BRANCHLESS BANKING:
WWB GHANA’S
EXPERIENCE
OUR DEFINITION OF BRANCHLESS BANKING
• Use of information technology to deliver financial
services to low income people beyond traditional banking
channels and using field staff and retail agents.
i.e.,
• Leveraging
– People (Field Staff & Agents)
– Processes (Complete transactions
at client locations)
– Technology (POS, Swipe
Card, Mobile Phones, etc.)
to deliver financial services to the unbanked and
underbanked (2M Accounts for Population of 22M,
with 6M mobile phone holders).
PERSPECTIVES DRIVING THE WWBG MODEL
1. Regulatory
Environment
2. Customer
Perspective
3. Technological
Environment
(Customer Value Proposition)
4. Institutional
Perspective
(The Business Case)
[WWBG Branchless Banking Model – Virtual Bank (Vbank)]
1. Regulatory
Environment:
MODELS PERMISSIBLE IN GHANA
• Real Time Settlement, Day-end Reconciliation
• FI-led model of branchless banking is allowed
but with:
– One-to-one (1-1) Model: In this model the FI offers mobile phone
banking services in collaboration with a specific Agent/Telco
– One-to-many (1-∞) Model: In this model a FI offers mobile phone
banking services to customers using mobile connection of many Agents/Telcos
– Many-to-Many Model:
In this model all FIs and all telcos are able to
serve each other’s customers
maximum connectivity &
maximum outreach
2. Customer
Perspective:
OUR CUSTOMER VALUE PROPOSITION
• Safe Custody of Cash
• WWBG responsible for safety of funds once received from the
customer
• Access to Cash is secured and based on Biometric identification
• Accessibility
• Saturation of Customer Business points through deployment of Large
Distribution Network involving Own Field Staff, Vbank Money Shops, and
Agents
• Door-Step Collection of Deposits and Payment of Funds by large number
of WWBG Field Staff
• Location of Vbank Money Shops within Walking Distance in market
centers to ensure constant access
• Field Staff, Vbank Money Shops and Agents are available to Customers
from 8:00am to 5:00pm
• ATM Deployment assures 24HR Access (Work-in-Progress)
• Instant value for any transaction (since transactions are Real Time!)
2. Customer
Perspective:
CUSTOMER VALUE PROPOSITION contd.
• Affordability
• No Charge is levied when Cash is deposited by our Customer
• Flat Highly Competitive Monthly Service Charge levied on Withdrawals:
WWBG Vbank
Average Travel Distance
Traditional Bank
Traditional Collector
(Susu Collectors)
0
2.3km
0
26
4
26
Av. Travel Cost (GHC0.12/Km)
0
GHC1.10*
0
Min. Debit Turnover / Month
(i.e., assume GHC1.00/day for
26days)
GHC26.00
GHC26.00
GHC26.00
GHC1.30
Min GHC5.00
GHC1.00
No. of Transactions / Month
Service Charge/ Month
Opportunity Cost of Interest
Income foregone (GHC26*0.83%
per month)
GHC0.22
GHC1.30
GHC6.10
Total Transaction Cost
to Customer
*Opportunity Costs of travel to the bank are not included (e.g., Time lost, Loss of Sales, etc.)
• No Hidden Costs or Charges to the Customer
GHC1.22
2. Customer
Perspective:
CUSTOMER VALUE PROPOSITION contd.
