Rabobank: Case Studies in Mobile Banking & Payments Development: November 2010, Prague CZ

Rabobank: Case Studies in Mobile Banking & Payments Development
A brief presentation on mobile banking and payments developments within Rabobank Nederland and Rabobank International; as well as some case studies of how Rabo Development uses these lessons learned in developing countries.
Dan Armstrong
IIR Mobile Payment Services
Prague, Czech Republic
02 November 2010

Introducing Rabobank
A View of the Current Mobile Banking & Payments Landscape
Rabobank Group: Leveraging Knowledge & Platforms World-Wide
Rabobank Nederland:
Rabobank Mobile Banking and Mobile Applications
Rabobank Mobile Innovations Projects
Rabo Mobiel
Rabobank and the new NL NFC (Contactless) Mobile Payments Joint-Venture
Rabo Development Case Studies:
NMB mobile (Tanzania)
Banque Populaire du Rwanda (Rwanda)
Banco Regional (Paraguay)
Contents

Landscape of Mobile Banking and Payments
Rabobank, ABN AMRO, ING, SNS, etc.
1990-1999, continues …
2002, continues … (quite popular)
IVR Banking & Payments
SMS Account Activity Alerts
Multi-ChannelBalance-Checking
Others …
Full-Service Mobile Banking
Remote Payments and Electronic Wallets
Mobile Contactless Payments (NFC)
Java
WAP
STK
USSD
iPhone
Windows Mobile
Samsung JET
Android
Etc.
VISA MobileAndroid
( ?)
Note: not exhaustive, there are other technologies used in the world, but these are the major ones.

Landscape of Mobile Banking and Payments : Detail
Can be ok, but a subset of Full-Service Banking?
Legacy
IVR Banking & Payments
Multi-ChannelBalance-Checking
Security: PIN-based, CLI can be used (but not reliably)
Easy-to-use, menu-driven navigation
Works on every phone
Cumbersome
Bank-pushed method; normally offered for free to customers
Simple to understand (can be)
Works on every phone
Can be applied to many products (accounts, loans, offers, discounts, etc.)
No transactions or advanced features
Customer-pulled method
Simple to understand (can be)
Can be applied to many account types
Can be done via SMS, WAP, USSD or apps
Is a “killer app” in many regions, including Western Europe
Somewhat limited in scope
Mobile Operators,Transport,Modern Banks … ?
Future?
Remote Payments and Electronic Wallets
Mobile Contactless Payments (NFC)
Can be easy-to-use
Full-service = transactions, inquiries, actions, information
Saves trip to the ATM or bank, supports virtual channels, saves direct bank costs
Can be made to work on many phones, but app-based functionalities require specific phone strategy, development, costs
More complicated to launch and maintain, but allows for transaction charges
Except for mobile network operator distribution networks (M-PESA, MTN Mobile Money, ZAIN ZAP, Tigo Cash), bank wallets have enjoyed limited success world-wide
Some successes: Apple iTunes Store, PayPal, some Japanese products, public transportation.
Likely a step too far for developing (and developed?) banks, customers can directly access their bank account!
Card-emulation products in trial since 2004
Lack of mobile network operator business case (and they normally buy wholesale phones)
Difficulty in making a business case for a contactless phone vs. contactless cards.
Handset availability - there are no phones!
SIM Tool Kit  Apps V1  Apps V2  USSD  WAP  etc.

