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Russian Market of Remote Financial Services

February 2013

Analytical Report (full version)

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Analytical Report (full version)

Russian Market of Remote Financial Services
Russian Market of Remote Financial Services
February 2013

Russian Market of Remote Financial Services

February 2013

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J’son & Partners Consulting company present the main results of the research of the Russian market of remote financial services, provided in January 2013.

 

Market structure of the Russian remote financial services:

 

        Mobile services
               Mobile banking
               SMS-banking
               Mobile operator’ss payments
        Banking non-mobile services
               Internet - banking
        Non-banking non-mobile services
               Electronic money

 


Mobile operator’ss payment service – electronic payment executed by service-operator’s of the cellular network, giving an opportunity to pay for goods and services via mobile phone or/and internet-portal using the funds of the personal account and/or banking card.

Mobile banking – service providing the service to manage client’s funds with the use of mobile terminal, pay for services and goods, make the transfers from personal banking account via mobile phone. The service implemented with the use of SMS commands (sms-banking) or via the special application for phones that have access to the Internet for data transfer.

Electronic money — obligations of eminent in electronic money value that are based on the electronic device and are for user’s disposal

Internet - banking — type of remote banking services providing the access to personal account and operations via any device with Internet access. Browser is used for operation execution, no need to install any client’s software.


 

Market of remote financial services

Market of electronic payment systems (EPS) consists of the following parts:

 

        Remote financial services (see the structure above)
        Terminals
               Banking terminals
               Non-banking terminals

 

According to J’son & Partners Consulting, the turnover of EPS market in Russia was 1 811 bln.rubles in 2012, showed the growth rate of 24% in comparison with the same indicator in 2011. Turnover of remote financial services is part of EPS market, it is expecting to be over 890 bln.rubles in 2012, and present 49% of the EPS expecting turnover. The turnover of the financial remote services will be 70% of the EPS market turnover.

 

 


    ¹ Here and after 20XXA – Actual data, 20XXE – Estimates, 20XXF – Forecast


 

According to J’son & Partners Consulting turnover of remote financial services was 896 bln.rubles and increased for 48% in comparison with the same indicator in 2011. It is expecting market expansion to 2,6 trln.rubles, CAGR will be 24% in the period of 2012 – 2017.

 

 

Major changes took place in the structure of remote financial services turnover in the period of 2008 – 2012. Non-banking services share (electronic money) increased from 12% to 31% by decreasing banking services share. J'son & Partners Consulting estimates that non-banking services share will drop for 5% in favor of banking and mobile services.

 

 

Mobile remote financial services

Mobile banking, SMS-banking and mobile operator’s payments are part of remote financial services market. Mobile operator’s payment is an electronic payment service provided by mobile operator’s, and allows to pay for goods and services via mobile phone or/and internet-portal using funds on the personal account and/or banking card. Mobile banking is a service providing to the client the opportunity to manage personal accounts with mobile terminal and to pay for services and goods same way, to transfer money from personal banking account. This service is implemented either with SMS command (sms-banking) or via special mobile apps that have internet access for data transfer.

 

According to J’son & Partners Consulting, mobile remote financial services market turnover was 24,4 bln.rubles in 2012, showed increase for 43% in comparison with the same indicator in 2011. In 2017 market will be estimating in100 bln.rubles, CAGR will be 33% in the period of 2012 – 2017.

 

 

In the mobile remote financial services structure took place some changes in the period of 2008 – 2012. Due to the SMS-banking share decrease, mobile operator’s payment share increased from 34% to 39%.

 

Banking non-mobile services

Internet-banking is part of non-mobile services. Internet – banking is part of remote banking services technologies. Access to accounts and operations on them are providing anytime from any PC with internet connection. As usual browser is used for execution of operations; it means there is no need to install any part of client’s software.

 

As a rule internet-banking services include:

 

        Accounts statements;
        Providing information about banking products (deposits, credits, UIF etc);
        Applications for opening of deposit, receiving credits, issuing banking cards, etc;
        internal transfers to the accounts of the bank;
        conversion of funds;
        payment for services.

 

An important feature of online banking security is the confirmation of transactions with one-time passwords (so that the capture would not give an attacker to gain access to funds). Although the theoretical possibility of changing the server is still remains, but the implementation of such fraud is problematic.

 

J’son & Partners Consulting estimates the banking non-mobile financial services turnover in Russia in 2012 was 591 bln.rubles, showed 39% growth in comparison with 2011. Mobile banking market turnover will reach 1,8 trl.rubles in 2017. In the meantime 75% of payments via internet banking were money transfer.

