In an earlier blog entry I wrote that MFS needs to be more than an alternative channel for traditional banking services to get traction in the developed world.

In the same vein I saw an article this morning  (http://mobile-financial.com/node/1741/Mobile-Phone-Location-Technology-Fights-Card-Fraud) talking about an Ericsson solution that provides country lookup services for banks to establish that a particular mobile device is roaming in a particular (and perhaps high fraud risk) country.

The idea being of course that if the mobile devices was linked to the credit card and a credit card transaction was initiated in a high risk country then the credit card provider could use the capabilities to verify that the mobile phone associated with that account (and by extension the owner of the card themselves) was actually located in the foreign country.

This strikes me as being a great example of how mobile banking solution can actually add value to transaction that is not possible by conventional channels.

One could take this scenario further and use the same technique on a far more granular scale - modern cellular networks provide location based services API's that allow (authorised) 3rd parties to locate an end-user device with varying degrees of accuracy.

Financial instiitutions wanting to

KISS #2

In an earlier article (http://www.mobile-financial.com/node/1501/KISS) I wrote about the need for MNO’s to create simple and easy to use mobile financial applications if they wish to attract critical mass to these new offerings.

That post was about growing the revenue potential from mobile financial services by making apps easy to discover and use.

There is another aspect of the business case to consider in parallel of course – that is keeping your MNO costs contained when rolling out a new service.   An article caught my eye this morning (Dongle Downsides from http://www.totaltele.com/res/ArticleDocuments/Mobile%20Broadband%20Watch/MBW_01_05_2009.pdf) that was discussing the introduction of mobile broadband ‘dongles’ and their  impact on MNO business.

According to the article a recent study by WDSGlobal had shown “the cost to support mobile broadband products and services is up to 200% greater than the cost to support traditional wireless products such as mobile phones” and the “average duration of a technical support call for such products is 28 minutes. By comparison, a technical support call for a mobile phone averages just less than 10 minutes”.

Whilst mobile broadband ‘dongles’ aren’t the same as the introduction of mobile financial applications there are strong parallels with the fact that both Mobile Broadband dongles and Mobile Financial Services both require an end-user ‘installation and

If you’re an MNO in the developed world you are probably faced with several real and immediate challenges:

 

·         You operate in a saturated market with little potential to acquire new customers  - you will have to fight to churn customers over from your competition and at the same time fight to retain the ones you have;

·         Commoditisation of service offerings – at least for voice services your network offerings are similar to your competition and superior coverage / capacity is a hard card to play;

·         Downward pressure on ARPU driving bundled service offerings and ever improving value for your customers;

 

One strategy to drive growth is to jump on the mobile broadband bandwagon – this offers new customer opportunities and revenue streams but is a high cost project once you factor in transmission and other capacity costs into your business case.   At the end of the day it is a bit of a ‘me too’ strategy that your competition are following too.

 

A complementary strategy to really follow the market based segmentation model and try to identify new segments that would be attracted by specific services.  Transient tourist and visitor populations are such a segment – they often purchase pre-paid subscriptions whilst visiting your country

Here in Australia our largest Telco changed it's mission and intent a few years ago to include:

"To do for customers what no one else has done: create a world of 1 click, 1 touch, 1 button, 1 screen, 1 step solutions that are simple, easy and valued by individuals, businesses, enterprises and government." (see http://www.telstra.com.au/abouttelstra/corp/mission.cfm)

The intent behind this statement has permeated the dealings of Telstra with the market and has driven their product offerings.   Simply the mantra is that the customer must be able to easily find and use the
application with as few key presses as possible.

This has meant that for mobile phones there is a 'Telstra' button on the phone and all value added services are easily accessible to end-users. The value of this strategy in terms of customer discovery and take-up cannot be under-estimated.   We have seen quite successfull advertising campaigns in this country that combine a sales pitch for consumers about the benefits of using network based GPS style services on the phone (with a day pass of $4 or a monthly pass for $15) with a (not so) subtle dig at superior network coverage for Telstra compared to the

We live in a time when our banking industries are in a state of flux and
change as a result of the global financial crisis.  Their strategic
investments of the past are coming onto the market for long-sited (and
cashed up) competitors to take advantage of the discounts on offer to
take on the assets.

http://news.alibaba.com/article/detail/markets/100065181-1-crisis-may-trigger-new-round.html

A good example may well be the Royal Bank of Scotland and it's intention
to cut short it's Aisa plans.  As reported in recent press it seems that
RBS's retail and commercial banking interests in China, India, Taiwan
and Indonesia are being spruiked in the market.

http://www.theaustralian.news.com.au/business/story/0,,25341167-643,00.html?from=public_rss

The interesting question is how will the future buyer maximise the
return on their investment?

One strategy for a western bank looking to grow revenues would be to
expand the 'beachead' that the aquired assets provide in terms of
banking licenses and infrastructure to address the under-banked segment
that exists in many of these countries with innovative mobile financial
services offerings.   Surely a whole new class of depositors will
improve the business case for the aquirer?

Will Aisa be the growth engine of MFS?

As an Australian with a keen interest in how the local
telecomunnications market develops I have been watching the debate and
machinations around the awarding of the "National Broadband Network"
tender that our government has been working on since they were elected
almost a year ago.  

The basic tenant of their election policy was to ensure that 98% of the
population were provided with fixed broadband services of >12 Mb/s.
This network utopia(?) was to be delivered by a Fibre to the node
deployment with VDSL2 copper drops for the last metres into the nations
homes and the government planned to invest 4.7 BAUD into the venture.

http://www.minister.dbcde.gov.au/media/media_releases/2009/022

Earlier this week they managed to surprise almost all industry watchers
when they binned their previous plans and announced instead that they
were upping the ante and in fact would form a public-private partnership
venture with a budget of 43 BAUD to build a fibre to the home network
bypassing the existing copper loop entirely!

This has provided many column inches of media reporting during the week
and one angle of discussion has been whether the Australian public will
have the appetite to consume the (presumably) expensive

Often when we talk about mobile financial services we focus on the economic benefits that MFS will bring to the under-banked nations where, by definition, the banking sector is not as widely used as in the developed nations and the mobile network operators are well positioned to bring value to their markets and earn financial advantage for themselves.  i.e. In an under-banked market there is a strong value-add from Mobile network operators

 

A trickier question is to consider the case in the developed world with strong banking infrastructures and brand awareness.   This is a world where the consumer is likely to feel more comfortable performing their banking directly with their own banking institution rather than with a mobile network operator.  

At least one survey puts this preference at almost 80% (page 10, http://www.checkfreecorp.com/assets/files/MobileFinanceSurveyReport6.2.ppt).

 

Clearly the brand recognition that our banking institutions have with their customers will be a strong defensive asset as this market develops.  The challenge for the mobile network operator will be to identify the core value-adds that they are best placed to provide and to find the right commercial models to work with the banks in this space.

 

At first glance the MNO value-add should include:

 

• Ability to develop, deploy and support mobile applications to