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121010_Mobile Banking & Payments for Emerging Asia Summit 2012_Bank Sinar Branchless Banking Project- Sinar Sip Experience
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121010_Mobile Banking & Payments for Emerging Asia Summit 2012_Bank Sinar Branchless Banking Project- Sinar Sip Experience

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    121010_Mobile Banking & Payments for Emerging Asia Summit 2012_Bank Sinar Branchless Banking Project- Sinar Sip Experience 121010_Mobile Banking & Payments for Emerging Asia Summit 2012_Bank Sinar Branchless Banking Project- Sinar Sip Experience Presentation Transcript

    • Bank Sinar Branchless Banking Project- Sinar Sip ExperienceMobile Banking & Payment For Emerging Asia Summit 2012 October 2012 1
    • Bank Sinar Harapan Bali Overview Bank Sinar Harapan Bali is one of Bank Mandiri’s (largest Indonesia bank) subsidiary which focus on the micro segment development TOTAL PROFIT : Rp. 8.84 bio Bank Sinar Strategy 1• Product Development TOTAL ASET : TOTAL FUNDING: TOTAL CREDIT: 2• Branch expansion outside Bali Rp. 1.03 Tn Rp. 833.9 bio Rp. 628.7 bio 3• Branchless Banking implementation NUMBER OF CUSTOMERS : 140.366 BSHB Vision : “TO BE DOMINANT IN MICRO & SMALL BUSINESS IN BALISource : Bank Sinar Data, June 2012 2
    • Financial Inclusion Level Comparison Many countries are still facing Financial Inclusion …including Indonesia which have 49% of Issue population with no financial access OECD Countries*) Middle Asia & East Europe 60 million people 193 million people 8% 49% South Asia 612 million 58% SE Asia & Asia East Asia 876 million people Middle East Africa 136 million orang 59% 326 million 67% 80% Latin America 250 million 65%Source: Global Financial Inclusion (McKinsey & Company, 2010) Source : World Bank, 2010*) OECD (Organisation for Economic Co-operation and Development) 3
    • Main Reasons for high Un-banked Population1 Low number of branches/ATMs 2 Low level of Financial Literacy Insufficient money 79% Saving Unemployed 9% Account Feel no benefit 4% Feel do not deserve 60% Credit / Loans Do not need credit 20% No collateral 4%To open or set up a new branch/ATM need considerably Insufficient money 45%high cost, Capex and Opex Approximately, a new branch Insurance Lack of knowledge 29%requires Rp. 350 million of Capex and over Rp. 950 millonOpex/year. Thus banks are more likely to open a new Feel no benefit 17%branch/ATM in a higher density area such as city or urbanarea.Source: World Bank Database, 2010 4
    • Understanding Un-banked Segment Banking is not for me I want convenient, easy, and immediate Banking brand access to my money enhances trust in services Payments need to be easy for Agent need to be me educated on the services in order to serve me well I (just like other 93% mobile subscribers) won’t change my number. I and most of my friends and families have mobile phonesSource : Visa, BSHB research 5
    • Adaptation to New Technology At the same time, Indonesian are adaptive to new technology Mobile phone subscribers (millions) Facebook users outside US (millions)Only within 18 years, mobile phone has swiftly Indonesia ranks 3rd in terms of facebook userspenetrated Indonesia population. It is so ubiquitous that (outside US) with around 18% penetration of theit also reaches the un-banked segment. total population. Most of them access facebook via mobile phone.Source: Association of Indonesia Cellular Phones and industry checking Source: Socialbakers.com, April 2012 6
    • Good Opportunity to Increase e-CommerceNumber of Internet Users (millions) Indonesia e-Commerce Transaction Volume Projection (Rp Tn) • People are no w more likely to use e-commerce as the result of easiness and convenient to use • However, micro payment transactions generally are not yet facilitated. 7
    • Main Key Issues for M-Payment in Indonesia E-Money as one of m-payment C A Mobile Network Operators instrument is still lack of interoperability• High churn rate becomes a problem especially when m- banking/m-payment services are view as increasing customer Stickiness• Level of active SIM cards in the market• Network coverage• M-banking cost charged by the MNO B D Some MNOs also have develop Mobile Regulation Money products• Cash-in/cash-out • More harmonize cooperation needed• Agent banking • Separate and clearer role between Banks and MNOs by regulation• KYC/AML 8
    • Indonesia Readiness for Mobile Payment Although number of phone subscribers Mobile phone prevalence is also relatively exceeds number of population, mobile low*) coverage is still an issue*)Mobile phone subscribers as a percentage of the 15-to 64 y.o populationSource: MasterCard Mobile Payment Readiness Index 9
