Technology Banker March / April 2015 by Technology Banker

The Voice of Technology and Finance in Africa

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March/ April 2015 £3.99

FIXING OUR APPROACH TO MALWARE – WHY A NEW CONTAINMENT STRATEGY IS NOW NEEDED Growing Interest in African Banking Sector

Future-proofing Compliance

How banks are preparing for the next phase of growth in Africa

Lessons for African banks from India’s visionary regulator

A new era for African

banking Africa’s cataylst for financial inclusion: the rapid shift to EMV cards

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©Technology Banker 2014 ISSN 2051-9443

MARCH / APRIL 2015

32 Finacle

37 What Banks Want:

A look at Africaâ&#x20AC;&#x2122;s technology needs Legacy systems a roadblock Most banks have outdated systems, which are preventing them from realizing their goals.

Banking grows Banking expected to outpace GDP in 2014, because of demand from rising middle class

Customer retention key priority

Focus on transaction processing time, streamlining customer processes, and meeting service quality expectations.

Economy wears a positive outlook

(One forecast says) GDP will grow 50 percent between now and 2019 to reach US$ 3.7 trillion (spurred by robust consumer demand)

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MARCH / APRIL 2015 Regulatory compliance a big challenge

The Voice of Technology and Finance in Africa

www.technologybanker.com

March/ April 2015 £3.99

www.technologybanker.com FIXING OUR APPROACH TO MALWARE – WHY A NEW CONTAINMENT STRATEGY IS NOW NEEDED GrowinG interest in AfricAn BAnkinG sector How banks are preparing for the next phase of growth in Africa

future-proofinG compliAnce Lessons for African banks from India’s visionary regulator

A new erA for AfricAn BAnkinG Africa’s cataylst for financial inclusion: the rapid shift to EMV cards

March / April 2015 Edition

News in Brief

Immense opportunities: how banks are preparing for the next phase of growth in Africa

Hatem I. Hariri explains how banks across the continent are looking at their IT infrastructure in light of the massive flow of new customers.

‘Security is in our DNA’ : how Verifone is helping banks to combat cybercriminals

Africa’s cataylst for financial inclusion: the rapid shift to EMV cards

How African banks are gearing up to meet consumer demand

Space Value of Money – the missing principle of financial valuation

Events for your Diary

Collaboration is the Key Abrham Gulilat, VP, Head of Operations of BelCash answers questions about the crucial impact of Ethiopia’s regulatory framework.

Rapid detection and response required against malware

Lessons for African banks from India’s visionary regulator

Damballa believes prevention is no longer enough and organisations must now put greater emphasis on detection and response.

Sourav Sekhar believes regulators in emerging economies, such as Africa, should take their cue from the Reserve Bank of India and not only strengthen the nation’s banking ecosystem, but also the banks.

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Ozgur Ozvardar of Verifone talks about EMV legislation, security enhancements and the challenges and benefits of operating in African countries.

Paul Opie explains how Africa’s migration to EMV cards and Mobile Financial Services will provide an innovative range of value added banking services for customers.

Anuradha Mallya identifies the challenges facing African banks and their push to improve efficiency and retain customers.

Armen Papazian explains how Space Value of Money is a key principle that is missing in a time and risk focused finance theory.

MARCH / APRIL 2015

NEWS IN BRIEF TCRA installs mobile phone traffic monitoring system The new Telecommunications Traffic Monitoring System installed by Tanzania Communication Regulatory Authority (TCRA) will help the government to have reliable statistics on mobile money transactions made by mobile phone service providers. This will allow the Government to fully collect due tax from the service providers, explained the Deputy Minister for Communication, Science and Technology, January Makamba, at the National Assembly recently. He was responding to a supplementary question during a Question and Answer session at the Assembly by Mbozi West lawmaker, David Silinde. In his question, Mr Silinde had asked the Government to state how much it had collected in taxes from the transactions, as he claimed that mobile telecommunications firms were annually transacting a lot of money, which came to trillions of shillings. The Deputy Minister noted that firms were making a lot of money from the service because a sophisticated system had not been available to record transactions, which was why the new system was being introduced to help monitor transactions.

Nigerian bank adds fingerprint recognition to mobile app Diamond Bank has added iOS Touch ID capabilities to its mobile app, which allows customers to securely login to their accounts on Apple devices by scanning their fingerprints. Ayona Trimnell, divisional head of corporate communications of the Diamond Bank, said: “Diamond Mobile App users who have iOS devices can now login to their accounts with just their fingerprints as an alternative to entering a User ID and password.” The Touch ID, which makes the bank the first financial institution in Nigeria to provide biometric identification capabilities, is available on a number of Apple products, including the iPhone 5s, iPhone 6, iPhone 6 plus, iPad Air 2 and the iPad Mini 3. The app also has many other features and capabilities, including funds transfer, bills payment, buying events tickets, online shopping wallet top-up, as well as searching for, booking and paying for local and international flights. The service is available in the Apple Store and will soon be available in other app stores.

NigComSat set to launch Ka-Band The Nigeria Communications Satellite (NigComSat) is set to launch its own Ka-band satellite solution, as part of the federal government’s efforts to expand technology to rural communities and improve the delivery of ultra-high speed connectivity and content in Nigeria businesses. NigComSat’s Head of Public Affairs, Adamu Idris, said: “The Ka-band will offer an advanced satellite system that is affordable to Nigerians, especially in rural communities. The Ka-band satellite covers the entire West African region and Mr Idris said its broadband services would be more affordable for small business and consumers as Nigerians will be able to get improved services at minimal rates.

IFC and Cignifi to boost airtel mobile money usage Cignifi has signed an agreement with the International Finance Corporation (IFC) that aims to expand the delivery and usage of mobile financial services in Uganda. Cignifi will work with IFC to help drive the adoption and growth of Airtel Uganda’s Mobile Money platform, an e-commerce service that enables customers to use mobiles to send and receive money, make payments and ATM withdrawals, check balances and deposit money from a phone. Greta Bull, IFC Manager, Financial Institutions Group Advisory Services Sub-Saharan Africa, said: “Data analytics potentially offers great insights for the development of innovative products and services to extend financial inclusion in Sub-Saharan Africa. IFC is excited to be working with Cignifi and Airtel Uganda to further explore this area of research.”

MARCH / APRIL 2015

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NEWS IN BRIEF Fibroniks service provides fastest broadband speeds in Zambia CEC Liquid Telecom has launched Fibroniks, its Fibre To The Home service that enables homes and businesses of all sizes to access superfast broadband with unlimited data packages. Fibroniks will provide speeds of up to 100Mbps, the fastest broadband that has ever been available in Africa, and provide Zambians with the Real Internet. This will enable businesses to use cloud-based services, such as Microsoft 365, Dropbox and online backups, as well as video conferencing based on OTT services. For home users, it will enable the entire family to be online at the same time using multiple devices. Initially available to around 8,000 homes and businesses in Lusaka, Fibroniks is being sold to end-users through ISPs, which are authorised CEC Liquid Telecom Resellers.

Central Bank of Kenya to publish comparative banks loan data The Central Bank of Kenya (CBK) announced on 13 February that it is going to publish the Kenya Banks’ Reference Rate (KBRR) data “to enhance transparency”. CBK will publish comparative data for various loan products offered by banks, which will facilitate decision making by customers and promote competition in credit pricing. “The KBRR should be seen as the minimum price for banks to participate in the credit market,” said the bank. “The charges may relate to the individual customer’s risk profile, the type of loan or the risks associated with the investment.” The scheme was launched on 8 July 2014 by the Kenya Bankers Association (KBA), which set the initial rate at 9.13 per cent, in collaboration with the CBK.

Quarter of users underestimate mobile cyberthreats The owners of mobile devices still underestimate the danger they might encounter, according to a survey conducted by Kaspersky Lab and B2B International. The survey shows that 28% of users know nothing or very little about mobile malware and only 58% of Android-based smartphones and 63% of Android tablets are protected by an antivirus solution. In addition, 31% of smartphones and 41% of tablets are not even password-protected. Mobile users’ risky behaviour might stem from the fact that 28% of them are not aware of the existence of cyberthreats targeting mobiles, and 26% saying they were aware but didn’t worry about it. To make matters worse 18% of unprotected Android-based smartphones contain precisely the information that attackers are most eager to find: PIN codes for bank cards, passwords to online banking systems and other financial data. 24% of them store passwords to social networks, personal and work e-mail and VPN and other sensitive resources, as well as personal emails (49%) and work emails (18%).

Financial Services firms lack the talent they need to succeed Seventy per cent of CEOs in the financial services (FS) sector see the limited availability of key skills as a threat to their growth prospects, a new PwC report has revealed. Based on a PwC survey of 410 FS CEOs across 62 countries, it found that firms are not just competing for seasoned FS professionals, but also have a rising demand for more diverse and hybrid types of talent. The report also shows that 78% of FS CEOs now look for a much broader range of skills when hiring staff, with 58% having a strategy to promote diversity and inclusiveness. In addition, 90% of FS CEOs believe a greater diversity of talent would improve their ability to attract talent and 85% say it would enhance performance. PwC said: “The key challenge FS CEOs are faced with is in how to attract, train and retrain people who, for example, combine digital and FS skills – few as yet possess such hybrid capabilities.”

