I have spent the last few weeks looking at the boom in Mobile Banking in America. I have benefited from the excellent blog by Brandon McGee and LinkedIn's ability to contact the key people quickly to bring myself up to speed having focused on the Mobile Payments boom in the Emerging Markets.
The first thing that get me is just how much the Banks have spent on Adverts that educate Consumers to the fact that they can Bank on the mobile. Chase has spent $70M so far this year and others have matched that spend.
Wells Fargo have adopted the most diverse platform offering Customers the opportunity to Bank via SMS, Browser and Java Client. Bank of America leads the field with 1M customers after just 9 months.
That's the good new, the bad news is that the best way forward at present is a Simple solution that uses SMS because users are too dumb to find the Java ap once the have installed it and the networks use of content rendering solutions means that they can't present a consistent view via a browser.
So here in the UK we have a system that few have heard of and less are using. Mobile Banking is happening in the US and Payments are now at the centre of business plans in Emerging Markets as the channel to reach the Unbanked. In the UK we have little prospect thanks to the fact that mobile data is something that Consumers stay away from because of the assumed high costs. Will be held back because of a lack of clear thought or will it be because we are not financially literate?
The CEO of ClairMail is telling Banks in the US that mobile needs to be at the centre of their strategy because of the fact that it will drive Dialogue in the same way that Tesco's drives business with the Clubcard.
Wells Fargo are developing Mobile becuae it matches the profile of its customer base, this profile sounds like First Direct in the UK but HSBC do not seem to see the need for the service.
A few reference points for you, less than 70% of Americans have a Bank Account, under 40% have a Cell Phone. Yet they see the value in Mobile Banking not for Payments but rather in fraud protection and marketing terms! Here in the UK more people have a Bank Account and a Phone and yet we have no vissible services.
Mobile Banking is an ecosystem that needs to undertake defined steps if the Mobile is to replace the Walet. Without the simple account checking ability to educate users what hope does peer to peer payments have?
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4 comments:
I suggest you have a look at MONILINK in the UK, they seem to have most of the big banks already signed up for mobile banking incl firstdirect and HSBC.
Monilink is a service that is used in the UK, however it is done by VERY FEW. If you are a user of Vodafone then you might find a Banking service from Yodlee that is live with one UK Bank and about to add two more.
My issue is also about the lack of promotion as much as lack of innovation. In the US what you have is competition and so innovation which to some extent is a result of the fact that the Mobile Networks are still Walled Gardens. Talking to the developers and they speak about the ability to get a consistent look and experience.
If you can remember the early days of Mobile, what you saw from Orange was a demonstration of a lifestyle rather than presentation of a technology. If you search You Tube for Mobile Banking you see adverts that follow the same methodology.
Hello again,
Monilink's strategy seems to be signing up the banks into free but exclusive deals in the hope that if they hang on long enough, mobile banking in the UK will eventually take off. I'm not sure if they will survive, given the apparent lack of consumer interest. However, one possible stimulus might come from the apparent growth of pre-paid payment cards. There is a REAL need to know your balance before you go spending on one of those and so a mobile-card link could take off.
Outside the UK, we are building a number of USSD based banking and micro-finance systems simply because it works across almost any GSM phone and can be centrally controlled whilst being acceptably secure.
In some ways, you could argue that going back to USSD might be a good way of rapidly deploying basic mobile services to a huge potential base in Europe/US which you could then migrate across to Java type apps over time....
Simon
Mi-Pay
Thanks Simon for the comments.
Monilink is a black hole that just sucks up money from its investors at present. They have spent a lot of money for less than 200K downloads and I would expect that less than 1% of them are using the service on a weekly basis. Talking with American developers they see the business as under funded and expect it to run out of cash before it can scale.
USSD would be great if only it was supported here in the UK.
The more I look at things the more important the formation of an Open system becomes. I understand that the Mobile Payments Group is looking at a number of schemes that could facilitate the type of growth that we can see in the US.
Not sure if Mobile Banking is a subset of Internet Banking but do think that the issues of security and cost are being removed by current trends. For some Mobile Banking will be browser based, and little more than account query. For Premium users I expect that they will use a Java Applet/Midlet combination.
Starting to think about how one might run multiple personalities on a single SIM if the Banks intend to use challenge and response on an exclusive nature.
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