are the city’s new status symbol.

The bags have become a right of passage for most on Wall Street – a way to wear all the blood and tears

Cards integrated with mobile money

Cards are not part of the scene in the case of most mobile money initiatives.Subscribers of mobile money deployments can do a myriad number of transactions just by making use of their mobile phones. It is now easy to send and receive remittance payments, do person to person payments, buy airtime and pay bills. So why would you still want to offer plastic to mobile money subscribers.

And the answers is very simple: some transactions in the payments domain are only possible with a card and or a sixteen digit (with CVV) number.

It is very complex and difficult to perform a payment transactions at a traditional merchant (with a POS) or to withdraw cash at an ATM without a plastic card. To really get the benefit of these huge traditional payment networks it is essential to offer plastic cards in conjunction of mobile money accounts.

Buying online mobile implies some payment challenges

 Internet on a big screen (meaning a PC) is still the most popular for on-line purchases. One would think that the limitation of input devices, size of screen and usage of mobile phones would limit their use as a means to purchase on-line goods. But this seems to be not the case.

A case in point is the ShopSavvy application that allows users to shop for the best on-line price while scanning products in a physical shop. ShopSavvy allows subscribers to perform a purchase on the mobile in real-time. (Read here). According to research done by Coremetrics, almost 10% of on-line purchases now comes from mobile devices in the US. In the same article Amazon reports that mobile on-line purchases have tripled since last year. (Read here).

Of course paying for goods using a mobile device is a bit more tricky. It is not as easy to enter card and CVV numbers standing in an aisle in a shop. Just not practical. So what most on-line app providers do, is allow subscribers to store their payment instrument with them. Payment is then just a "one-tap" instance. With the proliferation of mobile on-line purchasing, this may lead to a situation where you may have registered your credit card details with many different suppliers - some potentially less responsible than others. The complexity when wanting to charge something to an alternative card and the management of payment information sored all over the cloud are just some of the problems that I see.

The challenge is to find a mobile-friendly, easier to use and secure payment solution that can be used across many different applications.

NFC gathers momentum with strong endorsement by a large nyumber of carriers

 I have been quite critical of the potential and the likelihood of NFC payments becoming a mainstream solution soon. (Read here and here). I did however say that it is going to require a large eco-system to get established. Many players should agree on standards and start executing on it at the same time.

This seems to have happened in November when the GSMA announced that 45 carriers (and a few handset-manufacturers) have accepted and endorsed the single-wire protocol for NFC phones. (Read here). This is extremely relevant for the NFC industry for the following reasons:

• The common commitment will provide the basis for developers of payment systems to start focussing their efforts around an agreed architecture.
• The fact that phones, processes and systems can now be deployed that will be interoperable and inter-changable, will support a more viable business case.
• Lots of the energy that was spent on alternative solutions will loose momentum.

With these building blocks in place, the grading of NFC as becoming a viable payment technology must be increased with a few notches. While it is unlikely that many of the predictions made by analysts will materialise, we can now safely say that NFC payments will become a reality in the not too distant future.

Great mobile payments and branchless banking Videos - a limited collection

It is often said that a picture paints a thousand words - well if that is the case, I suppose a good video can write a book. In the early days of mobile banking some crude mobile banking video's were made - a clear indication that the product specialists could not describe what they wanted to build to the video producers. But since a few years ago, some brilliant little video-clips were produced - either to advertise a new service or to inform or educate stakeholders. Below are some of the best clips that I know of:

• The first mPesa advert (according to rumour produced on a very small budget). (Watch here)
• One of my favourite adverts, ever, is the one used for the launch of the product (Watch here). Telenor has subsequently produced a few more masterpieces (Watch here and here).
• The documentary produced in collaboration with the Worldbank for Wizzit in 2007 was also one of the great videos (Watch here)
• A delightful little ad (that I really enjoy) was produced for MTN in West Africa in 2010 (Watch here)
• Great Airtel Money ad (Watch here)
• Using local comedians in a series of adverts for mKesh in Mozambique was very successful (Watch here and here)
• A simple, but very cute advert for BSP bank in PNG, was produced recently (Watch here)
• The energy and pace of the Gemalto advert for their NFC product is a lot of fun (Watch here)
• And many others (Watch here, here, here and here)

I am sure that there are many more and look forward to readers of this blog post posting links to others.

