“Bank-led” Mobile Banking

The four winning ingredients outlined in the previous post has shown again and again to place Banks in a leading position by taking charge of its own destiny through a Bank-Led approach to mobile banking…

Of course, no journey is complete without challenges. New entrants and low barriers to entry makes this is a very competitive and fast changing field. There are also many other challenges that banks have never had to face before (eg technology, non-traditional competitors, products, network operators and new regulation). In order to compete in this space, banks will have to meet these challenges by gearing up with the right staff, skills, and investment, along with an appetite and capacity for change, and innovation approach that must be driven from the leadership team. (I suggest reading “The Black Swan”, for some good insights into the nature of disruption).

Deploying elementary and appropriate banking services is not a trivial undertaking. Mobile Banking is evolving all time. Banks will have to get used to managing multiple partnerships within a complex web of relationships and dependencies on MNO’s, technology partners, vendors, competitors, legislators and governments.

How to get there
Many banks with legacy SMS banking quickly evolve from a basic platform to a value added notification product for corporates and higher value customers, as well as for ‘out-of-band’ authentication and security, however as the products and markets evolve this will become less relevant.

Banks increasingly recognise the need to guide the market with a bank-owned and operated mobile banking strategy that puts the bank squarely in the driving seat, with control over the pace and introduction of mobile banking products and service to its banked customers, with strong commercial drivers.

The bank is then in a position to lead the market and build out vertical and horizontal products and services as the market demands, By owning and controlling its platform, the bank can then look to expand into the unbanked and low-banked markets with strategic partners that can add value to the bank proposition (rather than the reverse). A vendor and MNO-agnostic strategy is central for any bank to remain agile and responsive to the changing landscape. Many banks are also missing a trick by simply not grasping how mobile networks actually work, and how to get the most out of this, preferring to think of mobile network GSM & LTE carriers as an extension of their carrier IP networks!

Agility is the key staying relevant and competitive, as, quite frankly, no one can predict the technology future with any degree of certainty, given the pace and nature of change, however we do have some insight into how emerging markets develop in response to new technologies, based on what we have reasonably seen elsewhere in the world.

Based on this, we doubt whether new technologies such as NFC, smartphones etc will gain commercial mass-market traction in many emerging markets in the short and medium term (these technologies are struggling in developed markets for a variety of reasons, and it is likely emerging markets will remain behind this curve). However its wise to test the waters with new and innovative products around mobile web, and mobile, where it makes sense to do so, and by remaining engaged with MNO’s, and market trends

If you want to know more about mobile and banking, get it touch, to find out what you don’t know, you don’t know about mobile…

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