About Rabobank Group
(46 as of 2010)
3,7 mln internet banking customers, 7 mln NL customers overall (population: 16,5 mln), 9,5 mln customers world-wide
152 local banks and 1200 locations
Loyal, involved customers including 1,5 mln members
AAA rating (Moody's, Standard & Poor's, Dominion Bond)
Tradition of innovation: ATMs, internet banking, WAP and web presences, mobile banking, television banking, GSM services and operations

Rabobank and the NL Banking Landscape
NL market position EOY 2008
Mortgages (1) - 27%
Savings Accounts (1) - 41%
Loans (1) - 22%
Insurance (1) - 13%
Payments (2) - 30%
Investment (2) - 16%
Rabobank has the highest trust rating of all NL banks with 42%; #2 is 17%
Year-on-year, Rabobank ranks with the best bank website, customer service centre, CRM implementation, marketing and sponsorship programmes

Leveraging Knowledge, Experience & Platforms
Mobile Banking 60.000 customers (2003)
WAP, J2ME, iPhone, Android, Windows, Widget Apps
Rabo Mobiel 270.000 Customers(2006)
Mobile Banking 100.000+ customers (2003)
WAP, J2ME, iPhone, Android, Windows, Widget Apps
Rabo Mobiel 200.000 Customers(2006)
SMS Alerts 190.000 customers
(2002)
Mobile Wallet45.000 customers(2006)
Mobile Cash Management (FL)(2008)
(2002)
MiniTix Mobile Wallet45.000 customers(2006)
Mobile Cash Management (FL)(2008)
Fiserv Mobile BankingTrial(2010)
NFC Contactless Payments Joint-Venture (2010)
NMB mobile290.000 customers(launched mid-2009)
(launched 2008)
NMB mobile320.000 customers(launched mid-2009)
(launched 2008)
BPR Mobile Banking30.000 customers(launch Sept. 2010)
Mobile Feasibility Study
(2010)
(2010)
(2010)
Xapit Instant Banking 130.000 customers(launched end-2008)
FNB Mobile & Fast Account(launched mid-2010)

Rabobank Mobile Banking : Launched with WAP
Mobielbankieren enables transfers to known parties and payments up to €50.000 with Random Reader
SaldoDirekt provides 1-click account balances on all your accounts
Rabofoon telephone banking (IVR)
SMS Alerts for banking, transfers, payments, telco spending alerts
Mijn Mobiel telecommunications spending alerts, history and invoices
Rabo Financial Services Portal with financial services info., current stocks and financial news
WAP
iPhone
Android
WM
WAP
IVR
SMS
SMS
WAP
WAP
WEB
WAPlaunched in 2003

Mobile Banking Apps : Different Platforms
Windows Mobile(6.0, 6.1, 6.5)
iPhone & iPad Touch(all OS types)
Samsung Jétwidget & pre-installed apps
Android

Rabobank Nederland Mobielbankieren : From Browser to App

Rabobank Mobielbankieren : Usage 2010
2003-2009 level
Basically static Mobielbankieren usage 2003-2006. Rabo Mobiel launch and promotion increased the usage from 2006-2009. Launch of “apps” in late 2009 generated hugely increasing sign-up and usage figures.

Other Apps Offered by Rabobank Nederland
MobileBanking
SMS Betalen(SMS P2P Payments)
RekeningDelen(sharing a bill)
Interpolis
Schaadhulp(settling & recording damage)
Sports &SponsorshipApps

SMS Betalen : iPhone application

SMS Betalen : Java Midlet & Android App
Java (J2ME)
Android

Rabo Sponsorship Apps
Rabo Sport
Rabo Hockey
Rabo Cycling
iTour (Tour de France 2009)

Third-Party Payments Apps : Powered by Rabobank
2 x Shutter Island
iPhone
Android

Rabo Mobiel

Rabobank GSM MVNO & Value-Added Bank Product
Great, Core Mobile Telecommunications Product
Rabobank Values – trust, security, quality, easy-to-use services, cooperative value
Online Self-Care Environment
Secure Mobile Banking
Commitment to Applications Innovation (Mobile Financial Services)

Rabo Mobiel in the Marketplace

1.Rabobank GSM MVNO
Telecommunications Services
Mobile Internet Access
Mobile Content, Information & Media
Portals and Self-Care
2.
Value-Added Bank Product
Banking “On the Go”
Premium Product / Combination
Communications Channel for Local Banks, Members and Customers
3.Mobile Incubator
Product/Business Development for Mobile Financial Services and Products
Launch of Remote and Contactless Payments and Partnerships
4.Mobile Knowledge Centre
NFC, Consumer Behaviour & UsabilityEncryption, Mobile Business Rules
Mobile Low-Value Payments
Standards, Retail/Consumer Acceptance, Security, Sustainability
Rationale for Rabo Mobiel

