Last mile banking

The following article is based on a presentation which I gave during the „GigaCon IT w Bankowości” conference.


In the days when, what I call work now ,was sheer fun, I used my computer also for pure entertainment i.e. computer gaming. One of those games was Sid Mayer’s Civilisation (the first and oldest version). The game involves inventions which trigger the development of a civilization created by the player or even which are indispensable for the growth of the civilization. Banking is also such invention. Completing the game without inventing it is impossible.

99% by Martyn Hutchby

Perceiving banking as a foundation for civilizations may seem to be an unusual attitude now. One might say that 99% of the society regards banking as an “evil empire” which destroys the community instead of developing it. However, it’s a missed observation since the majority of mankind has no access to banking services at all. There are numerous places on Earth where the simpliest financial services are a luxury.


In such places development of banking and providing the widest accessibility possible are treated with utmost importance in the struggle with financial seclusion and poverty. Take Nigeria for example, looking from the perspective of an individual inhabitant, one of the poorest countries in the world. 84,5% of Nigerians is in daily funds of less than $2 after calculating the parity of purchasing power. For Poland the index is only 0,2%. Nigeria is plummeting down i.e. ranks at one of the lowest positions of any poverty index. The relation of the gross domestic product per capita for Poland and Nigeria equals 11,5%. In spite of different relief programmes access to many civilization achievements is still limited for many inhabitants. Only one third of them has had contact with any form of financial services.


And yet, the country has taken on a challenge of shifting from cash transaction management or as it is called by the authorities: implementing cashless society. The project concerns the whole country, although Lagos was tackled first as the richest region and city of Nigeria. ( A choice made apparently due to a possibility of financial encouragement to complete the project – lodgments and withdrawals have been taxed here).

In the „rich North” talking about non-cash transaction we mean credit card operations. One should bear in mind that introduction of payment cards technology incurs expenses. The issuance of a chip card costs a bank about €5. With the financial capabilities of the Nigerian society it seems to be a high amount, too high to promote this kind of mass payment system in a short time.

However, 99 million (~ 60%) of Nigerians is already in possession of “chips” … on their mobiles phones SIM cards. The fact has been noted by the financial market regulator in Nigeria and commercial banks have been financially ‘encouraged’ to introduce mobile payments services. TouK has implemented such a project with a Nigerian partner.

USSD mobile payments

However, one should bear in mind that the mobile telephone sets the Nigerians usually own do not belong to the top class ones. Besides, even in Poland only every fifth person uses a smartphone. The mobile phone application would certainly not contribute lot to the commercial success of the service. The solution would have to operate on the old-type mobile phones which apart from making phone calls allow only sending short messages.

A gradually outdating in Poland USSD protocol (The mPay company who has solely backed the idea in Poland is going through a crisis situation recently) has been chosen (Not by us but the orderer. We do not claim the authorship of this idea. ) as the main access channel.

So what have we done? We have used an open source microfinance solution for transaction processing. We have integrated it with electronic transfers’ agent (an entity similar to a polish company Blue Media with the qualities of Krajowa Izba Rozliczeniowa). Therefore the system of mobile payments can be supplied not only with funds from the orderer’s bank but also from any other bank. Notwithstanding payment fees, such solution was probably cheaper for the bank than ordering the appropriate service from the core banking system provider. Naturally, it has been effected by creating a sufficient multi-channel integration façade, which has been then connected to a USSD protocol integration platform. Moreover, we have integrated the WAP channels, web, ATM. In fact it’s a fairly simple system. It’s so simple, that as Jakub Nowakowski (responsible at TouK for the project) said, in Poland a very big company would have to run it for really big money.

The road ends here by Melvin “Buddy” Baker

Speaking of the last mile banking in Nigeria, the last 100 miles should be considered a last mile. In this context, among the more interesting functionalities the one similar to the recently introduced in Bank Pocztowy cash withdrawal order (the postman brings the money to the door) should be mentioned. The chosen, presumably trusted by the local community people may become the bank’s agents providing cash withdrawals. The agent arrives at the customer’s and they both confirm the transaction using the USSD protocol and the customer receives the cash. It’s enough for the customer to own a SIM card as the agent may have an extra phone set at their disposal.

Mini Tesco by shawnleishman

This example shows that something else constitutes mobile banking than in Europe or North America. It’s not about the access to a bank account but mainly about the opportunity to make payments, about the alternative for credit cards. Besides the term ‘mobile money’ is more popular rather than ‘mobile banking’. The service we currently provide is allowing …shopkeepers’ registration. The offer of lease of a credit card terminal and paying the commission on each transaction is surely out of the question for a lady from a ‘mini-tesco’ in the side picture. The mobile payments in the form they are made in Nigeria allow a lower entry threshold and lower fees.


At this stage it may seem as though TouK has implemented an outdated technology for undemanding users. However, it’s a misjudgement. First of all, the less demanding user is by nature more challenging for the software architect. Secondly, these we have done not leaving the others undone. Apart from the already mentioned access channels, we have created a smartphone application. In case of the lack of mobile Internet availability (most of Nigerian regions), the user maintains continuous accessibility to the service with USSD protocol. We have created a system of micropayments with full multi-channel accessibility.


Surely every project manager is familiar with the side diagram. It’s an ‘iron triangle’. Every project involves three constraints: scope, resources and schedule. The role of project manager is to organize the work to meet these constraints. The later interpretation adds an unstated fourth ingredient in the ‘iron triangle’ diagram, that is quality, which should be understood in the following way: if we change one of the constraints without changing the other two, we have to assume a change in the quality. Needless to say, it’s right to change the central element with any given peripheral one, e.g. quality with scope, which should be interpreted as follows. If we wish to change one of the following in the project: quality, resources or schedule without changing the two remaining constraints, we will have to change the scope. It’s, by all means, a true statement… for the project.

Yet, you can’t interpret the iron triangle by realizing a specific task facing a dilemma: cheap, quick or well performed. It is a misinterpretation. ‘The iron triangle’ is about carrying out a project and not about the choice of the provider. Choosing the partner to carry out a project we don’t choose a location in an absolute triangle. You might say that we chose a triangle within which the provider will operate.


The realisation of the Nigerian project by TouK, to some extent, reveals the falseness of the thesis: ‘quick, cheap or well performed’. We have had the chance to directly rival a subsidiary of an international credit card operator, who were implementing their ‘off-the-shelf’ solutions for competitive banks. The quality is proved by 100 000 users. The schedule? At the beginning of September the bank was granted a service license from the financial market regulator and then we started the works. We implemented the first release (friendly user test) in December. In February the first users were registered. A competitive company was making a months’- long pre-alpha project. ‘Our’ bank has saved huge money on the project. The difference lies in the rank of size. By the way, for one of these banks which introducing the solution for an international card operator we have realised USSD integration i.e. the key channel on the Nigerian market, since, as it usually happens, 20% of the missing functionality in the ready-made software constitues 80% implementation expenses. Fortunately for that bank, they were in touch with our partner in Nigeria. ;)

The conclusion?

It’s always worth to get your bearings and see if the bespoke software which meets requirements in a 100% is cheaper, better and implemented faster than a proprietary “off-the-shelf” solution. Doesn’t hurt to ask at TouK.

To sum up, I will mention that all the works have been completed remotely. None of TouK’s staff have a Nigerian visa. We have just simply responded to one of those e-mails and that’s how it started.

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