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Digital transformation is leaving no sector of the economy untouched, and financial services is no exception. Fintech and the finance sector in general have evolved significantly over the years, continually adopting the latest technologies and innovations to stay on the cutting edge and maximize profit.
An OECD report on artificial intelligence (AI), machine learning (ML) and big data forecasts the global finance sector will double its AI spending from $50 billion in 2020 to more than $110 billion in 2024.
Leading technologies like AI and cloud computing are being exploited mostly for high-end financial services customers. But some organizations are using other, equally important technologies to reach overlooked market segments, especially in emerging and developing economies.
One of the organizations attempting to drive innovation in the finance sector is VYZYO, a U.K.-based company that facilitates financial and social inclusion with offerings such as a cloud-enabled platform-as-a-service (PaaS) and telecom value-added services (VAS). The company’s vision is to ensure digital payment and mobile financial services reach all segments of a country, supported by an ecosystem that promotes equal access to essential financial services and improves users’ livelihoods.
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VJ Odedra, founder and CEO of VYZYO, told VentureBeat that the company wants to create equal opportunities for everyone — regardless of financial status, social background or geographic location. He said VYZYO’s platforms empower its service provider partners to offer digital payment and mobile financial services that are “fast, accessible, sustainable and easily scalable.”
Closing the gap between the banked and the underbanked/unbanked
In 2018, the World Bank reported that about 1.7 billion people globally had no access to banking services. In the Middle East and North Africa, only 44% of people over the age of 15 had a bank account, compared with 68.5% globally. So, while COVID-19 has accelerated the adoption of digital payment systems worldwide, a wide gap still exists between the banked and the underbanked or unbanked today — a gap VYZYO says it wants to close with its fintech-as-a-service solution.
According to Odedra, while other players offer financial services to the underbanked and unbanked, many don’t contribute to improving the lives of customers in these market segments. He believes that leading with social responsibility is the only way service providers can achieve sustainable profitability in those segments.
“From our experience, finding the equilibrium between social responsibility and profit will increase demand for services from the underbanked and unbanked. This allows us to improve the livelihoods of customers in these segments, while improving the bottom lines of our partners,” explained Odedra.
VYZYO markets itself as the one-stop shop for fintech and telecom VAS, offering an array of technologies that drive financial and social inclusion. Its cloud-enabled technology, which Odedra says enables VYZYO to scale its financial reach, uses the power of cloud infrastructure like AWS and others. VYZYO also collaborates with many commercial partners — including mobile operators, financial services providers, postal authorities and government organizations — to set up shop in local markets, making essential services available to entire populations.
“Let’s be clear: the divide between the banked and unbanked has been partially perpetuated by the banks themselves, who have historically targeted customers with stable income, regular expenditure and the ability to purchase and repay loans and other banking services. As a byproduct of this strategy, many banks have neglected the needs of the wider public, which has prevented a significant percentage of the population from accessing essential banking services,” said Odedra.
He further noted that this situation has “created an important market opportunity for other service providers to offer mobile money and mobile wallet services.” Odedra recommends that service providers targeting the underbanked and unbanked should focus on the social needs of customers in these segments first, after which margins will be made in large volumes in a socially responsible framework.
Fintech innovation to drive value and adoption
While most financial services providers and fintech vendors focus on profit-oriented services offered over the internet or on mobile apps, Odedra said VYZYO is looking across the entire stack. An example is its VYZYOPay platform, which enables the company’s partners to facilitate access to banking services regardless of the end user’s device. Not only users with smartphones, but also those with older devices or limited connectivity can access those essential services through SMS, USSD and interactive voice.
The company claims its additional products provide similar access to healthcare, education, government services and even entertainment through its video-on-demand platform WatchNow.TV.
“Our combination of technologies allows for equal access and opportunities for all, making financial and social inclusion a reality,” said Odedra.
More on VYZYO
Founded in 2017 by VJ Odedra (CEO), VYZYO has about 75 employees. The company claims its customers include some of the world’s largest brands in the financial services, telecom, retail, media and energy sectors.
VYZYO recently signed a commercial partnership agreement with CAMPOST, the national provider of postal and financial services in Cameroon, to deploy and operate digital payment and mobile financial services. VYZYO and CAMPOST will manage digital payments for government services, including welfare and healthcare reimbursements; money transfers and international remittances; and mobile financial services for micro-savings, micro-credit and micro-insurance.
VYZYO says these new services are financially and socially inclusive and will be available to the entire population of Cameroon, including those with limited or no access to banking services and communications infrastructure.
The company has also signed an agreement with Al Baraka Bank in Tunisia to offer a mobile wallet service to its customers across the country. The service will enable financially and socially inclusive digital payments for government services, mobile transfers, merchant payments and more.
Odedra said the company has also signed numerous commercial agreements to support the launch of fintech, telecom VAS and payment services in Ethiopia, Uganda, Ivory Coast, Nigeria, India and Thailand.
With a total of $5 million in seed investment already raised from two private investors, VYZYO is looking to raise additional funding of more than $30 million. The company intends to use the funds to expand its corporate structure, deliver on recently signed projects and accelerate growth in new territories in Europe, Africa, the Middle East and Latin America.
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