 

 

Non-banking non-mobile services

Electronic money — emitter’s monetary obligations in electronic form that are for client’s use in electronic form.

 

In September 29, 2011 the Federal Law № 161-FZ "About the National Payment System" dated June 27, 2011 has become crucial for the industry, where stated the definition of electronic money (EM), key requirements to EM transfers and to EM operators. If earlier activity regulated by set of laws and individual articles in various laws, the law "About the national payment system" has become a single regulatory instrument for the industry of electronic payments.

 

There are several systems of electronic money in Russia, the largest among them are:

 

        Visa QIWI Wallet;
        Web Money;
        «Yandex.Money».

 

According to J’son & Partners Consulting, non-banking non-mobile remote financial services (electronic money) market turnover in 2012 was 281 bln.rubles and increased for 72% in comparison with the same indicator in 2011. Total share of Visa QIWI Wallet, Web Money and Yandex.Money in 2011 by turnover was 90%. At the end of 2017 market expansion will be more than 680 bln.ruble, CAGR will be 20% in the period of 2012 – 2017.

 

 

Key conclusions

According to J’son & Partners Consulting EPS market will grow and increase its share in comparison with other payment methods in 2012 – 2017. Key drivers for EPS development will be remote financial services that will increase its share in EPS from 49% in 2012 to 70% in 2017.

 

In the turnover structure of remote financial services market non-banking services (internet-banking) presented 66% at the end of 2012 and 3% - mobile services. Major changes are expecting in the market structure in 2017, such as: growth of mobile services share to 4%, banking non-mobile services to 70% and share of non-mobile non-banking services will decrease accordingly.

 

        Non-banking non-mobile remote financial services market turnover (electronic money) in 2012
            was 281 bln.rubles, increased for 72% in comparison with the same indicator in 2011. Total
            share of Visa QIWI Wallet, Web Money and “Yandex.Money” by market turnover was 90%.
        Market turnover of banking non-mobile financial services (internet-banking) in 2012 in Russia
            was 591 bln.rubles, showed the growth of 39% in comparison with 2011. In the meantime
            75% of payments via internet-banking were money transfers. Mobile banking market turnover
            will reach 1,8 trl.rubles.
        Mobile remote financial services market turnover was 24,4 bln.rubles, increased for 43% in
            comparison with the same indicator in 2011. In 2017 market will be estimating in100
            bln.rubles, CAGR will be 33% in the period of 2012 – 2017.

 

Detailed results of the Research are presented in the full version of the Report: “Russian remote financial services market”

 

1. Introduction
2. Remote financial services market overview
       2.1. Russian remote financial services market assessment
       2.2. Russian remote financial services market structure
3. Banking payments
       3.1. Mobile banking market
              3.1.1. Market description
              3.1.2. Mobile banking market in Russia
              3.1.3. Mobile banking market in USA
              3.1.4. Mobile banking market in Europe
       3.2. Internet banking market
              3.2.1. Market description
              3.2.2. Internet banking market in Russia
              3.2.3. Internet banking market in USA
              3.2.4. Internet banking market in Europe
       3.3. SMS-banking market
              3.3.1. Market description
              3.3.2. SMS-banking market in Russia
              3.3.3. SMS-banking market in USA
              3.3.4. SMS-banking market in Europe
4. Non-banking payments
       4.1. Mobile operator’s payments market
       4.2. Mobile electronic money market
       4.3. Electronic money market
5. Service distribution by market segments
       5.1. Cellular communication services
       5.2. Internet (broadband access)
       5.3. Fixed telephony
       5.4. PayTV
       5.5. IP-telephony
       5.6. Money transfer
       5.7. Social networks
       5.8. Online games
       5.9. House and utility bills
       5.10. Traffic penalties and fees
       5.11. Avia- and railway tickets
       5.12. Tickets for entertaining shows
       5.13. Insurance payments
       5.14. MLM
       5.15. Catalogue trade
       5.16. Internet shops
       5.17. Other
6. Key Russian market players of remote financial services market
       6.1. MTS
       6.2. Beeline
       6.3. Megafon
       6.4. Sberbank
       6.5. Alfa-bank
       6.6. VTB24
       6.7. Russian Standard
       6.8. Bank of Moscow
       6.9. TransCreditBank
       6.10. Uralsib bank
       6.11. GaspromBank
       6.12. Rosbank
       6.13. Raiffeisen bank
7. Conclusions
       7.1. Russian market of remote financial services. Current situation
       7.2. Tendencies and forecasts

 

