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The Voice for Banking and Finance in Africa
www.technologybanker.com
September 2012 ÂŁ3.99
Is Mobile Money the way to serve Africa’s un-banked? ATM: A look at its future in the Africa Market
What happens to Ethiopia now that Meles is gone?
Increasing Bank Profits through Customer Education
Who is going to tell them about the bright side of African economy?
The Voice for Banking and Finance in Africa
From The Editor
Welcome to Technology Banker - Informing, Influencing and Insipiring Business Change is a focal point for growth. Some changes don’t go according to plan, and some are controversial, but they are all exciting and leave lessons for us to learn. This year, Africa is going through lots of changes. The death of Prime Minister Meles had left everyone wondering where the country is going. And the introduction of Islamic Banking in Nigeria heightened the tension within the population that is already divided by religion.
operators are constantly introducing new services for the unbanked and policy makers continue to introduce new regulations to stabilise the finance sector. However, in Kenya, it looks like the Finance Act 2008 hasn’t helped the small banks it was meant to help. Instead, it put them in a vulnerable position for a take-over. But then again, one can argue that if they can’t come up with the capital to make them fit, then they should not be in business. I hope you enjoy this month’s issue. To those inclined to contact me to express their opinions, you can e-mail me at hope.varnes@technologybanker.com. Hope Varnes, Editor
On the banking and technology front, banks and telecom
Page 10 Telecommunication News Latest telecommunication news across Africa and Asia
Contents Page 4 - 5 What happens to Ethiopia now that Meles is gone? With his death, Meles left a very big boots to fill. Will his successor step up to the challenge? Page 6 Why is Islamic Banking Controversial in Nigeria? Islamic Banking is stirring tension in Nigeria, but why? Page 7 Company news How two India based technology companies help make banking easy
Page 11 When Technology fails How a small glitch in technology affected millions of people Page 12 - 13 Developing Africa’s Young Talents Page 14 Opinions Page 15 Kenya Finance Act 2008: its impact on small local banks Page 16 - 17 The Compliance Challenge - An Opportunity for Business Excellence
Page 8 Banking News Latest news on banking organisations across Africa Page 9 Security news Look out for these new Trojan Horses
Page 19 - 20 Executive Interview Page 21 - 22 ATM: A look at its penetration of the Africa Market Can ATM compete against Mobile Money in Africa?
Page 23 Top 10 mobile payments companies in Africa Which providers have captured the market? Page 24 - 25 Is Mobile Money the way to serve Africa’s un-banked? There are 79 million financial consumers in Africa using informal money transfers; can mobile money serve them all?? Page 27 Increasing bank profits through education Dr Linda Eagle is President and co-founder of Global Bankers Institute talks about why banks Page 28 Business Analytics How can Banking and Finance Institution Capitalise on their customer data Page 29 Africa’s Top 5 Mobile Banking Apps Value and benefits of top mobile banking apps in Africa Page 30 Events For Your Calendar For Private Use Only
Publisher - Stefan Grossetti Stefan.grossetti@technologybanker.com
Sales & Marketing - Jenny Howard Jenny.howard@technologybanker.com
Editor - Hope Varnes Hope.varnes@technologybanker.com
Managing Editor - Remi Akinjomo Remi.akinjomo@technologybanker.com
Deputy Editor - John Bennett John.bennett@technologybanker.com
Design & Creative - Monika Derfinakova Monika.derfinakova@technologybanker.com
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www.technologybanker.com | 3
News Analysis
What happens to Ethiopia now that Meles is gone? As Ethiopia mourns its leader, the outside world watch keenly to see how the nation copes without its strong leader By Aisha Benson
E
thiopian State TV finally confirmed the death of Prime Minister Meles Zenawi on 21 August. As a response, government officials across the world sent their condolences to Ethiopia with praises for the prime minister who ruled the country for 21 years. During his reign, Meles turned Ethiopia as the darling of the West. He let the Americans fire drones from Ethiopia. He sent troops to Sudan and fought against the Somali Jihadists. As a result, the west supported him and Ethiopia received nearly $4 Billion of foreign aid every year. And most of it was put into good use. Infrastructures were built, including big dams that were aimed to increase the country’s hydroelectric power five times by 2015. Jean Ping, The Chairperson of the Commission of the African Union, in a press statement declared that ‘the death of Prime Minister Meles has robbed Africa of one of its greatest son.’ He added that Prime Minister Meles, with his chairmanship of its Implementation Committee, played a vital role in promoting the New Partnership for Africa’s Development (NEPAD). In her press statement, US Secretary of State Hilary Clinton expressed her admiration of the ‘Prime Minister’s personal commitment to transforming Ethiopia’s economy and to expanding education and health services.’ She added that he was an influential voice of Africa and valued his role in promoting peace and security in the region. However, not everyone will miss Meles. Although his economic policy was sound, his humanitarian policies were ruthless. He ignored pleas to respect human rights and democracy. He dismissed environmentalists’ concerns about the effect of the dams to Kenyan rivers. And he repressed the freedom of the press. Just two months ago, Somali online journalist, Eskinder Nega, was sentenced to 18 years imprisonment, after being accused of spying for foreign forces. Although the country has experienced rapid economic growth, life is harder than before for ordinary people. In the last 12 months, the food prices had gone up by 400% and the inflation went up as high as 40%.
Now that the strong man of Ethiopia is gone, what will happen to the country? Ethiopian government officials confirmed that according to the country’s law, Deputy Prime Minister and Minister of Foreign Affairs, Hailemariam Desalegn, will take over the prime minister role and run the country until the 2015 election. Although the government stressed that Hailemariam’s appointment will be confirmed by the parliament, it is not without controversy. He is the first Protestant Christian and the first non-Tigray and non-Amhara prime minister to rule Ethiopia. In a parliament that is dominated by Tigrayans, will he have any power at all? Or is his appointment simply a political move to appease the people from the south who dislike the fact that Tigrayans hold the power in the country?
4 | Technology Banker September 2012
Interim Prime Minister until 2015 election Hailemariam is highly regarded by colleagues and is described as humble, friendly and soft-spoken. However, these qualities may be good to have in a friend, but these are not good enough to keep a nation together.
Will Hailemariam manage to fill Meles’ boots? Jawad Mohammed, a political analyst from Columbia University, believes that Hailemariam’s appointment is only symbolic. He adds that Hailemariam will not have any power to wield. Without the assertive personality that made Meles the undisputed leader of Ethiopia, Jawad doubts that Hailemariam can hold his position.
‘The death of Prime Minister Meles has robbed Africa of one of its greatest son.’ - Jean Ping, The Chairperson of the Commission of the African Union
David Shinn, former U.S. ambassador to Ethiopia, says that if Hailemariam has a tough side, he needs to show it to the world if he wants to remain in power. As Ethiopia mourns its leader, the outside world is watching keenly to see how the nation will cope.
