St George over the moon about Smartphones

According to Australia's St George Bank, it's smartphone transaction volume has grown in the past 12 months to equal the activity in 40 physical branches.

The bank spent under A$2 million scrubbing up applications for the booming mobile apps market, a tiny fraction of the A$2 billion set aside by it's parent Westpac for the group's IT transformation program.

The Westpac subsidiary wants to carve a niche in the digital space and differentiate itself from other financial institutions.

St George Bank chief information officer Dhiren Kulkarni said smartphone transaction volumes were increasing by 20 per cent a month.

It was one of the first banks to launch an application for the Apple iPhone about a year ago, spending less than A$500,000 on that project and will be the first bank in Australia to unveil a mobile banking application for the touch-based Blackberry Torch 9800. It also has versions for Google's Android platform and Apple's iPad.

Mr Kulkarni estimates the bank has spent less than A$2m developing applications for smartphone and tablet devices.

He said St George customers were embracing smartphones faster than they latched on to the internet - the main reason for the increase was customers were increasingly doing their banking on the go.

"Transactions on the smartphone ... we're doing the equivalent of about 40 branches and increasing by about 20 per cent a month.

"The smartphone is with everybody ... it's mobile, you don't have to log in (like a browser) ... it's convenient."

St George's digital clients used its apps to transfer funds, request credit limit increases and conduct other forms of transactions.

Customers conduct more than 280,000 financial transactions from their mobile devices each month.

No major overhaul of core systems was required to adapt its products to the digital world and the bank's ability to adapt to different platforms seamlessly was due to its real-time processing system, Hogan. The bank has been using Hogan since the 1990s.

"This is where we're pretty smart. We're probably one of the few banks in Australia who's got the online, real-time system (called) Hogan (by CSC).

"This means the backend is the same (for all devices) ... we only change the interface for the iPhone or iPad."

St George worked with a contractor to deliver the free BlackBerry app, which goes live next week on BlackBerry App World.

While some banks like ANZ have decided to primarily focus on the iPhone and iPad, Mr Kulkarni said it couldn't ignore the BlackBerry.

"Most of our big customers have a BlackBerry and they've want this (app)," he said.

St George has around 1 million active internet banking customers and 150,000 active mobile banking customers.

China set to become largest mobile payments market - Celent

China will soon be the largest mobile payments market in the world, with 410 million users by 2013, according to research from Celent.

China is already the world's largest mobile phone market, with 740 million users in 2009. In terms of remote mobile payment, the penetration rate in the market was 10% in 2009 but this is expected to soar 48% year-on-year until 2013. For contactless m-payments, penetration in 2009 was only 0.5% but the number of users for this technology is set to exceed 400 million by 2015.

In its report, Celent focuses on the country's three major m-payments players; mobile operators, banks, and third party companies although there are signs of increasing cooperation between the industries.

During last May card network operator China Unionpay signed up a group of the country's banks, wireless operators and handset manufacturers to a mobile payments industry alliance that will establish standards and a business model.

Currently, mobile operators main focus is on contactless m-payments, and they have established their own payment networks in shops, stations and other outlets. Banks are licensed to handle large transactions and are able to provide complex financial products, mainly focusing on large payments, with SD cards bound with cards.

Celent believes that, in the long run, remote large value mobile payments will become the key development focus of China UnionPay and various operators, and the transaction total for these will far exceed contactless mobile payments.

Hua Zhang, a analyst, at the Asia financial services group of Celent, says: "Partnerships with banks are very important for vendors who want to enter the market. Currently, the best business model in the Chinese market focuses on cooperation between operators and banks. Mobile operators and third party payment companies are also strengthening their cooperation with the banking industry for increased success."

The Celent figures contrast with a recent survey carried out earlier this year by KPMG which suggested that a massive 77% of respondents have used their mobiles for banking and 44% for retail transactions.

Kenya's Orange launches mobile banking service

Telkom Kenya has launched a mobile money service which allows users to manage accounts held at Kenya's Equity Bank from their mobile phones.

Customers of the new product known as "Orange Money" can request bank loans, make interbank money transfers, withdraw or send cash and pay bills all from their mobiles.

"You now have your bank in your pocket," Equity's Chief Executive James Mwangi said at the launch of the new service. "That is how easy banking is going to become."

Some $30 million changes hands [in Kenya] through mobile transfers daily, Central Bank of Kenya Governor Njuguna Ndung'u said during the launch of Orange Money.

Telkom Kenya, which retails as Orange, and which is controlled by France Telecom's Orange, lags market leader Safaricom, which operates the popular M-PESA transfer service, as well as another operated by the local subsidiary of India's Bharti Airtel.