Rabo Mobiel Remote Payments Trials
Mobile Terrace Payments: MyOrder at various locations (2008-09)
Albert Heijn To-Go NFC Shopping: Amsterdam Amstel (2008-09)
J2ME
iPhone
NFC
J2ME
Bluetooth
Mobile Health: StichtingDiabeter, Health Agency, Achmea (2008-09)
MiniTix Mobile Merchants: SMS Betalen Java (2008-09)
Mobile Parking: Park-Line (2007)Rekeningrijden: with Rabobank (2008-09)
iPhone
J2ME
WM
SMS

Rabo Mobiel Proximity Payments Trials & Launches
NFC Mobile Ticketing: DiergaardeBlijdoorp (2008-09)NFC Fietsenstalling: Eindhoven, Tilburg (2008-09)
NFC Cashless Schools: kassa’s and vending, ASH, HHS/Redbird (2007-09)NFC Cantina Trials & Roll-Out: Carian/MiniTix (2008-09)
RabobankRotterdam
NFC
NFC
WEB
NFC Vending Trials: Coca-Cola, FEBO (2007-08)
NFC Mobile Domestic Debit Card and Shopping Tool: C1000 (2007-08)
J2ME
J2ME
WEB
NFC
NFC

Rabobank Banking & Payment Innovation
2006 – Open Mobile Internet (OMI) programme launched
2006 – Rabo Mobile launched (world’s first bank MVNO)
2007 – Rabo Schoolbank NFC Cashless Schools
1981 – First ATM in NL
2007 – Rabobank / Rabo Mobiel NFC Trials Kick-Off
1994 – 1st web portal www.tref.nl
2008 – Mobielbankieren up to €50k (RR)
1986 – Pin Retail PoS
1996 – Internetbankieren launched
2009 – NFC Payments Roll-Out
1989 – Telebanking
1980
1990
2000
2010
2008 – SMS Betalen Launched
1995 – “Rabofoon” IVR Banking
2007 – MiniTix SMS
1999 – 1st bank WAP site launched (mmm.rabobank.nl)
2005 – Rabo tv
2003 – Mobielbankieren on i-Mode
2004 – Mobielbankieren launched on Vodafone Live!, Orangeworld, T-zones
2004 – MiniTix Online Launched
Rabo Mobiel B.V.
2006
2007
2008
Postpaid Launch
Prepaid Launch
30 Banks Online
Orange -> KPN
120 Banks Online
MIB 6.0 (OMI)
MIB 4.1 (RR)
SMS Betalen Launch
Launch of Segment Packages
C1000 NFC Trial
Diergarde Blijdorp NFC Ticketing
MyOrder Terrace Betalen
MKB/ZZP
Youth
Postpaid Retail Launch
NFC Trials: Coca-Cola, FEBO
180k + customers
Senioren
Retail Launch
100k + customers
AH To-Go Trial

Rabobank and Mobile Contactless Payments

A view of the evolution of bank cards through EMV and beyond. “proximity payments” being seen as “card present” transactions.
Most contactless EMV products launched to-date target LVP.
A view of payment token evolution
NFC Loyalty & Membership
Shopping & SmartPosters
Proprietary Bank Cards
Contactless EMV Cards
Non-EMV Cards
EMV Cards
NFC Mobile Phones with EMV Card Emulation
NFC Ticketing & Coupons
NFC Public Transport
Other, P2P, Payment, etc.

