In the last decade, financial inclusion efforts in emerging markets often prioritize expanding last mile access to cash-to digital points through Cash-in Cash-out (CICO) merchants. However, the low retention rate of local merchants in these tech-enabled low-cost networks, makes them a less reliable channel for banking solutions, especially in remote regions
where they may be the only proximate option. For the fintech firms, the high merchant churn rate impacts overall business sustainability . Our research aims to address the challenge by developing scalable personalized information interventions that improve merchant engagement with the fintech network. We explore two complementary approaches to information personalization: human-curated advice and AI-driven content curation. The first project, a pilot field study conducted with 43,541 nearly-dormant Fintech agents over an eight-month period, demonstrates the causal impact of personalized, data-driven human-curated advice. Treated Fintech agents experienced a consistent improvement in monthly earnings of 11% , with the top 20% of agents (identified through Causal Machine Learning algorithms) demonstrated a five-fold increase in earnings compared to an average targeted agent. The intervention tested in the first experiment, which, while impressive in its impact on merchants' outcomes, is limited by its ability to scale in a cost effective manner. Based on these insights the researchers develop the second experiment to investigate the potential of Generative AI (GAI) to enhance the scalability and cost-effectiveness of personalized information interventions. Through a series of pilot experiments involving 14,000 merchants, the researchers found a 35% increase in engagement when knowledge content is personalized through AI enabled curation with merchant profiles. Building upon these findings, we propose to scale up our personalization interventions, exploring the complementary roles of human expertise and AI in automating the process of providing personalized advice to advance reliable access to basic banking services in remote regions in developing economies.
Category
Year
Institution