Is Hailemariam strong enough to lead the country? Will he continue to rule it with an iron hand? Or will he be able to find balance and rule with an iron hand in a kid’s glove?
www.technologybanker.com | 5
News Analysis
Why is Islamic Banking Controversial in Nigeria? Islamic Banking has operated in different countries without any fuzz, so why is it dividing Nigeria’s religious leader?. By James Akinolu
CBN Headquarters Abuja, Nigeria
In 2011, Central Bank governor, Sanusi Lamido Sanusi’s granted Jaiz Bank International a licence to provide Shariahcompliant banking services in Nigeria. The decision was like a kindling to a fire. Christian Association of Nigeria condemned the decision and claimed that it will ‘Islamize the secular country,’ which was satirically answered by the Supreme Council for Sharia in Nigeria with a declaration that “untold casualties will result if Christians in Nigeria do not drop their anti-Islamic banking position.” Even Christian leaders were divided on their views. Tunde Bakare, a pastor of the Latter Rain Assembly, regarded the CAN’s condemnation as a lot of non-sense saying that: “Islamic banking cannot Islamize Nigeria just as Christian banking system cannot Christianize the country since the system will operate within the law of the land.” However, the argument didn’t end there. Godwin Sunday Ogmoji, a Nigerian citizen, took CBN Governor Sanusi and the Attorney General of the Federation (AGF) to court. And in June 2012, a Federal High Court in Abuja declared the licence issued to Jaiz International Bank PLC as illegal, on the basis that the CBN Act and BOFIA do not empower the CBN to issue a licence for non-profit financial institution. But the case was struck out because the plaintiff did not have sufficient evidence to demonstrate that the action can directly harm him. A decision that made both parties disgruntled.
So, what Islamic Banking so controversial? On principle, Islamic Banking is a sound alternative to conventional bank. And it operates in many countries without causing any tension. However, in a country that is highly divided by religion, it can be a bone of contention. Pushing for or fighting against Islamic Banking will be always interpreted as exerting religious beliefs.
6 | Technology Banker September 2012
“Islamic banking cannot Islamize Nigeria just as Christian banking system cannot Christianize the country since the system will operate within the law of the land.” - Tunde Bakare, a pastor of the Latter Rain Assembly
Company News
iCreate’s Biz$core ADF solution helps banks comply with RBI ADF regulatory reporting
In 2011, Reserved Bank of India (RBI) introduced the
through processing of the returns. And it was quick to
Automated Data Flow (ADF) directives, requiring
implement.
banks to submit all data and information available in their CBS and other IT system without manual
This year, Bank of America NA became the latest major
aggregation, conversion or filling of data.
bank to implement iCreate’s Biz$core DF solution.
As a result, collecting data from different source,
Commenting on their new customer acquisition,
compiling them and formatting them into RBI
Mr Vivek Subramanyam, CEO, iCreate said, “We are
prescribed formats were prohibited. To comply with
delighted to partner with an institution of the stature of
the new RBI’s regulatory reporting, Indian banks such
Bank of America in helping them achieve RBI’s deadline.
as HDFC Bank, IndusInd Bank and Dhanlaxmi bank
I am equally happy that Biz$core ADF will provide a
implemented iCreate’s Biz$core Automated Data Flow
regulatory reporting framework that is extensible to
solution. The solution integrated seamlessly with
other countries in the future.”
the banks’ data repository, and allowed a straight
Infosys named ‘Core Banking Technology Provider of the Year’ 2012 Infosys was named ‘Core Banking Technology
help banks comply with regulations, deliver efficiencies,
Provider of the Year’ 2012, during The Banker
bring products to the market quicker and improve
Innovation in Banking and Technology Award, an
customer experience.’
honour it shared with Cisco.
Bangalore-based technology giant, Infosys, is known for its Finacle platform which is installed internationally
According to the judges, this year’s competition was
across Asian, Middle Eastern and African banks.
a close-fought battle. It was so close that they ended
In 2004, Infosys’ Finacle was a runner up and was ‘Highly
up with two winners. They added that the entrants
Commended’ in ‘The Banker Innovation of the Year
offered ‘more sophisticated and capable platforms to
Award’.
www.technologybanker.com | 7
Banking News
JOHANNESBURG FirstRand Bank has taken over 75% shares of Merchant Bank Ghana, in a $91 Million deal. As part of the deal, FirstRand Bank will acquire $72.22 Million worth of shares from the shareholders and issue $18.78 Million new shares subscriptions.
LONDON/ JOHANNESBURG Barclays and Absa Group are in talks about merging their African operations, in a move aimed to speed up Barclays’ expansion in Africa. Absa Group, the third largest bank in Africa, is 56% owned by Barclays since 2005, but both operations ran separately.
Some loans on MBG’s book were not included in the deal. Instead, they will be acquired by shareholders. Joe Tetteh, CEO of MBG stated that FirstBank will provide MBG with expertise, products and business relationship that can lead MBG to re-establishing itself as Ghana’s leading bank. FirstRand is South Africa’s second biggest bank. The deal is still subject to the approval of South African and Ghanaian regulatory body.
Rabat
It is estimated that by merging the two operations, Barclays’ loan book in Africa, on average, will increase by 9% between 2011 and 2015.
International Finance Corporation is planning to buy 5% of Banque Centrale Populaire at $190 Million. Each share was valued at 201 dirhams.
This year, Absa Group’s share prices dipped due to concerns over bad debts. Of the four big banks in Africa, it has posted the worst performing shares in the last six months. While its rival FirstRand, posted nearly 20% increase, Absa Group posted a 7% loss.
This is BCP’s second deal with foreign partners since April, when it sold 5% of its share to BPCE.
Originally, Absa was planning to buy Barclays’ African assets. However, it decided to shelve the plans as they were not able to agree on the price. In the new proposal, Barclays and Absa are planning to merge their operations in Botswana, Ghana, Kenya, Tanzania, Uganda, Zambia and the Indian Ocean. Barclays will also remain as the majority stockholder. Barclays assures employees that the proposed merger will not result in job cuts.
8 | Technology Banker September 2012
The sale is part of BPC’s move to raise funds for its expansion plan. BPC is Morocco’s second largest lender by market value. In June, it announced its plan to buy a 50% share in Group Banque Atlantique.
NAIROBI CFC Stanbic banking arm posted a 37% increase in H1 pre-tax profit equivalent to 1.78 Billion shillings, in August. It was also approved by Kenya’s Capital Market Authority to issue shares.
