With the recent expansion of Safaricom’s M-Pesa money transfer service to the UK, Kenyans abroad now have an additional cash remittance avenue besides the well-known Western Union and MoneyGram services.
According to Safaricom’s chief executive Michael Joseph, the firm plans to run the Kenya-UK service for three months before expanding to other markets.
“We would like to introduce the service to Uganda, the United Arab Emirates and US, but only after we comply with regulatory issues in those countries,” said Mr. Joseph.
To send money to Kenya using the service, users will be required to identify themselves, provide the recipient’s name, Kenyan mobile number and the amount being sent in pounds Sterling.
With transaction fees ranging from $5.6 to $9.6, the transfer is converted to Kenya shillings at the day’s prevailing exchange rate, thereby guarding against exchange fluctuations as it is an instant transfer.
Currently, the maximum amount that can be transferred internationally through M-Pesa is $350 with the amount allowed per month from a single sender in the UK capped at $14,000.
M-Pesa, which was launched in Kenya in 2007, had a subscriber base of 7.3 million by end of July, served by an agent network of over 12,000, with cumulative person-to-person transfers of $2.7 billion. The volume of monthly transfers is $2.5 million.
The move to launch the service in the UK is seen as one meant to tap into the international remittances market especially from Kenyans living and working abroad.
Monday, 19 October 2009
Friday, 16 October 2009
M-Pesa Used in Job Scam
A sign of maturity in the development and use of new products is its adaptation to use by criminal elements. M-Pesa the highly successful Kenyan mobile payment system is no exception as this investigative report from Kenya’s NTV shows.
Thursday, 15 October 2009
Bank Training – Critical Element for Today’s Banker
Banking has changed dramatically in the past decade. These changes have been so far reaching that the old disciplines that were core to the successful banker of the 1990s have long since relegated to the dusty back shelf.
To succeed in banking today the banker has to master a wide range of new disciplines. Although he may never become a true expert in these he or she still needs to have a sufficient working knowledge of the subject to enable a reasonable level of effective decision making.
This is equally true for bankers at the “coal face” such as those at the front desk or in the back office as well as those in the more lofty towers of head office, be they in accounting, audit, strategy, planning, operations or the like.
This is why staff training is so very critical. Bankers today need to understand the wider world, whether it is the operation of payment systems, credit cards, real time gross settlement, Swift, ACH operations, electronic payments, mobile payments and so on.
They also need to have a clear understanding of where banking and bank operations are heading – what is done today and how it will be done tomorrow. Technology continues to change the world. To keep up with these changes, to exploit them to your organizations benefit you first need to understand them. Just look at how the Mobile Phone is redrawing the banking world. New applications and processes for the Mobile Phone are being developed and launched by the day.
Of course all these changes also bring with them new dangers and risks – ways in which the ever vigilant banker and his staff may be duped. So an investment in Operational Risk Management training is also critical. What is operational risk? How it can be mitigated? What is fraud and how do you manage it? What is Business Continuity and how do you set it up? All these are key issues that the modern banker needs to know about.
Citadel Advantage offers a wide & comprehensive range of professional courses and training for commercial and central banks in the areas of; Operational Risk Management (for Basel II and for back-office risk mitigation), Specific Operational Risk Management areas including Business Continuity Planning, Anti Money Laundering & Payment Systems, and Liquidity Management.
We also offer a range of Workshops and Introductory Lectures dealing with the main areas covered in our full courses. If you can't find the exact course in our schedule that you are looking for, contact us. We may be able to build a course for your specific needs. Professional courses and training are available at a centralized venue, regionally (currently in Southern Africa & Western Europe), or In-house on your premises.
To succeed in banking today the banker has to master a wide range of new disciplines. Although he may never become a true expert in these he or she still needs to have a sufficient working knowledge of the subject to enable a reasonable level of effective decision making.
This is equally true for bankers at the “coal face” such as those at the front desk or in the back office as well as those in the more lofty towers of head office, be they in accounting, audit, strategy, planning, operations or the like.
