Business information Systems Management pgp18

Case Questions
Case: Eko: Mobile Banking and Payments in India
Akshey Bhogra (PGP/18/178) Section D
Questions:

1. What were the SWOT of the Indian market at the time of the
case for the finance sector? For Telecom sector?
SWOT- Indian Financial Sector
Strengths

Strong brand recognition of various banks

Diversified portfolio offerings
Big capital reserves

Weaknesses

Available in only 140000 out of 600000 villages

Insufficient infrastructure to server Indias large population
High cost and time required to reach remote areas

Opportunities

Unified electronic payment infrastructure

Beneficial for social security schemes and subsidy
Cost of cash could be reduced to one third of current level
RBI has liberalized guidelines permitting customer charging
Unique biometric based Identification number, Aadhaar has wide
reach

Threats

Brand dilution by CSPs

Severe consequences on financials
Strict rules and regulations by RBI

SWOT Indian Telecom sector

Business information Systems Management pgp18

Case Questions
Strengths

High penetration of mobile phones

One of the fastest growing networks
High foreign investment
A large number of players
Innovative services being introduced

Weaknesses

Late in adopting new technologies

Large investment required to start a telecom business
Little R&D
Slow regulatory reforms
High import and low export of technology products

Opportunities

Value added services for healthcare, education, banking and

entertainment
3G and 4G
Increasing popularity of smartphones
Fiber connectivity to be introduced
A large population still needs to be covered

Threats

Political instability
Strict regulatory practices
Competition from foreign players
Weak IPR Protection
Taxes and duties

2. How well did you think Eko was able to combine the
opportunities of the market to its advantage?

Business information Systems Management pgp18

Case Questions
Ans: Eko was able to combine opportunities of the market to its advantage
due to the following reasons
First mover advantage: Early to recognise the target segment
consisting of migrant labourers, handcraft vendors, rickshaw pullers and
domestic help
Innovative products: Addressed the need of target segment through
various innovative products such as No-Frills Account and Tatkal
Remittance Service
Benefits to customers: Outlets open from 8 am to 10 pm, seven days a
week with nominal fees and less transaction time
Favourable regulatory policies: The BC regulation gave Eko an opening
through which they could source bank accounts and configure them for
mobile transactions
Objective of Government and RBI: Financial inclusion had been an
important goal for the government and RBI

3. What challenges lay in store with Eko? How well has Eko been
able to overcome all the challenges?
Ans
The Initial Hiccups: First couple of years were very tough for Eko which
dried their initial funds of Rs 23.7 mn
Overcame by: Forging partnership with Centurion Bank of Punjab as a
BC for opening no-frills accounts
Partnership with Centurion Bank ended very early when it was acquired
by HDFC, as a result of which it had to shut down all 2000 accounts it
had acquired
Overcame when: It received a grant of Rs 97 mn from CGAP
Technology Program a program co-funded by Gates Foundation
Not project itself as another software platform company
Overcame by: Building Eko into a consumer brand as per its founders
vision and outsourcing its technology development
Thus it efficiently managed most of the challenges in the past but the
main challenge lies ahead in deciding its future course for expansion

Business information Systems Management pgp18

Case Questions
4. What would be the challenges of the BC model for the
government?
Ans:
BC model would pose significant challenges for the government. The
financial viability of BCs depends on large volume of transactions. At
present BC dont get to process enough transactions to make the
business look lucrative. People who need BCs services but dont use
them are those who either dont know about BCs or are apprehensive
about availing the services of BCs. So lack of awareness is another
major challenge for the government. BC also face challenges such as
lower remuneration from banks and managing their CSPs.
5. What are the essential factors that Eko stressed on during its
operations?
Ans
Users were largely illiterate but were number-literate migrant workers
Most of the users used ultra-low cost mobile handsets and had no or
limited data services
Leveraging the existing behaviour of users
Mobile number of account holder to be used as identifier instead of
their bank account numbers
6. Considering the competition would you suggest Eko to
reconsider its business model? What specific advice would you
give to Eko?
Ans
It is not a good time to change direction as Eko has achieved modest
success in some cities. It needs to maintain its original vision of being
a consumer brand by being in contact with end consumers.
Government regulations has made the remittance model economically
viable. The experience of international firms like M-PESA also suggests
this as the right path. Good proposition of expansion of Ekos current
services in segments such as utility bills and insurance payments etc.
Eko has already built expertise in this area. A large population is still
unbanked indicating a huge potential market for the kind of services
offered by Eko.

Business information Systems Management pgp18

Case Questions