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BBVA Innovation Edge. Mobile Banking (English)

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What's going on around the world in mobile banking? Here, conceptual "pictures" of mobile banking practices around the world are presented, covering 12 countries in four continents. In this issue we …

What's going on around the world in mobile banking? Here, conceptual "pictures" of mobile banking practices around the world are presented, covering 12 countries in four continents. In this issue we sum up the best social business case study and we analyze future opportunities around it.

´BBVA InnovationEdge' is the first corporate multiplatform magazine focused on innovation. Each edition featuresarticles, analysis and huge information about a particular theme. The mainpurpose of the magazine is to express the new trends and the upcomingtechnologies that may impact to the financial industry.

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  • Korean mobile banking system is far beyond its future already, isnot it strong enough? can it be stronger in the future? so than with what improvement? how can it be more innovative.. where is conceptual 'picture'of mobile banking. NFC? voice recognition? harddd......
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  • 1. APRIL 2012 2Mobilebanking NEW EXPERIENCE IN THE POST PC ERA Mobile (R)evolution Opening the doors for our customers Global snapshots Forecasting for innovation Trending issues Technology trends Edge April 2012 | MOBILE BANKING Innovation page 1Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 2. Enabling anAnytime,AnywhereWorldNew innovations are providing novel ways to enable an“always on” society: mobile, social, and cloud technologiesare being interwoven into the fabric of everyday lifecreating new value or offering new efficiencies. Themobile handheld device is becoming the touchpoint fora wide array of products and services, as mobile devicesare the “go to” gadgets for most consumers. Businesseswant to be well-positioned to take advantage of theopportunities, including financial services companies. Innovation Edge April 2012 | MOBILE BANKING page 2Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 3. The first commercial mobile service was ing additional opportunities that mobile tech-launched 32 years ago in Japan, as NTT Do- nologies may offer, it’s clear that we are on ourCoMo began offering mobile communica- way to an anytime, anywhere economy. Withtions service to customers on December 1, the right business model, companies can1979. Today, we are on the cusp of pervasive, serve 6 billion customers using mobile tech-global connectivity, as mobile phones have nologies: for creating and maintaining “sticky”broken the 6 billion subscription mark in 2011 relationships with customers; and as the main(See the mobile penetration graphic below). channel for the delivery of the companies’ val-Although much of the technology “under the ue proposition in a customer-centric way.hood” has changed since the early days, in es- source: Communities Dominate Brands | Celebrating 30sence, mobile devices have transformed from Years of Mobile Phones, Thank You NTT of Japan. 2009.a simple phone to a personal computing and source: ITU (International Telecommunications Union) | Key Global Telecom Indicators for the World Tele-communication device in a handheld format. communication Service Sector. November 2011.While the world is still exploring and discover- Mobile penetration timeline2000 2005 2011719subscribersmobile million 2.21 billion mobile subscribers 6.16 billion mobile subscribersDEVELOPED COUNTRIES: DEVELOPED COUNTRIES: DEVELOPED COUNTRIES:469 million (65%) 990 million (45%) 1.64 billion (27%)DEVELOPING COUNTRIES DEVELOPING COUNTRIES DEVELOPING COUNTRIES250 million (35%) 1.22 billion (55%) 4.52 billion (73%) CONNECTIVITY mobile Mobile banking and other related products technologies. and services would not be possible if our (10’ tour) world wasn’t connected. Thanks to telecom- munication companies (referred to as Mobile Network Operators or MNOs), 6 billion peo- ple can potentially participate in the global Innovation Edge April 2012 | MOBILE BANKING page 3Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 4. economy with a mobile phone. That sounds that our parents and grandparents envisionlike great news. However, the connectivity when they think about a mobile phone. Thenproviders are not a happy bunch these days. there are the smart devices, the ones that areThey are upset because they feel as though leading the way in the post-PC era. The smartthey weren’t allowed to extract maximum devices are sub-divided into tablets (such as thevalue from their investments in infrastruc- iPad and Galaxy Tab), smartphones (iPhone,ture. While Amazon, Facebook, Google, and Blackberry, Galaxy S, etc.), and handhelds (iPoda whole lot more were striking gold in the Touch, PSP, DS3, etc.). Essentially, they are pow-Internet, the connectivity providers were left erful computers in an ultra-compact format. Atstanding practically empty handed, relegated the end of the day, the customer will access any-to the “pipes only” business with unflattering time, anywhere products and services via thesemargins. Put that together with the ongo- devices. The device manufacturers will spur newing shrinkage of their traditional voice busi- capabilities and, in turn, will spark new businessnesses (both fixed-line and mobile), one can cases, such as NFC technology (Google’s Walletsee why the telecommunication companies is an early example).are strongly motivated to explore only thosebusiness models that make sense for them OS PLATFORMSin the mobile space. The telecommunication The aforementioned devices need an OScompanies are extremely important, as they (Operating System) platform to run. Currentlyare providers of access and bandwidth. If the there are several OSs in the market, such asconnectivity providers can’t make compel- Apple’s iOS, Google’s Android, RIM’s Blackber-ling business cases for the forthcoming ma- ry OS, Nokia’s Symbian, Nokia/Microsoft’s Win-jor upgrades, such as LTE (Long Term Evo- dows Phone, Samsung’s Bada, etc. For smart-lution, a next generation technology which phones and smart devices, Android and iOSprovides sufficient bandwidth for 2-way are clearly leading the pack.streaming of high-quality live videos); the re-ality of anytime, anywhere business models APP STORE PLATFORMSmay be delayed. Although the most popular and best-known app store platforms are offered by OS plat-DEVICES form providers (for example, Apple offers theThere are two main types of devices: “dumb” and App Store for iOS and Google offers the An-smart. The “dumb” devices are also known as droid Market for Android OS), there are also“featured phones.” They are the familiar phones other app store platforms, such as the ones Innovation Edge April 2012 | MOBILE BANKING page 4Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 5. provided by some MNOs. Also, the concept Connectivityof app store platform is also evolving as we Wireless connection to the networkare noticing the emergence of enterprise KEY PLAYERS:apps and private apps store concepts. Mobile Network Operators (MNOs), such as Telefonica, ATT, Verizon, etcAPPS