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MARCH / APRIL 2015

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NEWS IN BRIEF First retail payment solution launched in Nigeria

ICICI Bank launches ‘Video Banking’ for NRIs ICICI Bank, India’s largest private sector bank, has announced the launch of ‘Video Banking’ for all its NRI (Non-Resident Indian) customers. Using this service, customers can now connect with a customer care representative over a video call, round-the-clock, on any day, from anywhere by using their smartphone. A bank spokesperson said: “We are pleased to commence the Video Banking service, which brings alive the experience of walking into a branch for customers from any corner of the world. It gives access to personalised face-to-face interaction, even when the customer is not in India. This creates an opportunity for us to engage with the customer to serve their needs better.” Video Banking will enable customers to perform all the transactions that can be done through the bank’s ‘Phone Banking’ services, such as bill payments, booking a fixed deposit and much more. The app can be downloaded at the iOS and Android App store. Customers will need to authenticate themselves to use this service.

Electronic payments extended to 500,000 Nigerian enterprises MasterCard and Grooming Centre have signed a Memorandum of Understanding (MoU) that will see electronic payment solutions extended to 500,000 micro, small and medium enterprises (MSMEs) in peri-urban and rural parts of Nigeria. Grooming Centre is a Nigerian micro-finance organisation that provides affordable loans to womenowned MSMEs. The MoU means the Grooming Centre will pre-load the funds onto MasterCard prepaid cards that business owners can use to withdraw funds from ATMs or pay for goods and services at merchants that accept MasterCard payments in Nigeria and 210 countries globally.

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Switch Initiative workshop explores ways of working together

Teasy Mobile Money has successfully deployed the first commercial Near Field Communication (NFC)/Contactless payments solution in Nigeria. Its Chief Executive Officer, Musa Ali Baba, said he believed this solution would not only make retail payments easier and faster, but also guarantee customer satisfaction. “We are very excited with the market opportunity that this solution will bring,” he said. “We believe that retail payments will seriously drive up the volume of transactions, as well as grow customer confidence in the mobile payments space. We want to make smaller payments quick, convenient, and contact-less can offer just that.” Teasy Mobile’s Chief Technical Officer, Stanley Vandu, explained that NFC stickers linked to customer’s mobile wallets will allow tap and pay transactions to be carried at the POS and mPOS. “Our platform supports a whole range of services that allow us to provide a whole bouquet of financial services, including m-commerce, cinema tickets and bus ticketing solutions, as well as bill payments,” he said at the launch.

The East African Switch Community Providers workshop was held in Arusha, Tanzania, in January, and brought together the five leading switches in the EAC: Paynet, Kenswitch, Interswitch, UmojaSwitch and RSwitch. There were also representatives from the Central Banks of Kenya, Tanzania, Uganda and Rwanda, Communications Authorities, Bankers Associations and relevant ministry officials from the EAC. The workshop ended with the launch of the new Switch Connectivity Initiative, which aims to increase convenience to customers, reduced transaction costs, and increased volume of business.

MARCH / APRIL 2015

NEWS IN BRIEF

Equinix and ScienceLogic collaboration accelerates cloud adoption Equinix, the global interconnection and data centre company, together with ScienceLogic, a leader in hybrid IT infrastructure monitoring, have announced a collaboration to simplify and ease enterprise migration to the cloud. As part of this agreement, ScienceLogic is deploying its monitoring services globally within Equinix International Business Exchange data centres. By gaining access to multiple cloud providers (MSP), via the Equinix Cloud Exchange, and leveraging ScienceLogic’s integrated monitoring solution, enterprises can achieve improved performance, security, management and costcontrol of their entire IT infrastructure. The combined solution enables Equinix’s managed service provider partners to better capitalise on the public cloud opportunity and offer new services to assist in the initial migration and ongoing management, helping their enterprise customers to move to the cloud sooner.

US$302,000 grant boosts plans to set up Sealink The efforts of the Nigerian ExportImport Bank (NEXIM Bank) to establish a regional maritime company, The Sealink Project, has received a fresh boost with the release of a US$302,000 grant from the Nigerian Technical Cooperation Fund (NTCF). The objective of the Sealink Project is to promote both intra and interAfrican trade, and so foster regional integration, economic growth and development in the West and Central African sub-regions. The grant from the NTCF, which is managed by the African Development Bank (AfDB), would be used to conduct further feasibility studies on the project. Mr Roberts Orya, the MD/CEO of NEXIM Bank, said the project would assist in improving the low level of export trade between Nigeria and other countries within the ECOWAS and ECCAS sub-regions. It would achieve this by mitigating some of the non-tariff barriers in intra/inter-regional trade in Africa, and assist in reducing the high transportation costs and excessive transit time that makes intra-regional trade in West and Central Africa noncompetitive.

MARCH / APRIL 2015

CR2 is first choice for BSB Botswana Savings Bank’s (BSB) has selected BankWorld ATM and Mobile banking solutions, which are designed by CR2, to manage their ATM and Mobile Banking Channels. CR2 was selected because it is a leader in the local market, as several leading banks in Botswana are already successfully managing their channels by using CR2 solutions. Also, the bank believes the CR2 BankWorld platform has the ability to take the bank forward to provide innovative self-service products for customers and reach new target segments. The adoption of services at BSB will include a selection of BankWorld functionalities that, for now, will be available on the ATM channel and via SMS. The bank will also be issuing VISA cards thanks to CR2’s CardWorld Producer module. Testing of new features is being undertaken on the current BSB network, which will enable accelerated implementations at reduced costs. Projected roll out of ATM services, including cardless access and SMS capabilities, as well as VISA card issuing and acquiring, is March 2015.

New forex policy to boost market liquidity in Nigeria The Central Bank of Nigeria has announced the closure of the bi-weekly sale of forex through the Retail Dutch Auction System (RDAS) and Wholesale Dutch Auction System (WDAS). The bank will now sell dollars at a fixed rate of N198 to the dollar at the interbank market for the time being. The move will significantly boost market liquidity and also lead to a decline in the recent currency pressure in the forex market, analysts at the Financial Derivatives Company Limited (FDC) said. It also lowers the risk of JP Morgan removing Nigeria from its key emerging currency bond index. The FDC also believes it will lead to higher revenue for states and the federal government, as well as boosting non-oil exports.

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NEWS IN BRIEF

Afreximbank helps African exporters compete with global players African Export-Import Bank (Afreximbank) is successfully supporting African exporters to compete effectively with global players in African markets, Afreximbank President, Jean-Louis Ekra, said in the Egyptian capital of Cairo in February. Speaking during a business forum organised by the bank and the Egyptian Ministry of Industry and Trade in Cairo, Mr Ekra outlined Afreximbank’s $500 million Egypt-Africa Trade Promotion Programme. The beneficiaries, he said, included an Egyptian exporter of heavy infrastructure equipment who the bank had helped to export products worth hundreds of millions of dollars to more than five African countries in the past three years. “Thanks to our support, Egyptian engineering firms have been able to win construction contracts in Nigeria, Kenya and Algeria despite stiff competition from international players,” he said. The new programme will support Egypt-Africa trade in a two-way direction, facilitate pre-financing of exports from Egypt to the rest of Africa, and provide payment assurance to entities engaged in eligible transactions, including payment and country risk guarantees.

TrustPay to launch in Ghana TrustPay is set to launch in Ghana in a move to offer a broad range of e-Commerce and m-Commerce payment options for merchants. This will give merchants the ability to give consumers the option to pay for their utilities via a payment method of their choice. TrustPay is designed specifically for merchants as a versatile, interoperable, international merchant services mechanism that facilitates trade, especially in emerging markets by connecting merchants and consumers to one another through one cohesive platform. By using a single Application Programme Interface, the unique interface integrates into virtually any payment system. The simplicity of this is that a merchant can easily accept payment from any type of customer, who can choose a variety of local payment methods to settle the transaction.

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Westcon only Symantec distributor in SADC

African merchants to benefit from Visa acquiring TrialPay

Westcon has announced that its longtime vendor partner Symantec has extended the value-added distributor’s footprint in the SADC region. With immediate effect, customers in Botswana, Lesotho, Malawi, Mozambique, Namibia, Swaziland, Zambia and Zimbabwe will now be able to source their Symantec products from Westcon, currently the only distributor in these regions. “Symantec is a key partner to Westcon throughout the southern Africa region, and SADC plays an important role in the growth of our business, particularly in this era of cloud computing,” said Leane Hannigan, Cloud Solutions director at WestonGroup Southern Africa. “As we gear our business to bring cloud services and solutions closer to our resellers, our partners are gearing their offerings to help end-user customers make the journey to the cloud securely.”

Visa Inc. has announced an agreement to acquire TrialPay, a private company offering a platform that connects merchants with millions of consumers through targeted promotions. As a payments technology partner to merchants globally, Visa will integrate TrialPay into its product portfolio as a simple and cost-effective way to help merchants acquire more customers, drive traffic and increase their sales by reaching Visa cardholders with targeted offers. TrialPay’s technology will strengthen Visa’s existing merchant offers capabilities and accelerate its ability to drive commerce opportunities through a series of highly customised, real-time offers to cardholders. Additionally, by integrating TrialPay’s technology with existing Visa network assets, merchants will now be able to receive more timely and valuable customer insights through Visa’s data and analytics capabilities.

MARCH / APRIL 2015

TECHNOLOGY INNOVATION

Verint extends customer engagement optimisation leadership Verint® Systems Inc. has announced enhancements to Verint Enterprise Feedback Management™ (EFM) that help to drive smarter engagement across today’s digital enterprise. The solution, which is part of Verint’s broader Customer Engagement Optimisation portfolio, focuses on connecting an organisation and its employees with customers over a sustained period of time, as well as continually advancing customer experiences by enriching interactions, improving processes and optimising the workforce. EFM helps to provide a stronger foundation for creating more engaging digital experiences, said Nancy Treaster, senior vice-president and general manager, strategic operations, Verint Enterprise Intelligence Solutions. Key feature updates include a new survey engine, enhanced question presentation, an integrated and easier-to-use SMS survey deployment for mobile devices, as well as improved reporting, analysis and case management capabilities.

