I finally caught up with responding to my emails that piled over the past two weeks while I was away attending the GSMA Mobile World Congress.  Overall, the conference was fulfilling as always and there was quite the turn out considering that most parts of the world is still recovering from the financial crisis in 2008-2009.

 

There were two major announcements that caught my attention last week.  The first was the unveiling Microsoft's new Windows Phone 7 operating system, and the second was Samsung's new Bada Smartphone operating system.

 

The Windows Phone 7 OS was developed from scratch and is a total rewrite of Microsoft's Windows Mobile Smartphone OS.  Windows Phone 7 OS looked very refreshing with a totally new home screen and user interface. There is also better integration to social networking applications.  Additionally, there also seems to be more focus placed around integration to other Microsoft products such as the Xbox LIVE and Zune products.  However, phones bearing the Windows Phone 7 OS will not be available until later this year - just in time for the holiday season.  I think there is still a lot of testing and bug fixes to be cycled

The Mobile Money Canada event that was held earlier this week in Toronto went without a hitch.  I was lucky enough to be helping with general event preparations as well as contributing in panel discussions. 

The event covered a variety of topics related to banking and financial services through speaker presentations and panel discussions.  The panel that I participated in focused on debating various aspects of a mobile banking solution that should be considered when implementing a mobile money initiative.  The intent is to share industry learning’s and specific pitfalls that may inhibit a successful mobile financial services initiative.  I felt we had good industry representation for the discussion.  Panelists included mobile banking platform vendors M-Com and Monitise, service providers such as Western Union Global Remittances and Systems Integrators such as DonRiver Inc.

It would have been nice to have financial institution and network operator representation to share lessons learned and their perspectives.  However, given that the Canadian Mobile Money industry is still in it’s infancy, it was difficult to secure speakers of those representations.

In summary, the following is an excerpt of the panel discussion that I was involved with:

Question:

What are some of the key mobile platform features or solution vendor traits that should be considered?

 

Responses:

·               Ensure that your partner vendor has the

Have you ever designed, developed and deployed an application, only to find that it doesn’t exactly meet your business needs?  Finding functional gaps in your application during the testing cycle can be expensive.  Furthermore, any solutions that are developed during this time are in jeopardy of being sub-optimal. 

Gartner research indicates that up to 40% of defects can be uncovered and corrected during the business requirements gathering phase of a software development life cycle.  These defects can be attributed to inaccurate system specifications, duplicate requirements, and lack of subject matter expertise.

Introducing software quality assurance practices and methodologies early in the project life cycle not only improves the quality of your end product, but also reduces the overall cost of development, support and maintenance of the application in the long run when you take into account the cost of change requests and support of band-aid solutions.

Mobile application testing has always been challenging due to all the variants in mobile devices and OS platforms.  Mobile testing has gotten more efficient over the years as new mobile development platforms and middleware aim to reduce application complexity and standardize functionality into a “one size fits all” application.  In addition, as mobile emulators are now developed and made readily available to the application development community, testing accuracy has greatly improved.  Furthermore, with the introduction of new automated testing tools and hardware testing approaches, physical hardware testing can be accomplished without even the need for device procurement and account provisioning.

Having said that, there are still a few areas where testing can be challenging.  In my experience, some real world user experience testing scenarios that are still challenging to test are:

Application behavior during intermittent connectivity lost, i.e. walking through a department store while executing a transaction. Application server timeout, i.e. a hung server process or an overloaded server that is slow to respond. Roaming partner gateway configuration and granular billing analysis, i.e. configuring APN gateways and validating roaming charges, and transaction line item matching associated to roaming charges Application performance while on roaming partner network, i.e. segregating roaming network hoping time from application performance time SMS and USSD short code testing through partner carrier networks globally, i.e. ensuring short codes are valid

As noted by numerous white papers and countless vendor presentations, there are many criteria such as application security, maturity, performance and vendor experience, which must be considered when evaluating a mobile banking solution. 

Having the opportunity to read many of these reports, I have found that there are some key criteria that are not emphasized enough.   Listed below are the topics, which I feel deserve further discussion and serious consideration when selecting a mobile banking solution from a vendor:

1. Back Office Support - Pre-built functionality to support back office business process integration such as customer relationship management and customer service support, settlement automation and financial reconciliation, business activity monitoring and reporting to decision support analysis, regulatory auditing, business performance, etc.   Having a mobile banking service offering without the ability to operationally support it will severely cripple customer support and retention objectives.

2. Technology - Support for legacy systems integration.  One of the most common challenges of a typical mobile banking deployment is the ability to expose existing core banking services to new digital channels such as the mobile device.   The reason for this is that most banks still utilize mainframe infrastructure to perform their core banking activities such as account balances, account transfers, debits and credits, etc.

3. Modularity and Scalability –

After reading the article “Visa to unveil contactless debt card at games“, Published by the Toronto Star today, one quote in this article really caught my attention.  The article referenced a quote from the Canadian Federation of Independent Business who wrote, “One of our greatest concerns is that Canada would lose its low-cost, flat-fee debit card system”.  The federation was referring to the Interac card system.  I began wondering if there is any merit to this concern.

