BRANCHLESS BANKING: WWB GHANA’S EXPERIENCE

1. BRANCHLESS BANKING: WWB GHANA’S EXPERIENCE

2. OUR DEFINITION OF BRANCHLESS BANKING • Use of information technology to deliver financial services to low income people beyond traditional banking channels and using field staff and retail agents. i.e., • Leveraging • People (Field Staff & Agents) • Processes (Complete transactions at client locations) • Technology (POS, Swipe Card, Mobile Phones, etc.) to deliver financial services to the unbanked and underbanked (2M Accounts for Population of 22M, with 6M mobile phone holders).

3. PERSPECTIVES DRIVING THE WWBG MODEL 2. Customer Perspective (Customer Value Proposition) 3. Technological Environment 1. Regulatory Environment 4. Institutional Perspective (The Business Case) [WWBG Branchless Banking Model – Virtual Bank (Vbank)]

4. 1. Regulatory Environment: MODELS PERMISSIBLE IN GHANA • Real Time Settlement, Day-end Reconciliation • FI-led model of branchless banking is allowed but with: • One-to-one (1-1) Model: In this model the FI offers mobile phone banking services in collaboration with a specific Agent/Telco • One-to-many (1-∞) Model: In this model a FI offers mobile phone banking services to customers using mobile connection of many Agents/Telcos • Many-to-Many Model: In this model all FIs and all telcos are able to serve each other’s customers maximum connectivity & maximum outreach

5. 2. Customer Perspective: OUR CUSTOMER VALUE PROPOSITION • Safe Custody of Cash • WWBG responsible for safety of funds once received from the customer • Access to Cash is secured and based on Biometric identification • Accessibility • Saturation of Customer Business points through deployment of Large Distribution Network involving Own Field Staff, Vbank Money Shops, and Agents • Door-Step Collection of Deposits and Payment of Funds by large number of WWBG Field Staff • Location of Vbank Money Shops within Walking Distance in market centers to ensure constant access • Field Staff, Vbank Money Shops and Agents are available to Customers from 8:00am to 5:00pm • ATM Deployment assures 24HR Access (Work-in-Progress) • Instant value for any transaction (since transactions are Real Time!)

6. 2. Customer Perspective: CUSTOMER VALUE PROPOSITION contd. • Affordability • No Charge is levied when Cash is deposited by our Customer • Flat Highly Competitive Monthly Service Charge levied on Withdrawals: • *Opportunity Costs of travel to the bank are not included (e.g., Time lost, Loss of Sales, etc.) • No Hidden Costs or Charges to the Customer

7. 2. Customer Perspective: CUSTOMER VALUE PROPOSITION contd. • Ease of Use or Convenience • Low Cost Magnetic Stripe Card and or Biometric recognition for complete transaction • Third Party lodgments allowed • Simplified Processes completed at the client’s business location: Pre –Enrolment Process Enrolment Process Enrolment Process Transaction Process

8. 2. Customer Perspective: THE OFFER • Process loan applications (using Credit Scoring) • Take Savings deposits/ repayments • Allow Withdrawals /disbursement • Provide Remittances / transfers • Balance enquiry • Mini Statements • Mobile Phone Top-ups (Work-in-Progress) • Bill Payment (Work-in-Progress) • COMPLEMENTARITY • CROSS-SELLING • FULL RANGE BANKING SERVICES

9. 3. Technological Environment: TECHNOLOGY PLATFORM Vbank INFRASTRUCTURE & COSTS GHC1.4 :US$1

10. 4. The Business Case: OUR MIGRATION PATH FROM BRANCH TO BRANCHLESS BANKING Branch Banking Branch Banking Branch Banking Branch Banking Vbank Vbank Up to 2006 2007 – 2008 2009 From 2010 Pilot Phase Roll-out Phase

11. 4. The Business Case: MIGRATION PATH contd. External Main subject involved in banking activities Internal Static Dynamic Approach to Market and Products delivery Conceptually, 3 Paths were identified by WWB Ghana….. Path 1 Conservative Growth Path 2 Aggressive Growth Organic Growth Path 3

12. 4. The Business Case: MIGRATION PATH & VALUE CONFIGURATION External Main subject involved in banking activities Internal Approach to Market and Products Delivery Static Dynamic Orientation: WWB Ghana chose Path 3.. Customer/Partner Development & Economies of scale Configuration: • Leverage Agent infrastructure and reduce capex • Improve and extend services to Rural /Peri-Urban • Harness Partnerships with Retailers and Vendors • Increase scale and serve large clients • Manage Risks and Legal issues related to Partners • Introduce Client-end solutions (eg Txt to pay, etc.) IT Infrastructure: Application Server, Internet, ISDN, Switch, GPRS, POS, Mobile Phones Delivery Outlets: Field Staff, Money Shops, Retail Agents, Telcos, Web-based Systems, etc. Orientation: Orientation: Traditional Products Offering Product Diversification Configuration: Configuration: • Enhance complementarity and cross-selling • Employ less costly and adaptable technology • Diversify and Refine Products and Services • Focus on Value Addition • Use Field Staff to simulate “Agent experience“ • Offer Standard Loan and Deposit Products • Deliver directly to Walk-in Clients • Limited use of Field Staff in Deposit Mobilization IT Infrastructure: IT Infrastructure: Server/PC Solutions, Internet, Application Server, Internet, ISDN, Switch, GPRS, POS, Delivery Outlets: Delivery Outlets: Banking Hall and Field Staff Banking Hall, Field Staff, and Money Shops,

13. 4. The Business Case: PLATFORM INTEGRATION

14. BENEFITS TO CUSTOMERS • FAST: a palm top operated account at your doorstep so clients do not have to queue for banking services. • ACCESSIBLE: our Field Staff and Retail Agents are a phone call and walking distance away. They will come or you can walk to at your own convenience anytime. • SECURED: clients fingerprint safe guards their account. No one can access their account without their input. Every transaction hits clients account immediately. • SIMPLIFIED: it is very easy to operate. Your balance is available to you immediately.

15. BENEFITS TO WWBG • Rapid expansion of deposit mobilization services. • Low cost deployment of banking services to the unbanked. • Cost efficient mobilization of deposit. • Growth in deposit mobilization • Low cost of funds for lending  Positive impact on our returns

16. KEY SUCCESS DRIVERS • Thorough Research-Backed Pilot Testing (allowing for refinement-products/services, channels, systems ) • On-going Process Mapping and Refinement (front- and back-end) • Suitability of Branchless Banking Application and Timeliness of Support • Cross-selling of products and full range of products • Favorable legal and technological environment • Less costly dynamic technology with scalability • Effective Risk Management • Cost recovery • Well thought through Migration Path & Value Configuration