GTBank/Etisalat partnership: Simplifying mobile money for mass adoption
This strategic alliance is coming at a time when the mobile phone is becoming a vital instrument in the future of the banking industry, writes BEN UZOR.
Undoubtedly, mobile financial services have enormous potential to expand access to financial services to both the unbanked and under-banked in Nigeria. Available statistics speaks volume of the massive prospects of using mobile technology to quickly attain the financial inclusion objectives clearly outlined by the government. Almost 57 percent of Nigerian adults – 50 million people – do not have access to formal financial services. But 64 percent of the adult population owns a mobile phone, and a whopping 84 percent have access to one. This discrepancy, according to Grameen Foundation, leads to a situation in which one-third of all adult mobile phone owners in the country do not have bank accounts, and an even larger percentage of those with access to a phone are unbanked. In spite of the lush ground available to support the development of mobile financial services, only 0.1 percent of Nigerian adults use them. Industry observers are of the view that providers have thus far failed to provide low income customers with the positive user experience that would spark a surge in uptake. When the Central Bank of Nigeria (CBN), the regulator of the financial services industry, launched mobile money service in 2010, many industry observers believed the country held all the aces to become a dominant player in the African market. A different picture is reeling out as mobile money is proving a hard nut to crack.
Challenges
The lack of generally accepted proofs of formal identification required to assist service providers navigate KYC concerns has been identified as a major drawback to the success of mobile money operations in Nigeria, according to the Lafferty Group. Market observers are also of the view that the infrastructure constraints, poor agent network, and the lack of reciprocal interoperability amongst disparate mobile money systems, were some other factors militating against the growth of the sector. But, it’s not all doom and gloom. According to research study published by The Boston Consulting Group (BCG), the use of mobile financial services in Sub-Saharan Africa (SSA), Nigeria inclusive, to perform basic transactions such as payment of utility bill and remittances could produce an estimated $1.5 billion in fees for mobile money providers by 2019. Clearly, the opportunities for revenue generation are highly apparent but a few bottlenecks need to be removed.
Leonard Kore, a research analyst for telecoms and media at IDC, said, “For mobile money to succeed in Africa, providers should focus on educating citizens on the benefits of the concept, simplifying the message for the poor/unbanked segments and communicating value-added propositions to the middle class and banked populations,” added Kore. Though Nigeria’s Gross Domestic Product (GDP), population and mobile telephone penetration (over 130 million subscribers) are the largest in Africa, majority of rural businesses, which have been the main success drivers of telecom-led mobile money operations in Kenya and other East African countries, are not using the service in Nigeria. According to him, if the country intends to scale the service, stakeholders in the industry need to work together to expand distribution networks, embrace interoperability, establish a proactive and supportive regulatory environment, and develop an effective partnership ecosystem.
GTBank/Etisalat partnership
Owning a mobile phone is easier than opening a bank account in Nigeria. Aside the many levels of documentation involved in the traditional banking system, there is the problem caused by proximity to bank branches or ATM machines. Today, many people in the informal sector still keep their savings at home. The recent strategic partnership between Nigeria’s fastest growing and most innovative telecommunications company, Etisalat and one of Nigeria’s top Banks, GTBank would however go a long way in resolving this challenge, as it makes having a bank account as easy as getting a phone line!
The GTEasysavers Account which is the result of the partnership between GTBank and Etisalat was launched simultaneously in two locations; Lagos and Abuja. At the different venues; a cross section of Journalists were shown how easy it is to open a GTEasysavers Account.
Easy Does It
Registered subscribers on the Etisalat network can open a GTEasysavers account by dialing the USSD short code: 737*0# on their mobile phones, after which they will receive an SMS that composes a ten digit GTBank account number. Owners of the new account can then make cash deposits at Etisalat Experience Centres, and GTBank branches. They can also make electronic transfers from other banks; use Cash Deposit ATMs at GTBank branches and GT Express Agent locations. Undoubtedly, the product has the possibility of becoming highly relevant in Nigeria, with the increasing call for a cashless society.
Speaking at the launch of the breakthrough product, Matthew Willsher, chief executive officer of Etisalat Nigeria, said the company continues to look forward to creating revolutionary solutions for its customers. He explained that the partnership with GTBank will guarantee that customers get the best since both companies are at the forefront of innovation in Nigeria. The telecommunications company (telco) is also trusting that GTEasysavers would make banking more accessible to everyone. Also speaking on the partnership, Segun Agbaje, managing director of GTBank, expressed delight in the shared values of the Bank and the telco to make innovative changes.
The Smart Move
The strategic move of Etisalat and GTBank comes at a time when the mobile phone is becoming a vital instrument in the future of the banking industry. A Wall Street Journal (WSJ) article on the “10 innovations of the Bank of the future,” notes the important place of the mobile phone in future banking system. It states that, “The banks of the future will be on mobile phones.” While expressing optimism for more partnerships with the telco and the banks, Willsher said, “This is the start. I am sure there are many more solutions we can offer in the future.” He assured the media that Etisalat Nigeria will initiate plans for more breakthroughs. With the GTEasysavers, the Etisalat line is more than a communication channel, but is now a platform for financial inclusion and a vital instrument for making financial services available to those in the rural areas.
Wooing the Unbanked Population
In a survey conducted by Enhancing Financial Innovation and Access, EFInA, on financial inclusion in 2012, it was noted that, 34.9million adults representing 39.7 percent of Nigeria’s adult population, were financially excluded. Further still, only 2.5 percent of the adult population was banked. The research also shows that billions of Naira circulates the informal sector, which could negatively impact on the country’s economic expansion. The survey reveals that 23.0 million adults still save at home. The CBN understands the challenge this may pose to the economy and is hoping that before the year 2020, it would have reduced the number of under-banked and unbanked people in Nigeria by 20 percent.
It is highly commendable that Etisalat is creating innovative solutions for its subscribers to enjoy, through strategic partnerships with leading financial institutions. Etisalat had in the past introduced the Easywallet application, which offers its customers a platform for services like sending money to family and friends, making payment for DSTV, GOTV and LCC bill among others. It offers Etisalat customers easy and convenient access to their mobile money wallet and bank account. The CEO of Etisalat concluded that, ‘’Our commitment is to continue to offer innovative products and services in fulfillment of the promise we made to Nigeria over six years ago when we commenced operations in the country. We are confident that GTEasysavers Account will begin a journey towards financial inclusion for the unbanked customers on our network.”