DevicesThe word, “Apps,” automatically provokes animage of these really cool buttons that we tap Handheld device manufacturerson our handheld devices to do things. Tech- KEY PLAYERS: Apple, Samsung, HTC, Nokia,nically, those apps are known as native apps. LG, Sony, Nintendo, etcThey are custom-built applications that run ona specific OS platform, often times written for OS platformsa specific device or set of devices. They offer a Operating System of smartphones,rich experience for the end-user as the device’s tablets, or other devicescapabilities are incorporated into the app, such KEY PLAYERS:as NFC, GPS, camera, etc. However, there is a Android, iOS, Blackberry, Windows phone, etcprice to pay for the richness: native apps mustbe developed per individual OS platform, which App Storecan quickly push up the costs of development. Virtual Store for app purchasesOn the other hand, there is another type of app KEY PLAYERS:(although lesser known): web-based apps. In Apple´s, Google´s Android, RIM´s App World, Nokia´s, etcessence, any “mobile enabled” site accessedvia a mobile browser can be considered a web- A Appsbased app. The advantage of this approach isthe “write once, publish many times” capability Native or web appsas web-based apps are device agnostic. Most KEY PLAYERS:people think that web-based apps are unflatter- App developersing but new developments such as HTML5 arequickly blurring the line between web-basedapps and native apps; and it may prove to be arobust and cost-efficient way to produce appsthat provide a rich user experience. Innovation Edge April 2012 | MOBILE BANKING page 5Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 6. Mobile (R)evolution Retail Banking industry analysts define Mobile Banking as “platforms that enable customers to access financial services.” There are three main technologies employed in Mobile Banking: SMS, Mobile Browser, and Custom Applications; and collectively, they are referred to as “Triple Play.” In terms of business models, Mobile Banking offers banks new ways to relate to customers (acquisition & retention; and up/cross-selling opportunities) and a new channel (which also happens to be the most cost effective). Depending on geography and footprint, Mobile Banking can be “additive” or “transformative”; in other words, “One of Many” or “One and Only”. source: Juniper Research. White Paper: Banking on Mobile. 2009. Innovation Edge April 2012 | MOBILE BANKING page 6Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 7. T echnically speaking, Mobile Banking is composed of three mobile technologies:SMS (Short Messaging System), Browsers,  Additive: Mobile Banking as One of Many. Mostly applicable in developed coun- tries or metropolitan areas in developingand Apps. Collectively, they are known as countries. Markets are highly competitive.triple play. These virtual customer relation- Generally, Mobile Banking is one of manyship touch-points and channels can be devel- channels and customer touchpoints andoped “by hand” by the bank or be purchased offers the highest convenience. Driven by“off the shelf” from Mobile Banking solutions Smartphone/Smart device adoption. Gen-providers. Most banks are going the “safe” erational issues are influential.route and adopting off the shelf solutions.In order to differentiate ourselves from our   Transformative: Mobile Banking as Onecompetitors, BBVA has chosen “the road less and Only. Mostly applicable in rural areastraveled” and we are doing it “by hand.” in developing countries and out of foot- print areas in developed countries. Mar-Functionally speaking, Mobile Banking is a kets need to be developed. Mobile Bank-customer relationship touchpoint and chan- ing enables (opens the doors to) previouslynel. In other words, it is one of many different unapproachable, new customer segmentstouchpoints and channels a bank may have. and offers access to banking products andHowever, it is the touchpoint and channel of services. Driven by inexpensive handsets.choice of an increasing number of retail bank- Generational issues are less influential.ing customers, especially Gen Y and Gen X.source: Business Model Generation source: BBVA | Money for All ( Internal Document). 2011. source: Juniper Research | White Paper: Bank- ing on the Mobile. January 2009.To clearly understand Mobile Banking and itsimplications, it may be best to think of it as“additive” or “transformative”. Innovation Edge April 2012 | MOBILE BANKING page 7Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 8. USE. Widespread in developing world, Mobile many alert applications and some payment options in developed world. banking PROS. Can be used across platformstechnologies and carriers, smart and dumb phones, easy to use and fairly safe. CONS. Not permitted in some regions, some security concerns, reduced functionality. SMS Mobile Custom browser aplication USE. Widespread in developed world, USE. Gaining significant traction in particulary within regional and 2nd the developed world, used for mobile tier banks, mobile browsers connect banking, coupons and location based mobile users to an augmented inter- services. net banking site. PROS. Provides a rich user experi- PROS. Familiar to internet banking ence. More secure and stable. Retains customers, simple integration with ex- loyalty and offers cross-selling isting internet platforms, works across opportunities. devices and MNOs. CONS. Integration issues required CONS. Fairly common practice (no competitive for each device. Must be installed by advantage). Takes a number of steps to log in. customer. Can be more expensive to Adaption to small screen not always done well. deploy. Innovation Edge April 2012 | MOBILE BANKING page 8 Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not be reproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 9. doors opening the for our customers Like many other industries, the retail financial services industry is in the midst of disruptive changes: mobile, social, and cloud technologies are reshaping industries and creating new ones. Something new seems to be on everybody’s minds: in the retail banking segment, the something new at the moment is Mobile Banking. Innovation Edge April 2012 | MOBILE BANKING page 9Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 10. A s part of an overall retail banking busi- ness model, Mobile Banking offers thestickiest touchpoint for banking customers the experience of many has been that the mobile channel is an extra cost rather than a cost reduction opportunity.” Overall, the “val-and most economical transactional cost for ue creation opportunity … is neutral at best.”banks. It also paves the way for new value source: EFMA & McKinsey. The State and Future of Mobile Banking. p. 7. October 2011.propositions and new banking models. How-ever, as in other industries, new entrants are However, for individual banks, the report goesaggressively entering into the retail bank- on to say that there are three major opportunitying business and posing new challenges for areas in Mobile Banking:bank executives as they explore and seekout the right business model.  Ultra-convienient and innovative banking.source: Bank Technology News | Banks Seek Sticky Relationshipsfrom Mobile Apps. February 2012.  Digital Commerce.  