"The service is mapped onto the customers' bank accounts, making it possible for the customers to literally run their accounts from their mobile handsets, with the accounts' security aligned to that of the bank," a statement from the two companies said.

Money transfer services, especially M-PESA, are hugely popular in Kenya and have transformed the way money moves around. Many Kenyans who did not hold bank accounts can now access basic banking services from their handsets.

Kenya now has 12 million mobile banking account holders, up from 2.6 million at the end of 2007. Deposits stood at a total 1.2 trillion shillings at the end of September from 540 billion in 2007, the governor said.

Equity Bank had 5.7 million customers at the end of September, the most in Kenya, largely driven by its mobile banking product with Safaricom that is known as M-kesho.

TRAINING COURSE “REMITTANCES – CREATING VALUE”

Athens, Greece – 14 & 15 February 2011

The transfer of migrant’s remittances represents a huge business opportunity for banks and other financial institutions which is still largely overlooked. The financial services industry, which plays such an important role in the Payments Industry, is missing an important opportunity if they ignore a very large component – Remittances.

The flow of funds from migrant workers back to their families in their home country is an important source of income in many developing economies. The total value of these remittances has been increasing steadily over the past decade and it is estimated that in 2009 the total value worldwide was over US$ 316 billion equivalent, involving some 190 million migrants.

For some recipient countries, remittances can be as high as a third of GDP. Remittances also now account for about a third of total global external finance. Additionally the flow of remittances seems to be significantly more stable than that of other forms of external finance. This is borne out by evidence from the recent financial crisis. Because of measurement uncertainties, particularly about unrecorded or informal remittances, the actual flows may be much higher – estimated by experts at 50% or more.

Informal channels are the greatest competition to formal financial sector in the Remittance space. Understanding what these are and how they operate is key to understanding their success. And their success factors are themselves critical to permitting banks to successfully compete for this important market sector.

This course is the definitive A to Z on Remittances – from informal systems to the revolutionary appearance of the Mobile Phone as a remittance tool.

This intensive 2-day course provides an insight of the payment system aspects of remittances, and is designed to assist financial institutions that want to improve their understanding of this important market as well as extend and develop the many business opportunities that present themselves. Processing these money transfers is a business opportunity with vast potential especially with the recent rise of the Mobile Phone is now set revolutionize the Remittance world.

We examine how the public and private sectors can collaborate to encourage the providers of remittance services to switch from informal to formal channels and how they can make the formal sector more efficient and competitive.

The course has been specifically designed for Senior Bankers involved with;

• Payment Systems and Money Transfers 
• Payment Strategy 
• Micro Finance 
• International & Correspondent Banking 
• Retail Banking Services 
• Banking Product Development

Central Bankers involved with;

• Payment Systems 
• Payment Strategy & Policy 
• International & Correspondent Banking 
• Payment System Regulation & Oversight

Senior Staff of;

• Corporations who employ migrant workers
• Money Transfer Operators 
• Government agencies involved in migrant workers 

 Development Agencies

For a fully descriptive brochure please send a blank e-mail to courses@citadeladvantage.com with REM-ATHENS in the Subject line.

TRAINING COURSE “REMITTANCES – CREATING VALUE”

Johannesburg, South Africa – 14 & 15 February 2011

The transfer of migrant’s remittances represents a huge business opportunity for banks and other financial institutions which is still largely overlooked. The financial services industry, which plays such an important role in the Payments Industry, is missing an important opportunity if they ignore a very large component – Remittances.

The flow of funds from migrant workers back to their families in their home country is an important source of income in many developing economies. The total value of these remittances has been increasing steadily over the past decade and it is estimated that in 2009 the total value worldwide was over US$ 316 billion equivalent, involving some 190 million migrants.

For some recipient countries, remittances can be as high as a third of GDP. Remittances also now account for about a third of total global external finance. Additionally the flow of remittances seems to be significantly more stable than that of other forms of external finance. This is borne out by evidence from the recent financial crisis. Because of measurement uncertainties, particularly about unrecorded or informal remittances, the actual flows may be much higher – estimated by experts at 50% or more.

Informal channels are the greatest competition to formal financial sector in the Remittance space. Understanding what these are and how they operate is key to understanding their success. And their success factors are themselves critical to permitting banks to successfully compete for this important market sector.

This course is the definitive A to Z on Remittances – from informal systems to the revolutionary appearance of the Mobile Phone as a remittance tool.

