January 25, 2011

Mobile Banking

By Chester Ng, Sales Director (Southeast Asia)


After selling livestock or milk in local markets, Maasai herdsman living in the Serengeti Plains of Kenya, used to return home with cash in their pockets, which might sound nice but also meant they were walking targets for theft. No more. Thanks to a mobile banking service, a herdsman's customers now transfer payment direct to the seller's account.

Kenyans in the city, meanwhile, are using the same service to pay for transport. But as a BBC reporter points out, try to do this in London, New York or Hong Kong or Singapore, for that matter, and you'll likely “find yourself with a very upset cab driver”.

At BuzzCity, we've noticed an increasing number of banks and financial institutions using mobile advertising to share information and promote services. But very few have actually introduced full-service m-banking. This is going to change. And as it does, there are a number of things that banks need to keep in mind . . . .



It's not actually that surprising that a nation like Kenya is at the forefront of m-banking. From mobile advertising to social networks, we've seen developing markets – where most consumers do not have access to computers – leading the way in so many areas of the mobile internet.

In Kenya, the company offering “branchless mobile banking” is called M-PESA. Over half the country's adult population uses the service to pay for shopping or utility bills, wire money to relatives or simply take a taxi home. Safaricom, the company behind M-PESA, also offers interest-paying mobile bank accounts, micro-credit and micro-insurance policies.

Standard Bank in South Africa is another good reference point as are Standard Chartered Bank's southeast Asia operations in Malaysia, Singapore and Thailand. Consumers can use their phones to check their bank account balance, manage credit cards or loans, pay bills, transfer money between accounts and more. However consumers are often required to register first from a PC before they being able to bank with a phone.



Other banks are experimenting with mobile and using it for customer service, branding, sales and marketing.  Others like Citibank India run lead generation campaigns: “Live your dreams” with a personal loan, says the Citibank banner ad. Consumers are taken from there to an online form. Bank employees follow up manually with a phone call.



Some banks are using mobile to help consumers locate the nearest ATM. Or take the case of BCA Indonesia, which has a cross-promotional campaign with a telecom provider. BCA wants consumers to use the bank when they top up or buy pre-paid mobile cards.


As financial institutions embrace mobile as a distinct channel -- not just a supplement to PC banking –their number one challenge is the same as they faced when first rolling out online banking: Consumer Confidence.

If consumers don't trust a service, if they don't feel one hundred percent confident that their money is safe, they won't use it.

So here are four tips:

1. Understand Your Local Mobile Market

How will your clients interact with the service? Do their mobile devices have GPRS, 3G, USSD? Do they use applications? A good resource to answer questions like these is the BuzzCity Campaign Planner, which has up-to-date data on over 200 markets.

2. Get the Product Design Right

The service needs to be intuitive and easy to use. From registration to payments to query resolutions, the platform should be friendly and efficent.

3. You Only Get One Chance

Customers who are unsuccessful in a mobile banking attempt will generally not try again. When a new service launches, banks need to get it right the first time.

4. Consumer Education is Key

Banks need to use a variety of channels to continually educate consumers and boost confidence. Messaging should focus on product awareness, ease of use and banking security.


When done right, mobile banking can create and grow new markets, enabling consumers in a variety of settings to save money and pay bills and in the process create value in communities as far-flung as the Kenyan Maasai and Indonesian commuters.


Notes: Hawa Omar, BuzzCity's Sales Director in South Africa, contributed to this article. The photo of the Maasai man is from the BBC clip, "The Maasai Go Mobile", which you can watch here.