This report will provide a few of the key themes and messages that were prevalent throughout the summit. The report is broken into two the following two main categories: (1) Mobile Marketing & Advertising and (2) Mobile Banking, Payments, & Money Transfers

Mobile-Financial.com attended the Third Annual Mobile Commerce Summit that took place in Las Vegas, June 3 – 5 2009.  

The summit brought together many parties working within the mobile commerce sector to discuss and debate developments in the industry including topics such as Mobile Banking & Payments, Mobile Marketing & Advertising, Mobile Remittances, Contactless Payments & NFC, Smartphones, and much more.  

Participants in the summit were primarily from North America and included financial institutions, regulators, payment processors, mobile wallet vendors, and handset manufacturers.  

Key topics that were addressed within the summit included the following:   

• Building and deploying mobile banking initiatives
• Selecting and implementing mobile commerce vendor solutions
• Mobile money transfers and international remittances
• Revenue opportunities in Mobile Financial Services
• The potential impact of Smartphones on the growth of Mobile Money
• Mobile Financial Services & Social Networking

This report will provide a summary of some of the key themes and messages that were prevalent throughout the summit.  The report is broken into two the following two main categories:

• Mobile Marketing & Advertising
• Mobile Banking, Payments, & Money Transfers

Section 1:  Mobile Marketing & Advertising

The conference kicked off with a pre-conference workshop covering Mobile Marketing.  The workshop moderator was Bob Gilbreath, Chief Marketing Strategist for Bridge Worldwide.  Bob provided an overview of the current Mobile Marketing landscape, key industry drivers, and discussed some of the key challenges facing Mobile Marketers.  He also provided options for how companies can use the mobile channel to appeal to the youth market.  

Key Drivers of Mobile Marketing
The workshop provided attendees with an overview of the key drivers that are propelling the Mobile Marketing industry.  This included the concept of the mobile channel enabling Value Adding Marketing. This means that a company’s marketing efforts can be achieved through servicing the needs that customers have for a product or service delivered through a mobile application.  This can be seen today in industry with companies developing mobile applications for the iPhone that provide added value to customers, but also fulfill company marketing needs.  An example of this is with Kraft Foods recipe application for the iPhone (iFood).  This application provides a convenient means for consumers to discover and try recipes, while simultaneously marketing the Kraft brand to the end user.  

Approaches to Mobile Marketing
There are several approaches that companies can use to launch and grow Mobile Marketing initiatives.  Two approaches that were recommended for companies interested in Mobile Marketing include the following: 

• Mobile Channel Unique Information:   Provide your target market with valuable information that they may not get through other means, and provide that information at the right time and place.

• Mobile Entertainment:  Create an entertaining experience that is interactive and appeals to the lifestyle of the individual.

A number of case studies showcasing successful Mobile Marketing applications were discussed, and most (if not all) of the applications fell into one of the two categories mentioned above.  All of the applications provide some sort of ‘value’ to the consumer, thereby creating a positive experience that the consumer then associates to the brand.  The mobile application itself also results in the consumer recalling the brand (especially with repeated use) and as a result produces a greater likelihood for the consumer to purchase products under that brand.

Barriers to Mobile Marketing Adoption
Although there is a lot of buzz about Mobile Marketing in the industry, several key barriers do exist that impact the adoption and success of Mobile Marketing initiatives.  These include:

• Mobile Banner Ads: The traditional banner ad approach does not work for Mobile.  Users are looking to access specific information very quickly and as such these ads are generally ignored.  Furthermore, these ads are perceived as a nuisance since the mobile screen size is fairly small and these ads take up valuable space
• Consumer Perception:  Mobile Marketing faces a wary customer:  According to a recent Nielson study, the most active users of the mobile internet and applications have expressed the least amount of interest in mobile ads
• Mobile Ad Interruptions:  Mobile ad interruption will likely not be tolerated.  This is seen in the fact that 72% of Americans have registered on the US Federal ‘DO NOT CALL’ list.  This alone says quite a bit about the public’s attitude towards marketing received via phone or mobile.  In addition, Service Providers are treading cautiously due to the fear of agitating or losing valuable customers in exchange for pennies per ad unit.
• Consumer Expectations: The Digital world can create a ‘Selfish Consumer’.  Consumers want to receive information and content on their own terms (ie. on demand) – when & where THEY want it.  Anything falling outside of that is likely to be perceived negatively.
• Target Market Focus: As with any marketing campaign it’s important to understand the target consumer, but with mobile, it’s also important to understand the type of mobile device that your target consumer possesses.  This is because it wouldn’t make sense to develop an iPhone application, if your target is a group of consumers that do not tend to own iPhones or Smart Phones in general.  In these cases, a company’s marketing objectives could still be accomplished through an SMS-based campaign initiated by a call to action through print, online, or even television ads.