Security News
New mobile phone malware is costing Android handset users
Flashback Trojan infected over half a million Mac Computers
The SMS Trojan Horse, discovered by Kaspersky Labs, infects handsets by pretending as a media player. It comes from an unnamed media player application and asks handset users to install a simple ‘media player file’. However, once it is installed, it sends messages to premium rate numbers, and users are ending up with expensive bills. At the moment, the Trojan is contained in Russia and Kaspersky rates its worldwide threat as low. In response to the issue, Google issued a statement that its applications are protected against this type of malware. Before an application is installed, details about information that the application can access are explained and users have to explicitly approve the access before the application is installed. Google warns users to be cautious and read the information it provides before installing any applications.
New Online Cyber-Weapon Discovered
Dr Web, a Russian anti-virus firm, claimed that over half a million Mac computers have been infected by Flashback Trojan, which made them vulnerable to hijackers wanting to use them as ‘botnet’. Flashback Trojan is disguised as a Flash Player Update, but once the user has installed it, the Trojan disables the computer’s security software and sends the machine’s information to the invader’s control server, which will allow someone to control the machine remotely. Apple has released a security update to clean the infected machines.
Extraordinarily Aggressive Trojan found on Chinese App Security firm TrustGo Mobile claimed that Chinese Android App stores are hosting an aggressive malware, Trojan!SMSZombie.
Kaspersky Lab has announced the discovery of a new cyber-threat that targets internet users in the Middle East. The new Trojan named ‘Gauss’ is a state-sponsored spyware, designed to steal sensitive data, focusing on browser passwords, online banking account information, cookies and specific configuration of the infected machine. Gauss is classified as a cyberweapon, and its discovery is part of the International Telecommunication Union’s effort to alleviate risks presented by cyber-weapons and promote global cyber-peace.
According to the security firm, the Trojan horse allows hackers to control the ‘SMS payment’ of the infected handset. This allows them to authorise transactions from the user’s account, for any amount, any time they want. The Trojan also has a self-protection mechanism which makes it difficult to remove. Trojan!SMSZombie.a gets into the handset by asking users to install additional files after they have installed an app. TrustGo Mobile also reports than since the malware was discovered last July, it has been found on seven apps available at Chinese Android app stores and has infected over 500,000 handsets.
www.technologybanker.com | 9
Telecommunication News
China
China Telecoms H1 profits dip but it remains positive. In the last six months, it gained 17.71 million new subscribers; 14.67 million of them are 3G customers. According to the operator, the dip in profit is only short term as it is currently investing on marketing to sustain long term growth in the iPhone high-end market.
India/Africa
Bharti Airtel posts a fall in profits on its Q1 report. In the quarter ending in June 2012, Bharti Airtel posted a 14% increase in revenue but its US$138.6 million net income is down by 37%. According to a statement issued by its chairman and MD, Sunil Bharti, Airtel is gaining market in Africa after two years of major investments. However, increased in licensed fees and taxes, and the change in processing fees which restricted the sale of bundled tariffs have increased the cost of telecom service by 2% in India. As a result, their profit margin is reduced. Although it saw a 44.2% increase in its mobile data revenue in India and South East Asia, Bharti Airtel’s overall EBIT was down by 18%. Airtel is currently considering selling 10% of Bharti Infratel but has not made a decision on timeline yet. In the meantime, it is intensifying its market operations in Africa and it is investing more on advertising and network rollouts.
Despite the decline in profit, China Telecoms is buying the CDMA network it is currently using from its parent company. Currently, 28% of its service revenue is allocated for network use. And the cost is increasing as the numbers of 3G subscribers increase. The deal will reduce the operators cost on network lease.
HARARE Econet Wireless, Zimbabwe’s largest mobile operator cuts its services to Zimbabwe’s state-owned mobile operator, NetOne. The decision means that NetOne subscribers are not able to call subscribers on Econet’s network. The move affects nearly 6.5 million subscribers from both networks. According to a statement released by Econet, NetOne owes the company over $20 Million in outstanding interconnection fees which it incurred since 2009. It added that in August this year, NetOne has informed Econet that it is not obliged to pay the fees. Therefore, it had no other choice but to cut the connection. Interconnection fees are incurred every time a subscriber calls a mobile number that is not in the same network. It is charged by telecoms operators worldwide.
Johannesburg MTN group, Africa’s largest operator, posted a 12% increase in net profit for H1 this year. The increase was due to its strong market in Iran, South Africa and Ghana. MTN’s revenue was up by 17.5% (equivalent to ZAR66.43 billion). It also gained 7% more subscribers, bringing their current subscribers to 176 million.
10 | Technology Banker September 2012
Technology
When Technology Fails The Centralised User Database technology was meant to provide a single point of access, but instead it became a root of a massive problem. By Andrew Thompson
It is undeniable that technology makes business easy. It makes customer service quicker and customer experience better. It also reduces running cost and increased staffing efficiency.
But what happens if technology fails? Well, RBS, NatWest, Ulster Bank, Orange, O2 and their customers found out the answer the hard way. In July, hundreds of thousands of 02 customers suffered a 24-hour blackout. Customers on 2G and 3G networks were unable to make a call or send text messages, with many of them taking their complaints on Twitter and Facebook. The outage happened the week after Orange customers suffered a 9-hour blackout. In O2’s case, the outage was caused by Ericsson when it transferred the subscribers’ details in its Centralised User Database (CUDB). During the transition, the data disappeared leaving handsets unable to authenticate their users. The CUDB technology was meant to provide a single point of access, but instead it caused O2 a massive problem. O2 was not the only business to have been hit by technology failure. RBS Bank, NatWest and Ulster Bank suffered more than 48 hours outage in June and again in July. The two days outage in June stopped customers from accessing their accounts online and offline. Customers were not able to receive or take money out of their account. Many complained that they were left out of pockets. In July, RBS was again hit by another failure, this time, their customers are unable to access online banking and their debit cards stopped working. The problem had caused some customers to consider moving to another bank. According to the RBS preliminary explanation to the Treasury Select Committee, the outage was caused by an error during an upgrade of their batch processing software. The error resulted to batch processing failure. The problem needed manual intervention, and it was made worse by the fact that the staff could not access the transactions that were processed up to the time of failure. As a result of the outages, O2, Orange and RBS endured big dents on their reputation that will take time to fix. The outages were also costly. In an exercise to mitigate the damage on their reputation, O2 offered £10 rebate to its 23 million users, Orange also offered compensation to its 27 million users and NatWest had to pay staff over time to keep 1,000 branches open late and through the week-ends to serve its 17 million customers. Ulster Bank also announced that it will give customers €25 compensation and 3 months free banking to its customers affected by the outage. The compensation package will cost Ulster Bank at least €35 million.
