Banking and Infrastructure in Developing Financial Services Markets

Banking and Infrastructure in Developing Financial Services MarketsA few slides on recent challenges in a few developingmarkets, showcase of a few Rabo Development partnerbanks.Dan ArmstrongTakashi Mobile, 30 November 2011

Distribution as a Customer Acquisition Tool Banked Customers Time

Distribution : Banking and Banking Usage Trends Alternative Traditional Physical Virtual

Rabo Development  Rabobank Development is a division of Rabobank International, one of the world‟s largest food/agri-banks • Wholesale banking in 48 countries, 59.000 Rabobank employees • AAA status as a retail bank, but focused on rural/retail and agri-banking  Rabo Development partners/takes minority equity in banks in developing countries that match this historical profile and skillsets.  In addition to support in food/agri- and basic banking services, Rabo Development also supports partners with brick-and- mortar branch network strategies, channels/automation projects (mobile, ATM, internet), banking products, fraud and in- country personnel.

Rabobank World-Wide KeyRabobank Group Rabo Development 48 countries, 59.000 employees Rabo International – Retail & Wholesale  Partner Banks: Brazil, Paraguay, Zambia, Tanzania, Rwanda, Mozambique, China Robeco, Sarasin, Orbay, Obvion, Interpolis, Rabo International - Wholesale Lage Landen, Athlon , etc.  Projects: Egypt, Malaysia, Vietnam, RIAS & Rabo Development Kazakhstan, Pakistan, Ukraine, Malawi, etc. Main focus on food and agri-banking, cooperative banking, and retail Rabobank Foundation

Banking in Harsh Environments  Bringing compute resources and solutions to banks in remote locations with limited infrastructure is a major challenge: • Fixed line internet connectivity (fibre, WiMax) and, if available, huge cost • Mobile internet connectivity (GSM/HSDPA, GPRS/EDGE, WCDMA, etc.) • Power (lack of power at all, or lack of stable power and/or UPS) • Weather conditions (humidity, flooding, sun exposure, lack of closed buildings and server environments) • Environmental conditions (dust, exponentially higher maintenance cycles) • Security of computing platforms (theft, transport, as well as e.g. stolen cooper phone wire for other purposes like jewelry) • IT skills (system set-up, monitoring, maintenance, usage of computers) • Literacy

Generating Successful Formulas Currently has / uses another financial product Too poor Redistribution Zone Target / Does not have Excluded by design Addressable access to the Market product Excluded by default Development Zone Does not have / use a financial product Does not want the product Has access to the product, but does not use it Potential users Enablement Zone Based on: http://www.bankablefrontier.com/assets/pdfs/access-frontier-as-tool.pdf

Zanaco  40+ years of success, growth and stability, successful expansions, privatisation and IPO  450.000 customers, 1.200 employees, 50 branches  Year-on-year profitability, K3 bln in assets, mature risk management regime. Healthy account portfolio including: • Retail: account services, personal loans, e-banking, Xapit, remittances, cash services • Corporate: credit facilities, e-banking, cash services, treasury and investments, trade services  Transformation to modern banking tools: 100+ ATMs, internet banking, mobile banking

Xapit Instant Banking  Mobile Banking: Launched in late 2008, USSD mobile banking • 250.000+ customers to-date • 20+ bill payment partners, prepaid airtime, etc., 21 transactions per month  Light Account: Also, Xapit „account‟ = welcome pack + mobile banking + ATM card  DSA: Sign-up for an account *444# and get mobile banking and a VISA debit card in 5 minutes.  Agency Banking: 123 ZamPost agency locations  Truck Banking: Zanaco mobile banking vehicles

FMB Fast Account  First Merchant Bank (Malawi) • 19 branches, corporate and retail banking, 600 employees, growing strongly • 1/11 commercial banks in Malawi  FMB Mobile / FMB Fast Account • Launched summer of 2010, 50.000+ customers to-date • Successful to-date – packaging of ATM card, bank account and mobile banking functionality • *** Includes immediate (small) balance on customers’ account, facilitating usage of the new product