This is why staff training is so very critical. Bankers today need to understand the wider world, whether it is the operation of payment systems, credit cards, real time gross settlement, Swift, ACH operations, electronic payments, mobile payments and so on.
They also need to have a clear understanding of where banking and bank operations are heading – what is done today and how it will be done tomorrow. Technology continues to change the world. To keep up with these changes, to exploit them to your organizations benefit you first need to understand them. Just look at how the Mobile Phone is redrawing the banking world. New applications and processes for the Mobile Phone are being developed and launched by the day.
Of course all these changes also bring with them new dangers and risks – ways in which the ever vigilant banker and his staff may be duped. So an investment in Operational Risk Management training is also critical. What is operational risk? How it can be mitigated? What is fraud and how do you manage it? What is Business Continuity and how do you set it up? All these are key issues that the modern banker needs to know about.
Citadel Advantage offers a wide & comprehensive range of professional courses and training for commercial and central banks in the areas of; Operational Risk Management (for Basel II and for back-office risk mitigation), Specific Operational Risk Management areas including Business Continuity Planning, Anti Money Laundering & Payment Systems, and Liquidity Management.
We also offer a range of Workshops and Introductory Lectures dealing with the main areas covered in our full courses. If you can't find the exact course in our schedule that you are looking for, contact us. We may be able to build a course for your specific needs. Professional courses and training are available at a centralized venue, regionally (currently in Southern Africa & Western Europe), or In-house on your premises.
We use real-life case studies to illustrate the course material, so enhancing the learning process.
Our training courses are offered as:
- Public Courses: Citadel Advantage provide courses and lecturers to the key banking and risk training organizations around the world as well as in its own name. Ask your local or regional provider of banking and risk training courses for a Citadel Advantage course.
- In-house Courses (at your location or offsite at a location of your choice): Citadel Advantage provides cost-effective in-house training programs that allow you to determine the, depth, attendee size, length and sequence of the training within the security of your own organization. If you have 5 or more people to train our In-House training service will save you money. All Citadel Advantage courses can be run on your premises anywhere around the world.
- Tailored Courses (to meet your organization's specific needs): Citadel Advantage also provides tailored training services to the banking and financial sector. We can tailor any course to your needs or develop a new course within a relatively short period of time as required.
- CAPMen Program (the “Citadel Advantage Personal Mentoring” program): This service is designed to provide non-judgmental and professional support to those (Mentee) in senior management or aiming to reach senior management positions requiring an in-depth competency in the areas “Payments & Settlements” and “Operations Risk Management”. “CAPMen” Mentoring utilizes the full range of our experience and specialized professional courses to provide coaching, guidance and advice on a one-to-one basis, in your offices, helping you, the professional, set new goals, broaden your vision and build strategies. “CAPMen” mentoring also helps develop personal management skills such as creative thinking, decision-making, problem-solving, and effective use of resources.
- For details of our current course offerings please see; http://www.citadeladvantage.com/schedule.htm
Our full course catalogue may be viewed at; http://www.citadeladvantage.com/catalog.htm
Tuesday, 13 October 2009
Risk Management - Focus on Fraud
CITADEL ADVANTAGE is presenting a 2-day intensive training course on Fraud within the context of Operations Risk Management in Madrid, Spain on the 22 & 23 February 2010.
Fraud can be extremely difficult to detect and studies show that most fraud occurs from or through trusted insiders. How aware are you or employees of fraud? Do they have a clear understanding of the role they play in detecting fraud? Do they understand you organization’s fraud policies and procedures?
“Risk Management - Focus on Fraud” is a 2-day intensive course on fraud and how it presents huge challenges for banks, requiring them to radically modify behavior and increase their vigilance in many of the traditional risks associated with banking activities.
Can your bank or organization cope with fraud? In fact could you even identify a fraud in your working environment? Are you maximizing your staffs’ potential to reduce fraud and error in your systems?
A major by-product of the financial crisis was the number of frauds which have come to light – frauds that had been running for years.