The new Visa card for emerging markets - applicable rules for a different market

Digital payments are difficult to deploy in emerging markets where cash-transactions accounts for the majority of payments. Furthermore, it is even more difficult to connect digital payment solutions to global payment networks, like Visa. This is because the rules and regulations controlling global payment systems have evolved with the realities of first world markets in mind.

Deploying these rules in emerging markets are difficult because of major differences in laws, subscriber behaviour and availability of infrastructure. What is needed is a fresh look at the rules that dictate global payment products. To re-think the rules and re-define them in the context of emerging markets.

The new Visa product (mobile pre-paid) (Read here) recently announced attempts to do just that. It is a fully fledged Visa product, but with a re-worked hand-book where the rules have been re-defined to cater for emerging markets. I would not like to comment on how well this has been done, as I am directly involved, but believe that it should be reported on in this blog.

CGAP's rich heritage of mobile banking articles

Few organisations have contributed so consistently towards the establishment of mobile payments than the Consultative Group to Assist the Poor (CGAP). I have written about their efforts previously (Read here and here), but felt that some of the recent articles, as well as their other efforts necessitates a seperate and new blog.


The contributors to the CGAP blogspace have consistenly produced well-researched, insightful articles. The collection of information on this space is probably one of the most comprehensive and best quality in the industry. The fact that the posts now span five years plus and that the editorial intention is to provide accurate information (rather than commercial gain), have made this such a valuable resource. Authors like Mark Pickens, Toru Mino, Sarah Fathallah, Claudia McKay, Prakash Lal and many more, should be complimented on their excellent work. 


Some recent articles that caught my eye were:

• What can we learn from selling soap (Read here)
• The case for more innovation in mobile money and branchless banking (Read here)
• The lurking challende of barnchless banking: Activating the inactive customer (Read here)
• Can mobile be "free" (Read here)
• Boosting the business case for Agents (Read here)
• Interoperability and related issues in branchless banking and mobile money (Read here)

In addition to the blog-space, CGAP also organises the CGAP Microfinance Photography Contest, provides advisory services and are sometimes instrumental in the sourcing of donors and funding. The research publications produced on a regular basis are also of emmense value. I salute everyone working and making a difference at CGAP. 

Social Media-Based Brand Ambassadors - Part 4

The Costs and Risks of Social Media Brand Ambassador Programs

[This post is part 4 in a series of posts related to Social Media-Based Brand Ambassadors.  This post focuses on the costs and risks associated with a brand ambassador program.]


Before an organizationchooses to empower and unleash social media-enabled employee brand ambassadors torepresent its brand and influence consumers, the organization should carefullyconsider the costs and risks associated with a social media-enabled brandambassador program – or any social media effort.  

While social mediaaccounts are generally free and can be created in less than 10 minutes, theseaccounts are of little use without the human capital (e.g., brand ambassadors)needed to add value to the organization’s social media efforts.  As such, every organization considering theuse of social media-enabled brand ambassadors should conduct a risk assessment thatwill help to identify potential pitfalls which will ultimately protect theorganization and ensure the success of the social media-based brand ambassador program.  The organization should use the results ofthe risk assessment in determining the appropriate strategy.

BloombergBusinessweek writers Michelle Conlin and Douglas MacMillan address social media risks in their blog post,“Web 2.0: Managing Corporate Reputations.”  According to Conlin and MacMillan, “Socialnetworking is a love-hate relationship. On the one hand managers want their workers to experiment so they cancultivate new-world skills.  Employees asbrand ambassadors!  Products virallytransformed into overnight hits!  On theother hand, bosses are filled with foreboding about social networking’s darkside – losing secrets to rivals, the corporate embarrassment of errant employeetweets, becoming the latest victim of a venomous crowd.”

Regardless of thepuffery taking place regarding the low- or no-cost features of social media implementations,organizations must not be fooled.  Socialmedia properly implemented costs money.  Assuch, organizations must determine the social media strategy that best fits theorganization’s risk appetite and budget.  In an effort to assist with this analysis the followingsection discusses the various risks and costs associated with social media implementations– including a social media-based brand ambassador program.

