Using digitalization to eliminate the unbanked in Colombia

How Davivienda, a local retail bank, helped reduce the unbanked population and created financial benefits through technological innovation


Colombia presented two very interesting and diverging statistics in 2010: The banked population, defined as adults with at least one financial product, was 64% and towards the lower end of the rankings of South American countries[1]. However, the population with at least one cellphone was found to be around 93%, making it one of the highest of the region[2]. How could the banking system leverage the ITC infrastructure to better serve their clients?

With a 30-million-dollar investment in 2011 Davivienda, the third largest bank (by AOM) in the country launched DaviPlata[3], a virtual money wallet targeting the Bottom of the Pyramid (BoP) population. The product allowed the user access to basic financial services through his or her cell phone. Some features include transfers across DaviPlata users, receive deposits from abroad or Davivienda branches, pay public services, and withdraw cash from Davivienda ATMs, even without a formal checking or savings account[4].

Critics acclaimed three important aspects of the product that made it attractive:

  1. Easy sign up: sign up was free and only required a national ID card and cellphone line, with immediate activation
  2. Simplicity in use: text messages and simple instructions allowed even the most technologically challenged to learn how to use the product
  3. By being a mobile platform, it was authorized by the government to be exempted from paying financial service taxes that heavily burdened the BoP population

The product was an instant hit, reaching over five hundred thousand users in the first year alone, expanding to over two million after three years[5] and receiving numerous awards for its innovation and contribution towards developing the Latin American banking system[6].

As the country’s cellphone market evolved, so did DaviPlata. In 2016, Colombia’s smartphone penetration reached 52%, prompting Davivienda to launch the DaviPlata app, allowing the bank to increase features to the product[7]. As of this year, the percentage of the population unbanked fell to 75% and Davivienda is widely recognized as a leader in the “race to the bottom”.

The success of the DaviPlata can be traced to the fact that Davivienda was able to adapt its traditional business model to fundamentally include technology in the forefront of its product and business innovation, far ahead of other local competitors. By recognizing that cellphone penetration in lower socioeconomic families was significantly higher than banking, Davivienda changed the question they were trying to solve from “how can I get customers in the bank branch” to “how can we get into their phones”. By reducing the friction points for sign up and embracing new technology, Davivienda obtained access to an untapped part of the population. Additionally, on the count of being first movers they were well positioned to capture important benefits. In 2012 the government selected the DaviPlata platform to distribute social welfare payments to BoP families with children. This was a critical driver in capturing clients and increasing volume of disbursements, and therefore, financial benefits[8].

The change in Davivienda’s business model came with challenges in its operating model. Significant resources had to be invested into building the capabilities required to handle a new set of IT services. Coordination and alliances with the three national cellphone carriers was also very difficult[9]. With the momentum gained and alliances created with the public sector and SMEs, DaviPlata required its own independently-run business unit (it was initially conceived within the retail banking business unit), generating even more pressure to generate results beyond a social benefit. Fortunately, Daviplata results continue to impress. In 2016 of DaviPlata were impressive. Over 2.7 Million active users, with over 60 million transactions that transferred over 1.1 Billion USD in funds. Its 2016 marketing campaign in which they promoted “Concepción, Antioquia, as the first town In the world without paper currency” is nominated for various industry awards. The commercial shows an old town “stuck in the past” in many ways, except in which transactions occur ([10].  Many of these transactions (along with the potential up-sell to new costumers) would not have been possible without DaviPlata.

Going forward, I would like to see Davivienda leverage the success of its platform to include inter-bank services. I also think it would be beneficial both for the company and its clients for Davivienda to explore how to better leverage the data obtained from the product to further develop new financial products and services to this part of the population.

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[1] National banks association report:

[2] New article siting National Industry and commerce report:

[3] News article:

[4] Product website:!ut/p/b1/04_SjzQ0NzA3NrW0NNKP0I_KSyzLTE8syczPS8wB8aPM4o0tAk38vJyMfJ0dHZ0NHAO9LS0dg0wNPA0NgQoigQoMcABHA0L6w_WjwEpM3D19DF3NAhzNAkLcDBzN3Fw9jXyNjdwdjaEK8Fjh55Gfm6qfG5Vj6anrqAgA8rng-g!!/dl4/d5/L2dBISEvZ0FBIS9nQSEh/

[5] News arcticle:

[6] News clippings and

[7]News clipping and





Lytx /lɪtɪks/ n. 1. a company saving lives on the road, digitally


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Student comments on Using digitalization to eliminate the unbanked in Colombia

  1. Thank you JDG for this post!

    It is very interesting to see that, after Davivienda lunched this new product, other banks such as BBVA followed by introducing the same system to reach this new market segment. [1]

    Also, it is remarkable how we can use technology to increase opportunities for all. Based on an expert interview to the General Manager of a leading online retailer site in Colombia, e-commerce sales growth is driven in part by increases in penetration of banking services. This means that Davivienda is not only expanding the benefits of financial services, but also increasing the general population’s access to online goods and services, which used to be a privilege reserved to more affluent Colombians.

    My main question for Davivienda’s future is how to leverage this technology to educate people on financial services. Having access to financial services is important, but if people are not well educated on the costs and responsibilities that are linked to the financial service they have, this can become a problem in the long-term through misuse of a complex service.


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