WSBI and ESBG

Human Capital & Investment in the Human Capital & Investment in the MediterraneanMediterranean

Ian RadcliffeIan RadcliffeEuro-Mediterranean Investment Conference Euro-Mediterranean Investment Conference

16 March 201116 March 2011

WSBI: a unique network of banks

92 countries380,000 outlets1.2 billion customers

Mission

To represent and to promote savings and retail banks, and to facilitate cross-border banking projects

WSBI

Throughout the world

ESBG

Throughout Europe

WSBI in the Mediterranean region

Members in: Albania, Algeria, Croatia, Egypt, Morocco, Tunisia, Turkey as well as EU countries in the region

Regional experience in delivering Training & Consultancy

Current project in Morocco (part of a global savings programme supported with funding from the Bill & Melinda Gates Foundation)

Why Human Capital issues are important to us

Sound, well governed and inclusive retail banking sectors are key drivers of economic development

The stock of competences and knowledge attributes in the ability to perform labour produces economic value

(M)SME Finance is a core activity of our members

Financial literacy is today’s ‘hot’ topic

Global considerations

Widespread consensus on root causes: Ample liquidity; global imbalances; search for

yield; increasing leverage

Financial innovation gone astray

Flawed incentives structure

Poor risk management

Supervisory deficiencies

International governance deficiencies

NB. The financial crisis has changed everything

European Commission, Economic & Financial Affairs

Customers Changing demographics Need for trust & confidence Shifting liquidity Technological confidence Social media accepted as means

for banks and customers to interact

The future market space for savings & retail banking

Regulators Global regulation? Customer protection New constraints on retail banking Non-banks allowed Data protection

Technology Convergence of different

technologies New delivery channels

Providers Pluralism or uniformity? Increased cost of capital Increased competition Demand for stakeholder value Emergence of non-bank players Partnerships

Global skill needs in retail banking

Shortage of management and leadership skills across the sector

Basic demand for skills in mathematics, IT, commercial skills; cultural and language skills becoming more important

Product knowledge and advisory / sales skills Need to respond to the global crisis:

Strengthened corporate governance Risk management and risk assessment have come

to the fore

A digression: what we learned from Central & Eastern Europe (1/2)

…although "nowhere in Europe has economic growth been as impressive and durable as in the countries of central and eastern Europe" a major challenge remains overcoming the gap in human capital investment and utilisation in these countries

'Lisbon Council for Economic Competitiveness and Social Renewal‘ Nov 2007.

Recommendations: Improve public investment in education and

skills; Leave no socio-demographic group behind. The

low birth rate and the brain drain make it compulsory to make every possible effort to integrate everybody into modern labour market, argue the authors;

Link the economy to the knowledge networks of the world by supporting the participation of universities, research institutions in technology and research networks in Europe;

Prepare for the ageing society to limit the impact of this demographic shift

A digression: what we learned from Central & Eastern Europe (2/2)

Access to finance

Access to finance is a key need Efforts over the past 30 years have focused

almost exclusively on the provision of credit Research shows savings mobilisation helps the

poor out of poverty 75% of 1.4 billion low-cost accounts

provided by savings banks

Global effort to significantly increase the number of usable savings accounts for poor people

Mission: Implement viable projects at selected WSBI

member banks Spread lessons learned throughout WSBI

membership and beyond Supported by funding from the Bill & Melinda

Gates Foundation More info on: http

://www.wsbi.org/template/content.aspx?id=3958

The WSBI savings programme

Selected WSBI MembersSelected WSBI Members

Latin America: 1Latin America: 1• SISTEMA FEDECRÉDITOSISTEMA FEDECRÉDITO, El , El SalvadorSalvador

Africa: 7Africa: 7

•SONAPOST,SONAPOST, Burkina Faso Burkina Faso

•Kenya Post Office Savings Kenya Post Office Savings Bank (KPOSB)Bank (KPOSB)

•Lesotho Postbank (LPB)Lesotho Postbank (LPB)

•Poste MarocPoste Maroc, Morocco, Morocco

•South African Post Office South African Post Office (SAPB)(SAPB)

•Tanzania Post Bank (TPB)Tanzania Post Bank (TPB)

•Postbank Uganda (PBU)Postbank Uganda (PBU)

Asia-Pacific: 2Asia-Pacific: 2• PT Bank Tabungan Negara (Bank PT Bank Tabungan Negara (Bank BTN), IndonesiaBTN), Indonesia

• Vietnam Postal Savings Services Vietnam Postal Savings Services Company (VPSC)Company (VPSC)

How do the poor perceive suppliers?

Perception that the bank, or someone else, would take their money if left in an account.

Registrations forms: too complicated Passbooks: slow, inaccurate, fraud Keeping money in an account is more expensive (bank

charges) than to receive payments at a goods store or in cash. Bank branches too far away Queues are unbearably long. Lack of understanding and confidence in using an ATM

machine. Agents cash shortages, sometimes not authorized to accept

deposits, affected by robbery Inappropriate staff attitudes

target groups: include women and informal sector entrepreneurs (who need to be encouraged into becoming banked rather than withdrawing entirely into cash, as cheque-cashing is closed off by tightening regulation).

The main product initiative: launch of mobile banking in a country where people seem to be reluctant to accept mobile money offers provided by network operators alone, which they don’t trust enough, whereas research suggests they are more likely to trust a bank if it offers a complete mobile banking service beyond simple money transfer.

Poste Maroc / Al Barid Bank

A project just being started,

Aim: improve market segmentation to make the bank more sensitive to the needs of the less well-off and then following through with new products, communication strategies and

channel formats.

Human capital issues from the programme

Understanding amongst member banks is now moving from what prevents the client from accessing services towards what prevents banks from providing accessible services to the client

Improving staff sensitivity to the needs of poor people and proficiency in the execution of the savings services designed for them

Market sensitisation and training staff is a bigger necessary investment than IT systems and equipment

At a global level, ‘up-skilling’ is back in vogue

More people want to save than borrow Staff training & marketing to the

customer where he or she is at is just as important as infrastructure investment

Conclusions

e-mail: info@savings-banks.com

For further info:www.savings-banks.com