A large proportion of the attendees at the conference were representing financial institutions, including Banks, Credit Unions, Remittance Providers, Credit Card Companies, and Mobile Money Vendors.  Within this group, there was a significant focus on Mobile Banking, Mobile Payments, & Mobile Money Transfers.  This section will re-cap some of the key themes that were discussed within these areas.  

Mobile Banking Uptake & Adoption:   

• The uptake or adoption of the mobile channel or mobile services has tended to exceed initial targets and expectations of banks.

Mobile Banking Information Access: 

• Information access is currently the most popular mobile banking feature for banking customers in North America.  Examples include Balance Inquiries, Transaction History, and Activity Alerts. 

Mobile Banking Transaction Services: 

• Transactions such as Bill Payment make up the smallest percentage of usage by customers.  Peer-to-peer transfers are popular but not widely implemented.

iPhone / Smartphone Mobile Banking: 

• Mobile Banking is very popular with iPhone and Smartphone users.  Several banks that participated mentioned that approximately 30% of mobile banking activity in their respective deployments comes from iPhones.

Mobile Browsers & SMS Banking: 

• Mobile browsers and SMS-based solutions are also delivering value for banking institutions.  These solutions are a good way for institutions to break into mobile since they are most pervasive across the varying types of handsets used by consumers

Mobile Banking & Mobile Money Transfers: 

• Mobile money transfers have experienced explosive growth in the developing world due to the ubiquity of mobile devices, the readiness of technology and vendor solutions, and a lack of existing financial services infrastructure.
• North America has not yet seen widespread adoption of Mobile Remittances due to the fact that consumers have a wide variety of options available to them, including In-Branch, Online, and physical Money Transfer Agents
• Banks interested in Mobile Money Transfers should develop an overall Mobile Money strategy first, and deploy transfers as a value added service to fundamental mobile banking functions such as account information access and SMS account alerts.   Financial institutions have multiple options to build and deploy mobile money transfer solutions, including either licensing a third party solution or developing a custom solution in house.  Third party solutions include those provided by vendors such as Monitise, MCom, Western Union, Fundamo etc.

Monetization of Mobile Banking: 

• Direct and incremental monetization of the channel is still in the exploration stage.  Validating the mobile channel, as well as customer access and satisfaction has been the focus to date.  Some ideas being investigated by institutions include the use of mobile advertising for additional revenues.

Case Study - Mobile Commerce Applictation Rollout at H&R Block: 

• H&R Block communicated that they have had a very positive experience with rolling out a Mobile Financial application to customers.  H&R Block Agents developed a mobile solution that allows them to alert customers via SMS when the customer's refund has been loaded onto their debit card.  Furthermore, this solution enables the customer to perform debit card balance inquiries via SMS

• As a result, H&R Block has benefitted from a large reduction in the number of calls to their IVR and customer support agents.  Furthermore, they have inexperienced an increase in overall customer satisfaction, as customers welcome a proactive notification of deposited funds.   

Case Study - Mobile Banking at USAA:  

• USAA is a virtual bank serving customers that are frequently on the move such as US military personnel.  As a virtual bank, USAA’s customers do their banking online or through the phone (IVR or live agent) .  To increase its ability to service its customers, USAA developed an iPhone mobile banking application.  The USAA mobile banking application enables customers to check their balances, find ATM’s, conduct peer-to-peer transfers, view transaction history etc.
• The application has been received well and rated very highly by USAA’s customers.  The application has also been noted by Apple itself for being one of the best Mobile Banking applications in the Apple Application Store.  USAA also communicated that customer adoption has exceeded their expectations and they have managed to turn their virtual banking model into a competitive advantage through the use of the mobile channel.