Wema Bank appoints four new directors

Partners to showcase “Internet of Things” monetisation

AGIB selects Path Solutions’ iMAL as banking platform

Wema Bank Plc has announced the appointment of four new directors to its board. These are Ms Abolanle Matel-Okoh and Mr Babatunde Kasali (new non-executive directors) and Mrs Folake Sanu and Mr Wole Akinleye (executive directors). The latest appointments bring the number of directors on the bank’s board to 14. The bank said the appointments reflected their commitment to sustaining corporate governance and adequate gender representation, as well as their desire to sustain its remarkable growth into the foreseeable future. Speaking about the new appointments, Wema Bank’s Managing Director, Mr Segun Oloketuyi, expressed confidence that the four new appointments would bring quality representation to the board. He also thanked the outgoing director, Mr Ramesh Hathiramani, for his immense contributions and value he had brought to bear during his time on the board. The new directors come with over 10 decades of combined experience between them and they have all made significant contributions to both the banking industry and the growth of the nation’s economy.

Comverse and Zebra Technologies will showcase a unique Internet of Things (IoT) monetisation use case in the Open Mobile Alliance booth during Mobile World Congress 2015 at Barcelona on 2-5 March. Together, the Comverse RCS API Gateway and Zebra’s Zatar IoT platform will empower service providers to work remotely from their mobile devices enabled by operator APIs provided to consumers and enterprises. The partnership will also extend Rich Communication Services (RCS) into the fast- growing IoT market, allowing service providers to tap into the tremendous revenue potential generated by IoT. “We are very excited to showcase our powerful Zatar IoT platform alongside Comverse at Mobile World Congress 2015,” said Philip Gerskovich, senior vice-president, New Growth Platforms, Zebra Technologies. “We believe mobility is a key success factor for IoT, and we aim to help customers empower their mobile workforces with tools optimised to easily capture critical information, as well as make data accessible to the people that run the operations.”

Path Solutions, the global application software and services firm for the Islamic financial services industry, has announced that Arab Gambian Islamic Bank (“AGIB”), the only Islamic bank in Gambia, has opted for Path Solutions’ iMAL as its centralised Islamic core banking platform. AGIB is currently using an in-house IT software system, but given the rising demand for products in accordance with Islamic principles, it intends to quickly scale up by launching new and innovative Islamic banking products. When approaching the selection process, AGIB senior management said they has looked not only at diversifying their product range, but also at fulfilling key aspects of regulatory compliance requirements. Muhammed Jah, AGIB Chairman, said: “After considering several alternatives, we decided on Path Solutions’ iMAL as the most appropriate solution for meeting the needs of the burgeoning Islamic banking segment. By implementing this pioneering core banking solution, AGIB will be able to offer new and unique products in line with the Islamic law to its customers.”

MARCH / APRIL 2015

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17/02/2015 09:

TECHNOLOGY INNOVATION

Growing Interest in African Banking Sector Hatem I. Hariri, Managing Director of Africa, Avaya, writes about the next phase of growth for the African banking sector and how addressing the needs of the ‘unbanked’ can drive forward innovation in technology.

‘Banking the Unbanked’, the concept of creating opportunity to access banking services for people who have been traditionally marginalised by traditional banking institutions, means different things in places like Africa, the Indian subcontinent, South America and parts of Asia.

From microfinancing through to peerlending and mobile-based banking, there are a lot of ways this is being done. The underlying fact, however, is that there is a vast number of people who are now seen as prospective customers by the banking sector. One person with a million dollars to invest is now being matched by an entire village with ten dollars per resident, and it is this groundswell that will direct the next phase of growth for

MARCH / APRIL 2015

the African banking sector. This is not to single out the banking institutions for blame – there just wasn’t the critical mass for them to justify the expenses of opening new branches to address the banking needs of a vast population, particularly in remote areas. There were additional considerations to take into account, including logistics, security, corruption and the reluctance of people with fewer means to hand over their hard-earned money to a large, faceless corporation.

Bringing rural citizens online So what is changing now? It is – like many sectoral transformations the world over – to do with the user experience. Telecommunications is the avenue of

choice for emerging markets to bring their people on to the ‘grid’ in order to access services and benefits that earlier evaded them. Mobile telephony, in particular, has been the driver of socioeconomic transformation, and emerging markets have leapfrogged the larger markets in adopting the mobile as a

necessary tool for daily life. The internet and its spread has also brought about a number of new ways in which to bring the rural citizen online, in terms of government and business services and benefits. Banking institutions have seized this opportunity and begun using existing networks as inroads to engage with their customers and prospects. The rural ATM on the back of a truck and the local grocer

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TECHNOLOGY INNOVATION

who uses pre-paid mobile credit as a form of currency are both ways in which the â&#x20AC;&#x2DC;unbankedâ&#x20AC;&#x2122; are becoming one of the largest sections of their customer base, and actually the one sector whose unique

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needs can drive the most innovation. Immense opportunities Banks across the continent are looking at their IT infrastructure in light of

the massive inflow of new customers. The opportunities for IT vendors are immense, whether it is in terms of the new byte-sized branches, contact centre expansion, storage capacity increases or

MARCH / APRIL 2015

TECHNOLOGY INNOVATION

which means people are more willing to interact with a service provider through non-traditional means.

more rigorous ‘big data’ capabilities. Advanced markets like Nigeria and Kenya, for instance, are already at the higher end of the adoption curve in terms of banking IT infrastructure, and these markets can be seen as comparable to any other similar market anywhere in the world. Unique growth

MARCH / APRIL 2015

areas exist in a number of sub-Saharan nations, where a growing emergence of stable governance, increased access to education and healthcare and more informed citizenry are driving demand for banking as a basic utility. Economic growth is also bringing about increased technology awareness and adoption,

Constant communication challenge The banking sector now sees geographical spread and offerings at the perceived ‘lower-end’ of the scale as competitive differentiators. The constant challenge is to find new ways of communicating and engaging with their diverse audiences, and to be seen as a relevant partner-ingrowth for customers that range from the smallest account holder to the largest enterprise. It is interesting to see the emergence of true ‘coopetition’ between the banking sector and telecom service providers in these markets. Initially, banks saw the telco as competition since successful solutions like ‘M-Pesa’ (mobile money) were redefining rural transactions, but now banks and telcos cooperate to deliver banking solutions on the telco’s network. Unique challenges call for unique approaches, and this is where Avaya has partnered with a number of banks in getting their processes and back-end ready for the volume of opportunity that accompanies their expansion. Infrastructure investment in Unified Communications and Mobility Solutions, enabling true ‘BYOD’, data infrastructure and private clouds are not to be seen as only CapEx or OpEx, but as a considered and prudent investment in the next phase of growth that Africa offers.

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AN EXCITING THREEDAY PROGRAMME FEATURING: Kim Dancey, Strategic Legal Advisor, FNB eWallet Solutions

Kimathi Githachuri, Head of the Helix Institute of Digital Finance, MicroSave

Hillary Miller-Wise, CEO, Africa Region, Grameen Foundation Kevin Marisia Amateshe, Product Manager Orange Money, Orange Kenya Dr Tumubweinee Twinemanzi, Head â&#x20AC;&#x201C; Competition and Consumer Affairs, Uganda Communications Commission

Peter Goldstein, Program Director, Financial Inclusion Insights Program, InterMedia Charles Inwani, Regional Cash and Voucher Programme Officer, UN World Food Programme Ronald Wakabi, Product Manager, Diamond Trust Bank, Uganda

FOCUSING ON THE FOLLOWING TOPICS: Is there a place for NFC in Africa? Is interoperability between competitors the best way to achieve scale and sustainability? Will cryptocurrency make waves or drown? Can new regulations standardise best practice in cross-border remittances? Financial Inclusion: Are we really meeting development goals? What will the African payments landscape look like in 2015?

SCALING AND SUSTAINING AFRICA'S CASHLESS FUTURE www.mobile-money-africa.com

REGULATIONS

Collaboration is the key Abrham Gulilat, BelCash Network Director answers questions about the crucial impact of Ethiopia’s regulatory framework, the company’s growing number of partnerships with banks and microfinances, and its plans to provide services for Ethiopians abroad.

What impact did the approval of the mobile and agent banking regulatory framework of 2013 in Ethiopia have on BelCash’s business and revenue model? Since the regulatory framework has been approved in mobile and agent banking, BelCash is providing multiple Ethiopian financial institutions a unique technology platform. It allows them to launch a mobile and agent banking service called: HelloCash. The regulatory framework has clarified our role and responsibility as a Technology Service Provider in the mobile and agent banking industry. Very important for us was that the regulation allows us to operate inline with our initial business plan. Is the established regulatory framework more accessible because it allows the effective and

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competitive delivery of financial services through the use of mobile devices and agents as delivery channels in the country? Yes, I think so. Definitively the regulatory framework is allowing the Ethiopian financial institutions to deliver services to end-users via their mobile devices and using agents as one of the delivery channels. I am convinced that the present framework will be the foundation for competitive, accessible and effective mobile money services in the country. Collaboration is the key to driving growth in today’s business. What is the BelCash model of partnership with banks and microfinance’s in your market, and how many partners do you have? BelCash Technology Solutions is only the Technology Service Provider to the financial institutions. As such

we are a stakeholder in the process of providing mobile and agent banking services. More importantly however, is that we are the technology partner of the banks and micro-finance institutions that offer mobile and agent banking services to the public. BelCash provides a full service model to the banks and microfinancial institutions, providing them with operational support, capacity building, service redundancy and call centre facilities. Through these partnerships, BelCash indirectly contributes to the financial inclusion of all Ethiopians. At present, we are servicing two financial institutions, and we expect to start servicing some other banks and MFI’s in the near future. What is your future plans for the rest of the region and for Ethiopians in the Diaspora?