The broader NL NFC application landscape
Some thoughts ..
Vending
NFC delivers interaction in the physical world, therefore card-emulation is a key focus.
DebitCards
In-Store Formulas
AccessControl
Credit Cards
Smart Posters
However, mobile apps & device connectivity deliver true differentiation over cards.
PublicTransport
SchoolsCantinas
Parking
Ticketing
Loyalty &Discount
Success comes via attention to customer requirements not technology-push.
OtherPayment
Couponing
Membership
NFC P2PInteractivity

NFC SWP Handsets
NFC SWP UICC
NFC Mobile Payment Applications
NFC Mobile Wallet Applications
TSM Role
Bank/SP Management, New Banks/SPs
Life-Cycle & Memory Management
OTA Capability & MNO Interface Management
Certification & Compliance
NFC POS, Other NFC Readers for NFC VAS
NFC Customer Experience
Other Value-Added NFC Handset Applications
NFC POS Formulas & Combinations
Brand & Marketing, Launch & Continuing Campaigns
Elements of the mobile NFC ecosystem
TSM Role

Rabobank International
Rabobank’s international market niche is food- & agri business
Customer Network: many of the global food companies
Expertise: dedicated research team (80 professionals)
Agri products: weather derivatives, price hedging instruments
Rural retail banks in various countries

Rabobank Development
Eligible banks:
Developing (low income) economies
Economic, political and social stability
Rural area and agricultural sector important for economy
Open for foreign investments
Safe for our staff

Zambia : ZanacoXapit Instant Banking
Launched in late 2008, USSD II mobile banking & ATM card
Highly-successful “sub-branded” operations help Zanaco change it’s image, sign-up for an account in 5 minutes.
130.000 active customers to-date
20+ bill payment partners, prepaid airtime, etc.
June 2010 Usage: 21 transactions per month (average), 1.56 mln transactions per month total
AIN, MTN & CellZ
Some Partner Bank Examples
*444#
Rwanda : BPR Mobile Banking
Launching September 2010 nation-wide
USSD II mobile banking & SMS Alerts
MTN & Tigo (90%+ mobile penetration)
Goal: 60.000 customers EOY1, 120.000 customers EOY2
*150#

… later in 2010
Some Partner Bank Examples
Tanzania : NMB mobile
Launched in August 2009
308.000+ active customers to-date, hugely successful and profitable, break-even: 8 months
Prepaid airtime, bill payment, prepaid electricity
Vodacom, Zain, Tigo, Zantel (99% mobile penetration)
SMS Alerts to 220.000 customers monthly
June 2010: 1.86 mln transactions per month total
*155*66#
Malawi : FNB Mobile / FNB Fast Account
Launched summer of 2010
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. (Tanzania)
1,8 mln customers (500k increase with the launch of mobile banking/payments)
Consumer and small-business focused
Dedicated to providing sustainable, viable access and direct financial services.
Proud of our history of support for Tanzanians of all income levels, government and businesses.
Close By
Extensive (largest) network with 145 branch locations and 300+ ATMs nation-wide.
Branch network designed to cover minimally 80% of Tanzanian districts.
Empowering Entrepreneurs
Paying special attention to micro, small/medium-sized and rural business.
Tanzanian agriculture is close to NMB’s heart (KILIMO KWANZA) and they play a roll in all parts of the supply chain.
Rabobank : 40% shareholder
Case Study: NMB mobile (Tanzania)

Easy-to-use NMB mobile banking and payments for all NMB customers (USSD)
Features the most desired consumer applications:
Balance Inquiry
Mini-Statement
Money transfers to any NMB account
TanescoLuku Prepaid Electricity Purchase
Vodacom and ZAIN Prepaid Airtime Top-Up
NMB Services like ATM card block, settings
Works with NMB Personal Account, TPDF Account, Student Account, Wisdom Account
Simply dial *155*66# to access
No need to fill-in forms or visit an NMB branch to sign-up, simply dial *155*66*123#
NMB mobile
NMB mobile
1. Balance Enquiry
2. Mini-Statement
3. Money Transfer
4. Prepaid Services
5. Other Services
6. Help