Commitment:  According to consultant Tony de Bree (www.TonydeBreeAdvies.nl),organizations have done a horrible job of taking care of their employees andcustomers.  “Clients nor employeesbelieve those companies anymore. We are far from ‘how to turn your ex-employeesinto ambassadeors/promotors.’” 

Julie Arnsdorf, President of J. Arnsdorf & Company (jarnsdorf.blogspot.com), agrees with de Bree. “It's similar to the proverbial tag ofwe have ‘quality products’ or ‘competitive rates’…it's just talk.  I've seen many marketing departments or adagencies develop brilliant tag lines for an organization, but the organizationnever implements the tag line's sentiment throughout their business orbank.  It's simply a hollow statement.”

De Bree’s and Arnsdorf’s comments are not uncommon.  Over the course of the past several decades, organizationshave lost credibility with their workers as a result of actions that have eliminatedjobs and cut wages.  Most recently, the OccupyWall Street movement brought to lightsociety’s discontent with the widening gap between the have and have-nots.

As a result of thenatural skepticism of employees and customers, organizations seeking to implementa brand ambassador program must be committed to making the long-term investmentnecessary to win over both employees and customers.  Lip service is no longer adequate and will surelyresult in failure.

Expenses:  Many publications, consultants,Web sites and other sources refer to social media as a “no cost” or “low cost”undertaking.  This advice has the effectof misleading many organizations into believing that the implementation andmaintenance of a social media strategy, including a social media-based brandambassador program, is a largely inexpensive undertaking.

In a interviewwith SmartBlog blogger Sam Taute (“A LookAt Social Media Costs And Returns With Erik Qualman”), Socialnomics author Erik Qualman stated regarding social media implementationsthat “Over 50 percent of businesses found it was more work than theyexpected.  The most overlooked cost forbig and small businesses is the soft-cost in terms of the hours employees mustcommit to engage properly in the space.”

Blogger Mark W.Schaefer presents a compelling, though potentiallydiscouraging, argument for employee social media ambassadors.  In his post “The Hidden Costs of Social Media Conversation” Schaefer statesabout social media-enabled employee brand ambassadors, “Certainly thisinteraction can humanize a brand.  But atthe end of the day, is paying your employees to be a psychotherapist to alonely widow in Pittsburgh going to sell hamburgers?  Is that the company’s core business?  And when does it end?  Do you keep adding people to have infiniteconversations?”  Schafer’s comments were in reference to aninterview by McDonald’s Social MediaDirector Rick Wion regarding McDonald’s goal of initiating socialmedia conversations.

Providing a less severeanalysis is Brand Infection blogger Nader Cserny whostates that “Social Media is affordable and you don’t need large marketingbudgets.  The only main cost is timewhile developing relationships.”  While Nader’s conclusion is largely true, as statedby Schaefer, organizations must invest time and money to develop the depth and rangeof online relationships that meet the organization’s expectations.

Heidi Cohen provides on her blog (“How To Calculate Social Media Costs”) 10 types of social mediamarketing expenses that every organization should take into consideration when developinga social media strategy.  Heidi’s list is not specific to brand ambassadors. It is a list that addresses the costs necessaryto develop an environment in which brand ambassadors can operate.

    1. Brand Monitoring:  This expense relates to the act of“listening” to conversations on the Internet. Costs can range from the software used to “listen” to the employee timespent “listening” to the time spent analyzing the conversations to the time spentproducing reports.  As previously stated,brand monitoring is a key activity for all organizations.  Regardless of the organization’s decision toenter into social media, every organization at a minimum should actively listento comments made on the Internet in an effort to better serve customers andtake proactive measures, if applicable.  Assuch, all organizations should realistically budget for this item.

     2. People:  A social media-enabled brand ambassador programrequires people.  In small and mid-sized organizationsmost brand ambassadors will maintain other positions within the firm and willact as brand ambassadors as time and opportunity permits.  In large organizations, brand ambassadors maybe dedicated social media-enabled brand ambassadors whose responsibility is tocomb the social media universe for branding/influencing opportunities.  Regardless of the format used, people costmoney.  As such, to the extent that brandambassadors conduct their influencing while on the clock, the organizationincurs a cost.

      3. Content:  Contentis King!  According to the HRManagement Guide blog (“SocialMedia Costs”), “The social media are about the interaction.  The dedicated employee has to find appealinginformation and has to publish information on a regular basis.”  The content used by brand ambassadors toengage with customers and potential customers must be created either internallyor externally.  The nature, complexity andsource of the content will determine the expense.

