Technology

Branches at village boutiques :

Banking via mobile phones

by Gamini WARUSHAMANA

Thilaksha Kodituwakku, a young entrepreneur has developed a banking solution which can deliver financial services through mobile phones.

Thilaksha Kodituwakku

The solution which can be used by commercial banks has been tested for security and confidentiality, said Kodituwakku

Responding to a recent article based on an interview with the Head of Technology and Chief Software Architect of ICTA Sanjaya Karunasena on service delivery through mobile phones, Kodituwakku said that he has developed a complete banking solution for commercial banks to support the delivery of financial services through mobile phones.

Managing director of Ekhash Lanka (Pvt) Ltd., Thilaksha Kodituwakku, a former bank manager and professional marketeer said that he is trying to convince the authorities and bankers on the advantages of this system to the country.

The former Director, Bank Supervision of the Central Bank the late Dr. Uthum Herath commended the viability of this solution.

Central Bank Governor Ajith Nivard Cabraal has positively responded to a request and has given me an opportunity to present the solution to Central Bank officials next week, he said.

The banking solution can be used to deliver banking services to rural areas using the country’s advantages including the extremely high telephone penetration and the high literacy of the people.

Today the majority of the population has no direct access to the formal financial system though they need financial services.

However, most people still save money in tills and this dead money does not come into the financial system.

Only 30 per cent of the population, especially those who live in urban and suburban have easy access to bank branches and alternative channels.

Their financial literacy level is very high.

The 70 per cent population living in rural areas are under banked or unbanked and have no access to bank branches or alternative channels while their financial literacy is very low.

Market segment

Most of the private sector companies have recognised the value of this market segment. For instance, companies selling FMCG soap, shampoo and food items use “Sachet Marketing” to sell their products to the rural masses. Telco companies too have focused on this market by introducing Rs. 20 and 50 reload packages and cards. The banks have tremendous opportunities to tap this market and banking via telephone is the ideal way forward.

The new M-banking model will give secure and quick banking service to millions of people, Kodituwakku said.

Kodituwakku explained the operation of the model. The bank service is delivered through agents and even small boutiques can act as bank branches that accept deposits and people can also withdraw money.

This is similar to telco companies selling their services through reload packages or phone cards.

The agents should have an account with the partner bank and maintain a pre agreed minimum balance daily.

When a customer needs to deposit money in his account in the bank he can visit an agent (A boutique in the village) and give money to the trader and the trader transfers the money from his account to the customer’s account.

The transaction will be complete within seconds and the customer and the trader receive messages on their phones informing them that the transaction was successful.

The system can be used for deposits, fund transfers, cash withdrawals, micro finance operations, payment of utility bills, credit card payments payment for goods and services and many more, he said.

This system is important in many ways. According to traditional banking system in the country today people have to visit a bank or bank branch to get the service. To reach a Teller machine too they have to go to a town or a suburb.

We did some research in Kurunegala, Anuradhapura and the Nuwara Eliya districts and found that most of the people who are excluded by the formal banking system live in areas that are far from bank branches.

Most of them wish to save money and use other financial services.

However, the opportunity cost of one bank transaction is their daily wage/earning from their economic activities in addition to transport and other costs.

Internet banking

Internet banking is available but access is very limited and only a few privileged people have broad band access. Several models introduced previously such as palm top banking, banking at a post office and doorstep banking have failed due to many limitations in technology or other practical difficulties. SMS banking is the most insecure banking system, he said.

Kodituwakku said that there are many advantages in this kind of banking system. It will enable banks to reach the majority of the population and attract the money that is circulating outside the banking system.

It will increase the GDP in the long run as the people need not stop their usual work to go to a bank.

People can access the formal financial system easily and reduce the risk of their savings.

The people’s financial literacy will also increase.

The system will help poverty reduction and enhance the lifestyle of poor people.

On the other hand banks could cut costs. Today the cost of a bank transaction is around Rs. 50 if all the costs associated in a bank operation.

For instance in Pakistan setting up a “agent location” is 1/30th of the costs of setting up a branch and the running cost is cheaper as 1/100th of the running cost of a branch.