Don't miss this opportunity to ensure that you and your staff are able to understand fraud and its ramifications.
WHAT THIS COURSE COVERS
What you and your staff will gain from this course
• Understanding the Human Dynamic – Greed and Fraud
• Understand and identify the key Fraud indicators and Red Flags
• Understanding Operational Risk – in the context of Fraud
• Positioning the organization to successfully manage the ever-present Fraud problem.
• Successful approaches to identifying and mitigating Fraud
WHO SHOULD ATTEND?
• Senior Bank Executives
• Risk Managers
• Operations Managers
• Internal and External Auditors
• Operations Officers
• Business Managers
• Compliance Officers
• I.T. applications providers serving financial institutions
• Consultants and professionals serving the financial services industry.
For more details including a fully descriptive course brochure e-mail us at courses@citadeladvantage.com today. Please indicate FRAUD-MADRID in the subject line.
Fraud can be extremely difficult to detect and studies show that most fraud occurs from or through trusted insiders. How aware are you or employees of fraud? Do they have a clear understanding of the role they play in detecting fraud? Do they understand you organization’s fraud policies and procedures?
“Risk Management - Focus on Fraud” is a 2-day intensive course on fraud and how it presents huge challenges for banks, requiring them to radically modify behavior and increase their vigilance in many of the traditional risks associated with banking activities.
Can your bank or organization cope with fraud? In fact could you even identify a fraud in your working environment? Are you maximizing your staffs’ potential to reduce fraud and error in your systems?
A major by-product of the financial crisis was the number of frauds which have come to light – frauds that had been running for years.
Don't miss this opportunity to ensure that you and your staff are able to understand fraud and its ramifications.
WHAT THIS COURSE COVERS
What you and your staff will gain from this course
• Understanding the Human Dynamic – Greed and Fraud
• Understand and identify the key Fraud indicators and Red Flags
• Understanding Operational Risk – in the context of Fraud
• Positioning the organization to successfully manage the ever-present Fraud problem.
• Successful approaches to identifying and mitigating Fraud
WHO SHOULD ATTEND?
• Senior Bank Executives
• Risk Managers
• Operations Managers
• Internal and External Auditors
• Operations Officers
• Business Managers
• Compliance Officers
• I.T. applications providers serving financial institutions
• Consultants and professionals serving the financial services industry.
For more details including a fully descriptive course brochure e-mail us at courses@citadeladvantage.com today. Please indicate FRAUD-MADRID in the subject line.
Monday, 12 October 2009
Liquidity – New Risks In Uncertain Conditions
For the past 15 years at least central banks around the world have been pushing “just-in-time” intraday liquidity as the preferred method of banks funding their real-time settlement (RTGS) accounts. While the implementation of RTGS took the settlement risk out of the majority of financial systems, it adoption and use for more and more critical financial systems (such as CLS) has exacerbated another problem – liquidity risk. This weakness has been spotlighted by t the liquidity crises that affected markets in March 2008 and, more severely, in September and October 2008. It can no longer be taken for granted that just-in-time liquidity will be available to financial market utilities at a time when multiple market participants are in danger of defaulting. This is the findings of researcher made public in the “Chicago Fed Letter” (see http://www.chicagofed.org/publications/fedletter/cflnovember2009_268a.pdf )
Friday, 9 October 2009
Online Fraud: Absa takes Client to Court
The Financial Technology portal reports that Absa one of South Afric’a “big four” has taken a client to court over a matter of online fraud.
The full report, which you can access at http://www.financialtechnologyafrica.com/Online_Fraud_Absa_Drags_FoneWorx_to_Court.htm , reads:
‘Johannesburg, South Africa: Big four bank Absa has denied any liability in a fraud case that saw R3 million illegally moved from FoneWorx's accounts. FoneWorx says just over R3 million of its money had been fraudulently moved out of its eight Absa accounts into 183 unknown, and unauthorised, Absa accounts, in February.
