FNNB's pricey mobile banking still ahead of the pack

| Friday October 30, 2009 00:00

Under the leadership of its former CEO Danny Zandamela, FNBB set the trend in the use of cellphone banking technology six years ago, overtaking Standard Chartered and Barclays to become Botswana's largest profit maker in the sector.

Introducing cellphone banking only in August this year, Stanchart and Barclays recently emerged on the market with innovative products of their own, which appear to be  relatively cheaper  in terms of charges but are trailing behind in terms of  service.

Today, FNBB has several options under its cellphone banking service, among them; purchase of prepaid airtime charged at P1; viewing history of purchase of airtime at P2.00; checking of account balance on a (i) single account at P0.50; and (ii) all accounts rated at P1.25;  mini statement  charged at P2.00; money transfer involving own account at P3; payment to any account charged at P4; and history of all payments charged at P2.00.Payment to any account  includes services such as utilities and mortgage  bills payments.

With over six years experience, FNBB is now offering these services to more than 60,000 customers who receive SMS notifications.By virtue of being a pioneer in the field, FNBB still has the upper hand, although the services don't come cheap.

In December last  year,  FNBB Cellphone Banking recorded a milestone in the channel's history by breaking through the one million pula cellphone prepaid  airtime sales mark.

Breaking the news, the bank said that prepaid airtime still remained the leading driver of transaction volumes on its cellphone banking channel, accounting for more than 80 percent of transactions recorded monthly.

Indeed, research has shown that cellphones provide the most accessible banking channel across all segments and that the reach is enormous. When considering the extreme penetration that cellphones have in Botswana, cellphone banking is the obvious step in making banking more accessible because the cellphone has become an integral part of everyone's lifestyle.

FNBB further harnessed the power and functionality of cellphones five years ago when it introduced inContact, a free message service that sends customers a real time SMS confirming all transactions taking place on their FNBB accounts. This world-first in the banking industry was well adopted by FNBB customers who quickly saw the benefit of keeping a finger on the pulse of their transactions and the potential for early fraud prevention.

But Standard Chartered has cellphone banking options of it own, namely, last three transaction details of account; statement request; cheque book request;intra and inter account transfers; fixed rates inquiries; and ATM withdrawal alerts of P200 and above while on-line cellular airtime recharge is about to come on stream. What is conspicuously not available is the transfer of funds to other banks and deposit alerts.

However, it is significant that Standard Chartered is the first bank in the country to offer the services for free; the only charge  is that of the mobile phone service providers, which is fixed at P0.55 per transaction. In an previous interview with Mmegi Business Week, Stanchart CEO David Cutting fingered the pioneering introduction of cellphone banking by FNNB as one of the reasons why his bank had lost some customers to the traditional laggard in the banking sector. Cutting said he was confident that Stanchart's launch of cellphone banking, alongside other products like Bancassurance, would set Botswana's oldest bank on course to win back its lost clients.'A lot of our customers left us and went to other banks such as FNBB because of the products they were offering,' he said. 'Now that we are going to have those products, we hope to convince them to come back. It's our job to do that.'

Finally accepting that electro-magnetic waves are the new front in the war for customers, Barclays Botswana answered with 'Hello Money' that offers account enquiries which include account balance; mini statement; and transfers to customer's own linked account to other Barclays accounts and to other banks in Botswana. Customers can make cheque book requests and view fixed deposit rates.

However, the hitch in this facility is that it so far  airtime top up is available only to Mascom subscribers, something Barclays says will soon mend by making widely accessible 'in the near future'. Utility bill payments and deposit alert services  are also not currently available under Hello Money.

An aspect unique to Barclays Bank is that the services are not transaction based.Instead, customers are charges a flat fee, depending on type of account. The charged are levied monthly as per the banking segment: Basic customers are charged P12.50; Standard customers P25.00 while both Prestige and Premier customers are charged P30.00 per month.

While these flat charges seem reasonable, they benefit customers who make a lot of transactions more. Hello Money's future offers include airtime top up, bill payments and an option to make transactions in Setswana.

And so the cellphone came to revolutionise banking in Botswana. But while Stanchart and Barclays play 'catch up' by means of pricing, FNBB is still ahead of the pack overall. The market leader will eventually be decided when the playing field becomes more level in terms of options offered by the three main players.