List of Figures

Fig. 1. Remote financial services turnover, bln.rubles, 2008А-2017F
Fig. 2. Remote financial services market structure in the banking services segment by market segments, bln.rubles, 2008А-2017F
Fig. 3. Remote financial services market turnover and structure by non-banking services segment, bln.rubles, 2008А-2017F
Fig. 4. Number of users of mobile banking services in the world, mln.users.
Fig. 5. Number of users of mobile banking services in Russia, thousands of users, 2008А-2017F
Fig. 6. Mobile banking market turnover and structure in Russia, mln.rubles, 2008А-2017F
Fig. 7. Payments via mobile banking structure, 2009А, 2011А, 2017F.
Fig. 8. Number of users who using mobile services in USA, % of the total mobile audience in USA, June 2011
Fig. 9. Number of users of different mobile services in USA, mln.people, September 2011 – June 2011
Fig. 10. Number of users of different mobile services via browser in USA, mln.people, September 2011 – June 2011
Fig. 11. Number of users of different mobile services in USA via apps, mln.users, September 2010 – June 2011
Fig. 12. Distribution of answers to the question: "Do you agree that mobile banking is fundamentally change retail
            banking in the next 5-10 years?", 2011
Fig. 13. Users share of mobile banking of total mobile audience in Europe, 2011A-2016F
Fig. 14. Types of mobile devices used to mobile banking access, 2011
Fig. 15. Number of internet-banking users in Russia, mln.users, 2008А-2017F
Fig. 16. Market structure and turnover of payments via internet-banking in Russia, bln.rubles, 2008А-2017F
Fig. 17. Payments via internet-banking market turnover by market players, 2008А-2012E
Fig. 18. Internet users share using internet-banking in USA and globally, 2011-2012
Fig. 19. Level of satisfaction of internet-banking services in USA by 100-point scale, 2003-2011
Fig. 20. Internet users share using internet-banking in Europe and globally, 2011-2012
Fig. 21. Number of informational sms-banking users, 2008А-2017F, mln.people
Fig. 22. Russian informational banking market in physical and monetary terms, 2008А-2017F.
Fig. 23. Number of users paying different services and goods via SMS-banking, 2008А-2017F, thousands.
Fig. 24. Sms-banking payments market turnover, 2008А-2017F, mln.rubles.
Fig. 25. Number of transactions, 2008А-2017F, mln.pcs.
Fig. 26. Average % of commission from each transaction on SMS-banking market, 2008А-2017F
Fig. 27. Number of mobile-banking users in USA, 2008А-2017F
Fig. 28. The distribution of mobile banking users in the U.S. by type of service, Q3 2011
Fig. 29. Penetration of phones and smartphones in USA, 3Q 2010 – 1Q 2012
Fig. 30. Types of mobile devices using to access to mobile and sms-banking, 2011
Fig. 31. Number of users making mobile operator’ss payments in Russia, 2008А-2017F, thousands.
Fig. 32. Mobile operator’ss payments market structure and turnover in Russia, 2008А-2017F
Fig. 33. Number of transactions and average commission on mobile operator’ss payments market in Russia, 2008А-2017F
Fig. 34. Mobile electronic money market turnover in Russia, 2008-2011, bln.rubles.
Fig. 35. Electronic money market structure and turnover in Russia, 2008А-2017F, bln.rubles.
Fig. 36. The structure and amount of balances in the market of electronic money in Russia, 2008a-2017F, bln.rubles
Fig. 37. Number of transactions on electronic money market in Russia, 2008А-2017F, mln.pcs.
Fig. 38. Average commission on electronic money market in Russia by market players, 2008А-2017F, mln
Fig. 39.Mobile operator’ss’ revenues in Russia, 1Q2010 – 2Q2012
Fig. 40. Mobile communication market volume in Russia, 2009-2017, bln.rubles.
Fig. 41. Turnover of payments via remote financial services in the segment of mobile payment services, non-including
            electronic money, mln.rubles, 2008a-2017F
Fig. 42. Number of “house” broadband connections in Russia, 2009-2015
Fig. 43. Internet (broadband) market volume in Russiam bln.rubles, 2009-2012
Fig. 44. Turnover of payments via remote financial services in the segment of payments of services in Internet
            (broadband access) not including electronic money, mln.rubles, 2008А-2017F
Fig. 45. Number of fixed communication lines in Russia 2010 - 2015 гг.
Fig. 46. Fixed telephony market volume in Russia, bln.rubles, 2009-2017 гг.
Fig. 47. Payments via remote financial services turnover in the segment of payments for fixed telephony, not including
            electronic money, mln.rubles, 2008А-2017F
Fig. 48. PayTV market volume in Russia, 2009-201, bln.rubles.
Fig. 49. Payments via remote financial services turnover in the segment of payments for PayTV, not including electronic
