Services are increasingly being accessed through mobile platforms – I pads, smart phones, e cards etc. As online trend strengthens, security of data, threat from cybercrime is likely to rise. The nature of crime of which financial crime is a major threat area concern will make a fast shift online. Hacking, stealing and penetrating hitherto secure systems will become more and more common.
The internet is democratizing polity the world over too. Social media has given a voice to the poor and the disadvantaged. Access to quality content that hitherto was locked into expensive, difficult to access hard copy format is becoming available online, often free and accessible to everyone. Banking and financial services hitherto were restricted to a section of society. With the aid of technology, this is becoming also accessible to the poorest and the unbanked.
All sections including the rich are vulnerable to cyber fraud. The demand for secure, convenient, twenty four by seven, three sixty five days a year access to services is rising. Service providers like banks, market participants, credit card companies, network and telecom backbone providers are trying to adapt to this sweeping disruptive technology induced change.
This has led to emergence of a new set of needs. Innovators are being inspired to provide solutions that will help make banking services more effective, convenient and secure. Rising concerns on credit card fraud and need to provide services to unbanked communities are forcing financial sector organizations into action.
Master Card supported one of their freelance consultants Manuel Preto efforts towards building an innovative solution that will help meet the challenges faced by financial services institutions. The solution that Manuel came up with is a secure mobile device that is exclusive to the banking and financial services sector. This is a story of this innovation.
Manuel was born in Mozambique, is a dual citizen of Portugal and Netherlands. He has spent close to a decade and half in the financial technology and telecom industry. Having spent several years in Africa and in Europe, Manuel understood financial inclusion – helping the unbanked to access financial services – better than many other European innovators.
He is a good business man, in addition to being an excellent innovator. He sensed the opportunity in the financial sector. He connected with Master Card and Accenture. He got INOV the Portuguese government innovation support institution to give him a grant of $1 million dollar towards creating a multi functional exclusively financial services focused device.
The device that he created looks like a flexible mobile phone. It is, though, a shade larger in size. Manuel says that the mobile phone is a multimedia device and is not designed for banking. He has named his innovation M Eskudo. It has a smart card, a communication unit, a touch screen all using miniaturized technology.
The hardware design and engineering has been outsourced to a designer and manufacturer based out of Germany. To make the unit more secure, Manuel had already scheduled an appointment with a block chain expert. He wants to incorporate block chain technology into his innovation. This will make the unit secure and hack proof – a critical need for the financial sector.
The unit technology is patented. It was tested in field conditions in one of the leading Portuguese bank. Master Card and Accenture participated in the testing of the unit. The testing unfortunately had to be stopped midway due to the 2014 European Financial crisis. Funding to the program was terminated midway. Today, the unit that is ready for pilot testing needs an urgent infusion of funds to take the project forward.
Manuel is now making efforts to secure funding from investors. He participated in the Money Conf event held from June 21st and 22nd 2016 in Madrid. When we spoke on June 23rd 2016 over skype, he did mention that discussions for infusion of funds with investors had been initiated.
The M-Eskudo platform is designed for use as credit and debit card, to generate passbook and to transact banking online. The device will be bank agnostic. It can be used to transact across multiple banks.
Manuel is looking at the potential of Africa in financial inclusion as a major market for his device. He is investing a lot of his time visiting Kenya and other countries scouting to market the device and offering end to end services. Although, India has a huge financial potential in financial inclusion, he was quite tentative in exploring that market. He found the complexity of the country and its business landscape quite daunting.
Additionally, I think the prevailing innovation ecosystem and governance structures in India and China two of the world’s largest markets for financial inclusion are more likely to prefer adopting a local innovation. The internal capability in these markets is considerable and has the capacity to service such a need.
Africa may be the right market that may adopt a Europe based innovation. However, my sense is that this will happen only if a telecom provider or any other institution with a multi country network is willing to take the innovation forward.
Master Card’s global network would come in handy and Accenture business development capability could be leveraged by Manuel. But he will have to persuade these institutions to support M-Eskudo production and service roll out.
M-Eskudo is an example of great European innovation struggling to find a market in the depressed global market conditions. It is a great loss for the world when one third of the global economy is struggling to support its innovators and creators. M-Eskudo is a great product. Manuel has the expertise and the understanding. He will need to use his business negotiation skills to make a deal. The Achilles heel probably is marketing, getting funding to do pilot testing is the least of Manuel’s problems.