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Strategy to expand mobile banking

Published on 16th Mar, Edition 11, 2015

 

Mobile wallet accounts to cross 50 million in five years

The State Bank of Pakistan has developed a strategy, in collaboration with the World Bank, to make a multifold surge in mobile account holders to over 50 million in the next five years, as branchless banking remains an effective channel to expand outreach of un-banked and under-banked people in the country.

The governor State Bank of Pakistan Ashraf Mahmood Wathra while elaborating the strategy to use Mobile Banking as a tool to expand outreach of the financial services under financial inclusion program said at the seminar “The National Financial Inclusion Strategy, recently developed by the State Bank of Pakistan in collaboration with the World Bank envisions that the uptake of M-wallet accounts will cross 50 million over the next five years,” said Ashraf Mahmood Wathra, governor of the central bank.

The one-day conference also held thought-provoking and knowledge sharing sessions and panel discussions like “Challenges for making Mobile Wallet Secure”, “Protecting the Customer” and “Interoperability key to Scale in Pakistan.”

Speaking at the 8th International Mobile Commerce Moot, which was organized by Total Communications in collaboration with State Bank of Pakistan (SBP) and Pakistan Telecommunication Authority (PTA) the SBP Governor said ” at present, five million customers hold branchless banking accounts (m-wallets) to avail host of services including fund transfer, utility bills payments, domestic remittances, mobile top ups, loan repayment, and saving account features. “Presently, monthly volume of branchless banking transactions is 24 million, valuing Rs125 billion. Wathra said four more banks, including Bank of Punjab and JS Bank, have recently joined the branchless banking system in Pakistan.

It is interesting to note that the Information & Communication Technology (ICT) has made a breakthrough in the financial sector by expanding the outreach of the financial sector to more than 60 percent of the population living in rural areas and has made it economically and commercially viable for the financial sector to expand its services to such areas, which offer a huge opportunity for investment even for the telecom sector.

Dr. Syed Ismail Shah, Chairman-PTA, said the two regulators; the PTA and the State Bank of Pakistan (SBP) were working in close coordination to develop the regulatory framework that supports growth in the mobile banking sector.

The recent launch of 3G/4G spectrum has revolutionized the lifestyle in Pakistan, as it is playing an important role in socioeconomic development. The spectrum is not only helping increasing number of mobile accountholders to the required level, but it is also playing a pivotal role in nurturing other sectors, including education, health, commerce and entertainment, said Syed Ismail Shah. The number of mobile broadband subscribers has reached 14 million in the last eight months, or since the launch of 3G/4G services, from mere four million earlier. “It (mobile broadband) is expanding on an average by one million new subscribers every month,” Shah said.

 

Presenting his keynote on ‘silent financial inclusion’, Nadeem Hussain, CEO and President, Tameer Microfinance Bank talked about the overall ecosystem of branchless banking in Pakistan – highlighting potential of growth and future challenges. He said, “We have observed phenomenal growth during the last few years in the branchless banking industry with the help of enabling regulatory framework provided by the State Bank of Pakistan. It is high time for the industry to shift its focus from over the counter services to mobile wallets, for which we will have to create more awareness among prospective customers. Easypaisa, being the market leader, is already providing innovative solutions to its customers through mobile accounts — creating enough value for them to shift from traditional banking system towards mobile financial services.” He also presented case studies of different countries with strong penetration of mobile money services and identified steps that will further boost the pace of growth of local industry.

Yahya Khan, Head of Easypaisa delivered a thought-provoking presentation on ‘Next generation mobile money services’ — presenting as to how the future would look like with virtually unlimited possibilities unlocked by mobile money services. “With a vision to provide convenience to its customers, Easypaisa has completely transformed the financial services industry and will continue to maintain its thought leadership with groundbreaking solutions as per the evolving needs and preferences of its customers.” He also urged all the industry stakeholders to create synergies, in line with Easypaisa’s commitment to empower people through innovative technologies and subsequently accelerate socio-economic development of Pakistan.

Atif Aslam Bajwa, President, Bank Alfalah, said banks should take advantage of technological advancement. Otherwise, they would be drive out of the market. “Becoming a digital bank soon is a matter of survival,” he said. Davor Ebling, Global Director, Mobile Money Operations – SAP, said penetration of mobile banking is much higher than the conventional banking globally.

Ghazanfer of Waseela Bank said NADRA should reduce its verification charges for opening a mobile bank account to less than one rupee from current Rs20-30, as it is offsetting the benefits to stakeholder of m-wallet.

Conclusion

In order to fully exploit the technology support in the life style scenario, which offers a win-win situation both for the financial and telecom organizations as well as the common man, the situation calls for upgrading the level of governance especially in the governor organizations like NADRA where the elements having vested interests like other government organization instead facilitating the people with simple and easy procedures have made it extremely difficult for the people get identifications or renewal or essentially needed modifications in the documents. Like police stations they have divided areas and do not deal with the people living out of their domain while the NADRA should be a centralized service provider like ATMs facility provided by the banking sector to anyone through out the country. There is a need of a real good governance and practically speaking facilitation to the people as these government departments are supposed to serve the people rather than govern or dictate the innocent citizens!

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