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REGULATIONS

Of course we follow the developments in the region carefully and with great interest. However, we have no intention to go cross-border immediately as our focus is totally on the Ethiopian operation. I am glad you mention the diaspora. The BelCash Technology platform is ready to process incoming remittances from the Ethiopian diaspora and will provide a most cost efficient way of distribution. It is not available yet as we await for the banks to implement this service. It goes without saying; we keep a sharp eye on the international developments. The trend in international remittances indicates that the total costs of a remittance should be reduced. BelCash is very aware of that aspect. With that said, adding international remittances to the existing service package will strengthen the position of the banks in that domain, while continuing to enhance financial inclusion in the country. What is unique about BelCash in comparison to your competitors? What makes our solution unique is its interoperability and shared infrastructure features. The system is designed so that multiple banks and

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MFIs can become interconnected, and offer a mobile money service to their respective customers. As such, partnering financial institutions are able to share each other’s agent and branch networks to serve each other’s customers. What is unique about our propositions for our partners is that they are multiple. Our partners do not need to set up their own call centres individually, they are able to rent call centre facilities from us on a pay-asyou go basis. What’s more, they are also able to use our data centre for their disaster recovery and failover needs. What is unique about BelCash in comparison to your competitors? As I just mentioned, the fact that we can deliver a full service package is totally unique when you compare us to other players in the market. Not only that, the solution we offer the banks has some very important features that clearly distinguish us. First of all, there is the interoperability of the system and the shared infrastructure features. In addition to this, there are a couple of features that contribute enormously to the user-friendliness of the service, such as:

•• People can access their HelloCash account and perform transactions using any type of mobile phone—not just a smart phone; •• Multi-connectivity through IVR, USSD and the internet ensures that everybody can connect to the system; •• The call centres can handle customer calls in up to seven languages spoken in the nation; •• An international remittance service can be integrated; Furthermore, both banks and MFIs can be interconnected, and will then be able to share their network of agents. That way, partnering bank and MFI’s are able to share each other’s network of agents for the best benefit of their respective customers. And finally, last but not least; when a bank or MFI might already have some of the required modules, but are still missing a dedicated call centre, they do not have to wait until these facilities are built inhouse. They still can be immediately operational by using one or more of our facilities, such as a dedicated call centre, multiple channel connectivity, failover connectivity, you name it. As you can see, BelCash is ready for the future!

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SECURITY

Rapid detection and response required against malware With the average enterprise getting 17,000 malware alerts a week and antivirus products missing 826 malicious files a day, the computer security company Damballa believes organisations need to place greater emphasis on rapid detection and response by automating their manual processes.

Much of the job of an IT or security professional involves fixing that which is broken. Based on the state of malware infections, it’s about time that we fixed our approach to malware. Prevention has long been the focus of our efforts, but while it certainly plays a role, a modern anti-malware strategy must be supplemented with detection and response capabilities for a more holistic malware containment strategy. Notice I said containment and not prevention. This is a reflection of the current state of malware and our inability to stop it from getting into our networks. The declining effectiveness of preventative controls is no surprise. For years the industry has criticised antivirus, firewalls and IPS for their failure to stop malware they haven’t seen before. But the problem has come to a head. Nearly all of today’s advanced attacks use polymorphic malware, which constantly mutates and evades

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prevention technologies. To demonstrate the limitations of a prevention-centred approach to malware, Damballa conducted a comparison study from January to October 2014. We analysed a sample set of tens of thousands of files that had been sent to us by enterprises for review. We scanned files that our Failsafe system detected as malicious by four of the most commonly deployed antivirus products, and here’s what we found: •• In the first hour, the antivirus products missed nearly 70% of the malware •• After 24 hours, 66% of the files were identified as malicious •• After a week, the accumulated total was 72% •• After one month, 93% of the files were identified as malicious •• More than six months passed before

100% of the malicious files were identified. A 2015 Ponemon Institute reports shows that the average enterprise gets 17,000 malware alerts weekly – or 2,430 daily – from IT security products. Based on our study, antivirus products miss 826 malicious files on Day One. According to RSA, organisations spend about 80% of their security budgets on prevention technologies. Think about that for a moment: 80% of the security budget is spent on controls that are missing 826 malicious files a day. It took more than six months for antivirus products to catch up to the malware files that our Failsafe system discovered right away. But that’s just half the picture, right? Because while prevention technologies are missing true positives, they are also alerting false negatives. In fact, according to Ponemon Institute,

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SECURITY

organisations waste an average of 395 hours each week chasing false positives and/or false negatives. It costs organisations an average of $1.3 million per annum in time that is wasted responding to erroneous malware alerts. Media coverage of big-name breaches like Anthem and Sony would have the public believe that many security teams are twiddling their thumbs while Rome burns. Typically, nothing is further from the truth. Security teams are constantly working to prevent attacks – to the tune of $1.3 million per annum. But in almost every example from the mega-breaches of the last year or so, the security teams lacked any degree of certainty that the alerts from their prevention tools were actionable. For example, consider the Target breach. The retailer has more than 360,000 employees worldwide, about 2,000 stores, 37 distribution centres and a heavily trafficked retail website. Its network can only be described as massive. Target’s security team is likely to be bombarded by hundreds of thousands of alerts a day. How do you know where to start in a situation like that? The truth is, you don’t. In the haze of noise, security teams don’t know what matters and what doesn’t. In either case,

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finding the truth requires a long and painstaking manual process, and time is not your friend when a compromise has occurred. That is the greatest limitation of a prevention-centric security program. An alert on its own means nothing. It is a single artefact that must be correlated with other system log data to gain any context about whether or not it presents an imminent threat to security. In the meantime, successful attackers are stealthily making their way through the network, creating havoc. And the longer it takes to hunt down the threat, the greater the damage is done; hence the need for a malware containment strategy. With limited financial and human resources, no company can afford to dedicate the majority of its budget on failing controls. While prevention is necessary and good at stopping known threats, it can’t succeed in the face of advanced threats. A malware strategy must assume that some malware will get past our preventive controls and focus on containing the damage by reducing dwell time. Companies must put greater emphasis on detection and response. This means reducing the time between the initial infection, and its discovery and remediation by automating manual

processes and decreasing false positives. In order to reduce manual efforts, security teams should have: •• High-fidelity, automatic detection of actual infections to reach a statistical threshold of confidence in a true positive infection. Organisations that have such tools in place report that an average of 60% of malware containment does not require any human input or intervention. The automated tool takes care of the job. •• Integration between detection and response systems. •• Policies that enable automated response based on a degree of confidence. A structured approach that primarily relies on automated tools can help ensure that human resources are being used optimally and consistently, and can perhaps even be redeployed to more high-value projects. By automatically detecting what matters most, when it matters most, organisations can respond precisely before damage is done. To learn more about malware trends and how IT organizations should change their malware strategies for 2015, download the Damballa Q4 2014 State of Infections Report.

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COMPLIANCE

Future-proofing Compliance With banks in emerging economies, such as Africa, having to comply with demanding global regulations, Sourav Sekhar believes it is essential they follow India’s example and stabilise locally first, before moving to a global regime. He analyses the Indian regulator’s vision by using Automated Data Flow (ADF) and shows how this helped banks to become ‘compliance-proof’.

The global banking regulatory landscape has witnessed a rapid evolution over

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the last few years, during which time the Reserve Bank of India (RBI) has diligently dispensed critical compliance and risk regulations. Though there has been considerable opposition from the financial services industry, most of these regulations have been implemented in one way or another. A key point to stress here is that the RBI (India’s primary regulator) first introduced local measures, including data

stabilisation measures, during the initial phases of the regulatory wave, before focussing on global initiatives, such as FATCA, Basel III and LCR/NSFR. The primary motivation was to first stabilise the banking industry internally and prepare banks to reach a level where complying with global initiatives meant leveraging the implementation efforts that had previously been invested on local measures.

Wave of Indian regulations over the last 7 years

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COMPLIANCE

By introducing regulations in a phased fashion, the regulator played a visionary role in strengthening the financial stability of the banking sector. It progressively assessed the banks’ maturity levels first of all, and then ushered in newer, challenging global regulations. Banks in emerging but dynamic economies, such as Africa, the GCC and South-East Asia, are currently faced with the same dilemma – that of having to comply with overwhelming and demanding global regulations. If the Indian story can be appreciated as an example of a proven best practice in regulatory compliance, then it becomes fundamental for banks in emerging economies to stabilise locally first, before moving to a global regime. This article analyses the Indian regulator’s vision by using Automated Data Flow (ADF) as an example, and showing how it helped banks to lay the foundations to becoming ‘complianceproof’. ADF – from paper to paradigm In an ‘approach paper’ published in 2010, the RBI asked banks to build a Central Data Repository (CDR) for data to flow in automatically from all of the bank’s source systems. The automation aimed to ensure that the data required for RBI mandated regulatory reports would be fed seamlessly from the bank’s source systems, eliminating manual intervention in the process. At the time, most Indian banks were manually preparing and submitting these reports to RBI, with serious redundancies and inaccuracies in the process. With a multitude of source systems, over 200 reports and regulatory scrutiny at each juncture of the data flow, ADF seemed virtually impossible. The brilliance of RBI’s approach paper

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was not just about the recommendation (of automating data flow from source to report generation), it was also about the deep analysis and roadmap it provided in terms of the ‘hows’ and ‘whys’ of implementation. The paper also suggested two approaches – a standard one for banks that have little or no infrastructure for automation, and a variable approach for banks with some automation already in place. In addition, defining the data acquisition, data integration, data conversion and submission layer, substantially helped

