Mobile-Financial.com recently interviewed Lisa Stanton, CEO of Monitise Americas. Monitise provides a mobile banking and payment platform to financial institutions that want to provide financial services to mobile subscribers. Lisa drives the growth of Monitise and the mobile financial services industry in the U.S.by forging partnerships with mobile carriers, financial institutions, card issuers, merchants and transaction networks.

Monitise is definitely an exciting mobile financial services provider to watch and has caught the attention of the industry recently with a few major developments.   Just this week for example, Monitise announced that they are on track to double their subscriber base from 500,000 to 1,000,000 customers by 2010.  In addition, in June, Monitise announced a partnership with Visa that will be worth at least $13 million to Monitise.  Through this arrangement, Visa’s 1.7 billion customers will be given access to mobile banking and payment services delivered from Monitise. 

The following are excerpts from our interview with Lisa.  To listen to the interview in its entirety, please access the Mobile Financial Services Podcast by Mobile-Financial.com available in iTunes.  This podcast is part of a series of interviews that Mobile-Financial.com conducts with pioneers, leaders, and experts within the mobile financial services industry.   To access the podcast, please click here.  If you have any questions about the podcast or interview, please send an email to:  contactus@mobile-financial.com.

Mobile-Financial.com:  Lisa would you please provide our listeners with an overview of Monitise Americas and what you are focused on and your role as CEO?

Lisa:  Monitise Americas is headquartered in Providence, Rhode Island.  We’ve been around for about three plus years now and the technology that we license comes from the UK actually. 

Monitise which is one of our joint venture partners launched the technology and software for mobile banking and finances well before we were ready for it here in the US, a little over four years ago, and they are currently working with some of the largest banks in the world; banks like HSBC, NatWest and Royal Bank of Scotland etc. 

Our other joint venture partner here in the US, is Metavante, which you may recognize as one of the major processors in the US and soon to be acquired by Fidelity. 

So our solution here is live and we have been now for about eighteen months.  We provide a mobile banking and payment platform that is available across mobile wireless networks, across devices, and with any financial institution or prepaid card issuer in the US. 

We have all three modalities.  We have a downloadable application, we have browser access to the application, and we have a growing SMS service that focuses on real time information and alerting capabilities.  We’re live with a bunch of financial institutions and prepaid card issuers here in the US and just recently in fact announced the launch of our iPhone application.

So a full suite of services starting with the basic pragmatic functionality like balance inquiries, mini statements, transfers and bill payments and extending in the short term I would say in the area of mobile payments such as peer to peer payments and even near field communications or  contactless payments via the mobile device.

Mobile-Financial.com:  Why are banks today in North America launching mobile products and services or contemplating doing so soon?

Lisa:  Well we think it’s obviously about convenience.  For decades now the reason that a consumer would chose a financial institution historically and all the way up to today is really based on convenience.  Generally, how close is the nearest branch to where you live or where you work, and the ATM expanded that convenience, providing access across financial institutions.

We think that the mobile channel is sort of the ultimate in convenience for consumers, where everybody’s got a mobile device in their pocket book or attached to their hip or belt. So it’s really a convenience play we think - banking where you want, when you want, and how you want. 

So the fifth channel that we’re introducing here is likely to become the most used channel we believe in a very short span. Where online banking as a new channel took a couple of decades actually to catch on, we think in three to five years we’ll see more transactions being done via the mobile device than any other channel. 

So where it was a unique boutique type of thing with only the largest banks three years ago, now it’s catching on quickly.   Financial institutions are engaging in this channel and we think it will become a must have within the next twelve months when a financial institution is being considered by any consumer. 

Mobile-Financial.com:  As you engage with financial institutions, are you now seeing that they see mobile banking as a strategic advantage to provide convenience to customers? Or is it that they are just trying to play catch up and stay competitive with their peers?

Lisa:  Most of the financial institution representatives that we’re talking to now, interestingly enough now many of them come from the mobile division, which is sort of new and unique. Before we were talking to the online channel manager or the card channel manager.  Now we’re actually talking to people who exclusively focus on the mobile channel and that’s great for us because they become much more educated and when we meet with them they are already pretty educated in this space.  So that’s been another evolution over the past months I would say. 