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Developing Africa’s Young Talents
Technology Boost Young African Women’s Future
Africa/USA Cisco female employees mentor young women across Africa. During the International Telecommunication Union (ITU) Girl’s in ICT Day in April, Cisco launched its Africa Women Leadership Network Program, to give young African women who are studying at colleges and universities, the chance to meet female Cisco employees and learn from them how they got into IT and about their role at CISCO. The meeting was all done via video link using Cisco TelePresence® technology. Commenting on the program, Her Excellency Ambassador Tebelelo Mazile Seretse of Botswana to the United States said: “Mentoring and training programs aimed at young talented females in Africa are going to be vital to help our young workforce of the future to be able to adapt and secure career opportunities in the global 21st-century workforce. Africa’s growing youth population needs to be equipped with the right skills to help them thrive in this ever-changing world. I was delighted to participate in the inaugural session for Cisco’s Africa Women Leadership Network Program, as I see it as a very worthwhile initiative that will inspire and grow young women who are our future leaders in the continent. As the African proverb goes, ‘if you educate a man you educate an individual, but if you educate a woman, you educate a nation,’ I am pleased that Cisco is making their innovative technology available to enable so many young African women in different locations to collaborate so easily without the need to travel.” Africa Women Leadership Network Program is running until 2013.
12 | Technology Banker September 2012
New Graduates from South Africa’s Java Development Academy now on Apprenticeship
Cape Town, South Africa The first seven students who graduated from South Africa’s new Java Development Academy are now doing their one-year apprenticeship with SunGard’s asset management department in Cape Town. Java development Academy is a first of its kind in South Africa and was launched by SunGard early this year to develop young talents, and to ensure that there are enough qualified Java developers in South Africa to support its growing technology sector. The seven students for the pilot training were South Africa’s cream of the crop, as they were chosen among hundreds of young black college graduates. Their six months tuition included theoretical and hands-on training on specific projects. The qualification, earned by the students, is fully aligned to SAQA’s National Certificate: Information Technology (Systems Development) at NQF level 5. Commenting on the training, Alberto Fasana, managing director for SunGard South Africa, said: “The shortage of qualified Java developers is a global challenge, this is our local solution. Training the young graduates is a strategic investment that will benefit our business as well as giving them an opportunity to have a strong future.” SunGard is an internationally recognised software and technology services company, with 17,000 employees. It serves over 25,000 customers in more than 70 countries.
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Opinions
Huge opportunities for ATM and mobile money investors in Africa There is an overall need for the banking sector in Africa to reach a large unbanked population. In the past 2-3 years, there is a dramatic upward trend in ATM penetration rates and Mobile Money Subscription base, but the market penetration is still low. For instance, Nigeria still has less than 12,000 ATMs. Focus on ATMs and mobile money in emerging markets have traditionally been in India, and China. However, investors are now beginning to see the opportunity in
“ Ore Adeyemi
Investment Professional HSBC Principal Investments Emerging Markets Africa
“
large African economies such as Nigeria.
Africa doesn’t need Freebies Africa needs the Banking Sector to be more innovative with Small Business support and job creation- not a begging bowl or a freebie. I know that support needs differ in each Sector as well as the type of business, and the business itself. This may be technical, financial or IT support. Most African businesses have the potential and product to grow. But we also need to make the Buy Local thinking incentivised. For example, businesses that are selling imported products that can be acquired locally also need to start to introduce local offerings...And other bodies like the SETA’s should get more on the ground, have more capacity to bring African business to international standards...If not better.
14 | Technology Banker September 2012
“Evelyn Naidoo
Entrepreneur Johannesburg, South Africa
“
Compliance
Kenya Finance Act 2008: its impact on small local banks A number of smaller banks are expected not to make the target this year. By Ben Momanyi
A
At the end of this year, to comply with Kenya’s Finance Act 2008, all banks should have 1 Billion shillings of core capital. The regulation was aimed to help transform Kenya’s small banks into a more stable organisation. When
the Finance Act 2008 took effect in 2009, some banking analysts believed that implementing the new regulation would be challenging. However, the Kenya Bankers Association was positive that all banks would be able to raise the capital, considering that there was a three-year time frame to comply with the regulation. John Wanyela, then Executive Director of the Kenya Bankers Association was quoted saying that the Finance Act 2008 would have little impact to Kenya’s 44 banks as they already had the capital or nearly there. He added that: “Banks are conscious that they will need to raise their capital in order to do bigger business. Given the generous time frame, everyone will have attained that.” However, three years on and nearing the final month of the compliance, it looks like KBC’s optimism was proven premature. A number of smaller banks are expected not to make the target this year. And instead of helping small banks, the regulation simply pushed them to merge or be taken over by bigger banks, thus reducing competition in the banking market. In 2010, Equatorial Commercial Bank (ECB) and Southern Credit Bank merged under the ECB brand. And in August this year, NIC Bank announced its plans to acquire up to three local banks in Kenya that are not going to meet the Central Banks core capital
“Banks are conscious that they will need to raise their capital in order to do bigger business. Given the generous time frame, everyone will have attained that.” John Wanyela, then Executive Director of the Kenya Bankers Association
requirements. Higher core capital means that banks are more secure and are more able to withstand economic crises. However, if bigger banks continue to acquire smaller organisations, it will shrink the competition in the banking sector, giving consumers less choice on where to bank. The situation can cause further imbalance in the supply and demand chain, resulting to potential increase interest rates on borrowings and lower interest rates on savings. Additionally, as competition is the driver of innovation, the reduced number of banks can slow down the development of the Kenyan banking market.
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Compliance
The Compliance Challenge - An Opportunity for Business Excellence Today, the banking & financial services industry faces increasingly complex regulatory requirements and challenging economic conditions. Banking organisation must now cope with a complex range of regulations, directives and standards that were introduced to prevent the recurrence of adverse events that shook the global financial markets. The weak economic conditions in key markets have also created new business challenges. Banks have to compete harder, innovate faster, execute better and respond with greater agility to new opportunities. Adwait Nene Director - Business Development GIEOM
The way banks respond to challenges will determine, to a large extent, whether they emerge and stay as the new leaders or are relegated to secondary positions with diminished market shares and valuations.
Some of the leading players are adopting strategies based on using the traditional tools in a new and more effective way that technology now supports, using more focused interventions for significant performance improvement. This seems to be paying off as seen from gains across areas such as increased market position and positive peer group assessment, better staff engagement and morale, increased productivity, compliance, revenue growth and profitability.
