Sustainable Banking ChannelBSN Agent Banking
Azaddin Ngah Tasir
Senior Vice President
Bank Simpanan Nasional (BSN)
Global Sustainable Finance Conference 2013
4 & 5 July 2013
Karlsruhe, Germany
Malaysia Factsheet
General
• Capital: Kuala Lumpur
• Population: 29 mil
• Official language: Malay
• Ethnic groups:
• Malay 50.4%
• Chinese 23.7%,
• Indigenous 11%,
• Indian 7.1%
• Others 7.8%
Political
Economic
• Government :Federal
constitutional elective
monarchy and Federal
parliamentary
democracy
• Real GDP (%): 4.1% (Q1
2013; 5.6% in 2012)
• Legislature: Parliament
• Upper house: Dewan
Negara
• Lower house - Dewan
Rakyat
• Unemployment: 3.3%
(Mar 2013)
• Inflation (%): 1.8% (May
2013; 1.2% in Dec 2012)
• Total trade Jan 2013:
RM110.7 bil (€26.4 bil)
• Top 5 trading partners:
Singapore (16%), China
(14%), Japan(10%), EU
(9%), US (8%).
2
BSN – National Savings Bank of Malaysia
Established under BSN
Act 1974 to take over
the
functions
and
responsibilities of the
Post Office Savings Bank.
398 Branches nationwide
of which:
8 full-fledged branches
118 social branches of
which 45 operate where
no other banks operate
10 Mobile Banking Units
> 8.2 mil customers
>6,600 Employees
59 Micro Finance
Centres
995 ATMs
283 CDMs
>700,000
SMS Banking
Users
>350,000
Internet
Banking Users
3
BSN’s Memberships
Member of World Savings Bank Institute (“WSBI”) (previously
“International Savings Banks Institute”) since 1977. Our Chief Executive
is serving his 4th term as President of WSBI Asia Pacific.
Member of the Association of Development Finance Institutions of
Malaysia (“ADFIM”) established in 1981. Our Chief Executive is the
current Chairman of ADFIM’s Liaison Committee and Treasurer at ADFIM
Council.
Accepted on 6 Nov 2012 as an Associate Member of Association of
Development Financing Institutions in Asia and the Pacific (“ADFIAP”).
4
BSN’s Objectives
Generate Profits for
Sustainability
To continue evolving in order to remain
relevant in the industry so as to
generate profit to take care of the wellbeing of the staff and carry out our
mandates.
Mandated Roles &
Financial Inclusion
Promote savings and financing micro
enterprises.
Lend support to the Malaysian
Government’s Blue Ocean Strategy
and the Central Bank’s (BNM) financial
inclusion agenda where all Malaysians
will have access to banking products &
services.
5
BSN’s Financial Inclusion Agenda
Mandate to
BSN: Provide
financial access
Outreach
Scalability
Underserved
Communities
Non- urban
areas
Non-economical
areas
Low population
Cheaper cost
to serve
A better way…
6
A Better Way…
7
BSN Agent Banking
Officially
launched on
27 Jan 2012 initial 200
agents
8
BSN Agent Banking
Officially
launched on
27 Jan 2012 initial 200
agents
Recruitment
of Retail
Outlets as
Agents
9
Recruitment of Retail Outlets as Agents
Agents’ Criteria
It has own
core
business
It has own
active cash
flow
Registered Company - min. 12
months in operation
Trusted by
the
community
Why
Retailers?
Minimal
training
required
GPRS coverage
Good Financial Record
High foottraffic
5km radius from the nearest
BSN Branches.
10km radius from other
agents.
Proximity to
customers
Suitable building
infrastructure
10
BSN Agent Banking
Officially
launched on
27 Jan 2012 initial 200
agents
Recruitment
of Retail
Outlets as
Agents
5 Basic
Banking
Services
11
Banking Transactions Offered
TRANSACTION LIMIT
TRANSACTION
TYPES
AMOUNT
*NUMBER OF
TRANSACTIONS PER
DAY
*MAXIMUM
(Per transaction Per
Day)
MINIMUM
(Per transaction Per
Day)
Deposits
RM500 (€120)
RM10 (€2.4)
3 Times
Withdrawals
RM500 (€120)
RM10 (€2.4)
3 Times
Bill Payments
RM2,000 (€475)
No Minimum
Unlimited for
Different Bills
Purchase of BSN’s
Savings
certificate (eSSP)
RM1,000 (€240)
RM10 (€2.4)
Unlimited
RM500 (€120)
RM10 (€2.4)
Unlimited
Cashless
Payments
* Whichever comes first
The account opening function via P.O.S. will be available by end 2013.
12
BSN Agent Banking
Officially
launched on
27 Jan 2012 initial 200
agents
Recruitment
of Retail
Outlets as
Agents
5 Basic
Banking
Services
Innovative
use of
technology
13
P.O.S. for Banking
The Point-of-Sales (P.O.S.) terminal is widely
used
Agent may have experience using it
Ability to complete transactions from any
geographical location
Increased performance with minimized
transaction completion time
Prints bank-acknowledged receipt at the end
of every transaction
14
How does it Work?
