EQUITY BANK ALTERNATE DELIVERY CHANNELS

Transcription

1 EQUITY BANK ALTERNATE DELIVERY CHANNELS By Dr. James Mwangi, MD and CEO, Equity Bank Ltd, Kenya. Wednesday, September 19, 2007

2 KENYA DEMOGRAPHICS Location: On the East African Coast astride the equator Total Area: 582,650 sq Km Capital City : Nairobi Currency : Kenya shillings (KES) Population: 34,707,817 Population Density : 60% Age structure: 0-14 years: 42.6% (male 7,454,765; female 7,322,130) years: 55.1% (male 9,631,488; female 9,508,068) 65 years and over: 2.3% (male 359,354; female 432,012) (2006 est.) Literacy: Definition: age 15 and over can read and write Total population: 85.1% Male: 90.6% Female: 79.7% (2003 est.) Languages: English (official), Kiswahili (national), numerous indigenous languages Financial Access for People Aged 18+ (62% has access while 38% Financially Excluded): 19% (Formal -Regulated banks), 8%(Formal Others SACCO s and MFI s), 35%(Infomal - Accumulated Savings and Credit Associations) 38% ( Un-banked - no formal or informal financial products)

3 EQUITY BANK LTD. A Public Company at the Nairobi Stock Exchange. A Leading Micro Finance Bank in Africa. Customer Base in Year ,000 now 1.6 million Home to over 37% of Bank Accounts in Kenya 62 Branches, 44 Village Mobile Bank Units and 200 ATM s Award and Ratings: Best Kenyan Bank by Market Intelligence survey. Fastest Growing Bank by Market Intelligence survey Global Vision Award on microfinance initiators of concepts of the future that will shape the world economy Best Bank in Kenya by EuroMoney Global Credit Rating 2007 : Short-Term A, Long-Term A+ Company of the Year Award Best Corporate Planning Company in Kenya.

4 ALTERNATE BUSINESS CHANNELS Due to its large customer base, high volume of transactions and changing consumer needs Equity Bank aims to provide its customers with innovative financial products and a growing range of alternate delivery channels such as: ATMS POS Mobile Banking and Internet Banking The Bank has initiated setting a network of Agents to facilitate provision of financial services via the above channels. The Bank targets to recruit over 1,800 agents in the next three years So far the Bank has been able to undertake more than 68% of it s cash transactions via POS and ATM s.

5 MOBILE BANKING The Bank has been working on the mobile banking project, which will go a long way in boosting the Banks alternate delivery channels other in addition to the traditional banking methods. In Dec 2006 Equity Bank launched the SMS component of it s M-Banking Service Eazzy 24/7. As At 31 August, 2007 over 60,000 customers had subscribed to the service with over 500,000 transactions processed to date. In September 2007 The bank has launched the second component of the M-banking project. The service facilitates transactions via a USSD menu-driven mobile phone interface and a voice-activated (IVR) phone menu service on a VISA and Mastercard certified platform. The service is currently being piloted in a live environment with over 1,500 members of staff.

6 AVAILABLE M-BANKING SERVICES Customer Notifications Customer DR/CR advices Exchange rates Enquiries Account Balance Enquiries Airtime Purchase Cheque book Request Full statements requests Mini Statement Enquiry Stop Cheque Instructions Utility bills payment Loan Repayment Notifications Loan Approval Notifications Funds Transfer Person to person payments Person to business payments Business to person payments Stop card instructions Micro-Credit Services Under Consideration

7 POS In Mar 15, 2007 the Bank was admitted to VISA as a principal member and licensed to issues Visa Electron cards as well as acquire ATM transactions from all other Visa cardholders. Project under implimentation. In preparation of Visa POS transaction acquiring, the Bank has setup a POS network currently acquiring it s over 800,000 proprietary cards. In July 2007, the Bank launched the payment of goods and services as well as Cash-Back service using it s proprietary card. The bank has signed up to major supermarket chains each with over 250 tellers. By the end of the year, the bank targets to roll out to over 1,000 POS country wide at : Supermarket chains Fuel stations Wholesalers Established retailers Revenue Authority Pharmacies and Hospitals Administrative Centers Institutions and Distributors Transport Companies Utility Service Providers, etc

8 CLIENT VALUE PROPOSITION Improved security as the customer are able to perform banking transactions at their own privacy and without risk of carrying physical cash. Alternate Channels provide fast, user friendly and convenient means of transacting. Transact anywhere anytime round the clock. Mobile banking offers a medium for performing online transactions at very low costs as overheads are greatly reduced. Real-Time notifications of transactions in your account No need to visit the bank to make enquiries and requests

9 BUSINESS PROPOSITION Convenience and availability will fuel growth in volume of transactions and hence transaction revenues. Efficiency gains: The financial institution is able to handle substantially increased business transactions without corresponding investment in physical infrastructure Increased customer satisfaction thus customer retention and brand awareness and reinforce brand recognition Rapid access to financial services on the back of the mobile infrastructure banking the un-banked New partnerships and relationships with other businesses e.g. Telcos and distributors Liquidity management: Less cash in circulation. Minimizes expenses : Cash in Transit and Insurance New revenue streams.

10 ENVIROMENT Security and Privacy issues are far more significant for consumers who depend on Alternate channels to do financial services. For such contingencies, appropriate banking regulations, security,communications and information policies need regular review in order to embrace the emerging ABC products. The field of mobile banking is not only new and fast evolving but also sits at the overlap of two regulatory domains:- Banking and Communications. Depending on the product offering the overlap may raise the risk of coordination failure, where legislation or regulatory approaches are inconsistent or are contradictory. Complex regulatory issues surrounds mobile banking and thus a comprehensive vision for market development between policy makers, regulators and industry players can help to define obstacles and calibrate proportionate risk mitigations at appropriate times.

11 WELCOME TO THE LATEST EQUITY BANK BRANCHES (insert the SMS banking poster)

12 THANK YOU Q&A