    4. Social MediaPlatforms:  As previously noted, most socialmedia platforms are free to use.  However,there may be costs associated with their use such as the development of platformspecific pages/screens (e.g., Facebook landing pages) that require resources tocreate.  Organizations must be aware of suchcosts as part of the planning stage of a social media strategy.

      5. Support Media:  The social media strategy will determine theextent to which support media will be necessary.  For example, organizations may createmailings, newspaper advertisements and other activities to drive traffic to thesocial media platform.

   6. Marketing:  Activities needed to convert social mediaprospects to buyers.  This includes the marketingcampaigns that run on the social media platforms such as custom “apps.”

    7. Agencies:  Certain organizations may choose to outsourcesome or all of the social media activities. These costs must be taken into consideration as part of the overall socialmedia strategy.  Agencies costs may includeconsulting fees, social media outsourcing costs, and other associated expenses.

     8. Technology:  To the extent that technology support isneeded to launch and maintain a social media-based brand ambassador program,these costs must be taken into consideration. Such costs may include providing employees with social media enabledsmart phones, upgrade of computers, and any other technology that may beneeded.

     9. Analytics:  Every organization with a social mediaprogram should have in place a program to analyze the overall effectiveness ofthe organization’s social media strategy, including brand ambassadors.  The analytics provide the organization with thesocial media program’s return on investment.

   10. Complexity:  Organizations can spend verylittle on their social media efforts. Likewise, organizations with large budgets can spend millions of dollarscreating elaborate and complex social media strategies.  With social media there is something forevery budget.  This amount must be takeninto consideration as part of the planning process.

Code of Conduct:  Brand ambassador successrequires that employees commit to the organization’s code of conduct (e.g.,respectful tone, free of profanity, etc.) whenever they interact on a socialmedia platform.  Brand ambassadors mustunderstand that their personal social media activity may be interpreted asorganization-sanctioned activity. Therefore, whether on or off the clock, employees must be aware of theeffect that their interactions on social media platforms may have on theorganization.

A major challengein developing a strong Brand Ambassador Program is that employees continue tobecome less loyal.  Back in 2004 Ronald J.Alsop had the following to say about the state ofemployee relations: “Employees are more cynical and less trusting because ofall the recent cases of accounting abuse and executive greed.  What’s more, job insecurity, poor morale, andexcessive workloads have eroded employees’ commitment to companies.”  In the post-Occupy Wall Street era it is very likely that these same issuescontinue to concern workers in 2012.

Blogger LindaTucci describes in the TotalCIO blog at TechTarget.com (“SocialMedia Risks That Will Make Your Hair Stand on End”) an instance involvingan executive at a public relations firm.  The seasoned public relations executive wasflying to meet with a major client.  Uponarriving at the client’s hometown, the public relations executive tweeted thatthe client’s hometown was one of those places where he would rather die thanhave to live in.  An employee of theclient’s firm read the tweet and passed it on to senior officials at the clientand the public relations firm.  To saythat the public relations executive had some explaining to do is anunderstatement.  The embarrassment causedto the public relations firm by its executive was further exacerbated by thefact that the public relations executive was meeting with the client to pitch,of all things, social media communications! 

The publicrelations executive story noted above is an example of a major concern with socialmedia-enabled brand ambassadors.  Forthis reason it is crucial that organizations provide necessary guidance andtraining to brand ambassadors.  Ignoringthis call to action may result in similarly embarrassing situations that maydamage reputation and the bottom line.

Customer Service:  Rajib Kumar, blogger on Techncom.com, states that “When a consumer posts anissue online, he expects instant response which should be done promptly.  If the response drags, then it has a negativeeffect on the brand.  Don’t give theconsumer time to start bad-mouthing.”

While a 24X7 responseis not required for all social media programs, customers now expect to reach organizationsvia their social media platform of choice.  Further, customers expect prompt responses duringbusiness hours.  Their inability to resolveissues in that manner will go a long way in pushing them to organizations that doprovide the expected service.

To the extent thatthe organization provides customer service through a call center, it is in the organizationsbest interest to equip the service center with the training and tools needed toprovide the expected level of service.