It has since recouped R1.56 million of the stolen funds, and now wants the rest paid back to it. CEO Mark Smith says the balance of the missing money was transferred into the company's attorney's trust account, but then again removed by Absa.
The bank claimed the money had been wrongfully transferred and was actually a duplicate payment, he says. But Absa's head of media relations, Patrick Wadula, insists this is a duplicate payment, which FoneWorx has “refused to repay to Absa”. He says the bank has instituted legal action against Foneworx and its legal representatives, Martini-Patlansky Attorneys, for the return of the duplicate payment.
The bank also denies liability for the money having been illegitimately transferred in the first place. Wadula says Absa “at no time had access to Foneworx's cash focus system”. He says the system is operated and managed by the client's system manager, and Absa has no right of access to or control.
“The only way to gain access to the cash focus system and, in turn, to transfer funds on the system is by way of passwords held by the client or its employees and agents. Absa has no knowledge of these passwords,” says Wadula. He adds that the bank is not liable for the wrongfully transferred money.
However, Wadula says, there have been similar, though minimal, incidents previously. “Absa constantly warns its clients to protect user identities and passwords and that security measures must be put in place to ensure that such information is safeguarded.”
Advocate Clive Pillay, the ombudsman for Banking Services, says he is not aware of this matter. However, he says: “In terms of the Code of Banking Practice, banks undertake to provide reliable banking and payment systems services and to take reasonable care to make these services safe and secure.” '
The full report, which you can access at http://www.financialtechnologyafrica.com/Online_Fraud_Absa_Drags_FoneWorx_to_Court.htm , reads:
‘Johannesburg, South Africa: Big four bank Absa has denied any liability in a fraud case that saw R3 million illegally moved from FoneWorx's accounts. FoneWorx says just over R3 million of its money had been fraudulently moved out of its eight Absa accounts into 183 unknown, and unauthorised, Absa accounts, in February.
It has since recouped R1.56 million of the stolen funds, and now wants the rest paid back to it. CEO Mark Smith says the balance of the missing money was transferred into the company's attorney's trust account, but then again removed by Absa.
The bank claimed the money had been wrongfully transferred and was actually a duplicate payment, he says. But Absa's head of media relations, Patrick Wadula, insists this is a duplicate payment, which FoneWorx has “refused to repay to Absa”. He says the bank has instituted legal action against Foneworx and its legal representatives, Martini-Patlansky Attorneys, for the return of the duplicate payment.
The bank also denies liability for the money having been illegitimately transferred in the first place. Wadula says Absa “at no time had access to Foneworx's cash focus system”. He says the system is operated and managed by the client's system manager, and Absa has no right of access to or control.
“The only way to gain access to the cash focus system and, in turn, to transfer funds on the system is by way of passwords held by the client or its employees and agents. Absa has no knowledge of these passwords,” says Wadula. He adds that the bank is not liable for the wrongfully transferred money.
However, Wadula says, there have been similar, though minimal, incidents previously. “Absa constantly warns its clients to protect user identities and passwords and that security measures must be put in place to ensure that such information is safeguarded.”
Advocate Clive Pillay, the ombudsman for Banking Services, says he is not aware of this matter. However, he says: “In terms of the Code of Banking Practice, banks undertake to provide reliable banking and payment systems services and to take reasonable care to make these services safe and secure.” '
Money Transfers in Uganda
allAfrica.com: Uganda: Telecom Money Transfer Tilts Market
This article from AllAfrica.com provides an intersting insite into the current state of payments in Uganda. It is well worth a read. To access the original please click on the title post.
Kampala — Six months since the introduction of mobile money transfer, MTN and Zain have registered about 250,000 clients onto the mobile money transfer service moving over sh40b in transactions.
The two telecom companies' officials confirm that only the transactional limitation of sh1m seems to be standing in the way of the service which has tilted the market away from the traditional service providers.
Although figures are scanty about the actual market command of each player, there is ample evidence that MTN mobile money and Zain's Zap have eaten into the market share of traditional money transfer services of Western Union and MoneyGram as well as banks. MTN alone moves an average of sh6b monthly, according to Richard Mwami, MTN general manager, public access.
