My Presentation discussing the Plan for Mobile Financial Service in Timor Lestle, a consultant view

1. Plan for Digital Financial Service in
Raihan Alhusain
mCommerce Specialist
Bangladesh
Raihanalhusain@yahoo.com
+8801610001898
Timor Leste

2. Introduction- Timor Leste
•Timor-Leste has initiated a new development
phase - funded by offshore petroleum revenue that
is pursuing a high rate of sustainable economic
growth through the conversion of petroleum wealth
into human and physical capital.
•In 2011-2015, ADB will help the government
achieve this fast tracking of development by
supporting the upgrade of the country's
infrastructure and complementary initiatives.
•A Survey was conducted by Infuse to indentify
potential users of branchless banking /mobile
money services in rural areas.
•In this presentation we have used the data from
the survey, analyzed and devised a plan to deploy
financial services in Timor.

3. Agenda
1. Market Overview
2. Unmet Needs
3. The remittance Market
4. Converting Actual Wallet to Mobile Wallet
5. Market vs. Product/Service
6. Go to Market Strategy
7. Value Proposition Key Stakeholders
8. Customer Value Proposition
9. Proposed Service Roadmap
10.Proposed Execution Plan
11.Challenges & Risk

4. The Market
•87% Mostly Salary
Holder.
•49% receives salary
through cash
•59% Social payment one
of the main income
source
•32% receives Remittance
•72% sends money
•90% with mobile phone
•88% top up through kiosk
•Avenue for saving
Source: Infuse Mobile Banking Survey

5. The Unmet Need:

6. The Remittance Market in Timor Leste
Remittance
flow
• Inward remittance US$5 million per annum or around 1.4% of 2006 non oil
GDP(estimated at US$356 million).
• Labour the country’s second largest export after coffee.
Remittance
channel
• The majority of remittances are sent through Western Union, with significantly
lesser volume sent through the three foreign owned commercial banks, CGD
(Caixa Geral do Depositos), ANZ and Bank Mandiri.
Remittance
disbursement
• Remittances are most often hand-delivered, so cost, speed and safety could be
attractive selling points for branchless banking/mobile money.
High need categories: dependent households, workers, moving population,
single earners of network families

7. Converting Remittance Western Union to Mobile Wallet
Western Union Remittance Through Wallet
OR

8. Converting Saving through Banks to Savings through Wallet
Bank Savings
OR
Wallet Savings

9. Converting in Person Money Transfer to Virtual Money Transfer
Money Transfer
OR
Money Transfer

10. Converting Salary Through Bank to Salary through Mobile Wallet
Bank Bank
OR
SECRET 11/23/2014

11. Market Need Vs. Product/ Service Overview
Send money could be
attractive feature since most of
the people sends money on a
regular basis.
Saving through mobile banking
could be an interesting feature
since most people are saving
money at home.
Hand Delivered remittance
could turn into less expansive,
speedy and more safe since
cash handling will be much less
in rural household.
Rural people have access to
phones, but are not frequently
remitting pulsa (airtime)
Paying for cultural obligations is
ubiquitous, which indicates
potential for micro-insurance
Send Money
Saving through
Wallet
Remittance
Mobile Top Up
Insurance

12. Strategy: Go to market strategy
Strategy
Converting Actual
Wallet to Mobile
Wallet
Product &
Services
Indentifying
the need
Option 1:
Converting Actual Wallet to Mobile wallet
through Basic Mobile Banking for Hygiene
service
•Launch basic Mobile Financial
Service with focus on the money
transfer aspect, since this could be
the common need.
•Promote subsequent features by
phase, with required awareness &
education activities on each feature.
•Promote the umbrella concept in a
later phase in a binder
communication
Option 2:
Converting other wallets to mobile wallet for
innovative or good to have service.
•Launch all 3 features (Basic service,
Mobile Top Up & micro-credit pmt)
together. Focus more on the utility of
an e-wallet in general.

13. Value Proposition to Key Stakeholders
MNO
• Create more utility for the mobile
phone, increasing market
• Brand leadership
• Reduction of churn
• Create new distribution opportunities
• Alternate source of revenue
Government & Society
• Transparency, efficiency,
traceability
• Bringing informal cash economy
into the formal financial services
• Opens up new ways to link to
population financially
Financial Institutions
• Big Float
• Efficient last mile delivery
• Stimulates new economic
activity
Customer
• Most responded positively to the
infuse research question”
• Create an opportunity for the
unbanked to enter the financial
services world
• Lower cost, time; more affordable,
convenient and transparent
• Creates more utility for the mobile
phone

14. Customer Value Proposition
Security,
Trust
Transparency
Speed
-Ability to track transactions from Wallet.
-No Physical Cash movement
-Multiple levels of security to protect customer
rights and fraud
-v
-Instant Transaction
-No wait in long queue in the Banks
-Instant Notification Via SMS
Cost
-The approach needs to be lower cost than the
conventional approach
-Needs to leverage the strength of existing channel
and bank set up.
Proximity
Access
-The intention needs to ensure service in every
corner
- The gas station, General store etc need to be
used as agent channel
Convenience
Confort
-Implementation of simplified and easily
understood registration and transaction process
- 24x7 Transaction Facility @ trustworthy local
agent network

15. Proposed Service Roadmap

16. Proposed Plan to execute
Product
Business process
Branding
Tech architecture
D2
Test
D3
Technical test
Deploy
Consortium: Design and implement limited consortium
Define full business,
operations, and product
architecture.
Test adoption through
focus groups.
Business testing
Design
D1
Build
Exit / Modify?
Technology
Call centre
Marketing
Perform simulations
Build technology.
Build call centre.
Simulate processes.
Test architecture
scalability, security.
User acceptance
testing.
Launch to market
There could be two
phases of launching
– phase 1 is limited
functionality and
channel.
Channel preparation
Delay / Modify?
Develop financial model
State project plan
Show stoppers?
Review updated feasibility
Continually review quality
of delivered code back to
user requirements.
Business audit
Pre-Launch Review
Vendor preparation
Feasibility review
Handover to Ops
Regulatory
Go-live
Decision criteria Activity
Business review
Ensure that all critical functionality
in place.
Ensure all support process in place.
Ensure logistics in place.
Decide launch date
Launch / Modify?
Design Freeze

17. The Challenges and Risks
• Managing regulatory approvals
• Ability to structure business quickly – Building the Organisation
– Subsidiary with all SLA’s in place and changed operating model
– Trust fund that meets the needs
• Ability to operationalize the strategies fast
• Ability to learn and quickly respond to challenges post go-live
• Ability to successfully identify potential fraud and proactively
build control mechanism in SLA and system.
• Customer Education and awareness
• Retailer Training and Compensation
• Devising a long term sustainable business plan