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FNB sees value of banking by cellphone
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Sure Kamhunga
Business Day
Thursday, June 24, 2010
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Firstrand expects banking subsidiary FNB to aggressively grow its cellphone banking business in Africa and steal a march on competitors as it develops a cost-effective delivery channel to reach mainstream customers.
Cellphone banking is being touted by analysts as the next battlefront for banks competing to grow customers in Africa, where millions remain unbanked mainly due to lack of banking infrastructure. It could become an important revenue stream as banks develop and roll out technology-based banking services to expand their market reach.
Local bank executives said this week they had discovered that the service was increasingly becoming convenient, particularly for customers in rural areas.
FirstRand CEO Sizwe Nxasana this week said it did “not need a rocket scientist” to realise that cellphone penetration and growth rates in Africa were exceeding the pace at which banks were penetrating, particularly the mainstream market.
It followed, therefore, that cellphone banking would become an important revenue stream for banks, mostly because of its convenience and virtually free cost.
“Cellphone penetration has increased and continues to increase and will continue to increase quite significantly. If you juxtapose that against the percentage of the banking population on the (African) continent, there is a complete disconnect with the low rates of banking penetration,” Mr Nxasana said.
“Therefore, if you can find a way to use the cellphone banking platform that the people understand, and provide banking services, it means you will have a killer, winning application that can be a very important and significant engine for (revenue) growth,” he said.
FNB had the largest customer base using cellphone banking in SA, with more than 2-million, and was attracting about 90000 a month, FNB Cellphone Banking CEO Ravesh Ramlakan said.
Outside SA, FNB had launched cellphone banking in Namibia, Botswana, Zambia and Swaziland, with more than 110000 customers signed up for the service.
Mr Nxasana described FNB’s cellphone service as unique and “home-grown”, whose technology had been rolled out in operations outside SA, and would be launched in new markets such as Tanzania once regulatory approval had been given to start operations.
Nedbank wanted to replicate the success of the M-Pesa cellphone banking product launched in Kenya by launching its own version in SA in partnership with Vodacom, CEO Mike Brown said this week.
M-Pesa, operated by Safaricom, had so far registered 9-million cellphone banking customers since its launch in March 2007.
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