OmniBank introduces innovations to bring banking to doorstep of people
New entrant to the banking sector, OmniBank, is set to roll out two
products as it seeks to consolidate its foothold in the country since
it started its operations last year.
The bank is optimistic that by launching its Free
for all Account and Freedom Account by the end of the month, it will
demonstrate the flexibility and value it offers.
Free for all
“We have been saying that bankers have been
cheating us for too long. When you put your money in a bank account and
you are not taking the money out, you should not be charged a
maintenance fee because what the bank is doing with your money is
investing it. So charging you is not fair.
“If you can keep a minimum of GH¢100 in your
account, you will never pay any charge; but for businesses, you have to
keep at least GH¢1,000,” the Managing Director of the bank, Mr Philip
Oti Mensah, said when he paid a courtesy call on the Editor of the Daily
Graphic, Mr Ransford Tetteh, last week.
Freedom
Mr Mensah said the Freedom Account offered the
flexibility of connecting the bank account with mobile money which could
be for the payment of bills, including utilities and DSTV.
As part of a strategy to be accessible, the bank is
using its PayHouse—a kiosk placed at vantage locations—making it easy
to mobilise deposits through mobile money.
Mr Mensah, who described the PayHouse as a less
expensive method of reaching out to customers, believed that given the
momentum mobile money was gathering, banking would soon move to mobile
phones.
Currently, the bank has 30 PayHouses across Accra alone, but hopes to make it between 1,000 and 2,000 by 2020.
“What will happen in the next two years is that
mobile money agents will come and take a franchise from us. By then, the
PayHouse would have become a strong brand. It would be given to them
to pay overtime. Our overall strategy is to remove the merchants under
the umbrella.
“The whole revolution will be complete if vendors
join the platform. We are developing a system where mobile money will
become the system of payment and not cash,” he stated.
Student ambassadors
To position itself as the most student-friendly
bank, Mr Mensah said, OmniBank was recruiting ambassadors on the
campuses of tertiary institutions who would serve the brand by
mobilising deposits and earn commissions.
High interest
When the discussions turned to the meagre interest
depositors earned on their funds in banks while the same banks charged
astronomical interest on loans, he said the issue was not that simple.
While admitting that the interest on loans was
abnormal, he said the government was borrowing heavily from the local
market and made the cost of borrowing high for all customers.
Additionally, while individuals may be depositing
with banks, the chunk of the deposits were for interest-sensitive
customers who negotiated their interest against treasury bills (T-bills)
and would always ask for percentages that were higher than the T-bills.
“People will come and say ‘if T-bills is giving me
say 20 per cent, you have to give me 30 per cent’. If you don’t give it
to them, they will threaten to take their money away. Therefore, the
average cost of deposits for banks is quite high.
“Once governments stop borrowing heavily from the
market where interest rates are going now, everything will shape up
nicely and interest rates on loans will also become reasonable,” he
added.
Formerly known as Union Savings and Loans, the
microfinance company rebranded as OmniBank after receiving its licences
to operate last year.
Mr Mensah said while it might be young in the
sector as a bank, “the market has been generally positive. We managed to
build quite a strong brand as a savings and loan company”.
“We have had customers from other banks moving to
us because we have become what I will describe as a strong alternative.
What we want to ensure is that we don’t behave like the big banks when
we become big,” he added.
Incentives
Mr Tetteh, for his part, urged the bank to design
products that offered incentives to salaried workers to develop an
investing culture.
He said the Graphic Communications Group Limited
(GCGL) was interested in a banking product that made it possible for its
vendors to pay for newspapers sold early to reduce the default rate.
“We are trying to use the mobile money platform as a complementary payment system to boost sales,” he added.
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