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Yoma Bank plugs balance sheet into Wave Money

Myanmar’s fintech war moves from wallets to payments.



Hal Bosher, Yoma Bank

“There was no master plan,” said Hal Bosher, CEO of Yoma Bank in Myanmar. “It was backwards: first we founded Wave Money, and that’s what led to our digital strategy.”

Wave Money is a remittance and payments joint venture between Yoma Bank and Telenor, the Norwegian telco, one of just two telecom operators in the country.

Although Wave Money operates independently, Yoma Bank has begun working with it to offer micro-loans, insurance and other financial services to its users. The fintech has just launched a cash-in/cash-out service that lets Yoma Bank customers use Wave Money’s network of agents as an ATM.

From SME to consumer banking

That’s a big change for a bank with only 70 branches in the country. Wave Money provides payments through a nationwide agent network of about 41,000 people (a lot of mom-and-pop stores), or via a Wave smartphone app.  But Wave Money can’t accept deposits or make loans.

Yoma Bank, in the meantime, has been investing in digital solutions for what is primarily an SME lending business, but it lacks access to the unbanked. It is using Wave Money to turn itself into a consumer bank.

[Wave’s] getting us that consumer market.

Hal Bosher, Yoma Bank

Of Myanmar’s 55 million people, officially 15% have a bank account, but Bosher says this is a massive overstatement. “The real number is probably around 3%,” he said, because the industry is so inconvenient. The central bank, for example, mandates branch opening hours of 9 a.m. to 3 p.m. “You can either have a job, or you can have a bank account,” Bosher said.

Traditionally poor service and consumer-unfriendly regulation is, however, driving more people to fintech. Four years ago, there was virtually no mobile network. Today the entire country is on 4G and 90% of people have a phone – and most of those are smartphones.

More banks come in

Other banks have since jumped on the digital bandwagon. Asia Green Development Bank, for example, has rolled out AGD Pay, with a focus on bigger retailers. Telenor’s competitor, Ooredoo from Qatar, has a tie-up with CB Bank called M-Pitesan. Independent mobile wallet OK Dollar is another competitor.

And now KBZ Bank, the biggest in the country (its balance sheet accounts for over 40% of the entire industry), is starting a digital-payments push with Huawei as its technology partner.

So far, Yoma has avoided direct competition because of its SME focus. Its splendid isolation is now over. Although Bosher says Yoma’s plan is to go further downmarket, KBZ has stated its intention to also use digital for financial inclusion, introducing China-style QR codes to anyone with a smartphone.

“We lead in money transfer, but digital payments has become competitive,” said Brad Jones, CEO at Wave Money.

There was no master plan.

Hal Bosher, Yoma Bank

KBZ Pay received over 1 million downloads since it launched late last year, and the bank is now rolling it out among merchants. KBZ Bank CEO Mike DeNoma declined to comment, saying the bank is working on developments that will be publicized later this year.

The fintech war in Myanmar has casualties, too: M-Pitesan project has hit a snag. Along with Ooredoo and CB Bank, the third partner in the mobile money scheme is Red Dot, a mobile money operator that has gone bust, triggering anger among its agents who fear the company won’t make good their deposits. (Red Dot founder John Nagle told DigFin he’s relocated to Bangkok but declined to comment further.)

Digital spoils

Bosher says to make digital banking work, providers need to achieve scale quickly. But then it’s a profitable business: “Wave charges four times what banks charge, but they’re open 24/7,” he said. “And it’s dynamite.”

Yoma Bank has spent the past 18 months investing in its own tech stack. It brought in Finastra to revamp its core banking systems. Mark Flaming, the bank’s chief digital officer, installed Backbase, a Dutch middleware provider, to build customer journeys. And it uses Experian for credit scores.

Digital payments has become competitive.

Brad Jones, Wave Money

This has set the stage for Yoma to begin offering loans to Wave Money agents. Next it will target Wave Money’s actual users: there are 1.5 million people registered on its app, and another 7 million monthly active users, says Jones. The data from their behavior will help Yoma build credit identities.

“We were lucky to have founded Wave Money,” Bosher said. “They’re getting us that consumer market. We can plug our balance sheet into their distribution. That’s huge.”

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