The vast range and diversity of available mobile offerings can be mind boggling. Having an agreed common language and a clear taxonomy is critical for financial institutions developing a mobile strategy.

Mobile phones, and especially smartphones, can be so much more than voice communication devices. Many of those applications are not particularly relevant for a financial institution deciding its mobile strategy. However, Celent believes that financial institutions should care about a mobile phone being used in the following five ways:

1. As a media channel.
2. As a channel for banking (account) services--mobile banking.
3. As a traditional payment instrument acceptance device--mobile point of sale (POS)
4. As a payment initiation or approval device, enabling mobile payments. These include money transfer
   services, mobile commerce, and retail point of sale mobile payments.
5. As a repository of “wallet services” (non-payment)

This report, Making Sense of Mobile Financial Services, proposes a taxonomy for mobile financial services to provide a structured way to analyse various services already in existence as well as those being launched in the market. It illustrates the taxonomy with examples from the market. It also demonstrates that the challenges for a financial institution differ in different categories of mobile financial ser- vices. Finally, it discusses the challenges of sizing the mobile financial services market and makes recommendations of how to approach the challenge.

“The diversity of mobile offerings available can blur the lines across categories,” says Bart Narter, Senior Vice President of Celent’s Banking Group and coauthor of the report. “However, without a clear taxonomy as a starting point and an understanding of where overlaps may occur, making sense of any new announcement becomes particularly challenging.”

“Mobile is also blurring the lines between the physical and online worlds and between various payment transactions, which isn’t making the job of sizing the mobile market any easier,” adds Zilvinas Bareisis, Senior Analyst with Celent’s Banking Group and coauthor of the report. “Any mobile market sizing initiative needs to be a carefully tailored effort designed to achieve specific objectives of a particular organization.”