Ali Shah Asani is a seasoned FintTech expert with a notable interest in developing innovative solutions geared towards Financial Inclusion and Interoperability. He currently heads iPath (Pvt) Ltd, an innovation powerhouse which develops cutting edge FinTech&HealthTech solutions. Ali Shah is ambitious to empower the underbanked by developing turnkey solutions by forging partnerships with the industry at large to contribute towards sustainable economic development. Amongst his most prominent achievements is the development of the Asaan Mobile Account platform which aspires to bring 50 Million Pakistanis under the financial ambit.
Q: How does AMA enable greater Financial Inclusivity?
From an industry standpoint, existing players and the regulator have, in place, a facilitating payment ecosystem, from ATM sharing, to Interbank Transfers, Branchless Banking etc, fostering greater interoperability and financial inclusion. However, after reaching an apex, deploying new ATMs could be counterintuitive for financial inclusion, as they serve banked customers at locations with access to bank branches. It’s an over-kill with marginal gains. Remote areas still suffer from the last mile problem. To an extent the last mile problem has been solved with an extensive franchisee network, but if an agent is non-exclusive and signs up with multiple banks it cannot be termed as interoperability. The numbers can grow, but what we really need is a declining trend of the percentage of unbanked Pakistanis.
The last mile problem can only be solved by giving the population access to financial services at theirfingertips. Pakistan has one of the highest mobile penetration rates globally, and USSD (UnstructuredSupplementary Service Data) is abundant. Even the cheapest $10 phone is capable of accessing USSDwhich virtually removes all barriers to entry. AMA solves this problem.
Currently, to open a bank account a person has to visit a bank and fulfill necessary requirements to openan account. If you use a phone you are only limited to banking services provided in conjunction with yourTelecom operators’ partnership, such as EasyPaisa for Telenor and JazzCash for Jazz customers etc. If youhave a smartphone, you can download an app and open an account; a privilege most Pakistanis do nothave to this day, and if they do, it is assumed most of them are financially included in a way or anotheralbeit still less than 10% of the population.
With AMA you can open an account remotely in under a minute in any of the 12 banks, from any Telco.You don’t have to visit a branch or an agent to provide a biometric fingerprint. The account provides youthe same versatility.
Q: Is USSD an obsolete technology? At this time when we are discussing 5G, AMA has been built toleverage USSD?
– USSD is a technology we use every day, without even knowing what it is called or how it works. Everytime we dial a *# code on our phone to check balance or to subscribe a service we are using USSD. Itworks on every phone. It’s abundance draws out all other factors (Smartphone, App, Internet) to make itan ideal candidate to be used as a delivery channel for financial services.
While I strongly believe 5G is the future, the cost of adopting the technology and its viability may posethe same challenge why banks today hesitate to operate branches in remote areas where majority ofthe unbanked population resides. That is why USSD would be an enabler for AMA to open newopportunities to bring the next 50 million Pakistanis under the banking ambit.
Q: Mobile Financial Services were already provided by all 4 Telcos with their Bank partnerships, how isAMA platform any different?
A: Correct! The existing players have done a phenomenal job in moulding branchless bankingindustry. However, there are different models which are prevalent globally. In Pakistan, we have what’sknown as the One-to-One model, i.e. One Bank to One Telco. The 4 major players in mobile financialservices all have strong telecom partnerships and investments which enables an already extensivefranchisee network to operate as an agent network. Through this oligopoly they have covered significantground in financial inclusion, but prevented other banks to enter the marketplace. This is the reasonwhy the Big 5 resorted to a Telco-Agnostic model.
AMA is an ANY-to-ANY model, it opens new avenue for existing MFS players to compete and offer
services to subscribers of other telcos through their banks, and provides all branchless banking playerswith a level playing field to enter the space while existing players will have the opportunity to gaincustomer base from other mobile networks and banks. Subsequently, the consumer would be the onebenefitting the most, as it would introduce a plethora of services to choose from.
Q: If a customer does not visit the Bank, how do you ensure adequate verification of the customer?
