Mobile MoneyStrategies for Financial Institutions

Mobile World Congress, Barcelona17 February,2011

Teppo Paavola, GM, Nokia Mobile Financial Services S C KaliaS.C. Kalia,Executive Director, Union Bank of India

© 2011 Nokia2

Company Confidential

Consumer pain points eliminated by mobile moneyCo su e pa po ts e ated by ob e o ey

SAFETY B2B

all your wealth under mattress. In public transportation - carrying lot of cash

close your shop, carry cash to pre-pay wholesaler in next city for next day delivery cash

ACCESSclosest bank branch 20 miles away.

yGET PAIDfarmer delivers to city. Wholesaler:”Noclosest bank branch 20 miles away.

No PC. No point-of-sale payment terminalBRIBERY FRAUD

cash right now, come back next day”DISTANCE, EFFORT, TIME

di id SIM d h iBRIBERY, FRAUD postman knows your letter has cash. Asking for a tip – “10%?”

sending prepaid SIM cards home in a letter as a means of transferring fundsstand one hour in line to pay forg p %

government agent tells: “your benefit payment did not arrive this month ith ”

stand one hour in line to pay for electricity. Then another line for gas…your prepaid account runs out in the

iddl f ll t l dCompany Confidentialeither” middle of a call to your loved one

© 2011 Nokia3

Nokia Money - Service concepto a o ey Se ce co cept

Simple and intuitive mobile money serviceAlways in partnership with a bank;

Initial focus on emerging markets;basic services

• TopupAlways in partnership with a bank; and preferably with operators

• but not tied into any particular

Topup• Pay bills• Send money

banking/operator network• In India with Union Bank of

India

y• Pay merchants

Many other opportunities exist once the India• Multiple brands may exist in

distribution

network is in place

Works on most mobile devices, also from other manufacturers

Company Confidential© 2011 Nokia4

Turning Telecom Retailers to Agents for KYC & h i & h tKYC & cash-in & cash-out• ‘Agent application’ in a regular mobile

d idevice• Consumer native application

in preloaded Phones.p• Application Side-load or SMS IVR for

less capable phones. “All you need to know is the phone number”know is the phone number

• Commission & incentives to agents –only for customers doing transactions

• Nokia is the ”Master Agent” for the bank

© 2011 Nokia

Company Confidential

55 © 2011 Nokia

Face to Face Payments – no need for a separate payment terminal

Mobile Devices :The New Cash Register & POSThe New Cash Register & POS

Company Confidential© 2011 Nokia

Company Confidential

66 © 2011 Nokia

Pay Bill in few clicks instead of going & queuingMNO Top-Up, UtilitiesS iServicesInsurances, Charities

FlexibilityTime savings

Company Confidential© 2011 Nokia7

Connecting Peopleto what matters

Money

Company Confidential© 2011 Nokia

Company Confidential

88

Indian scenarioUnion BankMobile money services

85,000+ Bank Branches

65,000 + ATMs

60 Million Internet Users

687 Million Mobile Users

The Bank• Head office of the Bank inaugurated in 1921 by Mahatma Gandhi

– Father of the Nation

• 5th largest Bank in India with business mix Rs 3.20 Trillion (~ $ 70 billion)

Operating profit 26 67% CAGR• Operating profit – 26.67% CAGR,

• Net Profits – 19.67 %CAGR

• 3000 Branches and 6 Overseas Offices / Branch

• First Bank to offer Mobile Banking in India• First Bank to offer Mobile Banking in India

• 30 Million customers, 6.2 Million Debit cards

Financial InclusionA BUSINESS OPPORTUNITY

• Financial Inclusion is to provide banking services to vast section of unbanked/under

• Extending basic banking facilities to unbanked & marginally banked

BANK’S ENDEAVOURA BUSINESS OPPORTUNITY

services to vast section of unbanked/under banked populace at an affordable cost.

• 60% population in India do not have access to a bank account

to unbanked & marginally banked• Adopting both Branch and Branchless

BankingProviding Financial Literacy for gainfulaccess to a bank account

• Only 30,000 out of 600,000 villages in India have a bank branch

• Providing Financial Literacy for gainful utilization of services

• “ Need” creation among the target gro p• Banks will be extending reach to 2000+

population villages in first phase by March 2012 through Business Correspondent model;

group• Extending a combination of banking

products• In second phase, villages with population

<2000 will be taken up;

• Outcome - Speedy implementation

• Spreading Financial LiteracyRide on the telecom wave to achieve financial inclusionp y p

of Financial Inclusion

Financial Inclusion – Union Bank• Bank has drawn a 3 year Financial

Inclusion Plan to cover 10 million t 32 000 ill

• Rs 3.27 bn (~ $ 71mn) disbursed to the Milk Pourers of National Dairy

customers across 32,000 villages with 20,000 BCs

• 4.6 million customer base under

Development Board (NDDB) in 2 years

0 7 mn Micro Remittances handledbranchless banking using Biometric cards

• 14587 Villages covered

• 0.7 mn Micro Remittances handled amounting to Rs. 3.22 bn (~ $ 70mn) through Branchless banking in last 15

th• 14587 Villages covered • First bank to introduce micro loan

products repayable in weeklyi t ll t

months

installments• Rs 6.42 bn (~ $ 140mn) Government

benefits disbursed in 2 yearsy

Importance of Mobile Banking

• Over 687 million mobile phone subscribers in India and the number• Over 687 million mobile phone subscribers in India and the number continues to explode.

• Financial services companies are now working with mobile payment p g p yplayers to offer innovative mobile phone solutions to urban and rural Indian population.

R B k f I di h t i ti b k i l t i• Reserve Bank of India has restrictions on non-bank involvement in money transfer.

• Development of mobile financial services applications is beingDevelopment of mobile financial services applications is being sponsored primarily by banks in India.

Advantages of the Engagement with NOKIA

• Reach out large population across India by engaging 200,000 plus Retail outlets of Nokia as Business Correspondent Agents

• A cost effective model, riding on the established infrastructure, to provide affordable Banking servicesExploit the proliferation of mobile phones in the country and use this popular• Exploit the proliferation of mobile phones in the country and use this popular medium to reach large number of banked and unbanked customers

• Cross-sell a host of banking and payment services • Achieve our targeted reach of 10 million FI customers across 32,000

villages through 20,000 Customer Service Points by 2013

Union Bank Money - First large Mobile Prepaid implementation in India

Thank youSpreading smiles across miles….