Inconsistent Messaging:  Rajib Kumar emphasizes the importance of providingconsistent messaging by stating that “If a query has been posted on differentsocial platform, the response should be the same and consistent throughout soas not to confuse the customers.”  Assuch, “The staff managing the social media platforms needs to be organized andhave a common vision and goal so that they do not speak in different voices ondifferent platforms.”

Scale:  The HR Management Guide blog suggests that organizations should seek aslarge of a social media presence as possible to maximize use and investment insocial media.  “The social media need astrong and constant presence.  The smallpresence means no influence, and it does not bring any benefits.  The organization has to build a strong andfocused presence to be successful.”

Before developing aprogram to unleash the organization’s employees as brand ambassadors, the organizationmust ensure that it truly understands the costs and risks involved and is committedto the undertaking.  Without such a commitmentthe organization will ultimately fail in its attempt to leverage the advantagesof social media.

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Inside Investment Banking

If you want to break into investment banking but don’t have a degree from Harvard or an internship from Goldman Sachs, you should visit the website of Inside Investment Banking (IIB).

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Social Media-Based Brand Ambassadors - Part 3

BENEFITS OF SOCIAL MEDIA-BASED BRAND AMBASSADOR PROGRAMS

[This post is part 3 in a series of posts related to Social Media-Based Brand Ambassadors.  This post focuses on the benefits associated with a brand ambassador program.]


According to TomBlackett in Brands and Branding (Bloomberg Press, 2009), “When employees areexcited by the proposition they will help to sustain it and communicate it tocustomers, suppliers and others through their enthusiasm and commitment.” 

Forrester Research, Inc.’s Cindy Commander states in the 2007 Report Brief: Transforming Employees Into Brand Advocates that “Employees who actively ‘live the brand’create significant benefits for both the customer and the organization.  Customers of organizations with employeebrand advocates enjoy better customer service, greater anticipation of andability to have their needs met, and more attentiveness to their voice andfeedback.  The organization enjoys thebenefits of word-of-mouth marketing, greater profitability and financial results,and a more differentiated brand.” Social media-enabled brand ambassadorsprovide benefits to the organization as a result of their efforts to humanizethe organization.

Ability to Humanize the Organization: AdWeek Magazine blogger Noreen O’Leary emphasizes(“Employee Benefits: Workers as BrandAmbassadors”) that “The use of workers to humanize corporate entities hasbeen a time-honored marketing tradition, of course.  But in an era of Web 2.0 transparency, theirvisibility takes on greater meaning, signaling the higher importance ofcustomer service in the marketing mix. More subliminally, as America’s battered consumers have lost faith inthe institutions they hold responsible for the current economic mess – and areangry with corporations behind massive layoffs – staffers offer a kind of peercredibility as corporate advocates.”

Socialmedia-enabled employee brand ambassadors can play a major role in changing thepublic’s perception of the organization. Brand ambassadors have the ability to transform cold and impersonal organizationsinto warm and friendly customer-friendly companies.  Instead of dealing with an abstract concept,logo, or the image of an ivory tower, social media-enabled employee brandambassadors are able to transform transactions into human relations.  Social media platforms provide the “social”vehicle to connect with customers at a personal level – something that is notpossible through static Web pages and advertising.

Organizations transformthemselves by responding to social media inquiries as well as seeking out andcreating “conversations” on social media platforms.  These interactions are perceived positivelyif the communication is determined to be honest, genuine, and transparent.  Through these activities brand ambassadors havethe ability to transform customer interactions into rewarding personalexperiences.

Brand Awareness:  Social media-enabled employee brandambassadors can be very effective at creating brand awareness.  While the reach of a brand ambassador is generallynot the same as a mass market advertisement, the quality of the social media interactioncan produce a valuable word-of-mouth affect – the “viral” affect – that cancreate significant awareness and interest in the brand.

A sound SocialMedia-Based Employee Brand Ambassador Program turns employees into influencers.  As long as the brand ambassadors act in anhonest and transparent manner and consistent with expectations, they can createa favorable impression of the brand.

Meet Customer Expectations:  Social media platforms act asconvenient and easily accessible forums where customers and potential customerscan reach out to organizations through their brand ambassadors.  Customers are able to use social media platformsto pose questions, make statements or generally express their feelings about thebrand on their time and on their platform of choice (Facebook, Twitter,Foursquare, LinkedIn, etc.).