Disrupting new markets.According to the 2011 EFMA & McKinsey re-port, “The State and Future of Mobile Bank- Once the overall strategy for Mobile Bankinging,” mobile banking for the retail bank seg- is formulated, each bank will have to integratement (as a whole) is a “zero-sum” game: “new the “additive” Mobile Banking into its retailrevenues have been largely captured by non- banking business model. For banks aimingbanks, most players have yet to reflect the to be shapers, they will have to resolve theconvenience of mobile in their pricing, and “transformative” aspects of the model. Strategy defines Opportunities Digital Disrupting Ultra convenient x x Commerce new marketsFollower 110100111001100100010 Mobile friendly website and basic application 00111010101001001000 1010101001110101010010Leader Multichannel to deliver ultimate convenience 110100111001100100010 Drive sales via mobile 00111010101001001000 1010101001110101010010 Reduce cost to serveShaper Grounbreaking services 110100111001100100010 00111010101001001000 Active partnerships 1010101001110101010010 First mover in unbanked and new markets Innovation Edge April 2012 | MOBILE BANKING page 10Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 11. Call Centre $4.00 Additive Mobile Banking Additive Mobile Banking adds to the existing TRANSACTION COSTS BY business model has two main objectives: in- BANKING crease customer stickiness and reduce op- CHANNELBranch erating expenses by having a unified infra- $3.75 structure (for example, CCB). In general, the bank offers Mobile Banking as a complement with its other channels (please see the issue No 1 for more information regarding banking IVR channels). This model is prevalent in devel- $1.25 oped countries or metropolitan areas in de- veloping countries. ATM BENEFITS OF ADDITIVE MOBILE $0,85 BANKING INCLUDE: ONLINE  Migration of customer transaction $0,17 to the lowest cost channel. MOBILE $0,08  Adds to the customer-centric business model. source: Tower group. Fiserv. Mcom 2009  May help banks to generate new value propositions and revenue opportunities, such as mobile payments and cross-sell- ing/upselling opportunities. Innovation Edge April 2012 | MOBILE BANKING page 11Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 12. In general,transformative Transformativemobile banking Mobile Bankingare prevalentin rural areas Business Modelsin developingcountries and out Transformative Mobile Banking creates newof footprint value for banks by providing access to newareas in developed Customer Segments, thus offering bankscountries. new sources of revenues. In other words, they can help banks go where it couldn’t go with existing business models (BM). Transfor- mative Mobile Banking aims to develop new customers (unbanked and underbanked)BANK-LED MODEL through the lowest-cost transaction channel via a “branchless” strategy. This model is ei- ther led by a bank, an MNO, a 3rd party (for example, a mobile payment provider), or as a joint venture between two or more par- ties. The concept of ecosystem is important here, as the banks’ skill and experience inMNO-LED MODEL ecosystem management will likely become a key skill to operate these BMs effectively. In general, transformative mobile banking are prevalent in rural areas in developing coun- tries and out of footprint areas in developed countries.3RD PARTY-LED MODEL Thus far, three main Transformative Mobile Banking Business Models have emerged: Bank-led models, Mobile Network Operator (MNO)-led models, and 3rd party-led models. Innovation Edge April 2012 | MOBILE BANKING page 12Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 13. BANK-LED MODELThe banks offer strong capabilities in treasury, risk management, and fraud detection; and access to capital mar-kets and investment opportunities. However, in developing countries with a large share of population lackingfinancial sophistication, all the aforementioned strengths vanish. Traditional interest rate models do not applyto low-income customer base; the infrastructure is not cost effective; and unbanked customers are not alwaysaware (and may not even care) of the bank’s brand.FINO Bank (India) MCB Bank (Pakistan) Innovation Edge April 2012 | MOBILE BANKING page 13Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 14. MNO-LED MODELThe MNOs offers their large customer base a easy to use financial transaction services with their own distributionmodel. MNOs can leverage their customers’ need to buy airtime citizens in developing countries have and facilitateperson to person remittances and bill payments to increase their ARPU (average revenue per user). M-Pesa (Kenya-Tanzania) G-Cash (Philippines) Innovation Edge April 2012 | MOBILE BANKING page 14Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 15. 3RD PARTY-LED MODEL3rd parties, usually technologically driven companies, have strong technology capabilities. However, they lackthe bargaining power over larger banks and MNOs and certainly lacks the capillarity of an MNO’s distributionnetwork.Yellow Pepper (LatAm & Caribbean)Wizzit (South Africa) Innovation Edge April 2012 | MOBILE BANKING page 15Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 16. Half full or Half Empty? Mobile Banking possibly can add to or even transform the retail banking business model by offering anytime, anywhere access to financial products and services. As banks explore the opportunities and benefits, they must be wary of the complications that also come with them. Innovation Edge April 2012 | MOBILE BANKING page 16Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 17. W hen Mobile Banking technologies and its components are “put together” theright way, according to the EMFA & McKinseyreport, they can “collectively turn it into a uniquevalue proposition. … This effectively means thatbank customers can ‘meet’ their bank everyday, albeit remotely. These features plus a flexi- Some of the offers will result in the creation of new valueble cloud and ‘app’-based technology platform propositions for customersenables a more rapid development and inte- Percentage of banks currently offering these features:gration with third party products.” The benefits Information reportingof mobile devices are: 77% Alert messaging 73%  Anytime, anywhere availability Money transfers 64%  Unique IDs (and their use), specific Recurring bill payments 58% to each customer Check deposits  Simple to use, usually with rich User 55% p2p payments Experience 46%  Enablement of Location Bank location services 40% Based Services (LBS) Adding payees through a mobile application 35%  “Go to” devices for consumers Statementssource: EFMA and McKinsey & Co. | The State and Future of Mobile 34%Banking in Europe. October 2011. p. 5. Administrative functions 34% Funding cardsWith the aforementioned benefits of mobile 28% Mobile wallettechnologies, banks can offer value proposi- 27%tions. Personal financial management 25% Location based merchant offers or coupons 20% Click to call 18% NFC or proximity payments 17% Loyalty rewards 15% Coupon offers 12% Innovation Edge April 2012 | MOBILE BANKING page 17Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 18. RISKS Like all goo d things in to co m e h a life, succes nd in hand s seems and Mobile with challe Banking is nge s cording to no exceptio a recent su n. Ac- by KPMG re