Banks, Fintechs Gear Up for Myanmar’s Digital Revolution

Banks, Fintechs Gear Up for Myanmar’s Digital Revolution

by April 29, 2017

As Myanmar undergoes a digital revolution, international banks and foreign investors are perceiving the country’s large pool of unbanked as a still untapped opportunity.

The latest move comes from the National Bank of Canada which became a strategic shareholder in Myanmar’s leading mobile payments business Ongo, acquiring earlier this week a 22 million shareholding in the startup.

“This investment in fintech complements the activities we already have in the ASEAN zone through our subsidiary ABA Bank, in Cambodia,” said Louis Vachon, president and CEO of National Bank of Canada. “We look forward to contributing to Ongo’s success.”

Ongo is the consumer-facing brand of Ronoc Asia. The Ongo app allows individuals and companies to transfer funds directly between mobile devices, allowing individuals to make easy payment of products and services and peer-to-peer money transfers, and for organizations to manage finances with B2B payments and mobile payroll.

Customers can also use their smartphone to cash-in (convert their cash into e-money) and cash-out at over two hundred cash agent locations around Yangon.

Ongo currently employs over three hundred people in Yangon and is expected to grow to five hundred by the end of the year.

This new investment fuels Ongo’s “aggressive growth plans for Myanmar,” according to Michael Madden, the founder and chairman of Ronoc Asia/Ongo. The company aims to provide one million consumers in Myanmar with access to finance over the next three years, enabling them to progress to a cashless system.

Myanmar has been experiencing a digital revolution, with mobile phone penetration growing rapidly and expected to reach 90%+ within two years.

Singapore-based fintech firm OOjiBO, which serves the Burmese market, has developed a solution that works as a full stack retail banking system on a mobile phone. The company claims that its platform has a monthly average of 100,000 transactions with a monthly growth rate of 30%.


Digitalizing banking services

Local banks are looking to harness mobile technology and digital platforms to better serve their clientele, reach the underbanked, and fence off competition by newcomers.

First Private Bank (FPB) announced this week that it has selected Misys FusionBanking to help it modernize and digitalize its banking operations.

Similarly to Ongo, the bank seeks to facilitate access to financial services for all and has committed to transform its retail, corporate and digital offering to bring new products and enhanced services to customers quickly and efficiently.

“The market here has been through immense change across all industries, and banking is no exception,” said Sein Maung, chairman of FPB.

“As we come into a period of expected rapid growth, competition is heating up and customers are demanding superior products and services. Our mission is to deliver efficient, transparent and trustworthy banking to all and we know that requires a slick, modern technology platform at the core. Misys technology is flexible and scalable and will form the foundation for efficient, digital banking here at FPB.”

According to the World Bank, Myanmar’s economy is expected to grow an average of 7.1% per year in the next three years. In light of increasing competition, FPB said that by working with Misys, the bank will be able to provide consumers and businesses with relevant and innovative products and services. It hopes that this will help it capture a greater share of the country’s retail and corporate banking market.

Imad Abou-Haidar, the managing director for Misys’ Asia Pacific business, said:

“Myanmar is undergoing significant transformation as part of its economic, institutional and social growth. Supporting this change demands modern, trusted technology to power strong banking systems and increase opportunities for financial inclusion in the region.”

With less than 25% of adults in Myanmar having a formal bank account, financial inclusion continues to be an important topic in Myanmar. The Fintech and E-Commerce Summit in Yangon is coming back this year to address current financial inclusion challenges in Myanmar.

The event, which will run from May 29 to 30, 2017, will discuss the role of microfinance institutions, government agencies and regulators in financial inclusion, among other key topics.


Featured image: Pexels