6 months + 200 technology and finance leaders from 30 countries = four scenarios of branchless banking for poor people in 2020.

In 2009, CGAP and DFID talked with over 200 technology and finance leaders from 30 countries to determine how branchless banking, including mobile banking, might look in the year 2020. The work culminated in the CGAP/DFID Branchless Banking Scenarios 2020 Focus Note. A video discussion with the authors and some of the leaders in mobile and branchless banking was held in Washington in December; you can watch the archived video here. To help frame the scenarios process, we identified four forces and four uncertainties that are shaping the industry.

Force 1. Demography is changing such that

• there will be a greater number of younger consumers in most developing countries
• there will be more people moving to cities and across countries

Demography is an ever-present force in most scenarios—with high impact and certainty. After all, users of branchless banking in 2020 are already alive today. Clients in 2020 will include a large number of today’s youth. Young people have limited capacity to spend on new services, but a higher propensity to adopt new technology.

Another seemingly unstoppable demographic force is the movement of people—both within countries as a result of continued urbanization, and across countries through international migration. The UN Population Division (2007) expects that the developing world will be 51 percent urban by 2020, up from 45 percent now. This alone will fuel rising demand for improved ways to transfer money remotely from urban areas back to family in the countryside.

International migration patterns are harder to anticipate. Demand for labor in developed countries combined with internal displacements in developing countries will likely promote ongoing cross-border migration, even as formal barriers to immigration grow. The nature of these barriers will affect whether the formal remittance market grows as rapidly as it has over the past 10 years—quadrupling to over US$300 billion per annum (World Bank 2008c). For example, the legal status of workers has a material impact on their ability to satisfy customer due diligence (CDD) procedures to qualify for access to formal financial services in the host country.

The force of demography in its various manifestations creates a strong positive pull toward faster adoption of branchless banking, as more young people use new technology and migrants demand reliable, convenient, and affordable ways to make remote payments.

-Mark Pickens, David Porteous, and Sarah Rotman