A: Pakistan is one of the few countries in the world which authorizes customers against National ID
(CNIC) upon the purchase of new Mobile Connection, and has rigorously implemented policies to blockall unregistered SIMs in the country. AMA leverages this authorization to check if you are the rightfulowner of your SIM. When the platform sends an account opening request to the bank, the bankperforms several checks on the provided details before approving an account opening request. Once arequest has been verified, only then is an account activated.
Q: Does this model exist anywhere else in the world and how easily can it be replicated in other
A: The closest which could come to our implementation is one in India. When we were planning our
products and services we did find a few similarities with other such platforms around the world, typicallyin India, Sub-Saharan Africa and South America. The model can be easily replicated anywhere in theworld, if the impediment of bureaucracy and revenue models between both industries could be agreedupon.
Q: What were these revenue impediments between Banks and Mobile Operators?
A: Mobile Operators charge as soon as a number is dialed or a text is sent. As soon as you engage themobile channel you are charged, which is very different from how banking works. In a bank, you are freeto access the channel, example a visit to the bank branch, using an ATM, Mobile App etc, but you areonly charged when a transaction is made. Everyother action before the transaction is made such aslogging into the app, inserting the card in the ATM, entering you PIN is part of the transaction process.Then there are transactions which are free of cost, such as Balance Inquiry. The bank does not chargefor these transactions, but on AMA the mobile channel is consumed. We had to work hard to buildstrong relationships between stakeholders and regulators from both sides to reach a pivot thatsafeguards business and national interests.
Q: How did you manage to connect all Branchless Banks with Telcos?
A: The AMA platform is an amalgamation of two industries. Think of it as on one end you have all Telcosand on the other you have all member banks and in between both of them are connections which gothrough a box. That’s us! To make the clockwork palatable it can be simply explained as a 3-stepprocess. First, we interconnected with the USSD Gateway of all Telecom operators to route all AMAtraffic towards VRG. Our platform connects this with our Unified Banking Core, which hosts bankingmenus and services offered by Banks. The app processes and all incoming requests from subscriberhandsets into an interactive session where the customer can navigate menus to use services andprovide necessary details, such as entering a beneficiary account number during a funds transfer. Forthe third and final step, we have integrated with all AMA member banks, to which we route all suchinstructions to be processed into financial transactions.
Q: What technology did your team develop for the AMA Platform?
A: When we started we had many options on the table. There were some prominent players in both theTelecom space and similar reputable names in the financial sector, but none had bridged them togetherat this scale. None of them had ever connected the number of subscribers we were shooting for, nonehad operated the aggregate number of banking customers of all 12 memberbanks, including the Big 5banks which were new entrants, along with the existing Big 4 of the Mobile Financial Industry and aboveall that the fresh targets set by the SBP for new mobile wallet accounts under the NFIS (NationalFinancial Inclusion Strategy). AMA is a convergence platform entrusted to process the aggregate trafficfrom every telecom subscriber to every bank.
Before, even getting to the whiteboard, we were in the realmof millions of subscribers with millions oftransactions per day.
Additionally, as laid out by our regulators the AMA committee will routinely finalize new services for rollout on the platform multiple times a year. Hence, as an evolving platform it has to be robust to handleto allow stakeholders to perennially rollout new services.
We achieved this feat by using our Switching platform called iMPACT. The switch has been indigenouslybuilt in Pakistan by our team, with the help of International consultants from both the Payment and theHealthcare industry.
iMPACT is an extremely versatile technology solution which has demonstrated its farfetched multi-
faceted interoperability capabilities for us both domestically and internationally in the financial and
healthcare industry. In Pakistan, we have used iMPACT to build an interoperable financial platform,
Interconnect Telecom Operators, Banks and partner institutions. With our international partnerships,iMPACT ensures reliable connectivity and secure interchange of sensitive Electronic Medical Recordsacross over 61,000 Hospital and Clinics in the US.
The PCI Council (Payment Card Industry) has certified iMPACTin regard to all transactional interchanges:performed in a secure environment and compliant with the HITRUST (Health InformationTrust) Alliance and GDPR (EU General Data Protection Regulation). Additionally, both State Bank ofPakistan and Pakistan Telecom Authority have completed multiple inspections of the platform.