Risk Reporting (commonly referred to as the 14 Principles of BCBS 239) was introduced primarily to enable banks with better risk data aggregation and reporting capabilities. An important point to note here is that BCBS 239 is only applicable to G-SIBs (Global Systematically Important Banks) and suggested that national supervisors apply the principles to D-SIBs (Domestic SIBs). BCBS 239 focusses on four areas: Overarching Governance and Infrastructure, Risk Data Aggregation

Conceptual architecture for automating data submission to the regulator the banks to create an achievable roadmap. It is almost five years since ADF came about and most Indian banks are at an advanced stage of achieving compliance. They have already begun submitting automated reports by either using in-house capabilities or via solution vendors. Moreover, the regulation itself has evolved further with the introduction of XBRL submissions to further reduce redundancies and operational errors. Going beyond principles One of the lessons learnt from the financial crisis was that banks had woefully inadequate data and systems to manage and report risk. Most lacked both quality data and minimal risk information, for instance concentrations at industry and banking group level. These issues, especially during turbulent times, dramatically increased the chances of failure. Basel Committee on Banking Supervision (BCBS) 239: Principles for Effective Risk Data Aggregation and

Capabilities, Risk Reporting Practices and Supervisory Review Tools. The underlying requirement remains the same – data. The regulation requires that banks get “Risk” data equipped and move from a fragmented business level/ entity level/system level approach to a more consolidated level aggregation and reporting. It also requires banks to reconcile risk reports with source data. The regulation is only a set of principles and does not provide a specific approach to achieve an end state for reporting capabilities. Let’s examine the BCBS 239 principles vis-à-vis RBI’s ADF guidelines.(page 26) The need for strategic, comprehensive and implementable guidelines While both regulations require banks to automate the process of data aggregation, there are certain fundamental differences, including: An approach paper v/s principles. While BCBS 239 is a set of 14 principles that theoretically every bank should

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COMPLIANCE

The four pillars of BCBS 239

follow for data aggregation and reporting, it does not provide an implementation roadmap for banks. On the other hand RBI took a step forward by providing an implementation roadmap with clear guidelines on data acquisition, integration, conversion and submission. RBI published ADF as a ‘consultative’ paper primarily to reduce the amount spent on consulting by banks before implementing a holistic automated reporting solution. Currently, most of the G-SIBs are still behind the curve on BCBS 239, due to the time these banks spend on understanding the regulations, rather than implementing the solution. But India was a completely different situation, as RBI not only published

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the guidelines, but also included a clear end-state along with the implementation methodology. Data and report coverage. BCBS 239 is risk aggregation and risk reporting focussed, whereas ADF focusses on the whole gamut of data. For example, priority sector lending reports or branch statistics reports are a part of Indian Regulatory Reporting, which come under ADF. All the data acquired for regulatory reporting in an automated fashion can be easily utilised for higher level risk reporting and analysis (risk modelling, scenario analysis, stress testing, etc.) So the overall coverage of reporting, data extraction and conversion is much greater in ADF, compared to BCBS 239.

Target coverage. The target coverage for BCBS 239 is only G-SIBs, which are already at a mature stage in terms of data aggregation. But ADF doesn’t differentiate between target audiences in terms of their size. All scheduled commercial banks in India have to mandatorily comply with ADF requirements. New banks that acquired banking licences recently also have to provide a clear roadmap for ADF implementation. So, the clear mandate from RBI is to bring all the banks to a common endstate data infrastructure. Viewing it from a bank’s perspective, one in the initial phases of technological advancement might not even have enough data in its

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COMPLIANCE

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COMPLIANCE

source systems to cater to the reporting requirements, which makes ADF implementation a tedious and lengthy process. So, it was RBI’s accelerated thinking which culminated into an extensive ADF approach that caters for all banks, irrespective of technological maturity. Future-proofing. Technically speaking, BCBS 239 impacts on only the large banks (G-SIBs), whereas ADF is applicable to all banks in India, irrespective of their size and structure. But regulations such as Basel, FATCA, or for that matter domestic regulatory reporting, are applicable to all banks of all sizes. Since BCBS is a framework mandated only for the G-SIBs, smaller banks would not adhere to the same, and for every new regulatory requirement they have to think of a new solution or implementation methodology. On the other hand, the fact that ADF has been forced into all scheduled commercial banks has already prepared these banks in terms of data requirements, and thus would help them to speed up the process of complying with any new local or global regulations. Can banking regulators in emerging economies do an ADF? Published well before BCBS 239, RBI’s ADF approach paper not only covered all of the principles of BCBS 239, it also had the vision to accommodate smooth transitioning into newer regulatory realms. ADF’s coverage is not limited to just Risk data aggregation and reporting, but covers all aspects of compliance and risk, which makes it a much more comprehensive reporting requirement. ADF is now a mandatory requirement for all Indian banks, irrespective of their

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size or technological maturity. This makes it a cumbersome process for banks in the initial phases of technological advancement. But since an end state has been specified, banks have no choice but to completely automate the process, right from data acquisition through to report submission. Undoubtedly a game changer in the Indian banking regulation space, ADF has helped Indian banks to prepare themselves for future regulations (whether local or global). RBI’s visionary mandate was two pronged: stabilising the country’s banking sector to prepare for stringent global regulations and force banks to create a data ecosystem in preparation for future regulatory requirements. Regulators in other emerging economies could very well take a cue from RBI’s far-sightedness and not only strengthen the nation’s banking ecosystem, but also the banks. This may seem both over ambitious and unnecessary, but it will definitely deliver immense benefits in the long term, like it has for one of the world’s progressive economies.

Sourav Sekhar, Lead Consultant, Product Management & Strategy, Fintellix Solutions. Sourav is a BFSI domain expert with seven years of experience spread across Investment Banking and IT Consulting for the BFSI Domain. A Finance graduate from the Indian School of Business and a Mechanical Engineer from the National Institute of Technology Warangal, Sourav’s interests span across Risk, Compliance and Banking Decision Sciences.

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EXECUTIVE INTERVIEW

Securing the path to payments Ozgur Ozvardar, General Manager of Middle East & North Africa at Verifone, answers questions about mobile money, the migration to EMV cards and the constant battle to protect payment systems from cybercriminals.

With the current boom in mobile payments, how important is it that financial institutions embrace the latest technologies and stay on top of the game? Financial institutions are at the centre of the mobile payments space, and it’s important for them to make sure their offerings enable merchant clients to efficiently accept mobile payments and meet increasing consumer demands for this and other emerging forms of payment. With EMV legislation coming into effect in the US, would Africa be able to follow in their footsteps? The U.S. movement towards EMV has been discussed for the past few years. Today, the pending liability shift has created a welcome turn of events that

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is making widespread EMV migration in the U.S. a reality, and we’re now seeing similar migrations take place in other countries. Several nations, many in the South Africa region, have already moved to EMV and research conducted by “emvco” indicates that there were 77 million EMV cards and nearly 70 thousand EMV terminals across the Middle East and Africa in 2013. With innovative payment solutions in 150 countries and across vertical markets, what are the top 5 security enhancements and potential fraud shifts in your payments solutions across your markets? The world of consumer data is becoming an increasingly dangerous place and payment systems will always be under attack by cybercriminals.

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EXECUTIVE INTERVIEW

Implementation of effective, multilayered security is becoming increasingly complex, as EMV, encryption and tokenisation all add complexity to the management of payments. Merchants don’t have the time or appetite to manage that kind of complexity, so we work with our merchant clients and our partners – the acquirers, processors and gateway providers – to shift the burden of complexity away from them and onto the terminal by delivering securityrelated updates, software and services directly to the device. That’s a huge incentive for merchants to connect their terminals back to us. Once they are connected, we can help them to not only enhance and streamline the protection of cardholder data, but also increase their ability to sell more and better engage customers through value added services, such as couponing and special offers, delivered at the point of sale. As we grow, we will continue investing in new layers of security to ensure that the adoption of new technologies, such as NFC-wallets, Bluetooth Low Energy and more, do not come at the price of increased exposure to cybercriminals. The Verifone brand is recognised around the world for its highly reliable security architecture and user-friendly systems, as well as its global footprint of more than 27 million terminals in 150 countries. The bottom line is that security is in our DNA. We are continually engaging merchants and financial institutions at the whiteboard to help them reduce their

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EXECUTIVE INTERVIEW

growing exposure to data breaches and cybercriminals, and more aggressively safeguard consumer information. In which African countries does Verifone operate and what are the challenges and benefits? Verifone’s office in Turkey manages our operations in North Africa, while our South African office manages our operations across the southern part of the continent. Africa is still very much a cashbased economy and payment cards are used by consumers primarily to withdraw their salaries from ATMs, but this is quickly changing with the increasing use of cards as a safer alternative to cash. When you consider this, along with the huge growth in electronic payment systems in Africa, these are exciting times for the industry. People in Africa are eager for new technologies that make their lives easier, and they easily adapt to change and new ways of doing business. We work with banking and non-banking customers, and we are undertaking many government projects as well. In addition to terminals, we are providing new voucher solutions, bill payment and tax collection solutions, government subsidies’ programme solutions, and so on. Retail (consumer) banks are deploying our terminals, not only to large retailers, but also to merchants – both large and small – in a variety of industries, including hospitality. An example of one of our solutions that applies to all of our markets is Verifone Mobile Money. This is a mobile payment service that supports smartphones, as well

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as older phones. If you are a mobile developer and have a mobile app, like Google World, and want easy access to the African and world markets, we can make that happen. Support from our large footprint of installed payment terminals enables you to easily rollout, go live and reach many customers in markets of your choice in a very short time. We are working with MasterCard in Nigeria on, ‘The National Identity Project’. This is a government sponsored security project in which MasterCard supplies the cards and Verifone provides terminals that incorporate biometric readers which check fingerprint data. We capture the biometric data of the cardholder, and our software securely transmits it to the Nigerian Identity Management Commission’s host for security identification. All the messages are encrypted in the terminal and can only be decrypted by the Commission once its host has received them.