While Zain offers a diverse platform in which customers are able to merchandise, top up airtime and transfer money.
"The next phase which will soon be unveiled will see customers able to synchronise their mobile phone banking platform with their bank accounts with ZAP, " said George Buza, Zain's head of marketing.
The emerging dominance of the two products illustrates the thirst the market has for innovative products that make life easy.
Services like MoneyGram and Western Union have limited agents across the country.
Western Union, for instance, only has seven agent banks - Barclays, Ecobank, Centenary, Diamond Trust, Post, KCB and Crane Bank and a few sub agents.
On the other hand, there are hundreds of mobile money agents in all street corners across the country.
According to Juma Walusimbi, the communications director of Bank of Uganda, Western Union and MoneyGram were given a go ahead to operate under the financial institutions act because they are operating under licensed financial institutions.
"They presented their accounting and operational systems which ensured that they have audit trails and are safe," said Walusimbi.
But Walusimbi feels exclusivity rights on the two companies constrains the financial institutions that want to work with others.
"For instance, if bank A is working with Western Union, they cannot be allowed to work with MoneyGram," said Walusimbi.
Pride microfinance, for instance, falls under Crane bank which limits the amount of money Pride microfinance can collect as a full agent. Yet the microfinance firm is one of the most active branches, according to sources.
MoneyGram and Western Union international are reportedly reluctant in licensing new agents because of the added workload like supervision, training and hiring added workforce.
There are now six registered and operating telecom companies, two of who are offering the money transfer service. The benefits of the service have been boosted by the failure of commercial banks now numbering 21 to translate their services into everyday benefits to the common man.
Interest rates on savings are in point decimals while borrowing rates in Uganda are among the highest in the region. Also, inflation, both in the past (single digit) and present (at 14.5% in September) is way above the interest rates offered by banks for deposits. This means your meager savings in the bank's are simply wiped off by the high inflation.
"People do not save because there are no benefits to saving," said an expatriate working in Uganda.
Banks have remained largely urban based capturing just about 15% of the entire population.
The electronic funds transfer (EFT) and the real time gross settlement (RTGS) offered by banks are expensive, lengthy and uncompetitive. EFTs charges range from sh2,500 to sh10, 000 and take about two days, while RTGS charge upto sh15, 000.
"These two need to lower costs. But there is still business for everyone," cautioned Walusimbi.
In Kenya, the central bank said nearly half (47%) of all money transfers in Kenya are taking place through the mobile phones.
Although a major revolution in the money transfer business, mobile money has shortfalls. There are reports that agents sometimes run out of cash which creates lapses in the smooth running of the service. Also operators decry the lack of a harmonised identification system in Uganda like it is in Kenya and Tanzania.
"Keeping in consideration the sensitivity around money in Uganda, the slow pace at which people have embraced the use of this service in their day-to-day lives and the lack of a national/formal identification that restricts the acquisition of even more subscribers onto the mobile money service," said Mwami.
Leaving the responsibility of settling all claims by agents with little deposits in the rural areas are a burden and have limited growth of the service.
Will telecoms provide money storage as the banks do?
Isaac Nsereko, MTN chief marketing officer, says in the foreseeable future, it is very unlikely that telecom firms will undertake full banking roles like accepting deposits and extending credit.
"What I see more is collaboration on transfer and payment with the banks," said Nsereko.
In this arrangement, the mobile phone will continue to offer the infrastructure.
MoneyGram and Western Union have remained competitive by mainly exploiting strong brand presence and a public that has for long understood their modus operandi.
The mobile money service has clearly redrawn the competition lines with the traditional players.
This article from AllAfrica.com provides an intersting insite into the current state of payments in Uganda. It is well worth a read. To access the original please click on the title post.
Kampala — Six months since the introduction of mobile money transfer, MTN and Zain have registered about 250,000 clients onto the mobile money transfer service moving over sh40b in transactions.