rvey condu garding mo c te d age; securit bile bankin y, technolo g u s- and regulat gy adoption ion are the , cos t , lenges face biggest cha d by mobile l- first two ch banking. Th allenges ar e s u m e r co n c e related to e rn s a n d t h co n - lenges are e latter two provider re chal- lated conce source: KP MG | Moneti rn s .place in the z ing mobile: payment va How banks lue chain. J are preserv uly 2011. p. ing their 11. Innovation Edge April 2012 | MOBILE BANKING page 18Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 19. Customer related wet towel around the warm fuzziness of mo- bile banking, stating that most mobile bankingconcerns “is it safe?” applications are used to check balances, rath-Security is the number one risk for banks and er than making payments (globally): “Nearlyis also a key barrier for consumer adoption. all the interactions on mobile so far have beenIt’s been noted by some industry observers checking balances, … “That doesn’t sound like athat the EFMA & McKinsey report fails to way to make money. ”Adding to this, regulation/mention security (at all). Nonetheless, both legislation is also perceived to shrink margins,mobile banking providers and customers making mobile banking a bitter pill to swallow. source: ITNews | Gartner casts shad-clearly place it at the top of the list. Mary Mo- ows on mobile banking. July 2011.nahan, adirector at Javelin Research, also ad-dresses the concern for security. She states, Specifically in developing markets, banks“The main reason consumers don’t move to need to also understand ecosystems andmobile banking is because of security con- manage it well to leverage the mobile bank-cerns, … Consumers want to know that their ing opportunities. Given this, inexperiencemobile interactions and transactions are en- and unclear management objectives relatedcrypted, and they want some assurance that to ecosystems may pose as risks or barriersthey will be reimbursed for losses associated for banks, such as not understanding thewith a mobile-banking breach.” importance of agents or the logic of MNOs’source: BankInfo Security | Mobile Banking: Consumer EducationNeeded. November 2011. business models.Also, customer education or awareness is a key In addition, especially in transformational mo-element for mass-adoption of mobile banking, bile banking, MNOs pose a risk in that theyboth in mature and emerging markets. need to find a business model that works. As mentioned earlier in the mobile technologyProvider related overview, while they can be valuable part- ners for mobile banking, they can place de-concerns: “Show me tours ahead by delaying anytime, anywherethe money!!!” capabilities.Gartner analyst, David Furlonger, during theBanktech Summit in Sydney wrapped a cold, Innovation Edge April 2012 | MOBILE BANKING page 19Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 20. globalsnapshots What´s going on around the world in mobile banking? the BBVA Conceptual “pictures” of experience mobile banking practices are presented, covering 12 countries in 4 continents. Mobile World Innovation Edge April 2012 | MOBILE BANKING page 20Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 21. GLOBAL SNAPSHOTS Mobile WorldACTIVOBANK (PORTUGAL) ANDMILLENIUM BCP (POLLAND)Recognized as the Best Mobile Bank-ing in Europe award by Global Fi-nance Magazine, ActivoBank and Mil- SCOTIABANK (CANADA)lenium BCP mobile banking solutions ScotiaBank is Canada’s most international bank, with global pres-are available via a native app for the ence across the Caribbian, Central America, Latin America, andAndroid and iOS devices, as well as Asia. ScotiaBank offers “triple play” mobile banking solutions:a light browser application for otherphones. The mobile banking solution “App Mobile Banking” allows customers to check accountsoffers customers standard banking (personal, small business, borrowing and investing), transfersolutions, such as account balance funds between Scotiabank accounts, pay bills, send and receiveand activity, payments, and card man- e-Transfers, send Western Union money transfers, and findagement. Additionally, the app offers nearby branch or ATM on smartphones (iOS and Android)branch and ATM location information, “Browser Mobile Banking” allows customers to check per-FX rates, information regarding up- sonal and small business accounts, pay bills, transfer fundscoming payments, simplified activa- between Scotiabank accounts, pay bills, send and receivetion, application update information, e-Transfers, send Western Union money transfers, andand other customer centric features. find nearby branch or ATM on WAP enabled phones. “Text Mobile Banking” allows customers check account bal- ances, view the last 5 transactions, and view credit card informa- tion (available credit, minimum payment, and due date) via SMS. Innovation Edge April 2012 | MOBILE BANKING page 21Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 22. GLOBAL SNAPSHOTS Mobile World CITI MOBILE – CITIBANK Citibank’s portfolio of Mobile & Tablet Banking so- lutions is comprised of “Citi Text” (SMS), “Citi Mo- bile for Smartphones” (Mobile Browser), “Citi Mo- bile Apps” (Custom Applications), and “Citi Tablet Apps (Custom Applications); essentially, a triple play. Citi’s solutions support iPod, iPhone, iPad, Android devices, and Kindle Fire. Mobile banking solutions include from making account balance inquiries, transaction history, pay bills and track payments, deposit checks (RDC), see recent activi- ties, transfer money between accounts, perform p2p payments, and track rewards programs.CHASE MOBILE (JP MORGAN CHASE)Chase offers the complete combo: text, browser,and app based mobile banking solutions. The appoffers the most functionalities; as it enables custom-ers to check account balances and transactionhistory, pay bills and credit cards, transfer moneybetween accounts, make p2p payments, and de-posit checks remotely (RDC). Chase supports theiOS, Android, Kindle Fire, and Blackberry mobileoperating systems. Furthermore, the app offersa comprehensive contact directory (with auto-dial) and search for the nearest branch or ATM. Innovation Edge April 2012 | MOBILE BANKING page 22Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 23. GLOBAL SNAPSHOTS Mobile WorldBANK OF AMERICAAs early as 2007, Bank of America (BofA) launched itsfirst mobile banking services. Today, there are more than9.5 million customers actively using mobile banking solu-tions; which includes a mobile website, text banking, andnative apps. Currently, BofA offers native apps for theiPhone, iPod Touch, iPad, Blackberry, Android, WindowsSmartphones, and (most recently) Kindle Fire operatingsystems (OS). Regardless of the OS, the BofA’s mobilebanking apps offers the same functionality, including ac-count overviews, bill pay, and fund transfers. According toBofA’s mobile channel executive, “customers can expectadditional features for its mobile apps in the coming year.” ICBC (CHINA) ICBC is the winner of two AppStore awards in China: Best iPhone Financial App of the Year and Best iPad Financial App of the Year. Aside from the standard fea- tures, such as account management, money transfer, and mobile phone recharge; it also offers value-added features, including foreign exchange, securities trading, investment funds services (it even makes recommenda- tions!!!), and allows users to buy and sell precious metals. Innovation Edge April 2012 | MOBILE BANKING page 23Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 24. FINO (INDIA)FINO is an Financial Inclusion Solutions and Services company; GLOBALwhich is promoted by public and private sector banks (including SNAPSHOTS Mobile Worldthe ICICI Bank), insurance companies, and the International FinanceCorporation. They are headquartered in Mumbai, India. FINO hastwo main lines of business: Technology products and business cor-respondence services. As a technology provider, the company of-fers solutions which enable financial inclusion, micro-finance, andremittances. As a business correspondence services company,FINO offers its agent network to perform the “last mile” services for Transformativefinancial services companies. bank-led modelsFINO employs over 2,500 employess and has a solid agent net-work (which is 20,000 strong), spread across 239 offices. Theagents are equipped with GPRS enabled handheld biometricauthentication which reads the customers’ smart card informa-tion. By offering “doorstep” banking and other financial serviceswith cost-effective transactional costs, FINO is currently serving35 million customers across 24 states. The company purportsthat their customer acquisition rate is around 50,000 per day. Innovation Edge April 2012 | MOBILE BANKING page 24Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 25. MCBANK (PAKISTAN)MCB Mobile was launched in 2009, which was a joint collabora- GLOBALtion between MCB Bank Limited and Fundamo. MCB Mobile was SNAPSHOTS Mobile Worlda pioneer by delivering a cost-effective banking solution outsideof their branch footprint area. MCB Mobile offers banking ser-vices to the underbanked and unbanked consumers who gen-erally have mobile phones. Customers of MCB Mobile can viewaccount balances, transaction history, pay bills, make payments,transfer funds between accounts, “top off” mobile phones. Transformative bank-led models Innovation Edge April 2012 | MOBILE BANKING page 25Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 26. M-PESA (KENIA-TANZANIA)Developed by Vodafone and deployed by their affiliate, Safari- GLOBALcom, in Kenya; m-Pesa has been a Cinderella success story for SNAPSHOTS Mobile World“transformative” mobile banking led by an MNO, surpassing the14 million customers since its launch in 2007. Not bad for 5years of work.M-Pesa offers a wide range of financial services, including view-ing and managing account(s), paying bills, making payments,buying airtime, making deposits and withdraws (branchless Transformativebanking), and transferring funds. Additionally, M-Pesa also al- MNO-led modelslows customer to buy tickets (m-ticketing) and pay school fees.All of the features of M-Pesa is made available via a featuredphone. Swipe to see mo Innovation Edge April 2012 | MOBILE BANKING page 26Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 27. G-CASH (PHILIPPINES)An internationally acclaimed micro payment service, G-Cash of- GLOBALfers banking services via SMS. G-Cash customers can transfer SNAPSHOTS Mobile Worldmoney, pay bills, buy airtime, and make payments via a networkof government agencies, utility companies, cooperatives, insur-ance companies, remittance companies, universities, and com-mercial establishments. Also, G-Cash customers can access theservice via basic mobile phones or the internet. Transformative MNO-led models Swipe to see mo Innovation Edge April 2012 | MOBILE BANKING page 27Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 28. YELLOW BANKFounded in 2004, the Miami-based Company is the recipient of GLOBALthe first IFC (World Bank) equity investment in a mobile financial SNAPSHOTS Mobile Worldnetwork company in the Americas. With 3.6 million unique us-ers in nine countries, processing over 18 million monthly trans-actions, the firm has been selected by more than 40 banks andstrategic partners in the region.Yellow Pepper’s most promising product is its mobile wallet, aninnovative bank account that the user manages via simple text Transformativemessages from their mobile phone, never having to set foot on 3rd party-leda bank branch. According to Fast Company the company in Hai- modelsti had over 110,000 wallets with Digicel, a mobile phone carrierthat owns 32 networks from the Caribbean to the Pacific withover 11 million customers and Scotia Bank Haiti. With the fastgrowth of the service mobile wallets could number in the mil-lions as the service is expanded to other parts of Latin Americaproviding much needed financial inclusion to the bottom of thepyramid. Swipe to see mo Innovation Edge April 2012 | MOBILE BANKING page 28Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 29. WIZZIT (SOUTH AFRICA)Wizzit offers a secure and efficient payment mechanism to the GLOBALunbanked and underbanked consumers in South Africa. The SNAPSHOTS Mobile Worldcompany offers mobile transactional services via a featuredphone (and now online). The services allows customers tomake p2p transfers, buy airtime, pay bills, make payments, andoffers a Maestro debit card. Wizzit was conceived in 2002 andlaunched in 2005. Along the way, the company had to discovercustomer needs, while making it affordable, and secure a bankpartner, a pretty impressive feat when considering that it is one Transformativeof “new to the world” innovation (no instructions were included). 3rd party-led models Swipe to see mo Innovation Edge April 2012 | MOBILE BANKING page 29Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 30. Generally, banks have limited choice when Mobile Banking Technology deploying mobile banking technologies: DIY Platforms (Do It Yourself), Off the Shelf Products, or a mix Providers of the two. Below, leading providers of OTSFUNDAMOSouth Africa-based Fundamo, acquired by Visa inJune 2011, is a leading platform provider of mobilefinancial services for mobile network operatorsand financial institutions in developing economies.Fundamo has more than 50 active mobile financialservices deployments across more than 40 coun-tries, including 27 countries in Africa, Asia and theMiddle East. Fundamo’s deployments currently havea base of more than five million registered subscrib-ers and the potential to reach more than 180 mil-lion consumers with mobile financial services.The Fundamo Enterprise Edition mobile servicesplatform includes Mobile Banking (which deliversAdditive Banking and is typically for financial institu-tions wishing to provide mobile banking as an addi-tional electronic channel to access existing accounts)and Mobile Wallet (which delivers TransformationalBanking, typically for mobile network operatorsand financial institutions who want to address newmarket segments with a differentiated offering). Innovation Edge April 2012 | MOBILE BANKING page 30Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 31. FINACLE (INFOSYS)Finacle solutions address the core banking, e-banking, mobile banking, Islamic banking, treasury,wealth management and CRM requirements ofretail, corporate and universal banks worldwide.Finacle mobile banking solution provides bank-ing services through SMS, GPRS/ 3G and USSD-enabled handsets, leveraging a single platform.The Mobile Banking and Payments module includesaccount