Overview of Successful Mobile Banking Initiatives from Around the
Transcript of Overview of Successful Mobile Banking Initiatives from Around the
Overview of Successful Mobile Banking
Initiatives from Around the World
Amarante Consulting
Aiaze MITHA
March 2013
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Content
Overview of Successful Mobile Banking Initiatives
1. What is m-banking?
2. Some inspiring m-banking initiatives
3. So, what’s in it for Banks?
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Access to Finance Remains a Global Challenge
Close to 50% of adults in Central and Eastern Europe do not have access to formal financial services
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Mobile Channel Helps Broaden the Reach to the Large Unbanked
Masses who Own a Mobile Phone
World Economic Pyramid
Source: World Resources Institute (*Individual Annual Income: 2005 USD Purchasing Power Parity)
500 Mill *>$20k/yr
2 Billion *$3260 to $20k/yr
4 Billion *<$3260/yr or <$9/day
Reach of
MNOs
Opportunity: 1.7 Billion
people
Source: CGAP
Reach of
Banks
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What is M-Banking?
Branchless
Banking
Delivery of financial services outside conventional bank branches using information and communications technologies and nonbank retail agents.
Source: CGAP
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Content
Overview of Successful Mobile Banking Initiatives
1. What is m-banking?
2. Some inspiring m-banking initiatives
3. So, what’s in it for banks?
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160 Mobile Banking Deployments and 110 Planned Deployments
LEGEND Mobile Commerce projects
1 live mobile banking project
3 or more live mobile banking projects
2 live mobile banking projects
LAC
18 live projects
Africa 89 live projects
APAC
44 live projects
Source : GSMA MMU, Amarante Consulting, February 2013
EE
2 live projects
Middle East
7 live projects
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What’s Been Happening in the Mobile Banking Industry?
Mobile Operators have taken a leading role in mobile payments:
1. Existing infrastructure;
2. Agent network;
3. Large customer base
Banks have been slower at entering the m-banking space:
1. Sufficient liquidity and sufficient revenues from existing client base;
2. Focus on credit and not on opportunities to mobilize deposits;
3. Absence of a proven business model and tested IT solutions;
4. Lack of an enabling environment
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What’s Been Happening in the Mobile Banking Industry?
But there are more and more examples of Bank-Led Models:
Equity Bank: after launching M-Kesho in partnership with Safaricom’s M-Pesa; Eazzy24/7 as
Equity Bank’s own mobile banking channel that the Bank’s customers can access through all
mobile phone operators; and a mobile application that Orange mobile phone customers use
to access their Equity Bank account, Equity decided to build its own agent network.
Tameer – EasyPaisa: is a joint initiative by Telenor Pakistan and Tameer Microfinance Bank
to provide branchless banking in Pakistan. Easypaisa is available to all walk in customers and
Telenor subscribers in Pakistan. With Easypaisa, customers can pay bills, send/receive
money within Pakistan and from abroad, purchase airtime for their mobile phones, make
donations etc.
Transfer: is a joint initiative by Banco AV Villas and COMCEL in Colombia. It is a
transactional account operated via mobile phones that enables clients to make and receive
payments. It will be further complemented by a savings, credit and insurance offering
targeting the unbanked, all operated via mobile and agent channels.
Until recently, we mostly heard about Telco-led models: Safaricom Mis Safaricom’s successful mobile payment product, with over 18 million
customers served through 60,000 agents distributed across Kenya and over $1 billion worth
of transactions processed every month through the systemPesa:.
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Africa: M-Pesa Has Progressively Introduced a Complete Set of Mobile
Banking Products
M-Pesa
to Bank
M-Pesa
Na Bonga
M-Pesa
Transactional
Services
M-Pesa
P2P
Payments
M-Shwari
Savings
& Credit
M-Kesho
Savings
Account
2007: launch of M-Pesa by
Safaricom that quickly becomes a
leading service for cash transfers
Starting 2007: introduction of
additional payment services available
to M-Pesa customers (airtime,
merchant payment, bill payment…)
2009: M-Kesho is one of the first
product created to offer micro finance
products over the mobile channel
2012: within 3 months, M-Shwari,
that provides access to savings and
credit for M-Pesa Customers, has
captured a significant part of M-Pesa
customers
Starting 2009: Kenyan
banks started integrating
their banking infrastructure
with M-Pesa allowing
transfers between M-Pesa
and any bank accounts
2009: loyalty program that
allows M-Pesa customers
to earn Bonga Points on
chargeable transaction
M-Pesa: 18 million customers Over 60,000 agents
M-Kesho: 0.5 million customers after 6months launch
M-Shwari: 70,000 accounts opened the first day
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National remittance is the main product offering of M-PESA.