We’ve also developed another system, which is being rolled out by the Nigerian government to efficiently collect income tax. The system is also being rolled out by governments in other African countries as well. Meanwhile, Verifone’s portable payment devices are being deployed at all fuel stations in Egypt as part of the country’s state-sponsored modernisation of its entire retail petroleum market payment system. The smart card-based system is intended to help the country regulate the distribution and consumption of petroleum, reduce smuggling, and ensure that Egypt’s Petroleum and Finance Ministries can control the quantity and value of gasoline being consumed.

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MOBILE BANKING

A new era for African banking Africa’s migration to EMV cards and the vital role played by Mobile Financial Services have led to a dramatic improvement in the accessibility of financial products, laying the foundations for a new era in African banking. Paul Opie, Field Marketing Manager for banking at Gemalto South Africa, reports.

Around the world, the financial services industry is being transformed by emerging technologies, innovative services and an increasingly diverse mix of stakeholders and enterprises. And nowhere is the impact of these dynamic forces being felt more keenly than Africa. Whilst experiences and outcomes inevitably vary from one country to another, a number of common themes and trends are evident. These include Africa’s shift towards an EMV-based payment infrastructure; the critical role being played by Mobile Financial Services (MFS) in driving greater inclusion; and the willingness of progressive businesses to launch novel, multi-functional products that combine the benefits of traditional banking tools with additional value added features. Migration to EMV cards

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The foundations for this new era in African banking are provided by migration to an infrastructure and ecosystem based around EMV standards. In terms of where the continent stands at the moment, the picture is mixed. In countries such as South Africa, the move to EMV is complete; in others, including Nigeria, Ethiopia, Kenya, Tanzania, Ghana and Zambia, it is still very much a work in progress. According to EMVCo1, nearly 76% of card-present transactions in The Middle East & Africa were EMV enabled between July 2013 and June 2014, compared to a worldwide figure of just 30%. This puts Africa and the Middle East behind areas such as Northern Europe and Canada, Latin America and the Caribbean, but ahead of Asia and the USA. Across Africa and the Middle East, 39% of payment cards and 86%

of terminals are EMV enabled, and ABI’s latest research predicts that over 300 Million EMV smart cards will be launched in 2019, a threefold increase on 2014. Even allowing for significant differences between countries, it is clear that a tipping point has been reached, with sufficient resources now in place to accelerate the process of transition. The factors driving this change are compelling for financial service providers and end users alike. Above all else, EMV delivers a level of security and global interoperability that is far beyond magnetic stripe cards. Furthermore, the benefits of EMV extend further than ‘chip and PIN’ transactions to include contactless and mobile phone based payments, as well as card-not-present purchases. Providers can therefore offer customers a far more attractive product mix, including the speed and

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MOBILE BANKING

convenience of ‘tap and go’ transactions. Enterprises and their customers also stand to benefit from EMV’s more robust protection against fraud and counterfeiting. Wherever it has been deployed, the losses associated with such criminal activities have been reduced significantly. Furthermore, EMV is now established as the global standard for payments. As the world shrinks and people travel more widely, the ability to provide a card that can be used around the globe is becoming ever more important. Typically, such an offer will help to secure customer loyalty, attract new business and achieve that elusive ‘top of wallet’ status for the payment card in question. Towards value added banking services Almost as soon as it was established, the EMV infrastructure acted as a

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springboard that enabled progressive African banks and other providers to deploy value added multi-application cards. In addition to conventional debit or credit card functionality, EMV cards can also house loyalty programs, prepaid contactless payments and transit ticketing solutions. Certainly the prepaid sector is booming. According to MasterCard’s latest Global Prepaid Report, across Asia Pacific, the Middle East and Africa, payments using prepaid products are expected to reach $146 billion by 2017. And in markets such as Africa, prepaid cards provide an outstanding means of embracing citizens not currently within the banking and financial services system. Across the continent as a whole, fewer than 25% of adults have a financial product or bank account and 90% of transactions are cash-based. For

providers, this obviously represents a vast untapped market. For communities, financial inclusion is a key building block for greater economic development and wider prosperity. Having led the way in Africa’s migration to EMV, it is no surprise that South Africa has been the continent’s first country to witness the introduction of this new wave of smarter payment cards. In 2012, Standard Bank launched the ‘Muvo’, a multi-function EMV contactless payment card that enables the user to enjoy swift ‘tap and go’ access at the ticket barriers of Durban’s public transit network. As well as being more convenient, travellers and public transit staff alike benefit from the greater security of cashless transactions. For its part, Standard Bank has created a product with wide appeal, particularly to those that do not have access to a conventional

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MOBILE BANKING

bank account. Financial Services on Mobile Significant as it is, EMV is not the only factor behind the paradigm shift in access to financial services. Across the continent, the creation of a traditional ‘bricks and mortar’ banking infrastructure that could reach out to unbanked and underserved communities would be prohibitively expensive. However, the dramatic growth of mobile network coverage and phone penetration has opened a completely new channel through which new and existing customers can be reached. At present, it is estimated that 80% of African adults have a mobile phone – a figure that is growing by 4% per annum. This provides the platform on which the continent has pioneered the introduction of Mobile Financial Services (MFS).

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The figures speak for themselves. According to a 2013 GSMA Report2, at the end of 2013 over 50% of the world’s live MFS products were in sub-Saharan Africa, along with over 40% of planned new deployments. As of June 2013, 98 million Mobile Financial Services accounts were registered in this region – from a total of 203 million worldwide. Once again, differences within the African continent are apparent, with 34% of accounts located in East Africa. However, the spread of available services is wide: 36 of the 47 countries in the region have access to at least one MFS. There can be no doubt that the advent of MFS has led to a dramatic improvement in the accessibility of financial products in Africa. For providers, a myriad of new opportunities to engage with a previously untapped market has emerged. However, they are operating in an increasingly

competitive arena with new players being drawn into the financial services market, most notably in the shape of mobile network operators. The GSMA Report showed that the majority of countries in Africa were now home to at least two competing MFS offers. In order to translate this undoubted potential into bottom line performance, providers must ensure their offers are as compelling as they are secure, and add real value for the end user. Evidence of the impact that a successful MFS product can have is provided by Safaricom’s pioneering M-Pesa mobile money transfer account in Kenya. Launched in 2006, it has become the model for many similar services across the continent and beyond. Back then, just 26% of Kenya’s bankable population had access to formal financial services. By 2013 that

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MOBILE BANKING

figure stood at 67%, with 59% of the adult population actively using mobile money. This was more than a successful business launch; the entire outlook of the community had been changed. As a recent GSMA Report3 highlighted, the lessons are profound. Entitled Enabling Mobile Money Policies in Kenya, it said: “Mobile money is a catalyst for financial inclusion and the development of the digital ecosystem.” A multi-form factor approach Throughout Africa, EMV migration and mobile phone penetration have served to underpin a near revolution in the financial services sector, and the pace of change shows no sign of easing. Reflecting its position at the forefront of this transformation, Africa is also signposting a future characterised by

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ever greater convergence of products and the stakeholders behind them. At the beginning of 2015, mobile network operator Vodacom announced the launch of a prepaid EMV banking card that links seamlessly to its existing M-Pesa mobile wallet in South Africa. As a result, it will extend the reach of the M-Pesa account, giving customers access to safe and convenient cardbased transactions at the country’s 240,000 EMV payment terminals, and cash withdrawals from a network of 27,000 ATMs. Consequently, citizens that may never have had a conventional bank account are drawn closer into the financial services domain. At the same time, it demonstrates admirably the potential for a wide range of assets, including MFS and contactless, prepaid and multi-application EMV

cards, which will be combined to forge new, profitable relationships with citizens. For customers, the benefits are likely to be just as rewarding, with an increasingly competitive marketplace delivering not just access to basic financial services, but also a range of value added products and applications that will weave ever higher standards of convenience, security and freedom into the fabric of everyday life.

Sources: 1. EMVCo Worldwide EMV Deployment Statistics 2. GSMA Mobile Financial Services for the Unbanked 2013 3. GSMA Report – Enabling Mobile Money Policies in Kenya – January 2015

MARCH / APRIL 2015

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THOUGHT LEADERSHIP

The way forward – what banks want Anuradha Mallya, Principal Consultant at Infosys Finacle, takes an in-depth look at the technology needs and concerns of Africa’s banking industry, as well as the various challenges it faces.

Africa’s economy may be in for good times. One forecast says that GDP will grow 50 percent between now and 2019 to reach US$ 3.7 trillion, spurred on by robust consumer demand. Ethiopia, Uganda and Mozambique will lead the charge. Yet these optimistic predictions must be tempered by the sobering reality that a large number of Africans are still suffering from poverty, unemployment and inequality. This dichotomy is also at play in the banking sector. With Sub-Saharan Africa growing between 5 and 6 percent, the banking industry is expected to outpace GDP in 2014, driven largely by the financial needs of a rising middle class. As banks gear up to meet consumer demand, their principal concerns include

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staff augmentation, cost optimisation and building their operational scale. Large banks are looking at expanding beyond their home shores to capture foreign markets and the diaspora opportunity. On the other hand, second tier institutions are focusing on growing regionally through acquisition, while the smallest banks concentrate their efforts on building the microfinance business at home. Consolidation of banks in the East and West and the adoption of new technology in some markets are also ushering in big changes in Africa’s banking sector. But this dynamism contrasts sharply with the fact that about 80 percent of the adult population still does not avail themselves of financial services from formal or semi-formal

providers. This is an opportunity that mobile money transfer services have seized with both hands. That being said, building financial inclusion is only one of several challenges facing the industry. Managing regulation and risk At the top of the list is the difficulties created by having to keep up with regulation. In a survey of industry professionals and regulators in a handful of African countries, almost 90 percent of respondents said that implementing global initiatives was a challenge. Regulation is at the heart of this issue, because most African banks don’t have the skills or the systems to fulfil global reporting requirements, and therefore cannot operate in international markets.