management, deposits, funds transfer, billpayment, remote deposit capture, Forex, chequemanagement, ATM/ Branch locator, remittances,peer-to-peer payments, business-to-business pay-ments and contactless payments. The Mobile Fi-nancial Management module adds analysis tools,transaction tagging and product comparators. Valueadded services include mobile commerce, mobileticketing, mobile top-up for prepaid card, mobileadvertising, mobile remittances to charity causes, MONITISEmobile wallet, stock trading services, and mobile Monitise plc is a British technology company de-virtual financial advisory through video chat. livering mobile banking, payments and commerce solutions. As well as partnerships with most UK high street banks, Monitise provides services to over 250 financial institutions in the United States, has more than 6 million users worldwide, with live services in the UK, the US, India and Africa, and has a global partnership with Visa Inc to deliver its services to more than 1.9 billion card-holders. Monitise’s flagship product, Mobile Banking, enables a wide range of services including bank and credit card management, mobile top ups, transfers and payments. In addition, savings and lending prod- ucts can also be managed. It allows a variety of customer-configurable alerts, delivered either via SMS or smartphone ‘push’ notifications. It can also act as a secure interactive ‘CRM’ channel between the bank and their customers, enabling service and sales opportunities such as card activation, lost/ stolen card management and personalized offers. Innovation Edge April 2012 | MOBILE BANKING page 31Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 32. Amongst mobile banking pundits, custom-builtnative apps are the holy grail, which allows GLOBALbanks to leverage the unique properties of SNAPSHOTSeach device to provide the highest level of The BBVApersonalized, customer experience without experiencehaving to depend on 3rd party providers.BBVA’s award winning mobile banking appsenables anytime, anywhere banking for ourcustomers, making a perfect fit with ourCustomer Centric Bank (CCB) framework:either as part of an integrated multi-channelstrategy (Additive banking: One of Many) or aspart of a branchless banking strategy(Transformative: One and Only). Windows iPhone Android phone 7 BlackBerry iPad See the screenshots in the next pages Innovation Edge April 2012 | MOBILE BANKING page 32Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 33. GLOBAL SNAPSHOTS The BBVA experience iPad Innovation Edge April 2012 | MOBILE BANKING page 33Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 34. GLOBAL SNAPSHOTS The BBVA experience iPad Innovation Edge April 2012 | MOBILE BANKING page 34Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 35. GLOBAL SNAPSHOTS The BBVA experience iPad Innovation Edge April 2012 | MOBILE BANKING page 35Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 36. GLOBAL SNAPSHOTS The BBVA experience iPad Innovation Edge April 2012 | MOBILE BANKING page 36Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 37. GLOBAL SNAPSHOTS The BBVA experience iPhone Innovation Edge April 2012 | MOBILE BANKING page 37Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 38. GLOBAL SNAPSHOTS The BBVA experience Android Innovation Edge April 2012 | MOBILE BANKING page 38Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 39. Windows phone 7 Innovation Edge April 2012 | MOBILE BANKING page 39Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 40. Blackberry Innovation Edge April 2012 | MOBILE BANKING page 40Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 41. “Practice makes perfect,” so the saying goes; RECENT & FUTURE DEVELOPMENTSand BBVA has been rather busy perfecting its Along the way, BBVA picked many “kudos”mobile banking solutions. Backed by the CCB from users and we were awarded the “Appframework, BBVA provides customized native of the Week” honor for the week of Novem-apps for all major OS platforms for its custom- ber 3, 2011 in Apple’s App Store (Spain & Por-ers in developed markets. tugal). Also, BBVA published a geo-location app for the iPhone and Android OS, whichIn the US, the market for mobile banking is helps customers to find the nearest branchfiercely competitive. In order to position our- or an ATM.selves as market leaders, BBVA aggressivelypursued a strategy that provided the high- In Chile, Contigo BBVA app supports localest quality native apps for mobile devices, commerce deals: retail partners can useincluding smartphones and tablets (iPhones, the app to promote specific campaigns, re-Android devices, Blackberry, Windows Phone deem coupons, and offer proximity based7, iPhone, and the Blackberry Playbook). With advertising.the apps, customers can find see accountinformation, RDC (remote deposit capture), For the future, the BBVA Mobility Office is de-check accounts in real-time, make transfers, veloping other mobile banking functionalities,and pay bills. Please visit the “Trending Is- such as the integration of fidelity cards, e-cou-sues” section of this month’s issue of Innova- pons, and NFC payments, allowing BBVA totion Edge to see another BBVA first: opening offer new value propositions through the mo-an account with an app!!! bile channel.In Spain and Portugal, BBVA went from “zero” While most of our headlines related to mobileto “hero” in no time. Prior to February 2011, banking deal with the “Additive: One of Many”we had 0 (zero) native apps for mobile bank- concepts, BBVA has also made contributionsing and, just one year later, we now offer na- to “Transformative: One and Only” innova-tive mobile banking apps for 4 different OS tions. In Mexico, BBVA Bancomer introducedplatforms: iPhone, iPad, Android, and Black- “Cuenta Móvil Express” which utilizes theberry (with Microsoft Windows Mobile in the mobile phone number as the bank accountworks). Yes, a hero. number. Only proper identification is needed Innovation Edge April 2012 | MOBILE BANKING page 41Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 42. to open an account. Due to its simplicity andpracticalness, the launch of the product hasbeen a resounding success (especially withthe local media). In Peru, BBVA Continentallaunched native apps for the iPad and Black-berry in April 2011. Subsequently, a new ap-BBVA has also published a geo-location app for the iPhone andAndroid platforms that allowscustomers to find the nearestbranch or ATM.plication was released to the market whichfurther extends mobile banking capabilities.The launch of the pioneer service in Peru wasreceived very well. There are other initiativesin Chile (“Contigo Chile”) and Argentina (BBVABanco Francés) where the group introduceda location based offers where customers canfind the best local deals. Innovation Edge April 2012 | MOBILE BANKING page 42Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 43. Forecasting forInnovationA s we seen, Mobile Banking is fast becom- ing key component in a highly complexand competitive retail banking environment: BBVA is ready for the Mobile Banking (R)evolution and we are leading the way. Thenot only can it increase banks’ efficiency, it Customer Centric Bank (CCB)can also help banks create new value. As offers the overall framework ofsuch, Mobile Banking should be an integral the business model in