Safaricom positioned the product as a fast, safe and easy way to ‘send money home’. The service also enables airtime purchase,
bill payment, ATM withdrawal and purchase of goods and
services
Customers that have registered for M-PESA can send money to
non-registered mobile phone users on any network. This capability spurred initial subscriber growth since it enabled early
registrants to use the system even when there were few other
customers registered.
Large BTL and ATL educational camapign Safaricom invested a
large amount in marketing and customer education The product is aggressively advertised through. The initial TV and radio
advertisements of the product played on the emotional aspects
of national money transfer (“send money home”) and used the local culture to explain the benefits of the product.
Branding M-PESA has benefited directly from closely associating the product brand to Safaricom’s which is associated
with people’s idea of a modern Kenya and plays on nationalistic
sentiments. A distinct M-PESA sign is distributed to each retail shop and retail agents
Safaricom has developed an extensive agent network
nationwide. Currently, there are more than 22,000 by the end of 2010. Several large institutions such as Kenya Power and Light
Commission (KPLC), Kenya Airways, and Nakumatt
supermarkets also support MPSA
Agent Training and management is one of the key
achievements. Safaricom uses an external agency management firm (Top Image) with over 50 staff supporting the product to
train and manage M-PESA agents
Distribution & Ecosystem Marketing Campaign
Customer value proposition
Sources: CGAP, GSMA, IOM World, Various Web Publications
Africa: A Number of Factors Played a Key Role in the Success of
M-Pesa
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Asia-Pacific: Pakistan, A Promising Market Seeing Phenomenal
Development
MNOs acquiring
Financial Institutions
09/2009: in 2008, Telenor
has acquired a 51% stake in
Tameer Bank (MFI) and
subsequently launched
Easypaisa in partnership with
Tameer bank
11/2012: Mobile banking
service offered in partnership
with Waseela bank that
recently obtained a license
from the Central Bank to offer
mobile banking services
Bank Led Model
04/2010: Omni is a
branchless banking
service powered by UBL
Bank and available in
more than 600 locations
in Pakistan
Mobile and card account
holders can do a vast
array of Financial
transactions
An independent PSP
12/2012: Independent PSP
offering managed platform
and services to Bank in
Pakistan
Partnership between
a bank and a MNO
12/2012: Mobile banking
service offered by Zong
(MNO) and Askari Bank.
Through the service mobile
account holders can transfer
funds or pay utility bills.
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Asia-Pacific: is Easypaisa Successful?
Description Mobile account that enables any mobile users to do any type of transactions (P2P, bill Pay, Donations…). Easypaisa Khushaal is a savings product launched in Oct 2012.
Country Pakistan (Launched in 2009)
Partners Telenor (MNO) Tameer Bank (MFI)
Market Penetration
Customers: more than 1.1 million mobile accounts on Easypaisa service Distribution network: ~20,000 agents in 750 different locations (Easypaisa has more access points than the entire banking sector in Pakistan) Over 4 million unique transactions per month
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30 millon
subscribers
MOBILE BANKING
ALLIANCE WITH
CLARO AGENT NETWORK
~10,000 agents
~4,000 agents
TECHNOLOGY
BEING USED
2,700 ATMs
Latin America: Banco AV Villas, A Bank That Has a Mass Retail Vision
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Latin America: Banco AV Villas Will Gradually Introduce Financial
Products Targeting Low Income Segments
Transactional Account
Loan Products
Savings product
INSURANCE
PRODUCT
INSURANCE
PRODUCT
UNBANKED BANKED
Holistic approach to solving the challenges of the unbanked Strategic considerations around the partnership with a MNO Clear financial rationale
Enable
customers
to make
payments
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Content
Overview of Successful Mobile Banking Initiatives
1. What is m-banking?
2. Some inspiring m-banking initiatives
3. So, what’s in it for Banks?
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Bank Expand bank outreach at
low cost
Portfolio growth
Deposit mobilization
Selling other financial products
MNO Customer retention
Increase in ARPU
Generating new revenue stream
Customer acquisition (individual/corporate)
Perspectives for Banks and MNOs are Different
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A business case based on transaction revenues only is likely to be unsustainable
Significant CAPEX (e.g. mobile banking platform) and OPEX investments are only going to be offset by offering core financial products to a large customer base
The impact on the Bank’s P&L should be built around:
Revenue growth from float intermediation margin
Reduction in costs of funds
Improved operating cost ratio
Client growth (expand in
areas that cannot be
served by a Branch)
Deposit mobilization
Portfolio growth
Expected Returns for Financial Institutions