Turkiye Garanti Bankasi's general manager for technology, Halil Husnu Erel, was instrumental in overseeing the bank's launch of the world's first online-only Western Union transfers system and is now driving the development of a contactless 'e-purse' card, which looks set to reaffirm Garanti's status as a leader in retail banking innovation.
Turkey's retail banks have not shied away from embracing innovative new technologies and Turkiye Garanti Bankasi is no exception. The leading Turkish bank provides corporate, commercial and retail banking services, with more than 8 million customers, 770 branches and 2700 ATMs. In recent years, Garanti has led the way in launching tech-driven retail products, with a particular focus on money transfer and payment-transaction services. Halil Husnu Erel, general manager for technology at Garanti and a long-time Garanti employee, is tasked with overseeing the strategy development and execution of such projects.
Remittances, for example, are a major market in Turkey, the size and demographic mix of which makes for large volumes of domestic payment flows. As the second largest bank in Turkey by assets, remittances are an important retail business line for Garanti and the bank has dedicated significant resources to developing a delivery infrastructure for the remittance product that will serve to both increase accessibility geographically and reduce costs. In 2008 and 2009, the bank developed and rolled out a cardless ATM-based remittance application in combination with SMS functionality that allows unbanked individuals to access funds at an ATM using a PIN sent to them via their mobile phone. The project was awarded The Banker's Innovation in Banking Technology Award for Payment Technology in 2009.
But the bank did not stop here. "We felt that remittances should be extended internationally," says Mr Erel. "So we partnered with Western Union for international money transfers and Garanti became the first bank to make online-only Western Union transfers in the world," he adds. The service, which was launched in May 2009, allows Garanti customers to send payment instructions through Garanti's online banking system, with the back-end infrastructure provided by Western Union. Users can receive the remittance directly into their bank account.
"All the interfaces were developed by Garanti Bank, but they are all connected to the Western Union system," says Mr Erel. "We are still trying to add some innovation to the existing system. Other than just using online banking, we are working to offer Western Union services through other alternative delivery channels such as mobile banking, ATMs and call centres," he says.
Customer-friendly advances
Card-based payments are also an increasingly vibrant area of the Turkish retail banking landscape. During the past decade, the number of cards issued in Turkey has surged from 10 million to 45 million, according to figures from Garanti. "Turkey's substantial progress in the cards market has been driven by a number of key factors, including its young demographic [and] the wide acceptance and success of strong card-loyalty schemes," says Mr Erel.
Turkish banks have proved especially resourceful in building out strong customer loyalty programmes, often supported by technology that has yet to gain widespread acceptance in many other European markets. Contactless chip technology, which allows the user to undertake card payment transactions without inserting the card or providing a PIN or signature, is an example of one such rising technology.
Turkey has enjoyed a widespread uptake of contactless card technology, with Garanti a leader in this area through its partnership with MasterCard. The bank has also developed a contactless sticker, dubbed 'the Bonus Trink Sticker', which is shaped in the form of a credit card with a 16-digit credit card number and acts just like a credit card. The sticker can be attached to a mobile phone or iPod and allows the user to make contactless transactions using the mobile phone handset or iPod instead of searching for their traditional credit or debit card, or cash.
Innovation for success
Mr Erel says that Garanti is also preparing to trial a loyalty card product, the Galatasaray Bonus Card, in collaboration with the new Galatasaray football club stadium located in Istanbul and DenizBank, the Dexia-owned Turkish private bank. Tickets and user information regarding all home games will be loaded on to the Galatasaray Bonus Card with access to the stadium enabled via the contactless technology in the card. The banks hope that fans will be encouraged to use the prepaid card when visiting the stadium. "A key advantage for the football club of using Garanti Bank will be the access to a comprehensive database of its fans and customer relationship management functionality to use in marketing campaigns," says Mr Erel.
As a significant proportion of Turkey's population remains unbanked, there is also an opportunity for banks such as Garanti to exploit pre-paid card functionality, which allows users to load a cash credit onto a card to increase their market penetration. "Consequently, Garanti is now working on combining prepaid, debit and contactless functionalities into one card, called the 'e-purse', to encourage consumers to move away from ATM usage and instead to use the pre-pay cards to buy goods," says Mr Erel. Initial trials of the e-purse will include public transport and coffee shop chains, he adds.
Career history
Halil Husnu Erel
1997 - General manager for technology, Turkiye Garanti Bankasi
1994 - General manager, Garanti Teknoloji
