branchless banking

Branchless BankingPRESENTERS:

DANIAL SALEEM

MIR FARZOAK ALI TALPUR

Banking: Bank is an financial institution which accepts deposits & lend money to people who need

it.

Bank offers variety of products & services to customers.

The term bank is derived from old Italian word Banka which means a bench or money exchange table.

In olden days people started dealing with other on sitting on benches. The first bank to be established was established in Venice with

guarantee from the State in 1157. Bankruptcy’ was derived from the ancient Latin term bancus ruptus.

Branchless Banking: Branchless banking is a distribution channel strategy used for delivering financial

services without relying on bank branches.

Types of Branchless Banking:

Examples of Branchless banking includes are the: Internet Banking Atm EFTPOS devices Mobile phones

Internet banking allows customers of a financial institution to conduct financial transactions on a secured website operated by the institution.

Very cost-effective. Able to reach a wider cross-section of customers Make bill payments. Provides real-time banking information to customers.

EFTPOS

EFTPOS is an involving electronic funds transfers based on the use of payment, such as debit or credit cards, at terminals located at points of sale

Major players of Mobile Banking in Pakistan:

“Easypaisa” Introduce in 2009 by Telenor and Tameer Microfinance Bank

“Mobicash” by the partnership of Mobilink & Waseela microfinance Bank

“Omni”  Introduce in 2011 by United Bank Limited

“Timepey Service Introduce in 2012 by Zong and Askari Bank

“Upayment” by Ufone & HBL, Summit Bank, Soneri Bank and Bank AL Habib

Advantages of Branchless Banking: There are many benefits of branchless banking. . Bill Payments:A BB account can be used to pay utility bills (e.g. Gas , Electricity, Phone etc.)

. Merchant Payments:Customers can use a BB account to make payments for purchases of goods and services.

. Funds Payments:Branchless banking in Pakistan has proved to be an efficient instrument in serving Internally Displaced Persons and the people affected by devastating floods and rains for the past three years

Cash-In and Cash-Out:Customers may deposit and withdraw funds from their BB account using a variety of options including bank-branch counters, ATM machines and authorized agent locations.

Disadvantages of Branchless Banking:

Transaction limit:Customers are restricted within a certain transaction limit.

Connectivity:Branchless banking heavily relies on mobile & internet connectivity.

Security:Not as secure because anyone can access your account through the computer or a mobile phone

Growing of Branchless Banking In Pakistan: The number of mobile banking accounts showed a remarkable growth of 25 percent during July-September

2012, crossing 1.8 million mark, according to a Branchless Banking Newsletter released by the State Bank of Pakistan.

Branchless banking (BB) customers conducted almost 31.5 million transactions worth Rs139 billion during the quarter. The average size of each transaction was Rs4,420, while the average number of transaction per day rose to 0.349 million during the three months.

The branchless and mobile-banking are penetrating at accelerated pace throughout the country with number of players in the banking and cellular phone operators are entering into the emerging financial sector.

Source: http://www.sbp.org.pk/publications/acd/BranchlessBanking-july-sep-2012.pdf

Source: http://www.sbp.org.pk/publications/acd/BranchlessBanking-Apr-Jun-2012.pdf

Contribution Towards Economy: The branchless banking not only created handsome cash for banks and telecom operators but it also provided

business opportunities for medium and small sized entrepreneurs who have become agents after having made easy investment and getting short trainings.

Branchless banking in the country grew by 14 percent during first quarter of 2013 — January – March, 2013 –  and by the March end Branchless accounts have reached at 2.4 million.

Pakistan's GDP growth will rise by 3 percent by creating increased access to credit hence inciting new business creation.

Source: http://tribune.com.pk/story/589267/branchless-banking-registers-double-digit-growth/

Future Outlook of Branchless Banking in Pakistan :

Pakistan has become one of the fastest developing markets for branchless banking in the world. A number of developments indicate a positive outlook  for branchless banking.

The percentage of Pakistan's adult population using mobile financial services could rise up from the current 2 percent to 35 percent by 2020.

According to recent study access to mobile financial services in Pakistan could lead to the creation of 1 million new jobs by 2020. An estimated US$2 billion could be added annually to government revenues.

Source: http://tribune.com.pk/story/573727/still-in-its-infancy-mobile-banking-has-major-scope-for-growth/