Profit pools


From the desk of the CEO

With Greece very much in the news, we reflect this month that – according to Heraclitus – the only thing that is constant is change. Sometimes change is internally driven, in the quest for improvement and development, and in other instances, change is driven by external factors, and is not always welcome. But adapt we must. With some notable exceptions, much of the change in retail banking is now being driven by external forces like technology, though it's not always cutting edge technology that is causing the most change.

It's 20 years since mobile phones became widely available, and even then they were certainly considered exotic: many people weren't even sure that they would really catch on beyond a narrow circle of businesspeople. These days mobile phones offer critical access to communication networks for poor rural and urban populations in developing countries. While a development such as ApplePay's mobile payments system is a relative novelty in the US, the use of mobile payments on simple feature phones has existed in countries such as Kenya for most of a decade.

It seems that the humble simple feature phone could be the key to financial inclusion worldwide, though it's not clear that banks will be the main players in this regard. Last August, the Indian initiative to have a bank account for each household in the country resulted in a new world record, as more than 18 million people signed up for accounts in one week. Overall the initiative resulted in more than 115 million new accounts, with the downside that most of those accounts remain empty. Now there's a growing realisation that mobile phones could provide the avenue to widespread financial inclusion. Three out of four people in Kenya use their phones for payments, as against only one in three hundred in India. So the potential is enormous, and the Reserve Bank of India is now taking applications from non–bank players looking to offer remittances and deposits.

It's not only in India that new entrants to retail banking are challenging the established players, and Bruce Packard introduces a new Lafferty Thought Leadership report, New Entrants in Banking: The upstart challenge to traditional retail banks, by reflecting on how retail banks can and should learn from unexpected changes in other industries.

We finish this month's Insights with perspectives from three countries that are in various stages of transition from centrally planned economies. In a report from China, Sisi Liao looks back on a decade of furious change in banking, and looks forward to the emergence of new players in banking and finance. In a note from Cuba, we hear that the restoration of diplomatic relations will not be enough to tempt banks back onto the island, and in a letter from Moscow, Igor Lipanov writes about an unusual mob at the gates of the Russian Central Bank.

In keeping with the theme of change, this is the final edition of Retail Banking Insights in its current form. From February we will expand the scope of our news offering, with weekly newsletters replacing the current monthly editions. Beginning in March, we will also offer a series of new monthly newsletters focused on specific areas such as cyber crime, mobile finance, FinTech and more.

Along with these innovations, we're launching our new eWorkshop series in February. Lafferty's team of researchers and writers will present the latest insights and analysis drawn from our databases and thought leadership reports, and ranging from country specific to regional and global. We promise that there will be something to interest everyone wanting to keep pace with the fast changing world of retail banking.

Robert Grealis



March 2015
Ireland, Peru, Qatar, Egypt
April 2015
Colombia, Saudi Arabia, Netherlands, Denmark

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Established in 1981 by the company founder and executive chairman, Michael Lafferty, Lafferty Group has continued to be the leading global specialist provider of industry research and thought leadership for the retail banking and consumer financial services industry for over three decades.

With particular specialisations in the fields of retail banking, cards and payments and mobile financial services, the group's comprehensive services include Senior Management Councils, Benchmarking Research, Thought Leadership Reports, Conferences, Management Roundtables and Webinars as well as Intelligence and Advisory Services.

Councils are global membership bodies where senior executives meet on a regular basis in confidential sessions to share best practices and brainstorm the future. Members work together to enhance knowledge and identify best practices for mutual benefit.

Global Management Roundtables and International Conferences
Lafferty Conferences take place in every corner of the globe and feature world–class speakers from every aspect of retail banking and cards and payments. The conferences provide a stimulating and interactive forum with exceptional levels of delegate participation. Global Management Roundtables offer our invited guests and discussion leaders a rare inclusive opportunity to share their expertise and informed opinions.

Lafferty Global Research Databases
Lafferty Global Research Databases are an online resource providing critical market and competitor intelligence on payment cards, e–money, acquiring/processing, retail banking and consumer lending. Covering over 70 countries, Lafferty Global Research Databases provide clients with the information they need to make informed decisions in those markets where they already have a presence, as well as enabling them to make an accurate assessment prior to entering (or leaving) a market.

Lafferty Publishing
Lafferty Group report on exciting new industry developments, especially in the areas of retail banking, cards and payments, innovation in banking, e–money and e–commerce. With the knowledge we provide, our readers can be proactive instead of reactive.

Lafferty News Service
The Lafferty News Service provides the weekly Retail Banking Intelligence and the weekly Cards, Payments & Mobile Intelligence newsletters as well as the monthly Merchant Services Intelligence. We also offer several closely focused monthly newsletters including FinTech Watch, Retail Finance Intelligence, Cyber Crime International, P2P Watch, Mobile Finance Intelligence, Digital Banking Intelligence, Social Media Intelligence and Prepaid Intelligence. Our newsletters offer a compelling blend of news, commentary, interviews, analysis, country reports, statistics and more.

Retail Banking Academy
With the launch of the Retail Banking Academy in 2012, Lafferty Group made a major commitment to professional education for the banking industry. The Academy operates worldwide and is the only educational and professional body in the world dedicated exclusively to offering postgraduate professional education in the retail banking and cards and payments fields.