Frugal retail banking innovation meets social need and could disrupt sector

In his book No Bank (available here in French) Hugues Le Bret tells the story of Compte Nickel, a start-up that he and his associates created for the purpose of providing people kicked out of the banking system with an ultra-low cost alternative to receiving and making ordinary card payments.

Although, in a heavily regulated sector, the project required 3 years of massive effort, chasing the funding needed to obtain regulatory approvals that were themselves needed to give enough confidence to investors, the business model is very simple:

1. The customer buys a €20 ‘pack’ at a retail outlet that is licensed to sell state-regulated products such as tobacco and lottery games. The pack contains a Mastercard and an instruction booklet.
2. Following the instructions, the customer scans their ID at a specially designed terminal, and provides a physical address and an email address. This 5-min operation opens the account.
3. The retail outlet manager then swipes the card that was provided in the pack, instantly checking that the account has been properly opened, generating an IBAN number and activating the card.
4. With a few additional steps the customer uses a mobile phone to generate a PIN and the codes for online banking.

Time for innovation to make sense and for humanity to step on the path to progress once more

On Monday evening I listened to Etienne Klein’s thought-provoking talk at Les [im]pertinents in Paris: “is there a future for the idea of progress?” A physicist and philosopher of science, Klein is a strong advocate of the role of science as an engine of innovation but observes that in our so-called post-modern society the link between science/innovation on the one hand and human progress on the other hand appears to be increasingly tenuous, if not severed, in the minds of people. How did it come to this and how can we retake our future in our own hands?

City Cableways – A low-cost infrastructure solution for the post-crisis rebound

Cableways evoke primarily memories of mountain resorts and viewpoints. Aiguille du Midi in France, Rote Nasse in Switzerland, Plateau Rosa in Italy fly over stunning Alpine sceneries. Masada cableway in Israel, Table Mountain aerial cableway in South Africa, or Rio cable car in Brazil reach the top of mountains or plateaus otherwise difficult to access and no less stunning. Naturally, when we think cable car, we think going up, usually in a site of natural beauty.

Yet, slowly but surely, cableways have been finding their ways in cities, not only cities built at the foot of some sort of mountain such as Cape Town, Rio or Barcelona, but also cities as flat as London, Cologne or New York. In most cases, their purpose is to fly over a natural obstacle such as a river, but increasingly projects are popping up left and right for cableways flying across industrial areas or simply districts too densly populated to contemplate street level infrastructure. The idea may not be entirely new, but judging by the number of projects, it looks like an idea whose time has come. Here are a few reasons why.

PSA’s Hybrid Air – A low cost technology for the post-crisis rebound

Writing in December about past lessons on innovation for the post-crisis rebound, I relayed Marc Giget’s view that crisis have proven to be a fertile ground for innovation as long as it is frugal. Cost-efficient products, whether in terms of acquisition cost or running costs or both, are the typical winners that lead the way out of the crisis. This lesson casts some doubts on the short term viability of Renault-Nissan’s drive for full electric vehicles, but vindicates the ultra-low-cost strategy that they pursue through their Dacia subsidiary.

Yesterday, another great example surfaced: troubled French car manufacturer PSA (owner of Peugeot and Citroen brands) unveiled its Hybrid Air technology, which seems particularly fit for the post-crisis rebound.

Jugaad – A new discipline for the economy of the future

It’s been called ‘low-cost’ or ‘frugal’; now recognizing India’s excellence – although not monopoly – in the domain of ultra-low-cost innovation, it’s finally been given a Hindi name: Jugaad.

Traditionally, Jugaad are locally-made small trucks that provide low-cost transportation for people and goods in rural India. These small trucks, equipped with an engine derived from an irrigation pump,  typically cost less than $2,000. Recently, the use of the term Jugaad has been extended to describe an improvised arrangement or work-around, which has to be used because of lack of resources or excessive constraints.