RBAP-MABS & Rural Banks highlighted at the MMT Asia-Pacific Conference 2011

Having pioneered mobile phone banking and being noted as one of the world’s leaders in mobile money, the Philippines hosted the Mobile Money Transfer Asia Pacific Conference (MMT-APAC) on January 17-20 at the Hyatt Hotel and Casino in Manila. This is the second of Clarion Events’ MMT-APAC series, which started in December 2009.

Panel on the mobile phone banking initiative of RBAP-MABS and the rural banks

Panel on the mobile phone banking initiative of RBAP-MABS and the rural banks

Gathering the world’s mobile money industry leaders, mobile network operators, financial institutions, regulators and m-commerce practitioners, the conference featured presentations on the latest trends, updates and developments in mobile money from all over the world. Highlighted during the event were the mobile phone banking and mobile money transfer experiences of the Philippine rural banks presented by Bangko Kabayan’s Ms. Fides Ganzon, Cantilan Bank’s Gen. Charles Hotchkiss (Ret.), and RBAP-MABS Chief of Party John Owens.

While mobile phone banking remains a successful and steadily growing industry in the country, there still are a lot of things that can be done in order to further strengthen, improve and expand this service. Mr. Hotchkiss noted that mobile issuers and banks utilizing these platforms to promote access to banking services have to work hard in order to achieve critical mass in building a mobile money ecosystem.
Ms. Ganzon shared that the best strat egy for offering mobile money is to ensure that the bank’s own staff are the first to use the service via mobile money payroll. Not only does this create an initial sure clientele, it also allows the bank staff to become familiar with the features of the mobile phone banking services, thus making it easier for them to explain the technology and encourage bank clients to use the service as well. Cantilan Bank was among the pilot banks of the USAID-supported RBAP-MABS’ mobile phone banking initiative which started in 2005-2006. Both Cantilan Bank and Bangko Kabayan learned the lesson early on about ensuring employees understand the system by offering the Text-a-Sweldo service (sending salaries to employees’ mobile wallets via GCASH). The banks also offered this service to other companies in their respective markets. According to Ms. Ganzon, mobile money offered their bank a great way to meet rural payroll demands of their larger bank clients. She also said that the ideal market for mobile money payroll are companies with employees who are scattered or based in rural areas. However, she stressed that promoting this payroll system to clients requires banks to ensure that there is an adequate cash-out network in place.

While mobile phone banking remains a successful and steadily growing industry in the country, there still are a lot of things that can be done in order to further strengthen, improve and expand this service. Mr. Hotchkiss noted that mobile issuers and banks utilizing these platforms to promote access to banking services have to work hard in order to achieve critical mass in building a mobile money ecosystem.

MMT-APAC 2011

Rural Bank delegates: Gen. Charles Hotchkiss (Ret.) of Cantilan Bank and Ms. Fides Ganzon of Bangko Kabayan

Ms. Ganzon shared that the best strategy for offering mobile money is to ensure that the bank’s own staff are the first to use the service via mobile money payroll. Not only does this create an initial sure clientele, it also allows the bank staff to become familiar with the features of the mobile phone banking services, thus making it easier for them to explain the technology and encourage bank clients to use the service as well. Cantilan Bank was among the pilot banks of the USAID-supported RBAP-MABS’ mobile phone banking initiative which started in 2005-2006. Both Cantilan Bank and Bangko Kabayan learned the lesson early on about ensuring employees understand the system by offering the Text-a-Sweldo service (sending salaries to employees’ mobile wallets via GCASH). The banks also offered this service to other companies in their respective markets.

MMT-APAC 2011-b

According to Ms. Ganzon, mobile money offered their bank a great way to meet rural payroll demands of their larger bank clients. She also said that the ideal market for mobile money payroll are companies with employees who are scattered or based in rural areas. However, she stressed that promoting this payroll system to clients requires banks to ensure that there is an adequate cash-out network in place.

Mobile money agents must also be trained using a lot of role playing to get them really used to the services. According to Mr. Hotchkiss, one of the main challenges that the bank encountered was the clients’ “resistance” to culture change, breaking clients’ habits and encouraging them to embrace the new technology.

Mr. Raymond Estioko of the Central Bank of the Philippines (BSP)

Mr. Raymond Estioko of the Central Bank of the Philippines (BSP)

Mr. Raymond Estioko of the Central Bank of the Philippines (BSP), on the other hand, presented on the mobile phone banking and mobile money transfer regulatory environment in the country. According to him, with the country’s over 7,000 islands, there is a need for alternative channels to communicate and transmit money and financial services. Thus, the BSP allowed for an enabling regulatory environment for mobile money in the Philippines. Mr. Estioko reported that the BSP allowed non-banks (such as the telcos Globe and Smart) to offer mobile money. It also allowed remittance agents to perform cash-in/cash-out (CICO) services, thus providing clients with more means to access mobile money. The BSP also simplified the know-your-customer (KYC) process, formalized guidance on the issuance of electronic money, strengthened client protection practices among financial institutions, and allowed for more competitive business models to be tested. This includes partnership between telcos and financial institutions in bringing mobile money to the people.

The country’s top mobile network operators and mobile money transfer service providers, Globe Telecom and Smart Communications, also provided presentations on the Philippine telcos’ experiences in mobile money and mobile phone banking. Smart Communications co-founder and chief wireless advisor Orlando Vea shared Smart’s experiences in bringing mobile phone banking to the base of the pyramid. Globe Telecom President and CEO Ernest Cu presented Globe’s various mobile money services and projects, including the Rural Bank-GCASH ATM FaceCard, GCASH Remit, the use of GCASH to facilitate the Government’s Conditional Cash Transfer (CCT) program as well as the new launch of BanKO. BanKO President Tessie Tan also shared the new bank’s plans to use GCASH to provide banking services.

53

On the last day of the conference, both network operators allowed the delegates to experience using mobile money through their respective platforms: GCASH for Globe and Smart Money for Smart.

Globe brought the participants to RBAP-MABS particpating bank, PR Bank’s Ortigas branch, where they were provided with an orientation on GCASH and its partnership with the rural banks and the USAID-supported RBAP-MABS program. The delegates then received their Globe SIM cards, registered to GCASH and performed cash-in at the bank and in GCASH Cash-in and Cash-out outlets. They visited GCASH merchants at the Greenhills Shopping Center, where they bought goods using their GCASH.

71In the afternoon, Smart treated the delegates to an Amazing Race contest that allowed them to experience Smart Money at the SM Mall of Asia. The delegates were divided into teams and guided during a race where they performed Smart Money transactions via person-to person, via the Smart Money card, and performed money-in transactions and withdrawals from an ATM using a Smart Money card.

The conference was viewed as successful by the international delegates who attended the event. With examples such as the successful partnership by rural banks using the GCASH platform and Smart Money’s Island Activation program, mobile money is now increasingly being viewed as an effective means to assist in banking the unbanked and the underbanked. With all the interesting presentations by Philippine mobile money industry players, the Philippines again demonstrated why it is the mobile money capital of Asia.