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<h4>by Sirpa Nordlund</h4>
Executive Director at Mobey Forum
At Mobey Forum, we have long been extolling the virtues of mobile as an opportunity that banks and financial institutions can’t afford to miss. The desktop is dead and the laptop is dying; the age of mobility is already upon us and banks that don’t face up to this fact risk being elbowed into a back-end processing role in the mobile financial services (MFS) ecosystem.
Banks need to quit viewing mobile as just another customer channel and wake up to its potential to become a generator of significant new revenues. As the MFS landscape evolves and consumers demand more sophisticated and valuable financial services for their smart phones and devices, banks that fail to keep pace with the market will be overtaken by powerful and innovative new players that are entering this space.
Banks and financial institutions have always adopted a conservative approach to technology utilization. But erring on the side of caution will do them no favours in the mobile age. Mobile services can, for example, deliver new and actionable customer profiling data into the hands of banks, enabling them to better understand their customer base and create tailored, segmented services with greater customer appeal.
The shear range of stakeholders entering MFS is also a huge opportunity for banks. The revenue generating possibilities stemming from the development of partnerships with mobile service providers are limited only by the banks’ willingness to engage. Location-based apps, vouchers and loyalty schemes, social sharing, digital ID and gamification services are all starting to establish commercial viability. As these services ‘prove themselves’, consumers will give their trust and loyalty to the brands offering them. We have already seen retailers coming into the picture with quite a force. Here in Finland the leading retailer has not only become a bank, but also an investment and insurance company. The recent experiment of Bitcoin will certainly not be the last; before we know it we will have ‘retailer money’ to use for our micro payments. What about Starbucks coins? Or 7-Eleven money?
Banks should play a pivotal role in providing a trusted and secure means of managing one’s personal finances in the easiest way possible. Given the pace of change and the strength of the new players entering this space, there’s a real danger that the consumer will become accustomed to managing their mobile purchases, payments and other financial affairs through other means.
Timing, now, is everything. The clock is ticking. Banks and financial institutions may not be in pole position in mobile services, but given their prowess in traditional financial services they are in a strong place on the grid. If they want a flying start, the first step is to recognize that the mobile channel is different to bygone technologies. To view it as just another channel through which to reach customers, is to miss the point entirely. Mobile is a new age in banking and offers huge commercial potential for banks that are willing to open the doors to new partnerships, new business models, and new ways of thinking.
This is the very topic that we, along with a host of high profile speakers, will address at MobeyDay 2013, 11 June in Barcelona. View the agenda here and join the discussion