Fintech, Open Source, and Emerging Markets

Chapter 4. Open Source, APIs Drive Innovation

Digital technology, open source architecture, and application programming interfaces (APIs) are driving toward more collaboration and data sharing. We can expect a galaxy of new and profitable products, services, and processes from the fintech zeitgeist.

Monetizing the Model

Does the developing world offer a profitable business model? Yes! Practitioners in markets across the globe show they are able to monetize the strong growth of mobile and data traffic. This is a key factor at a time when revenues in the developed world from more traditional channels are squeezed. In financial services, added productivity issues and a sluggish economy lure attention elsewhere to growth opportunities. None other than Bill Gates affirms the financial success of serving emerging economies. Companies pioneering mobile banking find it profitable to serve the poor because “the marginal cost of processing a digital transaction is near zero. And because so many people in developing countries have mobile phones—more than 70 percent of adults in many countries are subscribers now—the volume of transactions can be very high. By making small commissions on millions and millions of transactions, mobile money providers can make a profit serving poor customers.”

Here’s an illustration. Financial opportunity is highlighted when forward-thinking giants like MasterCard are approaching unbanked areas of the globe. As all is going virtual, digital, and biometric, ...