Business Case

The Savings Typology page describes four types of low-balance bank account activity patterns.  On this Business Case page, we observe how these different patterns impact the business case for banks, first under a typical status quo bank offering (dubbed “Proposition 1.0”, described further on the Journey of Propositions page), and then under two more advanced stages of the Journey, a journey which is underway for each of the GAFIS banks.

This creates a 4×3 matrix of 12 different Business Case scenarios, which lead to varying bottom lines.  You can explore each by clicking on the savings types in the navigation bar above, and then scrolling down across the proposition stages.  We apply the so-called “ACTA” framework1 and present the GAFIS “stylized”2 results, but the tables are interactive (and downloadable), enabling you to input your own data or hypothetical scenarios to see how the business case varies with different particular activity patterns or cost structures.

For instance, for the “spend down slowly” type of savings, the Figure below summarizes the journey from Proposition 1.0 through Proposition 1.5 to Proposition 2.0.  The elements of each of these three stages are provided in more detail on the three respective “spend down slowly” (SDS) sub-pages.

1 In 2013, the Financial Services for the Poor team at the Bill and Melinda Gates Foundation published a report called Fighting Poverty through Payments, which frames a way of categorizing the components of bank account profitability.  Refer to Box C on page 14 of the GAFIS Project Report for a brief summary of this ACTA framework.

2 What does “stylized” mean?  Rather than simply average out the (sometimes extreme) differences among GAFIS banks, the GAFIS project developed a stylized financial model of a (Proposition 1.0) typical bank account, based on the profile of fees, costs and usage that depicts the general case across the GAFIS banks.  Please refer to GAFIS Focus Note 3 for more on the basis for this stylization.