This document discusses branchless banking and mobile phone banking strategies for rural banks. It provides examples of branchless banking technologies like ATMs, POS devices, mobile phones, and mobile money platforms. It discusses benefits for rural banks in partnering with merchant partners for mobile banking services, like expanding geographic reach and increasing deposits. The document outlines key phases for designing a business proposition and model, including determining priority "use cases", acquiring merchant partners, and providing support services. It emphasizes developing a strong value proposition centered on priority use cases and packaging of fee-based services for merchant partners.

1. Expanding Outreach through
Branchless Banking
John Owens
RBAP‐MABS
2010 RBAP‐MABS Regional Roundtable Conference
Pan Pacific Hotel, Malate, Manila
November 23, 2010

2. Branchless banking is a distribu<on channel
strategy used for delivering financial
services without relying on bank branches.
While the strategy may complement an
exis<ng bank branch network for giving
customers a broader range of channels
through which they can access financial
services, branchless banking can also be
used as a separate channel strategy that
en<rely forgoes bank branches.

3. Branchless Banking
Some examples of branchless banking
technologies include:
• Automated teller machines (ATMs)
• Third‐Party Merchants with Point of Sale
(POS) devices
• Mobile Phones (M‐Banking)
• Mobile Money PlaOorms linked to banks

4. Bill Gates on Mobile Technology to Facilitate
Banking for the Poor

5. FINO – Branchless Banking in India

6. Mobile Payments in the
Philippines via GCASH

7. Developing Merchant Partners
for Mobile Phone Banking
Key Lessons Learned in the RBAP‐MABS
Channel Management IniWaWve

8. ‘Channel management’ supports third parties (Merchants/CICOs) that are
providing financial facilitation services to end customers.
Bank
Examples
• Market research and development
• Sign‐up, accreditaWon
Support Services • Training of third party staff
• InformaWon, MIS
• Liquidity
Third party
(Merchant-CICO)
partner
• Payment acceptance
Financial Facilita<on • Sales and referral
• MarkeWng support
• Customer support
Customer

9. Benefits to Rural Banks
• What are the benefits to Rural Banks?
• By working with merchant partners (CICOs), Rural Banks can offer
m-banking services
• This reduces transaction costs for the clients and the banks
• Allows banks to serve more clients in more areas
• Merchant-Partners can also be provided with liquidity services and
credit opportunities
• Word-of-mouth marketing support
• What do Rural Banks need to do to get these benefits?
• Train existing Merchant-Partners (CICOs) how to market the bank’s
m-banking services
• Process requests for cash and e-money liquidity
• Manage the cross-sell – via relationship management

10. General Benefits of Mobile Phone Banking
(along the Value Chain)
Client
Merchant Bank
-Partners
Leverage Merchants-Partners and
Mobile Phone subscribers to
Convenient & more secure Increase walk-in traffic expand client base and maximize
than cash
(cross-selling opportunities)
revenue.
Decrease cash-on hand, Increase efficiency and save on
Comfort of dealing with
transaction costs
corner merchant or minimize fraud/risks
Merchant-Partner neighbors
Increase deposit levels
Revenue from fees,
Reduced transaction costs for commissions and incentives
Cross selling opportunities through
accessing banking services (no Merchant- Partners’ referrals
lines, no travel time/costs)
Significant image building
opportunity

11. What benefits can Merchant-Partners provide to banks ?
• Expand geographic coverage without building additional
infrastructure
• Decongest branches
• Refer new customer segments
SESSION 6

12. Business Proposition and Model Design Phases
• What is the business Determines how the bank
Bank model for management of should operate internally
the channel management and with its partners
staff and merchants?
• What are the Determines the skills
responsibili<es through the required and the allocaWon
value‐chain? of tasks in the bank
Third party partner
• Which merchants are Determines how many staff
priori<es to be CICOs? are needed and how they
should work
• Which ‘use cases’ are Defines the demand level
highest priority for Rural and nature of the end‐user
Customer Banks? training needed

13. Determine MPB “Use Cases”
• Kapitbahay Banking (“village banking”)
– Access to ENCASH and other Banking ATMs (Text-A-Credit)
– Human ATM (Text-A-Withdrawal)
– Remote Deposit Taking (Text-A-Deposit)
• Make Loan payments
• Pay Employees Salaries
• Pay Utility Bills via Mobile Phone
• Pay Suppliers via GCASH (not Checks or Cash)
• Send Money to Relatives (Remittance Services)
• Provide Info for a fee (balance inquiry)

14. Business Design of MPB Development
Pre‐Sales MarkeWng Sales and Set‐up Servicing
Training of Partners Liquidity AVer Sales
Market Research & Merchant‐Partner on MPB and Bank’s Management Support
Product Dev’t. Products
Acquisi<on
ProposiWon Dev’t Channel Management Telco’ Support
Mobile Channel Officers (MCO) are engaged from the beginning of the process
(Pre-Sales Marketing activities) up to ‘Sales and Set-up’ and then to servicing
Merchants and Clients (such as Liquidity Management and After Sales Support).

15. How to succeed in MPB implementation
through partners
• Development of Strong ‘Use Case’ Proposition:
• Use and implement the right ‘use cases’ (priority case)
• Marketing must be consistent with the ‘use cases’
• Offer package of services as fee-based income for Merchant-Partners (CICO,
bills payment, MPB services, referral incentives, remittance services, and
loading business—if not offered yet)
• Incorporate MPB into Bank’s Products and Services that will
address the following:
– Identify how MPB can help achieve bank’s goals
– Design products with MPB components
– Build partnerships and develop internal skills in handling the services
– Implement quality standards in processing transactions
– Design a good marketing plan for MPB

16. Merchant-Partner Selection Criteria

17. NEW:
RURAL BANK ATM
FACECARD

19. ense
Driver ’s Lic Vote
r ’s ID
NBI Clearance

21. Rural Banks
FACECARD
ATM
Powered by GCASH
GXI

26. Maraming Salamat!!!
Email:
jowens@rbapmabs.org
Websites:
www.rbapmabs.org
www.mobilephonebanking.rbap.org
www.youtube.com/RBAPMABS
Facebook:
MABS Phil