Kodituwakku has studied similar banking systems which have been successfully implemented in many countries. Eko in India, Gcash introduced by the Rural Bank Association of Philippines, Wizzit of Bank of Athens, Africa and WING introduced by Standard Charted Bank, Cambodia and Mcheck in Pakistan are some of the success stories. In India and the Philippines bank transactions can be done through an agent or a small village boutique. In India, the customer can even open an account through an agent.

Ekash solution

To make this kind of banking solution a success there should be the right approach, correct technology platform and appropriate marketing strategies.

Customers should be able to access via any phone, the mobile or land phone of any operator.

It should be a banking solution where the banks are responsible for all transactions.

A proven security system, compliance to banking regulations and Central Bank guidelines are essential.

The transaction should be as easy as making a telephone call.

Messages and instructions should be available in any language and the people’s literacy should not be a barrier.

Kodituwakku assured that the Ekash solution that he has developed has all these features.

He seeks the support of the Central Bank, Banks and telco operators to implement the system in Sri Lanka.

JKH scholorships for Moratuwa varsity students

JKH Transportation Group President Romesh David presents a scholarship to an undergraduate of the Transport and Logistics Management Department at the awards ceremony of the English Language Scholarship and Mentoring Programs sponsored by JKH for undergraduates reading for the Bachelor of Science degree in Transport and Logistics Management (BSc T&LM Hons.) at the University of Moratuwa.

JKH’s Transportation Sector recently awarded 26 university scholarships as part of its four year partnership with the Transport and Logistics Management Faculty of the University of Moratuwa. The scholarship awards coincided with the certificate distribution ceremony of the English Language Scholarship Program and the Mentoring Program which are also sponsored by John Keells Group for undergraduates reading for the Bachelor of Science Degree in Transport and Logistics Management (BSc. T&LM Hons.) at the University of Moratuwa.

The event was held on June 21, 2010 at the Cinnamon Grand Colombo. A total of 26 university scholarships were awarded to the students: 21 merit scholarships to second, third and fourth year students, and five need based scholarships for first year students. The merit based scholarships reward academic excellence while the need based scholarships help first year students reach their potential. JKH PLC has awarded over 54 scholarships since the inception of this degree program 4 years ago.

The English Language Scholarship Program and the Mentoring Program are aimed at enhancing the general capabilities and soft skills of the students. Over 200 students were awarded certificates at the ceremony which marks their first step as professionals in their chosen field.

Certificates of completion of the mentoring program were also awarded at this event. This program involves the mentoring of students by senior professionals in the transportation and logistics field.

The English Language Scholarship Program is sponsored by the John Keells Social Responsibility Foundation. This program is attended by all first year students and is of benefit to the students since the degree program is also conducted in English.

Euromoney picks HNB as best Lankan bank

Hatton National Bank (HNB) was recognised as the ‘Best Bank in Sri Lanka’ by the international Euromoney finance magazine for the second time at the Euromoney Awards for Excellence 2010 Dinner held last week in London.

Recognizing HNB as the Best Bank in Sri Lanka, Euromoney stated that crucial to Sri Lanka’s economic future is a solid banking system, and no lender has proved itself more capable over the past year than HNB.

Euromoney further stated that the privately run Colombo-based lender, which recently celebrated its 120th birthday, posted pre-tax earnings of Rs. 5.9 billion ($52 million) for the year 2009, up 24 per cent year on year, on income of Rs. 39.4 billion.

Managing Director/CEO, HNB, Rajendra Theagarajah stated “It is truly an honour to be adjudged the Best Bank in Sri Lanka by the prestigious Euromoney finance magazine for the second consecutive time.

Our strong commitment towards delivering an unparalleled service to customers, consistent growth recorded and continuous focus on enhancing shareholder value are the cornerstones of our achievement”.

Since 1992, Euromoney, the world’s leading financial markets magazine, has singled out outstanding institutions in finance.

Awards for Excellence have evolved with the markets they cover.

They now incorporate 25 global awards for banking and capital markets and awards for the best banks and securities houses in almost 100 countries around the world.