The two telecom companies' officials confirm that only the transactional limitation of sh1m seems to be standing in the way of the service which has tilted the market away from the traditional service providers.
Although figures are scanty about the actual market command of each player, there is ample evidence that MTN mobile money and Zain's Zap have eaten into the market share of traditional money transfer services of Western Union and MoneyGram as well as banks. MTN alone moves an average of sh6b monthly, according to Richard Mwami, MTN general manager, public access.
While Zain offers a diverse platform in which customers are able to merchandise, top up airtime and transfer money.
"The next phase which will soon be unveiled will see customers able to synchronise their mobile phone banking platform with their bank accounts with ZAP, " said George Buza, Zain's head of marketing.
The emerging dominance of the two products illustrates the thirst the market has for innovative products that make life easy.
Services like MoneyGram and Western Union have limited agents across the country.
Western Union, for instance, only has seven agent banks - Barclays, Ecobank, Centenary, Diamond Trust, Post, KCB and Crane Bank and a few sub agents.
On the other hand, there are hundreds of mobile money agents in all street corners across the country.
According to Juma Walusimbi, the communications director of Bank of Uganda, Western Union and MoneyGram were given a go ahead to operate under the financial institutions act because they are operating under licensed financial institutions.
"They presented their accounting and operational systems which ensured that they have audit trails and are safe," said Walusimbi.
But Walusimbi feels exclusivity rights on the two companies constrains the financial institutions that want to work with others.
"For instance, if bank A is working with Western Union, they cannot be allowed to work with MoneyGram," said Walusimbi.
Pride microfinance, for instance, falls under Crane bank which limits the amount of money Pride microfinance can collect as a full agent. Yet the microfinance firm is one of the most active branches, according to sources.
MoneyGram and Western Union international are reportedly reluctant in licensing new agents because of the added workload like supervision, training and hiring added workforce.
There are now six registered and operating telecom companies, two of who are offering the money transfer service. The benefits of the service have been boosted by the failure of commercial banks now numbering 21 to translate their services into everyday benefits to the common man.
Interest rates on savings are in point decimals while borrowing rates in Uganda are among the highest in the region. Also, inflation, both in the past (single digit) and present (at 14.5% in September) is way above the interest rates offered by banks for deposits. This means your meager savings in the bank's are simply wiped off by the high inflation.
"People do not save because there are no benefits to saving," said an expatriate working in Uganda.
Banks have remained largely urban based capturing just about 15% of the entire population.
The electronic funds transfer (EFT) and the real time gross settlement (RTGS) offered by banks are expensive, lengthy and uncompetitive. EFTs charges range from sh2,500 to sh10, 000 and take about two days, while RTGS charge upto sh15, 000.
"These two need to lower costs. But there is still business for everyone," cautioned Walusimbi.
In Kenya, the central bank said nearly half (47%) of all money transfers in Kenya are taking place through the mobile phones.
Although a major revolution in the money transfer business, mobile money has shortfalls. There are reports that agents sometimes run out of cash which creates lapses in the smooth running of the service. Also operators decry the lack of a harmonised identification system in Uganda like it is in Kenya and Tanzania.
"Keeping in consideration the sensitivity around money in Uganda, the slow pace at which people have embraced the use of this service in their day-to-day lives and the lack of a national/formal identification that restricts the acquisition of even more subscribers onto the mobile money service," said Mwami.
Leaving the responsibility of settling all claims by agents with little deposits in the rural areas are a burden and have limited growth of the service.
Will telecoms provide money storage as the banks do?
Isaac Nsereko, MTN chief marketing officer, says in the foreseeable future, it is very unlikely that telecom firms will undertake full banking roles like accepting deposits and extending credit.
"What I see more is collaboration on transfer and payment with the banks," said Nsereko.
In this arrangement, the mobile phone will continue to offer the infrastructure.
MoneyGram and Western Union have remained competitive by mainly exploiting strong brand presence and a public that has for long understood their modus operandi.
The mobile money service has clearly redrawn the competition lines with the traditional players.
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