    • Indonesia Readiness for Mobile Payment Global Perspective on Consumer Sentiment in IndonesiaConsumer in Indonesia are not yet persuaded of the value of mobile payments. Willingness to usethem and current frequency of use, Indonesia ranks below average. Therefore, intense marketing andeducation program may bring Indonesian consumers to adopt mobile payments Source: MasterCard Mobile Payment Readiness Index 10
    • Bank Sinar Harapan Bali – Branchless Banking Project • Promote national economic development by expanding financial access • Help prove that branchless banking can run well in developing countries• Increase micro & small segment • Provide additional customers services to subscribers• Cross-sell & provide additional • Increase number of services to existing customers AXIS customers Developed Sinar Sip as the seed for branchless banking • Increase access to financial services for the un-banked segment • Increase customer loyalty • Support partner’s growth and increase access to partners services 11
    • Branchless Banking Concept Traditional Banking Account Opening  Customer Cash In / Deposit G Bank Cash Out / Withdrawal Customers have to go to a bank branch to open an account or cash-in/cash-out Branchless banking Agent Account Opening  m  Transfer P2P Customer Cash In / Deposit m Fund Management G Customer Cash Out / Withdrawal m BankNot only from traditional banking access, customers may use mobile phone or come to agents in order to do their financial transactions 12 12
    • Sinar Sip FeatureSinar Sip is a saving account that can only be accessed through mobile phone. It offerseasiness, low rates and security Key Features  Can be accessed from any type of mobile phones (GSM)  P2P  Linked to Bank Sinar Account  Cash-token  Bill Payment  Airtime Top-Up  Purchase  Low initial deposit  PIN required 13
    • Sinar Sip FeatureThe Sinar Sip product is a very low in pricing and fit for the unbanked populations. 1. Cash-In/Cash-out FREE 2. Transfer a. Inter Sinar Sip FREE b. Sinar Sip – Bank Sinar Account FREE c. Inter Bank Sinar Account FREE d. Bank Sinar Account – Sinar Sip FREE 3. Token Transaction Rp. 4.000,- 4. Bill Payment a. Handphone FREE b. Telkom Product Rp. 1.000,- c. Telkom Vision FREE 5. Airtime Topup a. Axis FREE b. Mentari FREE c. IM3 FREE d. XL Bebas FREE e. Tri FREE f. Fren FREE g. Esia FREE 6. Request Payment FREE 7. Monthly Account Fee FREE 8. Account Statement Print Account Statement / sheet Rp. 2.500,- 14
    • Sinar Sip Feature Release 1 Release 2 * (date TBC) FutureAccount Opening Connect to other MNOs ATM FunctionalityCash-In / Cash-Out Loan Disbursement & Inq. Loan ApplicationSinar Sip to Sinar Sip Product & System Enhncnt. Fixed Term Deposit PurchasesTransfers Agent Development Micro InsuranceCash to Cash Transfers E-MoneyAirtime Top-upLinked Bank Sinar A/CBill Payment Some rationales behind E-Money has greater flexibility than bank account in terms of KYC. Easiness to have e- money account will have great benefit ATM is essential to increase customer base since ATM can be an “AGENT” 15
    • Some customer education and adoption strategies“Banking education “Low income Sinar-Mandiri” Payroll Package” • 50 markets •1.000 users targeted targeted •~60 participants•~7500 participants “Promo at Game “Community Online” creation at Schools ” •Current 8 stores •Canteen, school fee •35 stores targeted payment usage “Motorbikes / car “Program at bulk wash Program” laundry”•50 stores targeted •25 laundries targeted 16
    • Sinar Sip : Technology ArchitectureTelco Environment Bank Environment 17
    • Sample Transaction - user experienceSend Money Transaction 18
    • Sinar Sip Achievement Number Of Account Total Float (Rp. 000)2500 100,000 2112 86,708 1996 77,2212000 1772 80,000 1582 62,639 1348 14281500 60,000 51,673 41,949 45,4071000 40,000 500 20,000 0 - Jan Feb Mar Apr Mei Jun Jan Feb Mar Apr May Jun Transaction Frequency Type Of Transaction5,000 4,537 2.12% 2.23% 2.64% 0.76% 3,869 3,978 2.97% 1.23% Balance Enquiry4,000 Deposit 3,212 2,931 2,967 AirTime Topup3,000 Linked Balance Enquiry 44.26% P2P Transfer2,000 25.15% Withdrawal Mini Statement1,000 Linked Mini Statement Linked Transfer In - 10.11% Others Jan Feb Mar Apr May Jun 8.52% Source : Bank Sinar Data, June 2012 19
    • What Sinar Sip Needs1 • KYC still must be done by bank personnel • KYC requirements perceived to be very rigid by the un-banked REGULATION • Agent Banking regulation has not been implemented • E-Money regulation which needs to be fine-tuned2 • 3 major MNOs have e-money platform and product MNO • MNOs have full access to infrastructure Collaboration3 NETWORK/ • Agents needed to expand its network AGENTS • May Increase access to customers fund4 FINANCIAL • Need efforts / expensive to educate un-banked segment LITERACY • Government campaign in relation to financial inclusion, less cash society and mobile payment5 • Community as used case COMMUNITY • need lot of merchants 20