• Ease of Use or Convenience
– Low Cost Magnetic Stripe Card and or Biometric recognition for complete
transaction
– Third Party lodgments allowed
– Simplified Processes completed at the client’s business location:
Pre –Enrolment Process
Enrolment Process
Enrolment Process
Transaction Process
2. Customer
Perspective:
•
•
•
•
•
•
•
•
THE OFFER
Process loan applications (using Credit Scoring)
Take Savings deposits/ repayments
Allow Withdrawals /disbursement
Provide Remittances / transfers
Balance enquiry
Mini Statements
Mobile Phone Top-ups (Work-in-Progress)
Bill Payment (Work-in-Progress)
– COMPLEMENTARITY
– CROSS-SELLING
– FULL RANGE BANKING SERVICES
3. Technological
Environment:
TECHNOLOGY PLATFORM
Vbank INFRASTRUCTURE & COSTS
GHC1.4 :US$1
4. The Business
Case:
OUR MIGRATION PATH FROM BRANCH TO BRANCHLESS BANKING
Branch
Banking
Vbank
Branch
Banking
Branch
Banking
Agent
Branch
Banking
Vbank
Agent
Vbank
Agent
Up to 2006
2007 – 2008
Pilot Phase
2009
Roll-out Phase
From 2010
Agent
4. The Business
Case:
MIGRATION PATH contd.
Conceptually, 3 Paths were identified by WWB
Ghana…..
External
Main subject
involved
in banking
activities
Path 1
Path 2
Internal
Path 3
Static
Dynamic
Approach to
Market and
Products delivery
4. The Business
Case:
MIGRATION PATH & VALUE CONFIGURATION
Orientation:
WWB Ghana chose Path 3..
Customer/Partner Development
& Economies of scale
Configuration:
•Leverage Agent infrastructure and reduce capex
•Improve and extend services to Rural /Peri-Urban
•Harness Partnerships with Retailers and Vendors
•Increase scale and serve large clients
•Manage Risks and Legal issues related to Partners
•Introduce Client-end solutions (eg Txt to pay, etc.)
IT Infrastructure:
Application Server, Internet,
ISDN, Switch, GPRS, POS, Mobile Phones
External
Delivery Outlets:
Field Staff, Money Shops, Retail Agents, Telcos, Webbased Systems, etc.
Main subject
involved
in banking
activities
Orientation:
Orientation:
Traditional Products Offering
Product Diversification
Configuration:
Internal
Configuration:
•Enhance complementarity and cross-selling
•Employ less costly and adaptable technology
•Diversify and Refine Products and Services
•Focus on Value Addition
•Use Field Staff to simulate “Agent experience“
•Offer Standard Loan and Deposit Products
•Deliver directly to Walk-in Clients
•Limited use of Field Staff in Deposit Mobilization
IT Infrastructure:
IT Infrastructure:
Server/PC Solutions, Internet,
Application Server, Internet,
ISDN, Switch, GPRS, POS,
Delivery Outlets:
Approach to
Banking Hall and Field Staff
Static
Delivery Outlets:
Banking Hall, Field Staff, and Money Shops,
Market and
Products Delivery
Dynamic
4. The Business
Case:
PLATFORM INTEGRATION
BENEFITS TO CUSTOMERS
• FAST: a palm top operated account at your doorstep
so clients do not have to queue for banking services.
• ACCESSIBLE: our Field Staff and Retail Agents are a
phone call and walking distance away. They will come
or you can walk to at your own convenience anytime.
• SECURED: clients fingerprint safe guards their
account. No one can access their account without
their input. Every transaction hits clients account
immediately.
• SIMPLIFIED: it is very easy to operate. Your balance is
available to you immediately.
BENEFITS TO WWBG
• Rapid expansion of deposit mobilization
services.
• Low cost deployment of banking services to
the unbanked.
• Cost efficient mobilization of deposit.
• Growth in deposit mobilization
• Low cost of funds for lending  Positive
impact on our returns
KEY SUCCESS DRIVERS
• Thorough Research-Backed Pilot Testing (allowing for
refinement-products/services, channels, systems )
• On-going Process Mapping and Refinement (frontand back-end)
• Suitability of Branchless Banking Application and
Timeliness of Support
• Cross-selling of products and full range of products
• Favorable legal and technological environment
• Less costly dynamic technology with scalability
• Effective Risk Management
• Cost recovery
• Well thought through Migration Path & Value
Configuration