No Signal: North American Wireless Retail Banking & Brokerage
Aggregate usage drops more than 20%; IT spending by more than two-thirds.
Those involved in the banking and brokerage industry already know that the initial wireless hype has not resulted in widespread adoption by financial institutions and customers. Celent research shows that not only have usage and spending rates peaked, but they have been steadily dropping over the last several quarters. In Celent’s latest report, No Signal: North American Wireless Retail Banking & brokerage, Celent offers the first comprehensive look at the current disappointing state of wireless retail banking and brokerage in the North American market.
Celent estimates that the total number of users actively conducting banking and brokerage transactions peaked around a quarter of a million in 2001, and has been in steady decline ever since. Spending rates by financial institutions, including banks, brokerage houses, and credit unions, on wireless technologies and related services actually peaked in the previous year, and has dropped more than two-thirds, causing many pure-play wireless vendors to radically shift their business models and target markets, or even go out of business altogether. In several cases, banks have stopped or indefinitely postponed their wireless projects. For all the promise of mobile technologies, only 40% of the leading US financial institutions currently provide retail mobile services today.
"Now that the competitive pressure to go wireless has been removed, financial institutions have the luxury of waiting for the technology to mature, and to devise innovative new services that truly leverage the unique capacities of wireless," says Michael Haney, a senior analyst at Celent and lead author of the report. Very few of the firms offering mobile services have created transactional solutions taking advantage of the distinctive characteristics of wireless solutions, namely extreme personalization, timing, and location. The Celent report highlights the current offerings from the leading North American institutions, and provides a brief comparison with offerings provided in international markets.
"The current recession, in conjunction with a nascent but immature technology, and a huge misunderstanding of consumer behavior and wants, has brought wireless banking and brokerage into a state of rapid decline," says Haney. The report examines these factors in more detail, and includes recommendations for how financial institutions should proceed with their wireless endeavors in the short term.