Interac provides the bridge between payment processing mechanisms and your bank account in Canada.  This means that you can use Interac services to pay for goods at a POS, perform domestic money transfers via email, and withdraw money from ATMs.  The money would be credited directly from your bank account.  In addition, because the Interac service is automatically tied to your Canadian bank account, no additional registration is required from the customer.  Furthermore, you never have to top up your card since it is tied to your bank account.  Fee structures for Interac services are very reasonable and are not even charged by Interac.  Association members such as banks and merchants set the fees.  For instance, a typical domestic money transfer only costs an average of $1.50 CND per transaction.

Looking into this further, I decided to compose a table that compares

I was lucky enough to have found some time to attend a webinar event held yesterday by M-Com.  The informational session was to discuss some of the key issues or considerations in mobile banking and the attributes of a winning mobile strategy for banks based on M-Com’s industry experience.
 
To summarize, some of the key issues discussed are:
What are the access modes for the mobile channel?  Discussions around communication protocols, application platforms, and functional considerations were provided. Who is the target market?  What are the demographics of early adopters and what are some of the impacts based on geographic deployments. Where do mobile operators fit into the ecosystem? Are they friends or foes? What are some of the technology impacts we see in the future?  Will device penetration be evolved from basic handsets to majority smartphones or netbooks and notebooks?  
M-Com included many of the data points that were observed in the field.  One set of data point that I found most interesting was the cost reduction opportunity figures which compares channel costs figures within a typical banking operation.   For instance, costs per transaction was found to be approximately $4 for in branch, $3.75 for call center, $1.25 for

Microsoft and M-Com recently published a white paper discussing the Mobile Payments landscape.  In the white paper titled “Mobile Payments: Delivering Compelling Customer and Shareholder Value through a Complete, Coherent Approach”, the authors outlined the current state of the payments industry. 

The paper analyzed a range of issues surrounding the mobile payments industry that still need to be considered and resolved before serious movement can proceed.  An in depth look at the lack of industry standardization pertaining to processes and operating models, the lack of collaboration among parties within the value chain, security and risk concerns, the need for mobile application, device interoperability and enterprise integration framework was provided.

The paper does a great job of defining the various types of payment actors, as well as laying out the taxonomy of payment transactions in the mobile payment ecosystem.  In addition, it provides a good overview of the mobile payments current landscape, outlining the issues, opportunities and indicates areas for improved business interoperability within the sector.

One section of the paper that I found most interesting was the perspective around the distinct economic drivers that make mobile payments attractive to the various industry players, including financial institutions, mobile network operators, merchants, and retailers.   Economic drivers that were discussed include revenue models, customer retention and acquisition, cost reduction and

I read a great article the other day that outlines the similarities and differences between the Kenya and Tanzania markets and its’ appetite for M-PESA money transfer service.

 

In the article “Can the success of M-PESA be repeated?”,Gunnar Camner and Emil Sjoblom go into detail analyzing the various factors that impact the adoption rate of the M-PESA money transfer service.  The following key market characteristics were evaluated and that are thought to have influenced the uptake of M-PESA:

 

-       Initial Market Share of the MNO

-       Distribution and Agent Network

-       Marketing and Education

-       Geography and Demographic conditions

-       Economy

-       Existing Banking Infrastructure

-       M-PESA Competitor Landscape

-       Pricing and Value Proposition

-       Technology Platform

-       National Identification

 

Although all of these characteristics are influential to the M-PESA adoption rate, the authors suggest that the three most influential factors for the user’s uptake are:

-       The ability for MNO’s to transform their airtime topup distribution network to agent networks

-       Marketing strategy needs to be adjusted and to accommodate the target market needs for each region

-       Geographic and demographic conditions

 

When compared to Safaricom’s M-PESA subscription base, I was surprised to find that Vodacom even had approximately 280,000 subscribers, considering the fact that educational marketing has not yet been started in Tanzania.  I wonder what portion of these early adopters

A few weeks ago, I wrote a blog about the use of SMS technologies in Mobile Banking.  In that blog, I explored pros and cons of using such a technology for executing banking processes from the mobile device.  Since then, I’ve been compiling a list of example messages that leverage SMS to alert or notify consumers of any activity on their accounts or just messages from their bank.  Here is a list of example messages that are offered by various banks, solution providers and SMS aggregators.  If you know of any others, please share them here and I will gladly add to the list for all to see.

-Minimum/Maximum Threshold Balance Notification

-Bill payment monthly recurring charge reminders

-Overdraft notification

-Fraud alerts and notification

-Daily transaction limit notification

-Monthly transaction limit notification

-Daily balance notification

-Account debit notification – with channel information, i.e. mobile, web, teller, ATM, etc.

-Account withdraw notification – with channel information

-Daily transactions summary (last X number of transactions for the day)

-Transaction status updates for non real time transactions – i.e. wire transfer status, queued transactions, rejected transactions, etc.

-Loan process status updates

-Loan transaction summary

-Monthly interest summary

-Credit Card statement balance due date

-Automated prepaid airtime top up reminders

-Airtime threshold balance notifications

-Stock trade transaction status

-Stock performance summary