In Russia’s Cash Economy, Finance and IT Go Hand in Hand

DLD Moscow was the occasion to hear from experts and key players on IT and finance in Russia. A very helpful endavour when one realizes that there is a “Russian Paradox” as moderator Adrien Henni puts it. In short, Russia is still very much a cash economy, more so than India. Moreover, the Russian online banking penetration is only 6%

Maxim Nogotkov (left) and Cindy Padnos (founder of Illuminate Ventures)

However, thanks to new technologies, Russian entrepreneurs are developping services to cater to the specific needs of their local customers. For instance, Maxim Nogotkov, who made a fortune launching cell phone company Svyaznoy, transformed his 3000 mobile phones shops to promote the banking products of Svyaznoy Bank.

“We have a full banking licence” underlines the man who, according to Forbes, is now a billionaire. This position puts him at the crossing of the growth of smartphones and mobile payment, 2 very promising markets in Russia, as the shift from cash payment is slowly taking place.

Boris Kim

Talking about key player don’t begin to describe Boris Kim’s role in the Russian banking world. It’s simple, last year, more than half of the population of Russia used at some point one of Kim’s QIWI services.

Recognized as an integral part of Russian internet life, Qiwi’s products ranges from the omnious cash collecting kiosks to purchase online to more recent launchs like the QIWI virtual visa card, mobile apps, electronic wallets. Kim offered the audience some lessons for success: growth through cannibalization, using cloud money and getting mobile and social.

A Few Mobile Facts and Trends for Businesses

• - The smartphone penetration in UE5 (France, UK, Germany, Italy, Spain) is 42% when it’s only 39% in the United States

• - In 2011, the share for Android Operating System grew by 330%

• - However, Apple still has the biggest share of traffic with 30% in the UE5.
• - 75% of smartphone owners used mobile media in 2011.
• - Only 5% of the whole EU5 Internet traffic comes from mobile devices
• - There is a rise of mobile retail usage.
• - Germany was the fastest growing mobile retail market accross the EU5; +112% in 2011
• - Mobile payment: 20% of smartphone users have accessed bank accounts from their mobile. 11% accessed shopping guide
• - NFC contactless payment are causing the shifting marketing budget. Traditional players are on the losing side.

Facts courtesy of Veit Siegenheim from StrategyFacts, René Schuster from Telefónica Germany and Linda Abraham from comScore.

The Future of Augmented Reality

The folk behind Aurasma, which aims to bring virtual and physical worlds together, demonstrated their software at DLD12 this afternoon. The app functions from smartphones and is capable of “tagging” videos, graphics, interactivity and sound onto videos and photos. Matt Mills used it to bring a 20-dollar bill to life: the numbers disappeared, the national anthem played over the speakers, and fireworks went off behind the illustration of the white house. In another segment, Jessica Rabbit, from the 1988 film “Who Framed Roger Rabbit” made a guest appearance on stage. 

While augmented reality is very much in its infancy, Mr Mills sees it as the future of interaction. Newspapers will resemble The Daily Prophet from the Harry Potter movies. Nothing will be forced to stay static. Mr Mills invited DLD attendees to ask for free pro access to the app. “All we ask in return is that you be creative.”