In the decision making process obviously the business case is key to any new initiative in any institution.  So we help them design the business case around what we’re seeing in the market from experience in terms of, not only customer acquisition that I was talking about earlier, but also increased transaction on the accounts that they can access via their mobile and a stickiness factor or a retention that this additional service creates for consumers. 

You know the idea is once they (customers) get accustomed to accessing their account information and ultimately making payments with the mobile device, it’ll become even harder for somebody to steal them away from their existing provider with those services.  It’s a comprehensive sort of view at what this does for the retail profitability of a customer. 

Mobile-Financial.com:  In terms of the business models within the US for mobile banking, what do they look like? Are they typically bank led, mobile operator led, partnerships between the two entities?

Lisa:  There are certainly players who focus on each side of that equation.  Our model is sort of building an ecosystem if you will, so everybody gets benefit from the service with us being in the middle of all the players; the financial institutions, the wireless carriers, etc. 

We’re very much swayed towards the financial institution side so our company is a bunch of leaders who come from financial institutions or the payment space in general and our belief is that we can work with them to create very exciting products and functionality within the mobile space that they can offer to their clients.  The trusted relationship is still strongest for a consumer with their bank, or credit union or card issuer so we’re keeping them relevant in this mobile channel roll out by partnering with them to come up with new and creative functionality that consumers would adopt. 
So that’s our approach. 

One of the unique things I think for us is the integration point or the initial enrolment for the consumer revolves around their debit or prepaid reloadable card or credit card, so that basically includes just about every adult in the US that has some sort of plastic in their wallet and it keeps that sort of ubiquity available to everybody instead of just for instance an online bank. We don’t think you should have to be an online banker to do mobile; we think they’re very different channels.

Mobile-Financial.com:  Do you find mobile banking to be a gateway to financial inclusion within the US?

Lisa:  We really do.  One of the things we’ve been most pleased with over the last year is the way we’ve seen the general purpose reloadable issuers or program managers and processors getting involved in introducing a mobile channel. We really think that the population you’re talking about, the underbanked or unbanked, are most in need of this convenience factor because the penetration of mobile devices among those within that demographic is actually higher than the population at large.  So we know that they have the mobile device to use and similarly they probably have a lower penetration of home desktops or laptops or internet access to use and financial management is even more critical to that demographic. 

All the stars are aligned when you think about the underbanked population such that mobile will even more quickly we believe, become the channel of choice for them.  And that population is obviously growing as you know with this economy unfortunately government issued cards or government subsidies are now increasingly coming in the form of a deposit to a card account, so we think that that will be a prime candidate for mobilizing accounts for the underbanked.

Mobile-Financial.com:  Once a subscriber adopts mobile banking, what’s typically the path of feature adoption? 

Lisa:  I think its simple basic services informational generally - like what’s my balance, or what were my last five transactions?  Transfers have become very popular within an individual’s own account, say within my chequing to my savings following an alert, an SMS alert I might receive saying “My direct deposit has arrived.”  I’ll then go into the application and move money from chequing to savings so that I don’t spend it all.  Those kinds of simple pragmatic services are what we’re seeing people using most. 

But in all the research that we’ve done and people that we’ve talked to, there’s really strong interest in evolving on the payment side and frankly for the financial institutions and players and banks that’s where the real revenue comes from.  So we’re very focused on that next generation mobile banking which includes payment.

Mobile-Financial.com:  You’ve recently announced that you’ve launched mobile money app for the iPhone.  Can you give us a little bit of background on what that app looks like and what are some of the drivers for you guys to build the iPhone application?

Lisa:  The iPhone is obviously a pretty hot property, and with its growing adoption, it was absolutely critical to deliver a quality app.  You will find it in the iTunes app store under the name “Mobile Money US.”  The key is with the Mobile Money iPhone app is not offered directly (by Monitise).  We are not a direct to consumer. We actually are offered through partners, banks, and credit unions etc.  So the key is to see if your bank is working with us, then download the application. 

I have to say that I was pretty pleased with it, not having anything to do literally with the build or the technology; I was pretty pleased to see it when it first launched and I use it all the time on my iPhone.  So it does become pretty addictive as do some of the other iPhone apps, I guess.  So that’s just the first of the touch screen deliveries for us the Palm Pre, Android, the Storm etc. They all are following close behind so just got to keep up with the Smartphone market.