This intensive 2-day course provides an insight of the payment system aspects of remittances, and is designed to assist financial institutions that want to improve their understanding of this important market as well as extend and develop the many business opportunities that present themselves. Processing these money transfers is a business opportunity with vast potential especially with the recent rise of the Mobile Phone is now set revolutionize the Remittance world.

We examine how the public and private sectors can collaborate to encourage the providers of remittance services to switch from informal to formal channels and how they can make the formal sector more efficient and competitive.

The course has been specifically designed for Senior Bankers involved with

• Payment Systems and Money Transfers
• Payment Strategy 
• Micro Finance 
• International & Correspondent Banking 
• Retail Banking Services 
• Banking Product Development

Central Bankers involved with;

• Payment Systems 
• Payment Strategy & Policy 
• International & Correspondent Banking
• Payment System Regulation & Oversight

Senior Staff of;

• Corporations who employ migrant workers 
• Money Transfer Operators 
• Government agencies involved in migrant workers 
• Development Agencies

For a fully descriptive brochure please send a blank e-mail to courses@citadeladvantage.com with REM-JHB in the Subject line.

Mobiles “do the work of 40 branches”

The number of mobile transactions made by Australian St George Bank customers, if handled as face-to-face transactions, would require 40 branches to process, the bank's CEO Rob Chapman has said.

"Customers are conducting 250,000 transactions per month from their mobile devices," Chapman told the Financial Services Technology Media conference in Sydney, stating that he was informed this would be the equivalent workload of 40 bank branches.

St George Bank receives more than 1 million inquiries via mobile devices per month, said Chapman, pointing to the bank's iPhone app that was launched early last year.

The CEO said that the iPhone app has been downloaded more than 100,000 times since its launch and is used by over 130,000 customers per month, with over 600,000 log-ins to the app per month.

"They are predominantly using the app to check balances, transfer money and pay bills," he said.

Since then, the bank has also launched an iPad app, and was the first bank in Australia to launch an app for Google Android. Chapman said the bank was planning on launching an app for BlackBerry Torch in the near future.

Chapman noted that the vast majority of transactions now occur online, with 463 million transactions with the bank conducted online in the last financial year. St George Bank has also recently started engaging with customers on social media including Twitter and Facebook.

"It's early days, and we don't have many Twitter followers as yet," Chapman joked.

In determining what technology the bank takes up, Chapman said the first priority was what would save the customer money, or make their life easier, but he said that was already the focus of his CIO, Dhiren Kulkarni.

"When the CIO of St George comes to me, he's the most customer-focused person in the room," Chapman said.

Scrapping cheques in the UK could have serious effects on the elderly

The phasing out of cheques in the UK by 2018 will have “major ramifications” for the elderly, British MPs were told as a campaign was launched to prolong their use.

Millions of people still use this payment method every day and scrapping its use would hit small businesses, the elderly and blind people the hardest, it was claimed.

The UK’s Payments Council, which represents the banks, announced in December last year that it planned to end the use of cheques by October 2018.

But David Ward, a Liberal Democrat MP, launched a campaign this week to save the cheque, arguing that any decision to scrap its use should be taken by a body accountable to Parliament. Mr Ward told the House of Commons that cheques should be brought under the consumer protection remit of the Financial Services Authority, or the body that replaces it rather than a commercial body with vested interests.

He said that more than four million people used cheques everyday with small businesses, the elderly and the blind being hit the hardest by the decision.

"This decision will, I believe, have major ramifications,” he told MPs. “The truth is that setting an end date for cheques will inevitably accelerate the process by which businesses stop accepting cheques and individual banks stop issuing them, making the demise of the cheque a self fulfilling prophecy.”

The MP for Bradford East is using the so-called 10 Minute Rule to introduce a bill to save the cheque.

Mr Ward said elderly people were the largest group who were reliant on cheques, while they were also the group that would find it hardest to adopt alternatives.

"Overall my concern is that people will move back to cash and start to keep large volumes of money in their houses, making them vulnerable to theft,” he said.

"We do not want to see older people keeping wads of cash under their mattresses to pay for day to day necessities and outside help."

Cheques were first introduced 350 years ago, but the Payments Council has said their use is in "long-term, terminal decline".

The use of cheques has been falling since 1990, dropping by 40 per cent over the past five years.

Paul Smee, chief executive of the Payments Council, defended its decision, rejecting claims that such legislation was required.

"The Payments Council has set a target date to close the cheque clearing in eight years' time,” he said.

“But we'll only be going ahead with this date in 2016 if we've been able to ensure that alternatives have been identified, are accessible and are actually being used."