Cellphone banking thrives at Absa

By Christelle du Toit, ITWeb senior journalist

Johannesburg, 23 Oct 2007

Absa`s cellphone banking channel is fast overtaking its online and in-branch arms in terms of the number of transactions performed. This is in line with what economists predicted earlier this year.

According to Christo Vrey, Absa Group GM of digital channels: "For the first time, we are seeing more prepaid top-ups on cellphone banking on a weekly basis than on Internet banking."

He says, in the last two weeks alone, there has been a 30% to 40% increase in the number of top-ups. He adds that this will jump markedly in December, to a growth rate of more than 50%, as most people will be on holiday and prefer the convenience of cellphone banking facilities.

Cellphone banking at Absa has also changed banking patterns on the whole, says Vrey. He explains that, instead of doing a balance enquiry once a month in the bank, some people are checking their balance through cellphone technology as often as two to three times a day.

However, the value of online banking and online top-ups is still greater than those seen on the cellphone platform. Vrey attributes this to the fact that most people use online facilities for business banking and larger transactions, while cellphone banking is used mostly for smaller, private transactions.

He says the bulk of transactions on the cellphone service relate to balance requests.

Prepaid cellphone top-ups constitute the biggest value transaction and, Vrey says, cellphone banking is leading the way in this regard.

"The trend towards the mobile device is becoming more and more entrenched in a transactional basis."

Vrey says the bank expects to have nearly 1.7 million clients using its mobile notification system by November, and "the growth continues unabated".

July to September saw an average growth rate of 31% for transactions (both information and otherwise) in the cellphone banking channel, he notes.

"We are expecting this to grow by another 30% by December. We are closing in during the next month or three on half a million clients using cellphone banking" at an average uptake growth rate of about 50% over the six-month period.

Vrey says due to the bank`s "promoter" campaign, where people are advised at street-level about the advantages of cellphone banking, 1 000 (mostly existing) clients per month are moving onto the cellphone banking platform.

He does not expect the growth in the uptake of the bank`s digital channels to stop any time soon. "We generally don`t look beyond three years and I certainly don`t see it reaching a plateau in that time."

In July, senior Econometrix economist Tony Twine predicted "massive growth" in the cellphone banking arena. At the time, he said: "There are about 32 million cellphones out there in SA, so the potential for cellphone banking is much bigger than for Internet banking."

In contrast, he said online banking is still hampered by factors such as the availability of Internet access, the cost of bandwidth and customers` security perceptions.