whichpart of every bank’s retail banking businessmodel. To sum things up, we’ll start by re- Mobile Banking makes a perfectferring to the recent EFMA/McKinsey report, fit. For retail customers, our“The current state and future of mobile bank- award winning Mobile Bankinging in Europe” (2011): solutions offer BBVA customers anytime, anywhere banking; Mobile has the potential to revolution- paves the way for personalized ize the customer experience in personal location based offers; and opens financial services, with non-bank organiza- up possibilities for branchless tions often leading the way. banking, especially for customers in “out of footprint” Banks expect mobile banking to trans- markets. form the retail banking landscape, but ad- mit that they are not acting or investing ac- cordingly. Innovation Edge April 2012 | MOBILE BANKING page 43Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 44. The unique characteristics of the mo- So … few opportunities and many challenges bile device present three distinct areas for lie ahead for banks as they grapple with Mo- proposition’ and marketing innovation: ul- bile Banking. Given the highly competitive dy- tra convenient banking, digital commerce namics of the market, no one can blame the and the opening up of new markets and banks as they play the “wait-and-see” game segments. and seek to position themselves to be in the “leader” group without assuming too much The opportunities will create significant risk. However, while the banks are busy neu- scope for individual players to win (and tralizing incremental advantages amongst lose) market share – but the overall impact themselves, new competitors are entering on banking value creation will be at best the market with new business models that neutral. create and capture value with Mobile Bank- ing. What do you do when competitors com- Banks must shape, lead, or follow the mar- pete with business models? Mobile Banking ket, they will only succeed if they make a is transforming the retail banking landscape, conscious choice on which strategy to pur- all at once. sue and take concrete action accordingly.source: EFMA and McKinsey & Co. | The State and Future of MobileBanking in Europe. October 2011. p.1. Transformative Mobile Banking Transformative mobile banking, in general, is offered to the unbanked population in rural areas of develop- ing countries. As such, it is related to the financial inclusion of the “bottom of the pyramid” segment of the world’s population. Thus far, very few initiatives have successful (in Africa and Asia-Pacific). However, the successes are credited to very specific attributes and may not be “translated” well into other areas, such as South America. However, there are some key considerations that might be worth considering: Banks and Mobile Network Operators must work together as partners. Distribution networks must include external agents, who provide footprint and sig- nificantly reduce costs of operating and maintaining distribution. Educating and offering support to agents are critical success factors. Country specific regulatory concerns must be adequately addressed. In some re- gions of the world, the rules of the game are not always clear. 3rd party technology providers may greatly speed up the rollout of mobile banking solutions. Innovation Edge April 2012 | MOBILE BANKING page 44Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 45. In depth A list of links to other useful tools and resources that you may find useful as a supplement to the information offered on the ‘Simple Bank’ report.Books & publicationsBankable Frontier Associates , World Bank - Consultative Group to Assist the Poor (CGAP) | Branchless and Mobile BankingSolutions for the Poor: A Survey. January 2011.Centro de Innovación BBVA | Innovation Edge 1. January 2012.EFMA and McKinsey & Co. | The State and Future of Mobile Banking in Europe. October 2011.Federal Reserve Board of Philadelphia (Julia Cheney) | An Examination of Mobile Banking and Mobile Payments:Building Adoption as Experience Goods?IDC | Business Strategy: 2011 Consumer Preferences Survey Results - Focus on Mobile Banking. January 2012.Ignacio Mas and Colin Mayer (Said Business School) | Savings as Forward Payments: Innovations on Mobile MoneyPlatforms. September 2011.Javelin Research | 2012 Mobile Banking Vendor Scorecard: Mobile Banking Has Moved from a “Nice-to-Have” to a “MustHave” Channel. 2011.Juniper Research | White Paper: Banking on the Mobile. January 2009.KPMG | Monetizing mobile: How banks are preserving their place in the payment value chain. July 2011.Market Research | Mobile Banking: State of the Market and Future Opportunities. November 2011.Online Banking Report | Online & Mobile Banking Forecast: 2012 to 2021. January 2012.Vision Mobile | Mobile Platforms: The Clash of the Ecosystems. November 2011.Yankee Group | Telefónica Smells the Mobile Banking Coffee. February 2011. Innovation Edge April 2012 | MOBILE BANKING page 45Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 46. In depthOn the webAite Group | Fraud The Latest Threats. February 2012.Bank Technology News | Banks Seek Sticky Relationships from Mobile Apps. February 2012.BankInfo Security | Mobile Banking: Consumer Education Needed. November 2011.BankInfo Security | Mobile Banking: The New Risks. September 2011.Communities Dominate Brands | Celebrating 30 Years of Mobile Phones, Thank You NTT of Japan. 2009.GigaOM | The slow rise of the SoMoClo OS. February 2012.ITNews | Gartner casts shadows on mobile banking. July 2011.ITU (International Telecommunications Union) | Key Global Telecom Indicators for the World Telecommunication ServiceSector. November 2011.TNS | Mobile Life: Global Telecoms Insight. Innovation Edge April 2012 | MOBILE BANKING page 46Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 47. Summaries of the most relevant news of selected topics that have been published over the course of the month based on its relevance to the Banking industry.  The summaries were prepared by the editorial board.  Further information is made available for each given topic. Trending issues Technology trends In the following section, we outline the upcoming also technologies that will change everything, with in this predictions on what may come of them issue in financial industry. Innovation Edge April 2012 | MOBILE BANKING page 47Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 48. Trending issuesIn this section, readers will find summaries of the most relevant news of selected topics that have beenpublished over the course of the month based on its relevance to the Banking industry.  The summa-ries were prepared by the editorial board.  