Compliance Enablers: The New Approach 1. Policies Policies define the business rules and principles that govern the operations. Traditionally, these existed in printed or document format. Employees were expected to familiarise themselves with the content, and consistent application across the organization was assumed. But in a complex and rapid changing environment, like today, this approach is inadequate. Policies need to exist in forms and shapes that meet the following key conditions to be effective today: i. Correctly and completely reflect the applicable external regulatory provisions and internal directives. Experts in their fields need to update themselves continuously about new developments. They must assess the impact in the organisation and implement required changes. ii. Capture the special, firm specific practices and principles that differentiate its offering and create added value for customers iii. Be accessible to users and user groups based on their organizational roles and functions, and relevant to their specific needs iv. Be easy to consume and apply v. Have strong notification and change management capabilities
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2. Training Everyone understands the importance of continuous and effective learning in an organisation, especially in today’s climate. And training is key to that. For training to be effective, it should be carefully designed and assessed according to individual’s needs and role in the organisation. Traditional classroom methods will continue to play a role, but structured computer based training programs should also be used, as these can be more effective for system-based tasks, offer high scalability at low cost and incorporate better testing, validation and reporting tools. Incorporating critical behavioural insights into the training program can also lead to a higher level of engagement and participation and increased overall learning scores. 3. Controls Business and Compliance controls have traditionally been reactive and constrained by the limitations of the operational systems. This can make compliance slow and can cost business more money, as manual tracking methods means investing more staff and working hours. In the future, controls would need to meet the following new criteria i. Preventive and proactive: intelligent checklists based on careful analysis of historical data can help achieve significant reductions in operational errors ii. Automated tracking of semiautomated and manual activities for timely resolution iii. Configurable, rule based workflows for approvals and escalations iv. Active transaction monitoring
4. Performance Metrics Organisations should have a systematic and automated tracking system in place to allow stakeholders to objectively assess performance and develop programs for improvement.
5. Business Excellence Establishing standards and ensuring compliance is an important and essential first step to business excellence. Once this is accomplished, organizations are ready to raise the bar of their business performance. To improve performance, organisations must: • Identify key processes • Analyse related performance data • Apply appropriate tools The result must then be fed to a continuous upward cycle to sustain the growth of the initiatives. Banks have the option to respond to the regulatory and business challenges faced today by changing their operating models. Those that implement well-planned performance improvement initiatives will have a stronger chance of growth than those who remain reactive.
www.technologybanker.com | 17
connecting your world
Low Cost and Secured Communications Everywhere!
SATELLITE SERVICES FOR SMALL & MEDIUM SIZE BUSINESSES IN SUB-SAHARAN AFRICA Offering Broadband Internet Access, VoIP Telephony & Connectivity for Transactional Services. AppLiCAtionS: • Money transfer Companies (MtC) • Automatic telling Machines (AtM) • Virtual private networks (Vpn) • Financial institutions networks
www.satadsl.net
CountriES CoVErEd
Executive interview
Doing business in Africa: What does it take to capture a slice of the African market? Africa is being held as the new frontier, promising big potential market for international businesses and investors. Technology Banker talks to Jerome van der Putt, Chief Commercial Officer for SatADSL, Brussels based satellite service operator covering 25 countries in Africa.
Jerome van der Putt on the right
Why did you choose to do business in Africa?
In mid-2000, when we conducted market studies for the European Space Agency in Africa, we found that there was a market for low cost internet access via satellite.
Africa offers big opportunities to businesses, especially in telecommunication. If you just look at Nigeria, it has a population close to 200 million. Belgium’s population is just a fraction of that, yet it has 5 to 6 mobile operators. When we started business in Nigeria, it had a population of 160 Million, and there were 80 to 90 million mobile users but only 3 mobile operators. So, each operator had 3 times the market compared to Belgium.
If you dare to explore new markets in Africa and have the patience to understand the African business mentality, it’s one of the most exciting parts of the world to do business.
What challenges did you encounter when doing business in Africa?
Selling cycle in Africa is longer. Customers will tell you that they will buy your product, but they will only do it when they have a customer from whom they have collected the money. It takes time to understand this process because it is so different from the European and American ways. So you need to be patient. Don’t try to impose the European way of working. It will not work.
Doing business in Africa takes time. So, it’s a long term investment. As a consequence, you need more capital to sustain the development of your business. But once you established business relationship with them, they are loyal customers. African customers like personal relationship.
The regulatory environment is another challenge. In Europe, there is blanket licencing from the European Commission to make life easy for European industries. Fortunately, many countries are copying European rules. But for a third of African countries, regulation is still a grey zone. It is a major challenge for us because we cover the whole of Africa.
Sometimes, countries don’t like financial information to travel over a network with a hub outside the country, but you could be already far advance in the project before you find out about this regulatory issue that can block you to have access to the commercial market. But things are improving.
What was the biggest hurdle you have to overcome to get your business this far in Africa?
Logistics is our biggest hurdle. Our business offers a service that is easy to use. Our customers order a terminal from us. When they receive it, they call me to activate the service they require. They plug their PC into the terminal and off they go. They’re connected. They can browse the net, send and receive e-mails, have VOIP. But they need the terminal.
The terminals we supply are made here in Belgium and we have to ship them to over 25 countries in Africa. Currently, it is difficult to send terminals to specific countries at a reasonable transport price and custom clearance cost.
www.technologybanker.com |19
ATM in a gas station Accra, Ghana
What are the challenges you see ahead of you?
Tougher competition. In mid-2000, there was only one operator offering 3 fibre optic connections, now there are 5 operators offering fibre optics around Africa. However, it’s not easy to get fibre optics to reach rural businesses, so there is still a big need for ubiquitous internet access via satellite as we offer.
When I’m in Africa, I see huge advertising for cheap internet access using the dongle key. But the quality of the connection is not suitable for business users. That’s where our strength comes in. We provide low cost, reliable internet access for business customers. We position ourselves as a reliable partner of businesses, whether mobile operators, banks or money transfer companies that want to reach customers in remote places.
We don’t offer big connection. So, we don’t interfere with companies that are already well served in their headquarters in big cities. We concentrate on our strength, providing connections to remote places, so that their remote offices can talk to their main server.
We are currently running three demos of pilot projects with three main banks concerning ATM deployment in three different countries in three different regions of Africa. It’s a challenge to compete with big guys who have large marketing and adverting budgets. So we’re focusing on educating our target market about our specialised services.
Do you think mobile money will dominate the payment system in Africa within a few years? Will it make ATM redundant?
In my observation, money transfer company are still spreading like bush fire. We have clients planning to open offices in remote places. If mobile money is so successful, why do these businesses are still expanding and buying services from us? As I said, I’m not a specialist on mobile money, but I don’t see it, taking off like bush fire.
Apart from mobile payment, there is another technology that is booming in Africa, and that is intelligent ATM. It allows customers to take money out and also deposit money in. They can also use it to conduct other financial transactions. This is the kind of intelligent device that I think will grow in the African market. The pilot projects we are currently working on involve installing offsite ATMs in places like shopping malls and villages so people have access to banks. And we are talking thousands of deployments. One bank is planning to install 3000 ATMs in two to three years.
Why do they want to deploy ATMs?
I think it’ because people still like to have cash in their wallet.