Example: Mobile Banking Menu (USSD)
Your NMB account balance is: TSH 000,000.00Enter “9” to return to the main menu.
NMB mobile
Balance Enquiry
Mini-Statement
Money Transfer
Bills & Payments
Purchase Airtime
Bank Services
Help
*155*66#
NMB mobile
Please enter your NMB mobile PIN.
NMB mobile
1. Balance Enquiry
2. Mini-Statement
3. Money Transfer
4. Bills & Payments
5. Purchase Airtime
6. Bank Services
7. Help
Pease enter the recipient account or phone number registered for NMB mobile that you wish to transfer money to:
Enter the amount of money to be transferred:
Please confirm your money transfer:TSH 000,000will be transferred to
Enter “0” to confirm transfer and send.
Money transfer successful!TSH 000,000was transferred to
NMB mobile Ref. No: 12345678Enter “9” to return to the main menu.

NMB Milestones
ATM Money Transfer
NMB Personal Account: ATM Roll-Out Begins
Internet Bankingfor Corporates
100 ATMs within 1 Year
NMB SMS Salary Alerts
TanescoLuku Payment via ATMs
Vodacom Airtime via ATMs
2006
2007
2008
2009
NMB Business Account
NMB TPDF Account
NMB Bonus Account
85.000 SMS Salary Alerts Users
IPO: NMB Welcomes 27.000 new Shareholders!
NMB Wisdom Account (pensioners)
200 ATMs within 2 Years

Case Study: BPR (Rwanda)

BPR Branch Network

Our customer survey validates the vision ..
Would you trust a mobile phone for transfers and purchases?
Would you like to carry less cash?
Would you use a mobile phone for banking?
Would you be willing to pay for it if it added value?
Results: BPR Mobile Banking customer survey, April-May 2010, 7 branches & 170 customers interviewed.

Mobile Banking
Balance Inquiry
Mini-Statement
Money Transfer (BPR Accounts)
Prepaid Airtime
MTN
Tigo (pending)
Bill Payments
RECO Prepaid Electricity
StarTimes Africa TV
DStv
MTN Postpaid Bill
Tigo Postpaid Bill (pending)
Bank Services
Change BPR Mobile Banking PIN
Change Language
Order Cheque Book
Help
What can you do?
Also: Free SMS Salary Alerts!

Customer signs-up at a connected branchat the Customer Service desk
They identify themselves with their ID
We validate ID and automated account
We then search for the customer on the mobile banking system website (by account no.) and enter their mobile phone no.
BPR Mobile Banking will send a SMS to the registered phone no. with a welcome message and an initialmobile PIN
Newly registered customer will dial the USSD code and will be prompted on first logon to change their mobile PIN
All accounts with the same customer ID will be automatically linked to the phone no.
How will customers sign up?

Phase 2: Expansion
?? Banking the Un-Banked, A Modern Savings Account for All Rwandans
A transactional savings account that you can sign-up for in your own village or farm.
An account that doesn’t require “connected” branches to work.
Phase 1: Launch
In this phase, BPR wants to establish the platform for mobile banking – starting with valuable services for existing customers.
Successfully launch our platform, product and brand
Work out any kinks, get customer feedback
Attract new customers to the bank
Phase 1.5: Development
Launch new services, alerts, features
Show growth and development (“living product”)
Enable catch-up with last mobile operators, payment partners, RRA
Sub-branch automation via USSD
BPR Mobile Banking Roadmap Strategy
Q3 2010
Q4 2010
Q1 2011
Q2 2011

Phase I: Planning (2 weeks, 26 April – 07 May)
Phase II: Design & Architecture (2 weeks, 17 – 28 May)
Phase III: Build (5 weeks, 31 May – 09 July)
Phase IV: Test & Acceptance (3 weeks, 12 – 20 July)
Phase V: Friendly User Test (3 weeks, 02 – 23 August)
Launch (24 August, Rwanda International Trade Fair) – Sept. Live
Launch Timing
Friendly User Test
Test & Acceptance
April
May
June
July
August
I
III
IV
V
II

