Panel Presentation: Perspectives on Technology and Financial Inclusion

1. Panel Presentation: Perspectives on Technology and Financial Inclusion Vijay Gurbaxani Director, CRITOThe Paul Merage School of BusinessUniversity of California, IrvineE-mail: vijay.gurbaxani@uci.edu The Bottom of the Pyramid in Practice Institute for Technology, Money and Financial Inclusion University of California, IrvineJune 2, 2009

2. The Bottom of the Pyramid is Personal (and Real) Growing up in Mumbai Mangoes and chocolate The Bottom of the Pyramid as producers Ulhasnagar Sindhi Association Made by USA

3. Financial Inclusion is Critical Leela’s story Amrit’s curse Hundis and Hawala Financial inclusion for the middle class is relatively recent The challenges of financial inclusion My visit to the Bank of India

4. An IT Story: Financial Information Network and Operations (FINO) “Provides end-to-end technology and operational solutions to financial institutions, revolutionizing the way their services reach base of pyramid citizens.” Investors include: IFC (World Bank), Intel Capital Public sector: UBI, Corporation Bank, Indian Bank, LIC Private sector; ICICI bank, ICICI Lombard, IFMR Trust Customers: 11 banks, 20 MFI, 3 insurance, 4 government Reach: 1400+ locations, 4000+ transaction points 500 mm “unbanked” population in India; FINO reaches 5 mm

5. Inclusion encompasses many services

6. FINO: Time to Customer Base 1st million        1 year  2nd million    180 days        3rd million      69 days 4th million      50 days 5th million      37 days

7. The New Economics of IT Leads to the New Economics of Organization Economies in Production Scale Scope Specialization Economies in Coordination Internal Coordination External Coordination Informational Economies of Scale Network Effects

8. The New Economics Leads to New Structures Successful organizations are efficient information processing structures, and evolve to reflect new business and economic conditions Information technologies are now not only a set of processing technologies but also include communication and coordination technologies The improving price-performance of information technologies has dramatically changed the costs of information processing, which in turn affect the economics of organization. The net result is that optimal organization structure should evolve in response to the new economics of organization affording dramatic improvements in efficiency and effectiveness

9. Business Model Innovation: New Pathways To Value Creation Some organizations have diversified into related products or services Some have grown horizontally into different geographies Some have developed centers of excellence that service multiple divisions in the enterprise Some have developed networked partnerships with suppliers and complementors, reducing their own scale and scope Some have partnered in consortia to facilitate trade within their industry

10. 50 Years of IT Worldwide IT Spending $ Billions 1960s 1970s 1980s 1990s 2000s Source: IDC Directions 2004 Conference

11. IT-Led Innovation Must be a Big Piece of the Solution Advances in information technologies are creating ever changing management capabilities Information technologies enable/necessitate changes in organization structure and business models Organizations will succeed in a networked economy through the rapid adoption of innovative IT applications and new business models