20 | Technology Banker September 2012
ATM
ATM: A look at its future in the African Market Despite the popularity of mobile money, African consumers still love to have cash in their pockets. By Hope Varnes
A
ccording to the report published by ATM Part Company, in 2011, Africa had more or less 4,000 ATM withdrawals a month; twice as many withdrawals than America and 40% more than Europe and Asia. And in 2012, Africa posted a 4% growth in cash withdrawal. The statistics suggest that ATM is still a major channel for cash withdrawal in Africa, especially in the Eastern and Southern part of the continent. Since consumers love for cash is not likely to fade, it is fair to say that ATM withdrawals in Africa are likely to grow as the continent continues to experience economic growth. In 2009, Africa had the lowest ATM penetration in the world, with only 36,000 ATMs installed. However, according to the 2012 ATM Future Trends report, the situation has improved. It predicts that, by 2017, Africa will have the fourth highest distribution of ATM in the world after China, USA and India. Investments on new ATM installations have already started in many countries, starting with the Commercial Bank of Ethiopia announcing its plans to invest $5.8 million to triple its current numbers of ATMs. In Rwanda, where there is very little cash machines installed, the Bank of Kigali also announced its plans to have additional 60 ATMs this year.
www.technologybanker.com | 21
The Rise of Intelligent ATMs As banks and ATM manufacturers compete to get a share of the African market, innovation becomes a unique selling point, resulting to ATMs with enhanced functions that offer more than just cash withdrawal. The new generations of ATMs are more intelligent, user friendly, secure and more efficient. Customers will not only be able to withdraw cash, but they will also be able to make deposits. This service is handy for cash-based businesses such as market traders who don’t want to carry bags full of money after a day’s trading. It will reduce bank queues and provide quicker service. It is also hoped to reduce the customers’ vulnerability to muggings as they will not be keeping big stash of cash at home. Apart from cash deposits, the new generation ATMs also allow customers to pay bills, buy air time for their mobiles, pay traffic fines, buy tickets, and register for electoral polls.
Keeping Customers Money Safe Cybercrime is prolific, even in developed economies. In Africa, it is causing problems to both consumers and banks. According to PricewaterCoopers 2011 Global Economic Crime Survey, 60% of the people they questioned had been victims of cybercrime. Another report from Deloitte in Kenya revealed that Kenyan banks lost $366 million in 2010 on fraud. To address the problem, the technology sector is continually developing new security software to enhance ATM security. One IT company, Usalama Innovative Systems, has designed a two-pin system for ATM cash withdrawal. And in 2011, FirstBank of Kenya launched the biometric ATM, which uses body scanning to identify customers.
ATM vs. Mobile Money Currently, mobile money is receiving a big chunk of media coverage in Africa and internationally. New mobile money service is launched in the market nearly every month. It is touted to be Africa’s major form of financial transaction and is positioned as part and parcel of the African life. It is even suggested that it will make ATM obsolete. However, ATM and mobile money aren’t exclusive. In fact, they can complement each other. For instance, the two services can work hand-inhand to make remittance service quicker. As a family member sends the money through mobile, the recipient can collect the cash from the nearest ATM at the other part of the country, instead of going through agents.
Market Opportunities and Challenges Even with the current boom on ATM installation in Africa, there is still vast room for expansion. The market is barely covered. Currently, ATM installations are concentrated on only four countries; Morocco, South Africa, Nigeria and Egypt. And markets such as Kenya, Ghana, Uganda and Tunisia are looking promising. However, the ATM market is still facing major challenges such as financial illiteracy and poor infrastructure, causing high down time. A lot of work is still needed to change people’s mindset about using plastic cards instead of real money.
22 | Technology Banker September 2012
‘By 2017, Africa will have the fourth highest distribution of ATM in the world after China, USA and India.’
Payments
Top 10 mobile payments companies in Africa Mobile Money is hailed as a great success in Africa. However, McKinsey reports that only a few operators have managed to achieve a sustainable level. Technology Banker looks at which providers have captured the market. By Frank Williams
S
ince Safaricom launched M-Pesa in 2007, there have been 76 mobile-money deployments in Africa. And everywhere in the continent, mobile money is hailed as a roaring success. But so far, for most of the providers, the product offerings have not moved on beyond basic money transfer transactions. Based on wallet share, Safaricom in Kenya still tops the market at 12,605,000, followed by Vodacom Tanzania with 3,000,000 wallets. MTN comes third, with combined 2,868,556 wallets across its operations in Uganda, Cote d’Ivoire, Rwanda and Benin. Understandably, as the market leader, Safaricom has the most sophisticated offerings including, pre-loaded debit cards, ATM withdrawals, M-ticketing and bulk payments. However, for the rest of the top 10 providers, product offerings don’t differ much. The major products are still air time money top up and domestic money transfer.
Mobile Money Providers
Wallets
Safaricom Kenya
12,605,000
Vodacom (Tanzania)
3,000,000
MTN (Uganda)
2,000,000
MTN (Cote d’Ivoire)
450,000
MTN (Rwanda)
260,000
Standard Bank (South Africa)
200,000
MTN (Benin)
138,556
Tigo (Millicom- Rwanda)
49,000
Econet Wireless (Burundi)
33,000
Lonestar (MTN-Liberia)
20,000
Cost of Success Launching mobile-money service and sustaining its growth cost money. The amount of investment poured into it makes a difference in the wallet share. This is supported by the fact that the top 3 providers spent millions of money on the service. M-Pesa in Kenya costs Safaricom $30 million. Vodacom M-Pesa costs Vodafone $25 million and MTN spent $10 million in initial investment for their service offering in Uganda. Mobile-money deployments with less than a $1 million investment failed to sustain their services.
Future Products Remittance is a big part of African economy and will always remain as a key product offering for mobile-money operators. However, as the economy progress the number of entrepreneurs rise, operators need to increase their offering to compete against other financial institutions. Potential products that operators are currently looking to add to their offerings include payroll payments, current and savings account features with a facility to transfer money between accounts; insurance, pensions and education funds savings; and credit as alternative to bank loans.
www.technologybanker.com | 23
Cover Story
Is Mobile Money the way to serve Africa’s un-banked? Since the success of M-Pesa in Kenya, mobile operators and banks have rushed in to launch their own products in the market. Is mobile money the solution to Africa’s poor banking penetration? Who is in-charge... Banks or mobile operators? By Liz Abbot
A
Africa has a poor banking penetration compared to other emerging markets, according to the World Bank’s Global Findex Data Base published in April 2012.
The data showed that, while countries like Denmark has 99% banked adults, only 18% of the adults’ population in North Africa have access to bank accounts. In countries like the Democratic Republic of Congo and Guinea, 95% of the population are un-banked. Sub-Saharan Africa has better penetration, but only just, with 24% of its adult population having formal bank accounts.