The awards have one central theme - to recognise institutions and individuals that demonstrate leadership, innovation, and momentum in the markets in which they excel.

At the awards ceremony, Credit Suisse was adjudged the best global bank and Deutsche Bank, the best global investment bank. CEO, Citigroup, Vikram Pandit was recognised as Euromoney’s banker of the year.

CDB gifts IT lab to school in Hambantota

Students at the computer lab.

Citizens Development Business Finance Ltd (CDB) recently donated a much needed IT lab, fully equipped with computers, LCD monitors, printers, scanners, and internet facilities to HM/Nedigamvila Kanishta Vidyalaya in Tissamaharama, in the Hambantota district.

This state-of-the-art IT lab was ceremonially opened by CDB’s Chief Executive Officer Mahesh Nanayakkara, together with senior officials of CDB, the School Principal P.N.M Kumarasinghe, students and well-wishers.

Speaking on the occasion Nanayakkara said, the main objective of such projects is to give less privileged schools in rural areas access to information technology and thus enable them to launch into a future shaped by technological innovation.

The CDB Technology Centre paves the way for students such as those at Nedigamvila Kanishta Vidyalaya to zoom in on future opportunities in the growing IT sector as well as to acquire a skill which is indispensable in any area of specialisation.

The project is implemented under the CSR theme of CDB Pariganaka Piyasa (CDB Technology Centre).

Intec demonstrates low-cost charging and billing performance

A leading provider of Business Support System (BSS) solutions, announced the completion of another successful performance benchmark of its award-winning charging, billing and customer care system Singl.eView v7.0.

The performance results reaffirmed Intec’s commitment to providing software that offers exceptional performance on platforms that are a fraction of the cost of traditional UNIX servers.

It also demonstrated that Singl.eView, running on Intel® Xeon® processor 7500 series, easily supports millions of convergent prepaid and postpaid subscribers, executing real-world service and business processes.

The benchmark, carried out by Intec on Intels latest Xeon® processor 7500 series, validated the performance of Singl.eView’s critical functions:

* Real-time rating and balance management

* Batch post-event rating

* Bill cycle processing

Singl.eView is relied upon by many of the largest and most innovative communications service providers (CSPs) worldwide. Singl.eViews efficient, distributed architecture allows CSPs to lower their operating costs by supporting all rating, balance management, charging and billing tasks on a single platform, serving postpaid, prepaid and convergent customers for all classes of product and service.

The Intel Xeon® processor 7500 series ushers in a new era in performance and scalability within the fast growing x86 server market.

Singl.eView, running on the Intel Xeon platform, provides a powerful and cost-effective solution for today’s service providers, allowing an attractive price-performance ratio with more than adequate headroom to support the growing volume of increasingly complex demands of modern transaction processing.

EMEA Director of Intel Software and Services Group, Wolfgang Petersen said the results of this benchmark prove that BSS customers need no longer be dependent on expensive proprietary servers, and can be confident that Intel-based affordable processing solutions powered by the Xeon® 7500 series can easily manage highly-demanding workloads, and deliver the real-time performance necessary for a modern, converged communications service provider.

HP introduces energy-efficient laser printer for SMBs

HP launched its environmentally-responsible imaging and printing products and solutions, including industry-first innovations for small and midsize businesses (SMBs) to obtain more value from their IT investments and to reduce energy and paper use, reduce costs and environmental impact.

Senior Vice-President, Imaging and Printing Group, Hewlett-Packard Asia Pacific and Japan. John Solomon said, “HP is a leader in environmental sustainability.

It is in our DNA to deliver solutions that make it easy for customers to reduce their environmental impact and save money.

This aligns with our goal to remain the partner of choice for SMBs in Asia Pacific by providing a value equation that encompasses how we can help SMBs go green for their bottom-line and accelerate their business growth.

HP introduces the most energy-efficient laser printer in the world(1) The affordable, HP LaserJet P1102 and P1102w printers help customers affordabley increase efficiency.

In addition, with HP Smart Install, the HP LaserJet Pro1102w lets SMB owners quickly connect and print on-the-go or from virtually anywhere in the home or small office.