Wondering if cell phone banking can reach the unreachable? CGAP Technology Blog has published the results of a discussion with Daryl Collins (co-author of Portfolios of the Poor) and Olga Morawczynski (of Grameen Foundation) from June’s Mobile Money Summit, an examination that highlights some of the keys to effective cell phone banking.

Blog author Mark Pickens comments, “I worry some mobile money providers won’t see the volume of transactions they want to justify the investment, unless they go beyond offering a simple liquid wallet and mobile remittances… [M]obile money providers in many markets will need a more sophisticated suite of products to attract (a) an attractively large number of customers who (b) will be active and do a number of transactions per month.” Pickens’ conclusion suggests that a variety of insurance opportunities, savings, and business training, along with mobile phone access, is what will attract customers in markets where there is heavier competition for their business and more microfinance options.

One of the surprising conclusions Pickens reaches with Collins and Morawczynski is that “the poor are active money managers.” The average family living in poverty used eight financial instruments, according to these experts’ findings, indicating that people living in poverty want and will take advantage of financial opportunities and products.

Plus, people living in poverty are willing to pay to save. In a 2008 survey of M-PESA customers, 21% said their mobile wallet was “the most important way” they save. CGAP has found that low income clients will pay on average 15% of their saving value to use M-PESA because of the confidentiality it gives them from family members and others, and security compared to storing money in a hiding place at home. “In other words,” says Pickens, “here are poor people paying for savings, without it ever being marketed to them as a way to save.”

New cell phone banking and other mobile banking products may need an innovative approach. Collins and Morawczynski found that ethnographic examinations and financial diaries are the best ways to find out how people are spending their money and where they need access to better services and products, as Collins and his co-authors published in Portfolios.

Where cell phone banking can reach the most people is in places like Kenya, where the government takes it on and champions it, as it does through M-PESA. In Malawi, too, Opportunity successfully launched its cell phone banking product in May 2010 to reach more of its population, especially those living in rural and peri-urban areas, reaching the 60% of the people who already have a cell phone.

This discussion certainly highlights that there are exciting innovations taking place in the developing world and that there are more opportunities that can be developed. When those living in poverty have access to a variety of financial products, like savings and insurance, and access via a variety of methods, like cell phone banking, mobile banking and biometric technologies, they are eager to take advantage of them.