Titien Ahmad, head of
VRL’s Asia office in Singapore, gives edited highlights from a
recent seminar hosted by VRL Financial News in Malaysia on channel
innovation both in the region and globally. Attendees included
executives from Standard Chartered, South Africa’s Absa Bank and
Maybank, Malaysia’s largest bank.
VRL’s recent Channel Innovations Kuala Lumpur forum generated a
high level of interest from bankers in the city as the discussion
focused on the practicalities of launching mobile and online
banking and payments services.
Go deeper with GlobalData
The first speaker, Aman Narain, global head of
remote banking for Standard Chartered, pointed out that “banks are
a bit of a walled garden. Customer service is not integrated within
the bank.”
In his presentation, he said he felt that
customers were getting different messages and service levels from
the different customer touch points of the bank. He – and the other
forum speakers – felt that it was necessary for banks to look
outside the industry for ideas on improving customer
engagement.
At Standard Chartered, the online channel has
become a retail space with opportunities to cross-sell and deliver
rich content through podcasts, ‘mashups’ with Google Maps to
indicate ATM locations, and newsfeeds through an arrangement with
the Wall Street Journal.
Given that the online channel will be a work
in progress with a need for constant updates to reflect the dynamic
nature of the internet, Narain advocated an incremental approach
with monthly or quarterly updates to the website instead of a “big
bang” rollout.
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By GlobalDataHead of internet channels at South Africa’s
Absa, Carl Louw, advocated a fee-driven online banking approach.
With 1.3 million visitors a month and 1.1 million registered
internet banking users, Louw said his bank sees online banking at
the core of customer interface with services such as pre-paid
airtime, traffic fine payments, online share trading and account
opening.
Louw said that “mobile banking will overtake
online banking user numbers from both a usage and transaction
perspective”. He added that “online banking access, using a mobile
device, has grown 500 percent over the last year… and customers do
not mind paying for the convenience”.
The fee-driven structure of the online banking
channel has generated $98 million in revenue for Absa while
messaging has generated $18 million.
However, the customer response to fees might
vary with different markets. During the panel discussion, Ahmad
Shareza, executive vice-president of Maybank, highlighted the
bank’s experience in dealing with customer uproar over an MYR12
($3.40) annual fee charged for internet banking access. Maybank had
to subsequently withdraw these charges after the central bank
stepped in.
Louw said he strongly promoted a fee-driven
approach to providing internet and mobile banking services in order
to develop a revenue stream for these electronic channels and
expand their functionality.
“In tough times, as is currently the case,
diversifying income and not solely relying on interest-based
revenue pulls one through,” he said.
Customer ownership
In the mobile banking session, the
issue of customer ownership cropped up regularly. While George Held
of Zain contended that telcos are in a better position to mine
customer data, Abhishek Kumar of research group Financial Insights
thought that banks were starting to take a lead role in deploying
mobile banking and payments services.
Held, the group product and marketing director
of Zain, a leading mobile operator in the Middle East and Africa,
advocated Zain’s One Network which allows all its customers to move
across borders without roaming call surcharges and with free
incoming calls. The company’s ‘Zap’ branded service is a mobile
commerce and financial services transaction layer.
Providing the various service layers, Held
pointed out, enabled them to serve not only retail customers but
also the corporate customer base with its attractive high-usage
levels. As a result, Zap services are used for a wide range of
transactions such as salary payments, bill payments, funds
collection, airtime resellers, cafe and taxi payments.
Kumar, head of mobile banking research for
Financial Insights, highlighted that while mobile banking
strategies in developed countries tend to be application-based with
a high-level of functionality such as for OCBC Singapore, those in
developing countries rely on text messaging with limited
functionality and user-friendliness such as ANZ Cambodia’s WING
product.
Kumar said: “Banking penetration in Cambodia
is at 5 percent, meaning payrolls are manually distributed.
Therefore, there is an untapped market in the large number of
unbanked in Cambodia. ANZ Cambodia’s WING must be available and
accessible and able to operate on the majority of low-end mobile
handsets,” he said.
“Given the low mobile penetration rate in
Cambodia of 25 percent to 30 percent, ANZ also needed to build a
mobile solution that allowed individuals to share mobile phones and
did not tie customers to a particular mobile phone.”
Kumar said that it is too early for results as
the solution has just been deployed but “ANZ will look to establish
WING as the de facto payments solutions for emerging
markets.”
He advocated a close working relationship with
vendors and regulators and an appropriate strategy based on local
factors such as demographic and state of telecommunications
infrastructure.
The speakers in the mobile banking session
were, however, not too optimistic on the rollout of NFC/contactless
payments. Other than trials, Held asserted that “NFC is still a
public relations opportunity instead of a sound business case.”
