The integration of mobile and banking
25 March 2011
Banks, mobile network operators (MNO) and other payment service providers (PalPal, Boku) across the globe are exploring the integration of financial services and the mobile phone. Analogous to the Celent reports on the Taxonomy of Payments, I will be writing about the taxonomy of mobile banking. In broad brushstrokes I think of the following categories:
- Alerts: A one way text message likely configured on another channel.
- Alerts: A request response text message that can generate a transaction. e.g. Your balance is $95. Would you like to transfer from savings?
- Mobile banking: internet banking on your phone with an app or web browser
- Mobile proximity payments: typically using NFC, but also bar code, or camera for RDC.
- Mobile payments using the mobile network as the account holder, e.g. mPesa
- Mobile payments using mobile commerce via merchant.
- Mobile couponing: transmitting tokens of value to users.
I'd be interested in feedback on these categories and whether you think they should change. I encourage your comments. The integration of mobile and banking vary hugely. In Hong Kong, holders of the Octopus card, a transit payment card that is now accepted at many merchants in and near the metro stations, have taped their card to their mobile. It's a crude link between mobile and payments, but it is a first step. First Data has rolled out NFC tags that accomplish the same task. First Data provides the adhesive. On the other end of the scale is BankInter. This Spanish bank decided that mobile was so important it became a mobile virtual network operator (MVNO) BankInter Mobile. They buy network capacity from a MNO and have their own mobile service that they offer banking customers. Why do they do this? The bank wants to be thought of as on the leading edge of innovation. The phones you get from the bank, have banking software preloaded into the SIM. Banking is on your main phone menu. [caption id="attachment_2090" align="aligncenter" width="180" caption="Banking built into your phone"][/caption] Because your bank is your cell phone provider, they allow free mobile access to the bank. You don't pay SMS or data charges to use your BankInter Mobile phone to transaction with BankInter. This creates a level of integration between the bank and the customer other Spanish banks can't match. It also creates increased levels of customer satisfaction. BankInter Mobile customers have an 11% higher satisfaction score than BankInter's bank only customers. Please look for upcoming reports in The Taxonomy of Mobile Banking, and a case study on BankInter, as well as other reports on mobile banking.