Mobile-Financial.com:  Would you mind describing what your Visa alliance means to you, Monitise, as well as Visa and your customers?

Lisa:  I’ll be happy to.  It’s obviously early days for us to get specific about that but for us as you say it was a pretty significant announcement.  It’s not a bad thing at all to have one of the largest brands in the world endorse what you’re doing not only by allowing us to be their technology partner but also investing in the company. 

It is a global alliance so we’re pretty excited about partnering with them here domestically in North America but also beyond that in the regions that we’re in today, like the UK and entering into India and East Africa etc, and then longer term around the world.  

So we’ve just begun that alliance, as you said that announcement happened a couple of weeks ago, and we’re very busy figuring out what we start with in fact where we launch the partner product.  For us it’s a very exciting endorsement of what we do and who we are. 

Mobile-Financial.com:  What challenges are inherent with mobile banking deployments, what can be done to overcome these for financial institutions?

Lisa:  Well you know if I was sitting in my old seat as a business line owner at a financial institution, which I did for a lot of years, I think some of the things that I would consider is end to end solutions, so does it work on any device on any network number one. Is it inclusive? Can any of my retail customers and small business customers get engaged if they want to or is it just a subset like online banking?  The third is the strength or long term viability of the vendors or partners they’re choosing.  I think that’s an important consideration.  And then the fourth is really how heavy is the lifting? How much work do we need to do individually as an institution to get this solution live? 

Frankly it’s such a nascent market and product that we believe the advances in it will be fast and ongoing, so it’s not as though you could buy a product today and expect to be using that same product as it appears in eighteen months.  It will have to be designed to evolve so that you can offer increasing services as they become available. So you need to choose a partner who’s focused on evolving things like payments. I think those are all the boxes that need to be checked in the consideration of choosing a partner.

Mobile-Financial.com:  In terms of the road map for a mobile banking in the US as well as Monitise, what exciting things do you have coming in the months and years ahead?

Lisa:  So I think the big news for us are things around payments as we’ve talked about before.  I'm also really excited about our ability to include rewards or loyalty as a component of what we do.  You know rewards are expensive for any player to offer in the card space and the way they deliver a return is really when people redeem, because those are the consumers that are seeing enough value to stay with you and that is exactly what the rewards program is intended to do. 

So our ability to deliver enhancements to loyalty programs - say things like immediate redemption at merchant specific locations, or notification that you hit a certain level and you now have enough points to buy that airline ticket - things like that I think are really relevant to the on the go sort of design of the mobile applications.  So loyalty’s a big one for us, payments as I mentioned and who knows from there. We’ll have to see as our discussions with VISA and our other sellers evolve.

Mobile-Financial.com:  My last question is about security.  We hear security mentioned quite a bit when it comes to online or mobile.  I'm just wondering what’s your take in terms of mobile banking having the ability to offer improved security over traditional banking services?

Lisa:  Yeah, it’s an important question because you can’t keep talking about people’s finances without being acutely aware of the need for extreme security - great security as well call it.  We do believe that the mobile channel will be a more secure channel than say the online banking channel over time, just because of the personal nature of the device.  It always goes with you, you generally don’t let others use it, and you recognize you’ve lost it well before you realize you’ve left your debit card in the ATM machine.  So there a lot of basic things that make it more secure. 

The apps that are being designed are also designed by very smart people who are ensuring that the data is specific to each handset.  If you get a new device you have to download it again; you can’t transfer it and that kind of thing.  Taking advantage of some of the security features that the wireless and device manufacturers have created to protect their application too.  So security is obviously key but we believe it’s a strength with this channel.

Mobile-Financial.com:  Alright thank you Lisa it’s been a pleasure speaking with you today.  Good luck with your mobile banking deployments, keep us posted about your wins in the mobile banking market place.

Lisa:  Great, thanks.  I appreciate the interest.

To listen to the interview in its entirety, please access the Mobile Financial Services Podcast by Mobile-Financial.com available in iTunes.  This podcast is part of a series of interviews that Mobile-Financial.com conducts with pioneers, leaders, and experts within the mobile financial services industry.   To access the podcast, please click here.  If you have any questions about the podcast or interview, please send an email to:  contactus@mobile-financial.com.