Case Study: NMB Tanzania  NMB: National Microfinance Bank Ltd. • Also by-far the largest bank in Tanzania • 1.9 mln customers: regular Tanzanians, all teachers, army, etc. • ATMs in place (400+), most customers have ATM cards • 150 connected branches (100%)  However, as a former government bank: • Must handle bill payments, salary dispersal and non-customer transactions • Major queue problems

NMB mobile – mobile banking  Dial *155*66# to access  Features: • Balance Inquiry • Mini-Statement NMB mobile 1. Balance Enquiry • Money transfers to any NMB account 2. Mini-Statement 3. Money Transfer • Tanesco Luku Prepaid Electricity Purchase 4. Prepaid Services 5. Other Services • Vodacom and ZAIN Prepaid Airtime Top-Up 6. Help • NMB Services like ATM card block, settings  No need to fill-in forms or visit an NMB branch to sign-up, simply dial *155*66*123#  NMB mobile: • Launched in August 2009 • 550.000+ active customers to-date • All mobile networks, 100% nation-wide coverage • SMS Alerts to 220.000 customers monthly

BPR Rwanda  BPR (Banque Populaire du Rwanda) is by far the largest bank in Rwanda • “Bank of the people” with roots in cooperative and food/agri-banking (>85% of Rwandans are farmers) • 1,3 mln accounts (8x larger than the second largest bank)  In 2011, 47/191 BPR branch banks were automated: • Around 150 locations use paper-and- pencil ledgers • Staff may have no previous experience with computers • Fraud and information integrity are problems. • Customers can only bank at one bank location.

BPR Mobile Banking  “Project Columbus” • Automating all 191 branches in 14 months • Mobile internet (incl. USB modems, laptops) • Data migration, training of staff and customers, card distribution  New BPR E-Channels • BPR Mobile Banking (launched 09/2010, 110.000+ customers to-date) • BPR SMS Alerts • BPR ATM Cards • BPR QuickCash ATMs • BPR Call Centre

BPR “Quickcash” ATMs  Quickcash and ATM Cards • 100 BPR ATMs online in 2011 throughout Rwanda (donated by local Rabobanks) • Increased ATM usage through new marketing and promotions, usability campaigns and POS roll-out  New E-Banking Call Centre • BPR call centre successful operating, incl. ACD/call queue system • Inbound and outbound calling to improve usage, sign-ups and customer satisfaction • 650-1.000 calls per day, service level is 85%+

BPR Mobile Banking Mobile Banking 1. Balance Inquiry 2. Mini-Statement 3. Money Transfer (BPR Accounts) 4. Prepaid Airtime • MTN • Tigo (pending) 5. Bill Payments • RECO Prepaid Electricity • StarTimes Africa TV • DStv • MTN Postpaid Bill • Tigo Postpaid Bill (pending) 6. Bank Services • Change BPR Mobile Banking PIN • Change Language • Order Cheque Book 7. Help

BPR Mobile Road Shows & Sign-up Success

BPR: Simbuka  Creating awareness of technology and it‟s benefits for Rwandans  Automatically include new technologies in new account packages.  Bring older (loyal) customers along with the launch of new services.

Challenges in Rwanda, Tanzania and Elsewhere  Utilities  Costs • high-quality power • connectivity (VSAT, 2G/3G, land • paved roads lines) • generator electricity only option in  Environmental conditions some remote locations (costly) • heat • high-quality solar still expensive • humidity • but GPRS is being widely available • dirt and can be a cheap and effective solution – both for connectivity and  Knowledge for electricity • project management  Cultural Acceptance • branches as ambassadors • technology acceptance • trained technicians • trust • maintenance and support personnel • usability  Equipment • PIN/2FA • spare parts • local hardware/software licenses

Thank You! Dan Armstrong, +31652085071 www.rabobank.nl dan.armstrong@takashimobile.com www.rabobank.com

Banking and Infrastructure in Developing Financial Services Markets

by Dan Armstrong on Nov 29, 2011

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Banking and Infrastructure in Developing Financial Services Markets — Presentation Transcript