Africa attractive for mobile banking

By Christelle du Toit for FNB
Johannesburg, 26 Jul 2007

Cellphone banking in Africa is seeing faster uptake rates than those experienced in SA.

This is according to First National Bank (FNB) cellphone banking CEO Len Pienaar, who says growth rates in countries such as Botswana and Namibia are exceeding those experienced at home.

In addition, 80% of those registering for cellphone banking in these countries are actually transacting through the mobile channel, "which is more than double what we see in SA".

After less than a year of offering mobile banking in Botswana and Namibia, FNB has already registered more than 10 000 cellphone banking customers in these countries.

"These are very small economies and we won't see the kind of numbers we do in SA, but the growth has been faster than what we saw here," says Pienaar.

The First Rand Group is the only South African-based company to have branched into mobile banking services in adjoining countries so far.

The group's 10 000-plus cellphone customers in Namibia and Botswana translate to about 5% of FNB's clients in these countries. Pienaar says penetration in SA has reached about 8%, "and we will want the [foreign] subsidiaries' penetration to match and eventually even exceed that reached in SA".

Rural reality

Pienaar says mobile banking platforms are particularly attractive in parts of Africa that are sparsely inhabited.

"In SA, we have a high density of banking options, such as ATMs, card-accepting devices, and even branches. In Namibia, for example, this is much lower and you have a huge rural population," explains Pienaar.

He says the bank's approach to cellphone banking has adapted to the needs of different countries, with customers in Namibia and Botswana having to register for mobile banking in-branch so they can be shown exactly how to use the technology.

"Mobile networks are well-established in most of the countries we are in, and the technology, such as SMSes, is well-known," says Pienaar.

Having just bought an 80% shareholding in Mozambique's Maputo-based MDC bank, FNB is now present in five African countries other than SA, namely: Botswana, Lesotho, Namibia, Swaziland, and Mozambique.

Pienaar says the bank plans to develop each country's business model independently and is using open source software extensively in a bid to reduce the cost of mobile channel banking.

However, it still remains to be seen when mobile banking will be launched in countries such as Lesotho and Swaziland, as "these countries are so small we are still trying to find ways to make it affordable to roll out mobile banking there".