            money, mln.rubles, 2008А-2017F
Fig. 50. VoIP market structure in Russia by revenue volume in retail (B2C) and corporate (B2B) segment, 4Q2011
Fig. 51. IP-telephony market volume in Russia, 2009-2012, bln.rubles
Fig. 52. Payments via remote financial services turnover in the segment of payments for IP-telephony, not including
            electronic money, mln.rubles, 2008А-2017F
Fig. 53. Payments via remote financial services turnover in the segment of money transfers not including electronic money,
            mln.rubles, 2008А-2017F
Fig. 54. Number of social networks users in Russia, 2008-2016, mln.people
Fig. 55. Payments via remote financial services turnover in the segment of social networks, not including electronic money,
            mln.rubles, 2008А-2017F
Fig. 56. Russian online game market dynamic, mln. USD, 2010-2016
Fig. 57. Payments via remote financial services turnover in the segment of online games, not including electronic money,
            mln.rubles, 2008А-2017F
Fig. 58. Housing and utility market volume, bln.rubles, 2008 – 2012
Fig. 59. Payments via remote financial services turnover in the segment of payments for utility bills, not including
            electronic money, mln.rubles, 2008А-2017F
Fig. 60. Payments via remote financial services turnover in the segment of payments for traffic fines and fees, not
            including electronic money, mln.rubles, 2008А-2017F
Fig. 61. Passenger air transportation market in Russia, 2008-2011
Fig. 62. Payments via remote financial services turnover in the segment of payments for avia and railway tickets, not including
            electronic money, mln.rubles, 2008А-2017F
Fig. 63. Market of tickets for entertaining shows, bln.rubles, 2006-2009
Fig. 64. Payments via remote financial services turnover in the segment of payments for tickets for entertaining shows,
            not including electronic money, mln.rubles, 2008А-2017F
Fig. 65. Payments via remote financial services turnover in the segment of insurance payments, not including
            electronic money, mln.rubles, 2008А-2017F
Fig. 66. Payments via remote financial services turnover in the MLM segment, not including electronic money, mln.rubles,
            2008А-2017F
Fig. 67. Catalogue trade market volume, bln.rubles, 2008-2011
Fig. 68. Payments via remote financial services turnover in the segment of catalogue trade, not including electronic money,
            mln.rubles, 2008А-2017F
Fig. 69. Electronic commerce market in Russia, 2008-2016
Fig. 70. Payments via remote financial services turnover in the segment of internet shops, not including electronic money,
            mln.rubles, 2008А-2017F
Fig. 71. Payments via remote financial services turnover in the segment of other goods and services, not including electronic
            money, mln.rubles, 2008А-2017F
Fig. 72. Turnover of sms-banking and sms-information, mobile banking and internet banking, Sberbank, 2008A-2012F
Fig. 73. Turnover of sms-banking and sms-information, mobile banking and internet banking Alfa-bank, 2008A-2012F.
Fig. 74. Turnover of sms-banking and sms-information, mobile banking and internet banking VTB24, 2008A-2012F
Fig. 75. Turnover of sms-banking and sms-information, mobile banking and internet banking Russian Standard, 2008A-2012F
Fig. 76. Turnover of sms-banking and sms-information, Bank of Moscow 2008A-2012E, mln.rubles
Fig. 77. Turnover of sms-banking and sms-information and internet banking TransCreditBank, 2008A-2012F (logarithmic scale)
Fig. 78. Turnover of sms-banking and sms-information Uralsib bank, 2008-2012
Fig. 79. Turnover of sms-banking and sms-information, mobile banking and internet banking GaspromBank, 2008A-2012F
Fig. 80. Turnover of sms-banking and sms-information and mobile banking Rosbank 2008-2012
Fig. 81. Turnover of sms-banking and sms-information and internet banking Raiffeisen bank 2008A-2012F (logarithmic scale)
Fig. 82. Market turnover of remote financial services, bln.rubles, 2008А-2012E
Fig. 83. Turnover and market structure of remote financial services in non-banking segment, bln.rubles, 2008А-2012E
Fig. 84. Penetration rate of Internet users in Russia, 2008A-2016F

 

 

This Information Note is Prepared by J’son & Partners Consulting, We strive to provide factual and prognostic data that fully reflect the situation and are available to us before issuing the material. J’son & Partners Consulting reserves the right to revise the data after publication of new official information by the market players.

 

 

J’son & Partners Consulting company present the main results of the research of the Russian market of remote financial services, provided in January 2013