BPR Mobile Roadshows & Sign-up Success

Case Study: Banco Regional (Paraguay)

Rationale
Good for Banco Regional Customers
New, innovative, modern service for existing customers
Saves customers time and energy
Can service multiple account types (easy-to-bundle)
Easy to use, safe and secure, reliable – for many Banco Regional customer segments
Good for Paraguayans
Given internet and mobile penetration, provides services to the under/un-banked
Attract new customers to banking in general
Good for Banco Regional
Attract new consumer customers to Banco Regional
Platform for all sorts of new products and combinations
Allows customers to bank when and where they want
Cost reduction (queues, incentivises alternative banking channels)
SMS channel for us to communicate with customers
Transaction and commission revenue helps Banco Regional fund more product development
According to the customer survey: post-merger, Banco Regional customers await new services.

Mobile Financial Services Competition in Paraguay
SMS Alerts Product
SMS Alerts Product
SMS Alerts Product
Banco Familiar SMS AlertsBasic SMS Alerts product, free for customers.
ItaúClickBankingFlexible SMS Alerts for all account types, loans (Tigo, Personal). Free. IVR banking. Previously offered mobile transfers.
Vision Banco SMS AlertsBasic SMS Alerts product, free for customers.
SMS Alerts Product
SMS Alerts Product
BBVA SMS AlertsBasic SMS Alerts product, free for customers.
Banco Continental SMS AlertsBasic SMS Alerts product, free for customers.
MNO Money Transfer
Giros Tigo / Tigo Cash
USSD-based money transfer service for Tigo & non-Tigo customers. 4% commission charged to sender. Also promote mobile banking.
Launched w/Continental & Atlas
BilleteraPersonalMoney transfer, mobile wallet product from Personal.
There seems to be a “first mover advantage” for a full-fledged mobile banking strategy.
Time-to-market is critical here.

Paraguayan Socio-Economic Distribution & MB
4 % (ALTO)
Data Source: PRESENTACION - TARJETAS DE CREDITO AGOSTO 10 - FINAL.pptx
High-value customers and enterprise businesses need to be targeted in other ways. Traditionally expensive to attract these customers.
Driving specific products & services in lower-income areas = real scale opportunities
26 % (MEDIO)
Massive potential to expand in middle, middle-lower and lower income customer base with MB. This is the area where Paraguayans are under-served, but still can be profitable, long-term Banco Regional customers.
Bajo alto 10 %
Bajo medio 16 %
Massive potential to expand in low-income customer base with MB. Traditionally these are un-banked Paraguayans and not automatically attractive to Banco Regional. However, with a limited product set, and cost-effective support & maintenance, these could also be profitable for the bank.
Bajo bajo 30 %
56 % (BAJO)
14 %
(MUY BAJO)
Question: What are the segments applicable to a Banco Regional MB product? Likely this is upper-middle, middle, lower-middle and lower segments. Is Banco Regional interested in trying to expand successfully in these segments?

Business Case Drivers
Primary:
Customer Acquisition Tool
New customers in current regions
New customers in un-served regions
New customers to banking
Cost-Savings
Innovative “virtual” (alternative) channel
Helps lower branch queues
New Revenues
Deposits and loans from new customers
Bundle revenues
Direct transaction revenues
Secondary:
Loyalty
Service addition in bundles for existing customers
New 24/7 channel, bank in your pocket
Innovation
Supports Banco Regional’s position in Paraguay
Leverages lessons learned from partner banks
Enterprise Customers
Supports business account management with new consumer payment product in Paraguay
Supports payroll strategy

Thank You!
Dan Armstrong
Takashi Mobile | Financial Services
Rapenburgerplein 81
1011 VJ Amsterdam
The Netherlands
www.takashimobile.com
dan.armstrong@takashimobile.com
+31 652 085 071

Rabobank: Case Studies in Mobile Banking & Payments Development: November 2010, Prague CZ

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Rabobank: Case Studies in Mobile Banking & Payments Development: November 2010, Prague CZ — Presentation Transcript