Exclusive interview with Kim Dancey, Regulatory Head and Specialist Advisor: Digital and Alternative Banking, FNB, South Africa and panelist during the upcoming Mobile Money & Digital Payments Africa in Johannesburg in May.
1. What FNB products and services in the mobile money and digital payments sector are you most excited about at the moment?
One of the material challenges to successful mobile money deployments is the CICO challenge, that is enabling ‘cash-in and cash-out’. I am very excited about new banking technologies like self-service devices for CICO purposes. The FNB Slimline ATM is an example, this is a cashless ATM-type device that is installed at a retailer and enables voucher based cash-out, as well other services like balance enquiries. What I find particularly appealing with these devices is that they assist FNB eWallet in reaching more remote and rural communities where the cost of maintaining a conventional cash dispensing ATM is not feasible. These FNB Slimline devices provide community members with safe and convenient banking without having to travel long distances. Usage of the Slimline ATMs is starting to pick up with an average of 30% growth in cash out from an eWallet on these devices over the last four months.
2. Any particular current or recent projects/success stories that you want to share?
I am excited about the growth of FNB’s eWallet, particularly in the African operations, a 119% year-on-year increase in the last financial year. FNB’s eWallet has also maintained its growth trajectory in South Africa, with the total number of eWallets in all countries reaching 2.5 million, an 84% increase on the previous financial year. Two countries in particular have shown very high customer acceptance and take-up – both Namibia and Botswana’s growth has exceeded expectations with approximately 17% of citizens in Botswana and, in less than a year, over 5% of the population in Namibia receiving money into an eWallet.
3. What do you see as the main challenges for this industry?
There has been a very perceptible acceptance of financial inclusion as a measurable policy objective by regulators and acceptance as a business imperative by service providers. This is good news for the development of products and services in the money and digital payments ecosystem. One of the challenges that the industry still faces is the slower than required adaptation by regulatory bodies of the financial inclusion policies advocated by the Governments and Central Banks. A further challenge is that there is still a significant gap between the accepted potential for mobile money and the actual use of mobile money.
The Mobile Money ecosystem still reflects a ‘dump-and-pump’ behavior, where the ‘funds go in and then directly out’. The challenge is to move mobile money from being a payment instrument to an offering that is used as a money management tool. This challenge sits both on the supply side and on the demand side. On the supply side, it is a question of the corporate appetite for serving low income segments, a business case that requires high and sustained use; as well as in the design of products and services that are appropriate and user friendly. On the demand side, to the individual, the mobile money offering has not yet become a means of improving financial wellbeing beyond the receipt and transfer of remittance funds.
4. What is your vision for the industry?
That all people have access to financial service mechanisms that are appropriate and easy to use and which contribute to improved financial wellbeing.
5. What surprises you about this industry?
I never cease to be surprised at the role of mobile money and digital payments in bringing convenience to people’s lives – irrespective of income level. Both the additive and transformative aspects of mobile money have real impact on the lives of individual people.
6. You are part of a panel discussion on “working across disparate regulator environments” at Mobile Money & Digital Payments Africa. How is FNB dealing with this situation?
FNB engages extensively with the regulators in each country to determine the business models that will be acceptable in that country. Each country is very different on every level, so a ‘one-size-fits-all’ approach is not feasible.
7. What will be your message at the event?
I would like to touch on what is deemed the ‘ideal regulatory framework for mobile money and digital banking deployments’. The policy advancements are also interesting look at, for example the Maya Declarations made by various countries around financial inclusion objectives. The disconnect between policy initiatives and a country’s regulatory framework should be highlighted. So my message is: for mobile money and digital banking to meet the objectives of service providers, governments and the people – increased speed in the adaptation of the regulatory frameworks to these new products and services is required.