MARCH / APRIL 2015

THOUGHT LEADERSHIP

That being said, the industry is in the process of building up this capability by establishing the necessary structures and dedicating greater resources to compliance. Another related challenge is risk management, which even today relies on the use of Excel spreadsheets, especially in smaller institutions. Risk decisions are often based on data from legacy systems, which means data quality and currency are in question. Banks are therefore laying emphasis on improving risk profiling and the management of operational and market risk. Take Nigerian banks for example, some of which had bad loans to the tune of 33 percent of their total loan portfolio a few years ago. This has taught the industry to take a more prudent approach to credit expansion. Improving efficiency Legacy systems, where they exist, are exerting a drag on operational efficiency. As retail margins continue to shrink and fickle customers switch to cheaper providers, there is pressure on African banks to shore up cost efficiency through trade services and transaction banking. In a 2013 report on emerging markets, a well-known consulting firm talks about how South African banks are according high priority to improving cost efficiencies and processes. One of the things these banks and their counterparts in neighbouring countries are doing is investing in alternative channels. Retaining customers About two-thirds of Africa’s population

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is below 35 years of age. Banks are targeting the youth of course, but they are also aware of the importance of managing their senior customers and their massive pension corpus. This calls for fine segmentation tactics and differentiated products and services catering to the needs of different groups. Customer retention is a key priority. These imperatives are turning the banking industry’s focus towards customer-centricity. This is a bigger challenge in the context of a region where banking systems are often rudimentary and manual processes much in use. Efforts at enhancing customer focus vary across banks; some are trying to shorten transaction processing time, while others are streamlining customer processes, and yet others are focusing on meeting service quality expectations. While it is difficult to generalise for the region, it is evident that some countries are succeeding in their attempts. A 2014 survey of consumer perception of banking service delivery in Nigeria shows an improvement in the Customer Satisfaction Index over the previous year – 72.8 percent versus 71.9 percent. In the same survey, both retail and corporate banking clients cite customer service as the biggest reason for staying in a banking relationship. Besides working on service levels, African banks also need to improve crossselling and up-selling rates. Assessing the technology landscape As a first step to meeting these challenges, African banks must conduct an assessment of their technology

landscape to identify capability gaps. Several – if not most – banks are stuck with outdated legacy systems, undermining their ability to launch new products and channels, engage with customers, manage risk and fulfil compliance mandates. With the passage of time, these systems have become increasingly unreliable and expensive to maintain, and banks are paying the price in frequent outages. Worst of all, they are unable to integrate these systems with new channels of banking. Because their systems are fragmented and in silos, banks face problems in integrating data across applications, which is so necessary for generating a unified customer view, for delivering a seamless omnichannel experience, for consolidating risk across the enterprise, informing trade and treasury decisions, generating statutory reports and performing a host of other functions. As mentioned earlier, it is common for banks, especially smaller ones, to use spreadsheets in key processes. Take treasury functions like limit and position monitoring. It can sometimes take more than a day to discover a breach of limit by a trader or counterparty because of spreadsheet-based processes that refresh data in batches. That’s not all. Banks’ data challenges are compounded by inaccuracy, unreliability and incompleteness that result from incorrect mapping of sources and dependencies. Systematic overhaul required The solution lies in a systematic and thorough overhaul of infrastructure.

MARCH / APRIL 2015

THOUGHT LEADERSHIP

Legacy systems must be replaced with a modern core banking platform, which would yield several benefits. These range from cost reduction and business agility to easier compliance and risk management and seamless integration of applications, channels and data. Some of this is already underway at banks, which are no longer willing to pay the price of legacy, namely the loss of opportunity and competitive edge. With banks struggling to cope with the increasing demands of regulation and reporting, the call for core banking transformation will become increasingly urgent. Most tier 1 institutions are now equipped with new systems that will see them through 2025, given periodic upgrades and maintenance. And in the past 12 months or so, several banks, including Kenya’s Equity Bank, Ethiopia’s Awash International Bank and the National Bank of Ethiopia, have migrated to a new core banking platform, and Kenya Commercial Bank has announced plans to do likewise. Besides core banking, business intelligence and customer analytics are the technologies of interest to banks, many of which have not been able to differentiate their offerings or capture market share on account of poor data capabilities. Lack of channel integration is likewise compromising the industry’s ability to acquire customers and deliver seamless experience, which is sparking a demand for multichannel capability. Dynamism in the payments market continues unabated, creating a need for payment hubs and other infrastructure. There is a trend of collaboration between banks, telecom operators and large

MARCH / APRIL 2015

retailers in the areas of payment cards, mobile wallets and agency banking. Improving risk management The African banking industry would also benefit from a better approach to risk management. The fragmented systems of banks have forced them to manage risk in a piecemeal way by using multiple systems. This is not only expensive, but also inefficient because it precludes a holistic view of enterprise-wide risk. There is a need for a modern risk architecture that overcomes all these limitations and also prepares banks to comply with current and emerging regulatory stipulations. It is extremely important for this system to have real-time capability, so that risk managers see a view of enterprise risk in real-time and can therefore arrive at more accurate decisions. While on the subject of decisionmaking, the corporate treasury function could benefit substantially from an improvement in trade and transaction systems and processes. Standardising reporting systems and standards is one part; opening up communication between different functional units within the bank is the other.

will last for the next ten years, apart from channel banking capabilities. Whereas the smallest banks, which have limited resources will look for solutions, such as cloud infrastructure, to reduce both capital and operating expenses. For their part, vendors must offer solutions that fulfil these key expectations, as well as other needs, including scalability, flexibility, customer-centricity and the ability to keep pace with regulatory requirements. This implies that the solutions must accommodate a reasonable amount of customisation to cater to the demands of different countries. Last but not least, market knowledge and local support will go a long way in strengthening vendors’ claims for a share of the market.

Eyeing up opportunities Banking technology vendors eyeing the African market will find opportunities in the areas of core banking and risk management. As a result of their size, the largest banks will offer opportunities for implementing technology infrastructure and process standardisation across countries. Second tier banks will demand a stable, scalable platform that

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South Africa CIO SUMMIT 2015 Where IT meets Business

24-25 March, The Maslow Hotel, Sandton Johannesburg

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IDC’s 7th South Africa CIO Summit will take place at The Maslow, Sandton, Johannesburg, 24 – 25 March 2015. It will provide thought provoking and actionable insights to CIOs and Senior ICT Executives through a mix of end user presentations and case studies giving CIOs the opportunity to hear about the latest global trends, learn from ICT best practices and become involved in general discussions with colleagues and peers during the dedicated networking breaks.

Key Highlights

IDC Keynote Speakers

COMPLIMENTARY IEP WORKSHOPS Enterprise Architecture: Driving Sustainable Competitive Advantage Through Organizational Alignment IT Talent: Achieving Critical Priorities to Support Business Transformation Fueling

ANALYST INTERACTION

Serge Findling VP Research CIO Agenda Program

Vernon Turner Senior VP of Enterprise Infrastructure Consumer & Telecom Research

Meet IDC’s chief research ofﬁcer, chief analyst, and more than 25 international and regional practice heads, who will be on hand to provide valuable insights and analysis to leading ICT vendors, technology buyers, and end users during the event.

TECHNOLOGY TRACKS Take the opportunity to customize your learning experience by selecting one of the two

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breakout options to attend.

Jyoti Lalchandani Group Vice President & Regional Managing Director

PEER-TO-PEER CONNECTIONS The CIO Summit also provides unrivalled access to your peers and colleagues through numerous intimate and private group discussions.

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Mark Walker Regional Director, Sub-Saharan Africa; Insights & Vertical Industry Practice Middle East, Africa

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This is for promotional purposes only and does not constitute an invitation. If you are interested in attending the event, please contact: Eileen Gengan, Conference Specialist, IDC South Africa – Email: egengan@idc.com, Tel: +27 84 0881020 / 27 11 5173240

OPINION

Space Value of Money The financial economist and consultant Armen Papazian, PhD (Cambridge), writes about a new technology of value that measures and visualises the spatial dynamics of monetary value. Today, there is no financial valuation technology that provides investors with a multi-dimensional valuation tool. Investors, whether they are banks, private individuals, funds, investment houses or sovereign vehicles, make use of standard or custom models that are primarily built on a two-dimensional world, where the key yardsticks and parameters are Risk and Time. Indeed, much of financial valuation is built on two primary principles of value in finance. These are: 1) time value of money and 2) risk and return.

I introduce the principle and the associated technology of Space Value of Money, as the analytical and practical toolkit through which investors can expand and deepen their assessments of monetary value. Starting off with time and risk, if we consider the basic most central equation in finance theory â&#x20AC;&#x201C; the discounted cash flow model or the Net Present Value model â&#x20AC;&#x201C; this twodimensional world becomes apparent.