Customer and / or
Agent
P.O.S Terminal
GPRS Network and /
or Fixed Line
Transaction Switch /
Middleware and
BSN Host/System
Banking transactions performed via wireless GPRS at P.O.S. terminals provided by
BSN to its agents.
Customers confirm their Personal Identification Number (PIN) and a biometric
verification is done before initiating their transactions.
A receipt will be generated upon any successful transaction.
15
BSN Agent Banking
Officially
launched on
27 Jan 2012 initial 200
agents
Recruitment
of Retail
Outlets as
Agents
5 Basic
Banking
Services
Towards
Green
Banking
Innovative
use of
technology
16
Towards Green Banking
Traditional Banking Practice
398 branches




Form-based
Manual input
Fixed line
Longer process
Customers visit branches
• Online
• Real-time
New Banking model
Bring the Bank to
the Community
 Formless
 Automated
 Wireless
GPRS
 Simplified
process
17
BSN Agent Banking
Officially
launched on
27 Jan 2012 initial 200
agents
Recruitment
of Retail
Outlets as
Agents
5 Basic
Banking
Services
Socioeconomic
impact
Towards
Green
Banking
Innovative
use of
technology
18
Impact to the country: Fulfillment of the
Central Bank’s Plan* on Financial Inclusion
After
Before
Agent
Agent
Banking
Banking
Total
Sub-District
837
Served
388
754
46%
90%
Underserved
449
184
54%
10%
*BNM’s 10-year Financial Sector Master Plan (2011 – 2020)
19
Impact to Agents and Community
• Additional foot-traffic
• Reputation from affiliation
• Additional revenue
• Financial Management
• Synergistic partnership with BSN
• Access to micro financing for business
expansion
• Access to Banking for the
underserved
• Saves travelling time and cost
• Alternative , convenient access for
urbanites
• No queues, average transaction time
= 7 secs
• Banking + Cashless Purchases
• Extended banking hours (8.00am10.00pm, 7 days a week)
Agents
Community
20
Impact to BSN
Revenue growth
Transaction growth
steadily increasing
since launch as
public awareness
and acceptance of
agent banking
channel increases
Increased visibility
Widespread locations
of agents have
increased visibility of
the Bank more
effectively than
having a physical
branch.
New customer
segment
With 23% presence in
urban areas, BSN
agent banking is
attracting the urban
middle to high income
to bank with BSN.
21
Impact to BSN
Cost effective set up and operations
Costs
Set-up Cost
(One-off)
Yearly Operating
Cost
Branches
ATM-Off
Premise
Agent Banking
% Cost Savings –
Agent Banking VS
Branches
RM500,00
(€120,000)
RM45,000
(€10,700)
RM3,000
(€700)
99.4%
RM250,000
(€60,000)
RM40,000
(€9,500)
RM1 ,000
(€200)
99.6%
Rapid expansion
Jan
2012
200
Agents
June
2012
1,500
Agents
Dec 2012
3,660
Agents
May
2013
4,044
Agents
22
Impact to BSN
Overall Performance as at 31st May 2013
No. of Agents
4,044
Trx Count
6.3mil
Trx Value
RM561mil (€134 mil)
Average Amount Per
Transaction
Transaction
Types
Average
Amount
Deposits
RM150 (€36)
Withdrawals
RM160 (€38)
Bill Payments
RM80 (€19)
23
BSN Agent Banking
Sustainable
development
Officially
launched on
27 Jan 2012 initial 200
agents
Recruitment
of Retail
Outlets as
Agents
5 Basic
Banking
Services
Socioeconomic
impact
Towards
Green
Banking
Innovative
use of
technology
24
BSN Agent Banking & Sustainable Development
The Nation
Communities
& BSN agents
Supports the
Government ‘s
National Agendas
Expansion &
development of
local communities
• National Blue
Ocean Strategy
(Cost effectiveness,
rapid expansion,
high impact)
• Financial Inclusion
• BSN agents are also
agents of growth in
their communities
• Knowledge of IT
and banking
Environment
Reduces BSN’s
carbon footprint
• Minimise need for
brick-and-mortar
branches
• Promotes formless
and cashless
banking
BSN
Perpetual demand
for basic banking
services sustains
the agent banking
business model
• BSN can continue to
carry out its
mandated roles
more extensively
25
Our Implementation Focus
New &
Refresher
Agent’s
Training
Signage
24-Hour
Customer
Service
Hotline
Promotional
Items
OnGround
Support
Road
Shows
Public Information
& Awareness
Agent
Knowledge &
Support
Agent
Helpdesk –
Toll-Free
Line
Bulletin
Community
Events:
FOMCA &
BNMLINK
TV
Commercial
/ Interview
Social
Media Facebook
26
Moving Forward
To increase number
of agents
Introduction of New
Services
Retention Program
27
TVC
28
29