Q: What were the technical challenges VRG had to overcome during the development of the AMA
A: Both banks and Mobile Operators integrate with third parties using their defined standards and
requirements. The biggest challenge was to interconnect different standards and harmonize them in away which provides a unified experience to Customers regardless of their Telco subscription. We workedmeticulously with Telecoms to set common grounds which can be agreed for operations and governancewith oversight by the PTA.
As AMA would routinely rollout new services, adopting a different standard for every bank would havetranslated to increased complexity every time a change is made. As an example, sometimes even smallchanges, in regulatory requirements could be cumbersome as witnessed in the implementation of EFT(Electronic Funds Transfer) regulation in 2018 by banks, for which some banks had to wait for months tocomply. With successful partnerships with the State Bank and other Banks we derive harmonized standard forAMA transactions. This ensures immediate updates for new services, regulatory compliance and provides room for experimentation to explore new service opportunities.
Q: Do you plan to offer the service in other languages?
A: Yes! In order to cover a wider audience we are working on an Urdu version of AMA. After we
presented our solution to the State Bank, this was the first recommendation we received which wasvery well appreciated by our team.
Q: Can AMA be used to channel International Remittances?
A: Absolutely. In fact we are working with MTOs and banks to channel remittances to existing accountswhich could be linked to AMA. This way funds will always be available on their phone and there will beless dependence on cash. This will further strengthen the government’s efforts to curb Hawala/Hundichannels. It will provide more convenience and security to the customers as well as transparency andtraceability for financial monitoring.
Q: What other service(s) can be offered through the Asaan Mobile Account?
The Asaan Mobile Account Platform can play a pivotal role in G2P (Government to Person). Customerscan dial *2262# (USSD code) on their phone to create an Asaan mobile account. G2P donor institutescan register applicants and shortlist beneficiaries. Qualifying beneficiaries can be cross-checked with theAsaan Mobile Account database and funds can be digitally distributed into their bank accounts. Usingthe platform users can transfer funds, pay bills, purchase goods as well as withdraw cash from Bank’sAgent after biometric verification. Not only can this make the entire process efficient, transparent andsecure, but also safe by completely eliminating the need for cash or card.
We are strongly looking at small value retailpayments to be enabled through AMA. We are also
working on developing new services with our partnerships with banks to use their existing franchisee
network as merchants to which any AMA customer can securely make payments.
A big focus would be to offer shared services on the AMA platform as instructed by both regulators.
Starting from interoperable agent services, customers will be able to visit ANY agent to request basic cashservices, just like we can walk into any ATM of another bank to perform transactions. This wouldincrease the financial inclusion landscape and allow for customers of banks which currently do notoperate an agent network to leverage on the network of other banks providing maximum flexibility tothe customer.
The State Bank of Pakistan is working on the development of a Micro-Payments Gateway (MPG) to
enhance the payment infrastructure. AMA can be used to deliver the digital services enabled by MPGand the both can together work as a ‘dynamic-duo’ to force multiply the National Financial InclusionStrategy.
Q: Where do you foresee Asaan Mobile Accounts in the next 3 years?
AMA will bring hope and welfare to millions of Pakistanis. It will make banking palatable to the common man; provide the means: to conduct financial activity and access finance,both crucial for driving the economy towards prosperity.
At a macro level it will assist authorities in documenting the economy, or the so-called informal
economy, which currently makes it difficult for economic planning for development. It will enable
digitization and seamless disbursement of existing G2P initiatives, and would be effective in emergencyfunds disbursement at the time of need.
I foresee P2P (Peer-to-Peer) payments will thrive. Every day payments for buying goods at mom and popstores to services at local business and commerce will become more efficient with AMA. Merchants, willbe able to receive payments for goods digitally and also pay for supplies using the same channel.Thereafter, AMA will also make the current COD (Cash on Delivery) process cash-lite which will reducethe cost of cash handling, security and fraud.
Also, with new FinTechs entering the space after the Central Bank’s introduction of rules such as
PSO/PSP (Payment Service Operators/ Payment Service Providers) and EMI (Electronic Money
Institutions) we can expect to see more disruption in the payment industry which will forge new
partnerships between Banks and FinTechs and amongst themselves.