key issues and models in branchless banking in the pacific
DESCRIPTION
James Le Compte and Erik AelbersAccess to Finance ExpertsPacific Branchless Banking SeminarADB Pacific Liaison and Coordination Office, Sydney, Australia 19th – 20th November, 2013Co-hosted by Consultative Group to Assist the PoorSupported by the Pacific Private Sector Development InitiativeTRANSCRIPT
Key issues and models in branchless banking in the Pacific
James Le Compte and Erik AelbersAccess to Finance Expert
Pacific Branchless Banking SeminarADB Pacific Liaison and Coordination Office, Sydney, Australia 19th – 20th November, 2013
Contents
1. Constraints to financial inclusion in the Pacific
2. Opportunities for greater financial inclusion in the Pacific
3. Branchless Banking (BB) Models
4. BB Implementations in the Pacific
5. Discussion on Issues
No one said it would be easy…
Geographically dispersed & challenging terrain
11 million people (0.15%) across 85 million sq. km. (17%)
Relatively weak physicalinfrastructure
Low population density
PNG has 17 people per sq. km.
Tonga has 138 people per sq. km.
Philippines 329 people per sq. km.
Bangladesh has 1,034 people per sq. km.
Products that don’tmeet the needs of customers
Long queues at branches and ATMs, account opening and KYC barriers, high fees and distant location.
Contents
1. Constraints to financial inclusion in the Pacific
2. Opportunities for greater financial inclusion in the Pacific
3. Branchless Banking (BB) Models
4. BB Implementations in the Pacific
5. Discussion on Issues
0 5 10 15 20 25 30 35
13
18
20
23
25
30
Not enough money
Too expensive
Family member already has account
Too far away
Lack of necessary documentation
Lack of trust
Self-reported barriers to use of formal accounts
Non-account-holders reporting barrier as a reason for not having an account (%)
The gradual decline and re-emergence of rural banking
Commercial Bank Branches (per 100,000 adults)
ATMs (per 100,000 adults)
Mobile PhoneConnections
PNG 2 (2009) 5 (2009) 2,600,000 (2012)
Solomon Is 7 (2011) 11 (2011) 302,147 (2012)
Fiji 11 (2011) 37 (2011) 940,190 (2012)
Samoa 18 (2011) 28 (2011) 217,406 (2012)
Australia 30 (2011) 167 (2011) 30,600,000 (2012)
Bank and Mobile Phone Access in the Pacific
Supportive Regulatory Environment
Contents
1. Constraints to financial inclusion in the Pacific
2. Opportunities for greater financial inclusion in the Pacific
3. Branchless Banking (BB) Models
4. BB Implementations in the Pacific
5. Discussion on Issues
Hallmarks of a Bank-led Model- Traditional providers of financial services
- New delivery channel for existing or new financial product
- Leverages bank infrastructure & where it exists a national payments system
- Relies on MNO infrastructure for mobile communications
Strengths of a Bank-led Model- Existing processes for financial service discipline
- Engagement with regulatory bodies
- Experienced in running transactional platform
- Branches can support agent liquidity
Hallmarks of an MNO-led Model- Non-traditional financial service providers- Leverage existing agent networks and experience managing agents- A new product in a suite of products delivered over mobile channel - Customer funds tied to SIM and held in trust or individual bank account
Strengths of an MNO-led Model- Mass-market brand- Agent know-how- Experienced in running transactional platform- Innovative
Contents
1. Constraints to financial inclusion in the Pacific
2. Opportunities for greater financial inclusion in the Pacific
3. Branchless Banking (BB) Models
4. BB Implementations in the Pacific
5. Discussion on Issues
Branchless Banking Implementations
TIMOR-LESTE
VANUATU
In the Pacific
TIMOR-LESTE
VANUATU
Fiji: Two MNO-led implementations
PNG: MNO & Third-Parties
TIMOR-LESTE
TIMOR-LESTE
VANUATU
Regional: MNO-led implementations
Regional Bank-led roll out
TIMOR-LESTE
VANUATU
What will it take to gofurther with branchless banking?
Operational Challenges:Driving Usage - Managing Agent Networks - Attracting New Customers
What will it take to gofurther with branchless banking?
Enabling Regulation:Customer Registration - Principal and Agent Agreements – Transparency – Consumer Protection and Market Conduct
What will it take to gofurther with branchless banking?
A Need for Further Learning:What is Best Practice – Adequate Investment and Resources - Innovation
Discussion on Key Issues
Thank you.
More information contact :
Pacific Liaison and Coordination Officewww.adb.org/offices/pacific/main [email protected]
Asian Development Bank6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines Tel + 632 632 4444
Port Moresby Resident Mission Level 13, Deloitte Tower Port Moresby, PNG