Cambodia's economy has been growing these last few years with contribution from the banking sector. Currently there are forty commercial banks in the Kingdom, but penetration is still low due to a significant amount of the rural population that does not have easy access to open a bank account and are still skeptical about security issues.
The Ministry of Economy and Finance and the National Bank of Cambodia (NBC) work closely to increase financial inclusion. Ouk Sarat, director of the payment system department at the NBC, addressed recently at the National Summit on the Development of Microfinance Sector in Cambodia, the importance of increasing the mobile banking usage as it could bring more people into the formal banking sector. There are still challenges because of the lack of internet in rural areas, as well as a lack of confidence in e-banking security, which has slowed down the transformation process in the country.
However, there is not much difference between the Cambodian's mobile consumption habits and globally market trends. Users are on-the-go accessing social networks and applications via their mobile devices, utilizing them beyond calling and texting as what was primarily done so in the past.
Even though last year internet penetration remained extremely low, by contrast mobile broadband was expanding rapidly and at the same time boosting online activity in Cambodia.
Currently, the mobile and internet penetration is almost 45%, in other words, 6.7 million of the Cambodian population use internet mostly by mobile. Last year the number of people accessing the internet from their mobile devices increased by 1.3 million.
"By 2020 we wish that number will increase double," Kan Channmeta, State of Secretary of Ministry of Posts and Telecommunications (MPTC), said.
This objective is related to the ICT Master Plan 2020 established by the government, which aims to build Cambodia as an intelligent and savvy nation. The four strategic pillars are Empowering People, Ensuring Connectivity, Enhancing Capabilities and Enriching e-Services, which is also related to the financial inclusion plan.
Cambodia's banking is also transforming due to these habits and its young population. According to Askhat Azhikhanov, CEO of ABA Bank, 53% of the people are younger than 25 years old, "which means that in ten years, all these millennial kids will be our banking clients and of course they will interface with the bank and with any other company in absolutely different way," he said.
ABA Bank is one of the top banking institutions and was awardedGlobal Finance Magazine and The Banker Magazine's Euromoney 2016 award as the best bank in Cambodia. Since its foundation in 1996 as the Advanced Bank of Asia Limited, ABA Bank has focused on multi-channel banking and actively promotes branchless banking.
"All our customers are embraced with 24/7 banking solutions that let them do banking wherever they are," Askhat Azhikhanov said. "We have always been the pioneers in the market, without innovation it is difficult to compete. We have been the first bank who introduced internet banking in 2009."
In 2013, ABA implemented cash deposit machines outside their branches, which allowed anyone to deposit cash into ABA accounts and pay their bills among others services from a wide variety of locations and not only bank's branches.
Even though mobile banking applications are still relatively underused in Cambodia, last year ABA Bank also became the first bank in launching a full-scale native application which allows access to banking services at all times.
The ABA mobile app available for iOS and Android is easy to download and free of charge and allows customers to perform routine banking easily as it has almost the same features of ABA internet banking service, such as checking bank accounts, transactions, paying bills and transferring money among others.
One of the most popular features of the app is E-Cash, which allows anyone to withdraw money from any ABA ATM without a card. It works through a security code that was provided previously by an ABA customer and allows sending money to other person who does not have a bank account or a card. This is a 24-hour service like that allows customers to send money to the province in a safe way.
Innovation is changing banking customers' lifestyle, which means there is no further need to waste time in traffic jams and trying to find parking spaces during work hours to manage money.
Investing in digital services or what ABA Bank calls "SMART banking" in the last seven years has become one of its main competitive advantages.
"Our strategy is customers visit the branch only one time when they open an account, and then they do not need to come back again, as they can operate their accounts online or deposit cash through our kiosk available everywhere, even at the most popular shopping malls," Askhat Azhikhanov said.
"We are very client-focused and have multichannel capabilities with highly functional self-banking and customer-support channels", he says. "We are embracing the technological possibilities, it is absolute paramount right now and nowadays it is not simply good enough to have a very nice branch network. We are the third biggest bank/financier in the country. It's not simply enough to have very nice office," he added.
ABA Bank's digital development has also attracted the National Bank of Canada investment, which recently acquired 90 per cent of the bank, becoming the main shareholder. The engagement with an A-rated financial institution has meant for ABA Bank access to a more diversified funding.
ABA Mobile app has proved a hit amongst banking customers, "definitely, some clients who are now applying for an ABA accounts are coming because of the mobile app," Zokhir Rasulov, Chief Digital Officer responsible of ABA's digital transformation, said.
In fact, Rasulov refers to a customer's case that based his bank choice on whether the bank had big parking areas. Once he tried out ABA app and received information about all the different features, he decided to open an account with them.
Rasulov admits the application was not immediately accepted as any other new feature required market education. Therefore they also invest money and time in demos, video tutorials, advertising and other marketing tools.
Furthermore, ABA's team created a well-structured and complex contact center, which is not only based on phone customers' inquiries, but also a real-time web chat which is available 24/7 including weekends and holidays. This type of online customer service is the first in Cambodia not only for the banking sector but also for other sectors.
Due to ABA's customer focused strategy, they were also the first in linking the contact center to the Facebook chats, due to the popularity of the social network in the country.
"We have our own Facebook profile, Google Plus and YouTube, among others," Askhat Azhikhanov said.
ABA Bank digital team aims to continue developing, creating and implementing new banking ideas, at least one new feature every three months. For example, the latest updates have been the Fingerprint ID introduction which enforces security and allows users to log in to the mobile ABA app with a single touch of their finger, as well as an interactive map which helps to locate your nearest ABA branch, ATM or cash-in machine.
Along with these innovations, they have also recently released the Khmer version of the application which they hope will promote further population inclusion into digital banking.
Other ABA Bank future plans are to be able to issue and use virtual MasterCard which would have all the benefits of a real plastic card but branchless. This would even allow customers to make purchases using their phones. ABA's digital team is researching on the benefits of this type of payments used in other Asian countries, such as QR codes which are very popular in China.