The use of socialmedia-enabled employee brand ambassadors allows organizations to meet these customerexpectations.  According to Top DogSocial Media blogger Melonie Dodaro, “More than one quarter of all thetime people spend online is spent on social networks.  Regardless of what their needs happen to be,they are turning to sites like Twitter and Facebook in order to find what theyare looking for.”

The result of widespreaduse of social media is the recently developed customer expectation thatorganizations should also reside on the social networks used by customers.  Social media-enabled brand ambassadors that monitorsocial media platforms allow organizations to not only react to demand but to alsoproactively create a social media presence.

Techncom.com bloggerRajib Kumar states that “Customers want immediateacknowledgement and resolution and are not willing to wait endlessly listeningto call Centre hold tunes.  Consumerswant instant gratification even in customer service.  Smart and savvy businesses have started usingthe social media space to get closer to their customers and increase theirservice levels up a notch vis-à-vis the competition.”

Brand Differentiation:  In today’s globally competitivemarketplace it is not enough to be just as good as the next guy.  In today’s business environment it is importantto be different.  Anyone can make a plainvanilla product.  And vanilla generallytastes the same regardless of the maker. As such, unless the organization seeks to enter a price war overvanilla, the organization is better suited finding a way to differentiate its productsor services.

Brand ambassadorsprovide the organization with a method of setting itself apart from thecompetition.  Relative to competitorsthat do not employ brand ambassadors the organization is able to set itselfapart.  This differentiation not onlyassists the organization in avoiding vanilla product pricing but may alsoprovide for the opportunity to create loyalty and charge premium prices.

Early Warning System:  Social media monitoring involvesthe use of applications such as Google Alerts, SocialMention.com andradian6 to locate comments that reside on social mediaplatforms.  Identification of comments enablesthe organization to provide a timely response that is likely to be appreciated bythe commenter.

According toTechncom’s Kumar, social media monitoring providesorganizations with an early warning system. Customers will generally give organizations an opportunity to “right thewrong” before unleashing their fury on social media platforms.  As such, organizations that utilize socialmedia-enabled employee brand ambassadors to “listen” to social media conversationsare able to proactively identify and address problems before they manifest intomajor public relations disasters. 

Top Dog SocialMedia blogger Dodaro says that “Using social media the right waymeans you’ll also have the ability to listen to your audience, find out whattheir needs are and offer them a solution.”  An additional benefit is derived from customersthat share the positive experience via social media, turning themselves into a customer brand ambassadors.

Development of a Knowledgebase:  The use of social media to locateand answer organization-specific questions benefits not only the party askingthe question but also others that may have similar questions.  It is not uncommon for customers andprospective customers to search the Internet for answers to product and/orservice-related questions.  To the extentthat the response to a question is addressed on a social media platform it issubject to search engine indexing that makes the response retrievable by others. The availability of this information islikely to be viewed favorably by customers and prospective customers.

Techncom’s Kumar says about creating a public knowledgebase,“It can become a great resource for future reference and a guide point forother customers who will refer to the link or post.”  But the knowledgebase need not only includeresponses to questions.  It can alsoinclude proactive information provided through blog posts, tweets and otherinformation.

Improved Financial Results:  It is no surprise that anincrease in brand awareness results in improved financial results.  However, a Social Media-Based Employee BrandAmbassador Program will not in of itself create blockbuster financialsuccess.  It will contribute to thebottom line along with the organization’s other revenue generatingactivities.  Regardless, its effectshould not be minimized as it has the potential to become a significantcontributor to the organization.

Dow Jones MediaLab blogger Diane Thieke (“Employeesas Brand Ambassadors: Enthusiasm is Infectious”) states, “Today, I don’tthink there’s much question about whether there’s a benefit to having employeesengaged as brand ambassadors in social media.”  Instead, Thieke believes that that keyquestion is how to effectively manage a Brand Ambassador Program.

To the extent thatan organization can establish a sound Social Media-Enabled Brand AmbassadorProgram and use it to motivate its employees, the organization can become incrediblyeffective at influencing stakeholders.  Theconsensus among the experts suggests that the maintenance of a cadre of brand ambassadorsresults in stronger branding, improved customer satisfaction, increased revenueand stronger overall financial results.