Time and Risk Value of Money

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MARCH / APRIL 2015

OPINION

The net present value model, or the discounted cash flow model, treats future expected cash flows or free cash flows by discounting them over time at a specific discount rate, which is commonly the return on an alternative investment with the same level of risk. The net element consists in subtracting from this present value of future cash flows, the initial investment, treated as a lump sum. This equation formally considers the time-based return and the risk-based return of the investor, based on a series of projected cash flows in the future. Everything is assumed to be integral to either time or risk. However, independently of how wide or narrow our individual understanding of our physical context is, there is a context for time and that context is best conceptualised as space. Investment in space and time In the NPV model, the expected cash flows must be received/ earned by the investment in space and time, and in order to

receive such payments in the future, the initial investment is spent in a specific way, so as to generate those expected cash flows the model is discounting. Thus, what we summarise in the model as II (Initial Investment) will have, either as a lump sum or a series of payments, an impact on space. Space Value of money measures the impact of II in spacetime and generates a monetary value that becomes the space-based return of the investment. In a way, this principle is a formal integration of externalities into our mathematical attempts at providing the investor with a monetary value that combines the time based return, the risk-based return and the space-based return. Looking at Figure 2, the timeline describes not just expected cash flows to be earned in the future, but also the cash expenditures that make up the initial investment spread across the investment period, as per the business plan or investment plan.

Figure 2

MARCH / APRIL 2015

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OPINION

Whether our models account for it or not, and whether as a lump sum or a series of expenditures, the initial investment has and will have a space impact. The key missing technology is the one that measures the monetary value attached to that impact. Space Value of Money measures the space impact of investments in monetary terms, and integrates it into our valuation models in a way that allows the investor to compare the space impacts and returns of alternative investments in monetary terms. Space Value of Money is a technology that empowers investors to measure, compare and optimise the space impact of alternative investments, simultaneously

providing a 3D visualisation tool for the investor, transforming 2D inputs into 3D visuals. The key space value equations measure the Gross Space Value, the Net Space Value and the Net SpaceTime Value of investments. To start off, Gross Space Value is the total monetary and real asset value of an investment, accounting for: 1) new money created and 2) new assets created. Given that all investments happen in space and thus utilise space and biocapacity in one way or another, to measure the return, Gross Space Value subtracts from new money and new assets the ecological costs and waste costs.

Gross Space Value without time based on II

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MARCH / APRIL 2015

OPINION

Net Space Value over time is, in fact, the sum of the future value of all the cash expenditures (CEt) that make up the initial investment (II), over the same period of time (n), where the space value growth rate s, is the annualised growth rate of Gross Space Value. It should be noted that if the initial investment is a lump sum, the logic remains the same, though with a simpler future value equation. Space Value over a defined period of time The next leap in the assessment of investments is the calculation of the Net SpaceTime Value, putting the time and risk analysis with the Space analysis. Net SpaceTime Value Space Value of Money is a key principle and technology of value that is missing in a time and risk focused finance theory and practice. We are in space, whether we grasp it or not, and our actions leave footprints in space, whether we realise it or not. Space Value of Money is the technology that measures and visualises the spatial dynamics of monetary value, and it is an essential tool for even the most selfish of investors.

MARCH / APRIL 2015

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EVENTS FOR YOUR DIARY

March - April 2015

10 - 11 March 2015 SOUTHEAST ASIA ATMs 2015

The event will bring together 200-300 banks, independent deployers, processors, ATM hardware and software vendors, CIT companies and other service providers, in one venue, for a unique conference.

10 - 11 March 2015 CARDS AND PAYMENTS AFRICA 2015

Cards & Payments Africa 2015 is the leading marketplace and ideas exchange for Africaâ&#x20AC;&#x2122;s payments community, who are hungry for innovative solutions.

16 - 17 March 2015 AFRICA CEO FORUM

The 2015 AFRICA CEO FORUM is designed to facilitate networking and to encourage participants to share their experience, know-how and best practices.

17 - 19 March 2015 3rd ANNUAL GLOBAL TELECOMS FRAUD, REVENUE ASSURANCE & RISK MANAGEMENT FORUM 2015

Fraud is one of the major concerns of the tele-communication sector causing estimated loss of 7 percent of their revenue annually.

17 - 20 March 2015 PAYMENTS INTERNATIONAL 2015

The programme is driven by extensive research with the payments community, including leading names from transaction banking, new payments providers and corporate customers from around the globe.

18 March 2015 CUSTOMER INSIGHT AND ANALYTICS IN FINANCIAL SERVICES

Customer Insight and Analytics in Financial Services is a cutting edge conference which tackles the expanding role of data and analytics in understanding customers and the challenges for financial service providers as they seek to use insight to improve the customer experience.

MARCH / APRIL 2015

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24 - 25 March 2015 IDC CIO SUMMIT, SOUTH AFRICA

The CIO Summit is an unique opportunity for CIOs and ICT professionals to gather to gain insight from industry experts as well as real–world experience from CIOs on critical business and technology issues.

31 March - 01 April 2015 IDC EGYPT, NORTH AFRICA & LEVANT CIO SUMMIT 2015

The CIO Summit brings you two days of learning, peer sharing and exploring the latest IT and Business trends that will help shape and benefit your business and help you drive your IT Initiatives in the right direction all year long.

14 - 15 April 2015 CLOUD BANKING EUROPE

The Cloud Banking World Series is the worlds first dedicated educational journey for banks to meet, debate and further their knowledge on the transformational potential of migrating IT services/systems and applications to the Cloud.

13 - 14 May 2015 AITEC BANKING & MOBILE MONEY LAGOS 2015

AITEC Banking & Mobile Banking West Africa 2015 will address the key issues faced by the region’s increasingly dynamic financial services sector.

19 - 21 May 2015 MOBILE MONEY AND DIGITAL PAYMENTS AFRICA 2015

Expert session leaders from across Africa’s payments industry will ask provocative questions; market pioneers will provide their perspectives in a series of industry panels and cutting-edge presentations.

26 - 27 May 2015 SATCOM AFRICA

SatCom Africa is the leading marketplace and ideas exchange for African telco’s, broadcasters, ISP’s, end users and governments hungry for innovative solutions.

MARCH / APRIL 2015

PREMIUM VENDORS DIRECTORY

Computer Warehouse Group offer integrated ICT solutions that add value to the operations of diverse clientele, using highly skilled and well motivated workforce. CWG work with best-inclass partners and technologies from all over the world.

Digital Jewels Limited is an ISMS Certified Information Value Chain Consulting and Capacity Building Firm specialising in Information Technology and Project Management and first in Africa to achieve accreditation to the ISO27001.

Fiserv, Inc., a leading global provider of information management and electronic commerce systems for the financial services industry, providing integrated technology and services that create value and results for our clients.

GRGBanking, a leading provider of currency recognition and cash processing solutions in the global market with great potential and rapid development with comprehensive solutions widely used in Finance, Telecom, CIT and Retail sectors.

Global Bankers Institute is a Training, Communication and Consulting Firm dedicated to serving the financial services community. It provides modern training without sacrificing the principles on which todayâ&#x20AC;&#x2122;s banks were built.

Infosys is a global leader in consulting, technology and outsourcing solutions, helping enterprises transform and thrive in a changing world in areas such as in mobility, sustainability, big data and cloud computing.

Entersekt is an innovator in transaction authentication and introducing an isolated communication channel between phone and financial institution that avoids reliance on the open Internet for user and transaction verification.

VCASH allows you to transfer and receive money locally and through Western Union using your phone or online, plus much more. VCASH is fully licensed by the Central Bank of Nigeria to deploy mobile payment services in Nigeria.

SatADSL offers corporate internet access by satellite, with flexible subscriptions, state-of-the-art equipment and attractive price-setting with a set of tools which allow Distributors, Corporate and Individual users to monitor the terminals they operate.

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Mobile Money Transfer VTN VCASH and Western Union Mobile Money Transfer service with Western Union and VTN is an easy, fast and convenient way for VTN customers in Nigeria to receive money from abroad on their VCASH account.

In a few quick steps, a Western Union® Money Transfer can be added into a VTN VCASH account in Nigeria. 1 Western Union sender makes a money transfer at a Western Union® Agent location or online on a Western Union transactional website (where available). 2 Sender provides the VTN receiver the Western Union MTCN tracking number. 3 With the MTCN number, the VCASH customer can follow the Western Union menu prompts on their VTN phone to add the funds directly* onto their VCASH account! 4 The VCASH customer will enter their PIN, for user authentication. Additional information about the transaction may also be requested. (See diagram below) A 1. Send Money 2. Western Union 3. Check Balance 4. Mobile Top-up 5. Pay Bill Select

Western Union

1. Pick-up money

Western Union

Please enter 10-digit Western Union MTCN: _ (3 unsuccessful attempts will result in account blocking)

Select

Cancel

Select

Cancel

Western Union

Please enter the amount you are expecting to receive: _ (3 unsuccessful attempts will result in account blocking)

Select

Cancel

Western Union

Please enter your PIN to continue: _

Pick-up Confirmation: Western Union has deposited XXXXX into your account No. 00045XXX

Select

Cancel

5 The VCASH customer will receive an SMS notification confirming the deposit of funds into VCASH.

If the Western Union sender provides their mobile number on the Western Union Send Form, they will also receive a text message when the funds are delivered1.

Did you know? VCASH consumers in Nigeria can use funds in their VCASH account as determined by VTN, including: • Pay bills • Withdraw cash • Purchase airtime • Buy goods and services For more information, visit virtualterminalnetwork.com or WesternUnionMobile.com Available through:

* Funds will be paid to receiver’s VTN VCASH account provider for credit to account tied to receiver’s mobile number. Additional third- party charges may apply, including SMS and account over-limit and cash-out fees. Funds availability subject to terms and conditions of service. See Send Form for Restrictions. ** Service options are determined by the mobile phone service provider. 1 Standard Message and Data rates may apply. VTN, VCASH and the VTN logo are trademarks of Virtual Terminal Network. © 2013 Western Union Holdings, Inc. All Rights Reserved.

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