Beyond Branch Banking

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17 Νοε 2013 (πριν από 3 χρόνια και 8 μήνες)

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Beyond Branch Banking


Introduction

The concept


Provide access to finance


In 75 years of formal banking era, less than 30% of population has access to formal financial services


More than 7.5
mio
. mobile phone users within 7
-
8 years of market penetration with annual growth of 35%


Use mobile phone as an interface to banking activities


Nation
-
wide supporting agent network


Delivery of financial services in a fast, secure and low cost manner


Local Remittance


Send / receive money to and from anywhere in the country


Microfinance


Support microfinance activities in rural areas


Mobile phones are rapidly growing
-

Medium to spur entrepreneurial activities


Currently 20% of the population uses mobile phones, with projection of 50% by 2014


What is Kumari Mobile Cash (KMC)




KMC is an innovative mobile phone based payment system introduced by
Kumari Bank.



It is a product that enables business transactions via mobile

phones.



It offers various services such as point
-
to
-
point remittance, payment of


goods and services, and much more,
all across Nepal
!


Why KMC




It is a result of our continued focus on technology driven service delivery


to leverage technology as our delivery channel to customers


to reduce cost of transaction and save transaction time



It provides convenient and an efficient way to conduct business transactions



It provides much better market penetration compared to other products


Bank Branches (Per 100,000 People)


4.12


ATMs (Per 100,000 People)



3.40


Credit/Debit Card (Per 100,000 People)


2000


Mobile Phones (Per 100,000 People)


25,000



We cannot ignore this large customer base

2%

5%

15%

21%

25%

30%

35%

41%

48%

0%
10%
20%
30%
40%
50%
60%
2006
2007
2008
2009
2010
2011
2012
2013
2014
Percent of Population

Year

Mobile Phone Users in Nepal

15 million users

7.2 million users

Why KMC
cont…

Source for 2006
-
2009: "Nepal
-

Telecoms, Mobile, Internet & Forecasts" published by
BuddeComm
; Data for 2010
-
2013 are authors’ own projection based on
YoY

population growth rate of 2% and
YoY

mobile user growth rate of
20%


Point to point Remittance


Receive and send money directly from/to mobile phones anywhere in Nepal


Available on Nepal Telecom GSM Network across Nepal


Ncell

Network still being Pursued



Top
-
up cash or withdraw cash from mobile phones


At an agent or at a bank counter



Pay for goods and services at shops and stores anywhere in Nepal



Transfer money to family and friends


Peer to Peer Lending



Air
-
time top
-
up at face value



Associate bank account


Allows cash transfer from/to bank account



Pay utility bills



Web Portal

KMC Solution Features

Impact on Economy



Kenyan Experience


10% GDP flows through M
-
Pesa


5
-
30% increase in Income for those who use M
-
Pesa


With 20% of the population using M
-
Pesa
, that translates to roughly 3.5% GDP growth and

1.75%
decline in unemployment (
Okun’s

Law)



Easier access to finance


Increased economic activities


Easier to get microfinance loans and pay monthly installments


Secondary services on top of the platform


Mobile phone based transactions is a rapidly
-
adopting alternative business tool,
especially in developing countries.


Examples:


G
-
Cash,
Phillippines


Grameen

Phone, Bangladesh


M
-
Pesa
, Kenya



Combined market for all types of mobile phone based transactions is


expected to reach more than $600 Billion globally by 2013.



Social Benefits



This service is available to all mobile phone users, and customers registering for this
service
do not
have to have a Kumari bank account!


Government distributing money to almost 4000 village development committees (VDCs)


Current: Disbursement to one point requiring villagers to travel


Future: Disbursement directly to end user via a mobile phone



Retired veterans receiving pension


Current: A monthly camp setup in one place requiring the recipients to travel


Future: Pension funds disbursed directly into recipient’s mobile phone



A person living in a remote place no longer has to walk for one day to make microfinance
loan payments


Eliminating travel costs that sometimes is more than the amount of the loan installment



Son working in Kathmandu can send money to his parents in a village instantaneously


Eliminate physical travel


Eliminate risk of carrying cash



Daughter studying in Kathmandu can receive money from her parents instantaneously to
pay school fees



Built on Java platform


scalability and security



Supports any phone


Structured SMS for lowest common denominator


J2ME application for java enabled phones allows greater usability



Security


All transaction require PIN authentication


ISO 8583 standard communication


Firewall secured network of servers


Secured SMS Gateway using short code 2274 (CASH)


Transaction Amount Monitoring


Cap per transaction, per day, per month


Reduced physical cash handling

KMC Technology

How it Works

Merchant/Agent Enrolment



Mobile Cash Committee


Inclusion of all relevant departments



Product Development


Phase wise Implementation



Mobile Cash Department formed


Call Center with a country wide Toll Free Number



Meeting with Multilaterals:


World Bank, DFID, ADB, IFC



Meeting with Finance Ministry, NRB and NT



Advertisement and
Informatials

concept


TVC, Radio, Print Media, Animations, Pocket Guide etc.



Training to prospective agents, merchants and our employee in following locations completed


Eastern Region:
Biratnagar
,
Birtamode
,
Itahari
,
Urlabari


Western Region:
Argakhanchi
,
Beni
,
Baglung
,
Bhairahawa
,
Butwal
,
Damauli
,
Palpa
,
Pokhara


Central Region: Kathmandu,
Birgunj
,
Narayanghar


Mid West Region:
Nepalgunj
,
Surkhet
,
Salyan
, Dang


Far West Region:
Dhangadi
,
Mahendranagar





The Approach

Launched on 17
th

August 2010





Promotional Campaign


Educational and Awareness Programs through:


TV Interviews


Radio Programs


Local Events


Kiosks at various locations


Branding KMC to various neighborhoods


Advertisements on All major newspapers


Advertisements on All major TV channels


Advertisements on Many radio stations including regional ones


Roadmap


Short Term



Enroll All KBL Bank A/C Holders into Mobile Cash


Approximately 70,000 customers will be contacted


All Customers with Mobile Phones have been sent SMS


All Customers with email records have been emailed



Enrollment of Agents/Merchants


500 Agent Outlets


200 Merchant Outlets



Ncell

Gateway


Testing in Progress


Agreement to be signed in the near future



Dedicated Network at Large Supermarkets


Establish VPN and deploy API



Ability to initiate transactions online


Currently can initiate transactions only with mobile phones



Utility Payment


Various utility providers


Roadmap


Short Term



IVR


Interactive Voice Recognition


Customers able to conduct transactions with the help of voice prompts



USSD


Unstructured Supplementary Service Data


Quicker Response Time compared to that of SMS


Much better customer experience; the transactions are real time rather than “store and forward” concept of
SMS


Dependent upon Telecom Provider Service Availability



PoS

(Point of Sale) Device


Device that scans phones based on RFID signal, accepts payments, and generates receipt



Localization


Menu interface and SMS messages in Nepali Language



Support for GPRS Application


Internet Enabled



Application Built into the SIM


Dependent upon Telecom Provider Cooperation

Roadmap


Medium Term




Pension Disbursement to
Gov’t

Retirees


Microcredit payment Facility


Salary Disbursement


International Remittance


School Fee Payments


Insurance Premium Payments and many more……..

Roadmap


Long Term

Growth Milestones


Challenges


Regulatory Framework


Distribution Network


Awareness and Promotion


Illiteracy & Resistance to Change


Trust Factor


These challenges can be address with joint effort of
Government, Multinationals and other stakeholders….


We can help on Technicalities and Financial solutions..










Thank you