Money isn’t the only barrier It is not surprising that the main reason for not holding a bank account is the fact that people don’t have the money to put in it. 81% of the adults interviewed in the Sub-Saharan Africa admitted that they don’t have enough money to open and maintain an account. However, lack of funds is not the only barrier that stops African people from accessing bank services. Three of the big reasons for poor banking access in Africa are bank-driven. Due to lack of competition, banking in Africa is costly. For example, in Sierra Leone, the cost of banking accounts for nearly 27% of the country’s GDP per person. Additionally, there are very few bank branches around, especially in rural areas. In some places, it takes people hours before they reach a major town with a bank and there are only 4 branches per 100,000 people. Finally, the exceedingly cautious rules on anti-money laundering and terrorist financing; require individuals and businesses to provide documentation that they don’t have. As a result, legitimate customers who want to have access to formal financial services, but don’t have the required documents are alienated. According to the World Bank, the strict rules on documentation turn away nearly 23% of valid potential banking customers.
134 million financial consumers waiting to be served While the statistics looked dire, it offers massive potentials to both banks and ingenious businesses that can break the barriers that stop the 134 million adult, who conduct informal financial transactions in Africa, from having bank accounts. Due to banks’ inaccessibility, people have become creative in managing their finances and moving money around. Many started their own savings club by pooling together and putting an agreed amount each month into a kitty and giving the whole amount to a different member scheduled to receive the money that month.
24 | Technology Banker September 2012
The scheme doesn’t earn interests and can be risky. It is based on trust that the person they’ve chosen to collect the money will not run off with it. But it is proven to work and gives the members a chance to save for expected big expenses. For remittances, people are still sending money through bus drivers, travelling friends or if there is a large sum of money involved, they deliver them personally. According to the Word Bank’s statistics, 79 million consumers in Africa still use these informal forms of money transfer.
‘In countries like the Democratic Republic of Congo and Guinea, 95% of the population are unbanked.’
However, these types of schemes don’t answer many of the financial services that the un-banked. needs. Therefore, there is an open market for a solution that will make financial transactions simpler and safer for the un-banked. consumers, at the same time supporting the economy. Robert B. Zoellick, World Bank President, remarks that: ‘Providing financial services to the 2.5 billion people who are ‘unbanked.’ could boost economic growth and opportunity for the world’s poor.’
Mobile Money: Solution in the horizon The launched of M-Pesa in 2007 rocked the word of mobile technology and banking in Africa. ‘Mobile Money’ became a buzz word. It became the ‘in’ thing. And the frenzy over ‘Mobile Money’ was not just hype. After a thorough study of the M-Pesa service in Kenya, it is undeniable that it had a positive impact. The service made it easier for people to send money to families in times of emergency. A survey conducted by FinScope between 2006, prior to M-Pesa and 2011, when M-Pesa had 14 Million subscribers, also showed that domestic and international money transfers increased from 16.5% to 51.8%. If M-Pesa’s success is reproduced across Africa, it could mean that the majority of adults in Africa will have access to formal financial services and consequently give the economy a massive boost. However, despite the quick success of M-Pesa and the enthusiasm and support from the governments, reproducing M-Pesa’s success across Africa hasn’t been quick. To date, After Kenya, only Uganda and Tanzania, have reached considerable mobile money penetration. On the other hand, in Nigeria, the most populous African country and one that has the highest number of mobile subscribers, hasn’t reached its full potential yet with less than 25% of the population using mobile money. This, however, isn’t a bad thing. Nigeria alone has an estimated 34.8 million consumers who are using only informal cash payment options. That’s 34.8 million possible customers just waiting to be served.
Who owns mobile money: Banks or Operators? Should bank be in-charge of mobile money? Governments, not only in Africa, but also in India are pushing for regulations to put banks in-charge of mobile money. However, three of the world’s most successful mobile money services (M-Pesa in Kenya, Smart Money & G-Cash in the Philippines) are not associated with banks. Although they are required to deposit their money into a bank account, their services are purely under their control and responsibility. On the other hand, where regulations necessitated mobile money to run through banks, the growth had been slow.
www.technologybanker.com | 25
Human Capital Performance Improvement Audit Are you completely satisfied with the Return on Investment (ROI) from your current training? Are your training budgets driven by business goals and Key Performance Indicators (KPIs)? Are you holding training vendors accountable for quantifiable business improvements? Based on over 25 years of providing the BEST! Training, Communication and Consulting Solutions to the banking industry worldwide, the leaders of Global Bankers Institute have designed the Human Capital Performance Improvement (HCPI) Audit. The HCPI Audit is the first-of-its-kind service to offer the following benefits: 1) Ongoing Performance Improvement Plan based on cascading Strategic and Operational Goals. 2) Comprehensive Training Plan with behavioral outcomes aligned to Key Performance Indicators (KPIs) and Key Performance Measures (KPMs) resulting in a concrete Return on Investment for all training. 3) Effective Training showing measurable benefits in Sales, Customer Satisfaction, Operations Productivity and Quality, Employee Motivation, Risk, and Compliance, as well as any other identified bank goal. 4) Efficient Use of Training Budget through improved curriculum priorities and vendor selection and negotiation. 5) Holding Training Vendors Accountable by making them partners in the HCPI Audit process and requiring that they accept responsibility for delivering measureable improvement through their programs. Please contact me to let us know how we may best serve you. Global Bankers Institute brings experience, innovation and value, providing the BEST! Training, Communication and Consulting solutions to the financial services industry.
Dr. Linda Eagle Founder and President Global Bankers Institute 245 Park Avenue New York, NY 10167 +1.212.579.5500 ext. 3106 +1.646.236.7538 (mobile) linda.eagle@globalbankersinstitute.com www.globalbankersinstitute.com
Global Bankers Institute
Customer Education
Increasing Bank Profits through Customer Education W
ith as much competition as there is for banking customers, often the key differentiator is education. Banking is all about trust, and to build trust banks need to educate their customers. Customers need educating on the complex range of new products and services and the alternative channels available such as internet banking, mobile payment services and smart ATMs, so that they can take advantage of these platforms without causing undue demand on customer service personnel. The key areas to focus on are: • • • •
Security and Soundness Banking Applications Products Financial Education
Security and Soundness
Customers need to know that their money is safe. And training customers is equally essential as having trained staff in ensuring trust. Banks should train their customers on their security policies and procedures, as well as the regulatory compliance laws and regulations with which the bank must comply. In addition to training customers about how the bank protects customer money, banks should also train their customers on how to protect their own money. By providing training on fraud prevention and identity theft prevention, banks provide additional value to customers, increasing customer loyalty and retention.
Banking Applications
With advances in technology, banks are able to offer their customers more access to their accounts using mobile banking and computer-based self-service applications. These technologies are only a competitive advantage if customers are able to use them efficiently. Therefore, banks should train their customers to use these applications. This training should include an overview of the main features and benefits of the application, followed by screen-shot based procedure training that teaches customers how to use the application to suit their banking needs. The training should be created from the standpoint of the customers using a wizard-like flow so that customers can easily walk through all of the transactions they want to perform. This will increase customers’ confidence with the application, and yield increased customer loyalty and retention.
Products
Smarter customers make smarter financial decisions using the products and services that banks offer. In order to increase wallet share, bank customers must know the types of products and services available to them, as well as the features that differentiate these products from the competition. Product training should be made available to customers so that they can learn the various product offerings available, as well as the features and basic requirements for each product. Training should be based on customer needs being translated into bank solutions.
Financial Education
Customers who look to their bank as a source of financial knowledge are loyal and bring in new customers through word of mouth and referrals. Many banks are now building customer loyalty by offering education to small business owners on business planning and lending and to families for household budgeting and even educating children about money and the importance of saving. These future customers grow to know about and be loyal to the bank when they become adult customers.
In Summary
In summary, investing in customer education yields significant rewards by attracting and retaining smarter and more loyal customers thus increasing both market and wallet share. Dr. Linda Eagle is President and co-founder of Global Bankers Institute and may be contacted at linda.eagle@globalbankersinstitute.com
www.technologybanker.com | 27
Business Analytics
How can Banking and Finance Institution Capitalise on their customer data In 2011, McKinsey&Co published the report ‘Big Data – the next frontier for innovation and productivity’ and coined the word ‘Big Data’. Since then, it became a buzz word. So, what is all the hype? By Prashanth Patel In the last 10 years, the amount of customers’ data available to organisations has exploded to an exponential rate. It is almost mind-blowing. Every second of the day, businesses around the world capture data through internet, mobile phones, ATMs and other gadgets connected to a network. Every action or transaction that a customer makes leaves a digital footprint. To illustrate the amount of data collected, Adobe processes 1.4 Trillion of data every quarter for its clients. The data are collected from the web, social media platforms and mobile phones. The data collected are anonymous, but they provide information on customer behaviours and preferences. In the right hand, this unimaginable volume of data can blast a business upward. The authors of McKinsey’s report claimed that using the ‘big data’ can increase the business operating margin by 60%. They further claimed that; if the developed countries in Europe can harness the use of big data they can save €100 billion in operational cost alone and create over €400 billion in consumer surplus.
Big Data and the African Market The emergence of mobile money, intelligent ATMs and other technology advancement mean that, African banks and financial businesses are also swamped with data. This can be vital in understanding the African market to move the economy forward.
‘Every action or transaction that a customer makes leaves a digital footprint.’
Before, banks and financial institutions have to spend a vast amount of money and time on market research before they can bring their product into the market. Information had to be gathered slowly and collated manually. Today, online customer transactions, social platforms and mobile phones gather data automatically; and there is a wide choice of data analytic tools available to collate and analyse them. As a result, it is easier for banks and financial organisations to create products that match the customers’ needs, to send the right marketing message to the target market, to predict the market and much more.
However, there is a big cloud in the horizon for business analytics. Gathering the data and choosing the right analytic tools are easy. The real challenge is finding the right people who can interpret the data, create the strategy and device an action plan to address the issues gathered from the data provided. Technology can only go as far as crunching the numbers; businesses still need humans with analytical skills to exploit the value of the big data.
28 | Technology Banker September 2012
Feature
Africa’s Top 5 Mobile Banking Apps By Kingsley Kobo Experts predict that banking apps are the next big trend in mobile banking in Africa. These free apps are offered by banks, to enable their customers to carry out basic transactions, and use cost-effective value added services from anywhere, without having to visit their banks’ branches. Some functions, such as locating the nearest ATM or bank branch, are easily accessible without having to log in. But full access to account information and financial transactions need security verifications. However, African customers are wary of using banking apps to access their accounts because of security concerns. And they are quite right to be concerned. According to the 2011 findings by digital forensics and security firm, viaForensics, 25% of the mobile banking apps they tested didn’t provide adequate security. They found that passwords, partial credit card details, payment history and transaction details were easily retrieved from the handset. Only 44% of the banking apps available offered adequate security. Out of the numerous banking apps available, only 5 gained customers’ confidence and achieved success. Banking App FNB Banking App
Country South Africa
Release Date July 2011
Vendor
Cost
Compatibility
Functions
Built in-house
Free
Android, Apple and Blackberry devices
- GEO Payments - Manage Accounts - Money Transfer - FBN Branches/ATM Branches - Buy Prepaid products - Top up FNB Connect Accounts - View Account balance and statements - Transfer funds between linked accounts - Buy airtime from Vodacom, MTN, Cell C, Virgin, 8ta and Telkom Worldcall - Money transfer to Standard Bank South Africa customer - Funds transfer to any bank account in Nigeria - Airtime top-up - Payments for goods and services
Standard Bank Mobile Banking
South Africa
June 2012 Built in-house
Free
Android, iOS, and BlackBerry
UBA U-Mobile
Nigeria
December Built 2011 in-house
Free
Apple IOS devices
Nedbank App
South Africa
August 2012
Built in-house
Free
Android
Barclays Tanzania 1.0.0
Tanzania
April 2012 Built in-house
Free
iPhone, iPod touch and iPad. Requires iOS 4.0 or later
- Airline ticket payment - Access to Share trading portfolio - Nedbank Branches or ATMs Locator - Customisation – manage your application and customise a unique user experience - View your Accounts - View movements and transactions on your account - Transfer money within your accounts and pay bills - Get in direct touch with Barclays from your phone - Provides key information about Barclays Tanzania and security tips to help keep your money safe and make your banking easier
www.technologybanker.com | 29
Events for your calendar
What: Wireless Infrastructure Show When: 01 - 04 October 2012 Where: Orlando, Florida Website: www.wirelessinfrastructureshow.com/
What: e-Tech Africa Expo 2012 When: 01 - 05 October 2012 Where: Harare International Conference Centre, Zimbabwe E-mail: arlene@africaexchange.co Tel. no: +263 4 747755 or +263 774 413 652
What: 4th Annual World Islamic Retail Banking Conference When: 09 - 11 October 2012 Where: Dubai, UEA Website: www.fleminggulf.com/category/Finance/163
What: SME Africa 2012 When: 17 - 18 October 2012 Where: Johannesburg, South Africa Website: www.fleminggulf.com/category/Finance/163
What: NFC & Mobile Money Summit When: 22 - 25 October 2012 Where: Milan, Italy Website: www.nfcmobilemoneysummit.com
What: Mobile Money Global 2012 When: 19-22 November 2012 Where: Dubai, UAE Website: www.mobile-money-gateway.com/event/mobilemoney-global-2012
30 | Technology Banker September 2012
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