Further information is made available for each given topic.Core banking platforms App ecosystemHere you will find articles related to basic IT infrastructure which There are 5 main components in the current Apps Ecosystem:supports main banking processes, including technologies such as connectivity, devices, OS platforms, app platforms, and apps; alongSOA, WOA, digital platforms, etc. with related products and services providers (MEAPs, Mobility as a Service providers etc.).New formatsBased on design principles focused on customer insights, New New Gizmo eraformats offers retail banking customers more channels which A combination of Smart Sensors and Robotics will give rise to theare more granular and highly functional; a consistent, simple, and New Gizmo Era, ushering in a new age of efficiency and productivity.collaborative universal user interface; real-time intelligent processes; It is believed that by 2013 there will be a trillion interconnectedhighly personalized solutions; and is open to social networks and the devices with embedded Smart Sensors, and someweb. Examples of these new formats are provided here. with Robotics capabilities.Mobile banking New banking conceptsRelevant news about mobile banking platforms (which enable Banks around the world continuously explore new approachescustomers to access financial services, such as transfers, bill to strengthen customer relationships, both in the virtual and thepayments, balance information and investment options) can be physical worlds; including Virtual assistants, natural languagefound here. search tools, new marketing tools, different segmentation (children, gen Y,…) etc. This section will cover news along theseEnterprise 2.0 lines.Enterprise 2.0 is the integration of Web 2.0 technologies intobusiness processes. Information regarding implementations of Join & enjoyEnterprise 2.0, which generally involves a Entertainment is an integral part of our lives. Not only do we want tomix of social software and related collaborative technologies, can be live longer, but we also want a better, fuller life. In short, we want tofound here. enjoy our lives. Access to entertainment will become instantaneous instantaneous, both digitally and globally. Gamification could be oneMobile payments way to foster health education on prevention.Infotainment and socialThe process of using a hand-held device to pay for a product or networks are already an established trend, and news abound.service, either remotely or at a point-of-sale. Up to date information isprovided. Smart cities + urban mobility Cities are continually growing and urban life is changing. In aSocial Media Smart City, we find smart infrastructures with plenty of sensors,A group of Internet-based applications that build on the ideological allowing agents (citizens, governments, and companies) to makeand technological better decisions based on real time information. The agentsfoundations of Web 2.0 that allows the creation and exchange of not only use RTI, but also contribute towards it. As a key agent,user-generated content. Enabled by ubiquitously accessible and we will be exploring opportunities. An example of such changescalable communication techniques, social media is substantially is the urban transportation system. The current system ischanging communication between organizations and communities, unsustainable, and we foresee a future where we will be able toas well as individuals. design a transport that fits the needs of the city and its citizens. This is achieved through changing vehicles physically and usingDigital Marketing information, integrated as an additional piece of the city transport.Digital Marketing of brands use all forms of digital advertisingchannels to reach consumers, including social media, via a wide Healthrange of delivery mechanisms such as mobile phones, sms/ mms, Healthcare systems around the world will certainly godisplay / banner ads, etc. through a profound transformation. Financial pressures, along demographics and citizen expectations, will demand massiveCrowd finance adoption of new technologies to maximize efficiencies andA process where small amounts are money raised for a definite create new value. Read about it here,purpose, Crowd finance sources funds collectively from individuals.In other words, the money comes from a wide range of individualsand not from a single entity. Read more about it here. Innovation Edge April 2012 | MOBILE BANKING page 48Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 49. Trending issuesCore bankingplatform An iBank App Store?!?!New formats The concept of the app store will revolutionize core banking solutions, according to Don Free, a Research Director at Gartner.Mobile banking “Using an app store approach, you can break down the core banking system into smaller parts and drive significant innovations for the business. The app store approach allows you to accessEnterprise 2.0 components without developing them. You can now change business processes without involving IT.” With the growingMobile payments popularity of handheld computing, this approach may help banks find new revenue streams without straying too much away from core competencies.Social Media source: Don Free (Research Director) Gartner | February 2012Digital MarketingCrowd financeApp ecosystemNew Gizmo eraNew bankingconceptsJoin & enjoySmart cities +urban mobilityHealth Innovation Edge April 2012 | MOBILE BANKING page 49Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 50. Trending issuesCore bankingplatformNew formatsMobile bankingEnterprise 2.0Mobile paymentsSocial MediaDigital MarketingCrowd financeApp ecosystem “Branch Today, Gone Tomorrow: The Case for theNew Gizmo era Death of Branch Banking”New banking King sure knows how to share his ideas clearly and boldly:concepts all bank branches will die (soon), “Stop arguing that the branch is still critical to the average customer. Realize it is just one channel for them to choose from, and increasingly ofJoin & enjoy minor importance in their day-to-day banking relationship.” According to King, by 2015 the primary channel for day to daySmart cities + retail banking will be (in order of usage): Mobile, Web, ATM, Call Centers and Branchesurban mobility source: Brett King, “Branch Today, Gone Tomorrow” | January 2012Health Innovation Edge April 2012 | MOBILE BANKING page 50Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 51. Trending issuesCore bankingplatformNew formatsMobile bankingEnterprise 2.0Mobile payments Solving the Gen Y puzzle: BBVA Compass First toSocial Media Allow Mobile Enrollment from an iPhoneDigital Marketing Younger customers are going straight to mobile and they are bypassing online banking altogether. In aCrowd finance groundbreaking move, BBVA Compass’s new app allows customers to open a mobile banking accountApp ecosystem directly from their iPhone; providing a truly anytime, anywhere banking experience for customers. According to Alejandro Carriles, Executive VP andNew Gizmo era Director of Mobile and Online Strategies of BBVA Compass, “we think we’re creating a groundbreakingNew banking user experience.” At BBVA, mobile banking is notconcepts only an effective customer touchpoint but also a complete channel; accompanying clients during the each channel phase: awareness, evaluation, purchase,Join & enjoy delivery, and after sales. Source: Bank Technology News -Smart cities + American Banker | March 5, 2012urban mobilityHealth Innovation Edge April 2012 | MOBILE BANKING page 51Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 52. Trending issuesCore bankingplatformNew formatsMobile banking Be Social or Die!Enterprise 2.0 The lifespan of organizations today, according Dachis (a social business), is about 15 years. Social business drives adaptation by solving real business problems; by offering a more effective way ofMobile payments “doing talent management, supply chain collaboration, business agility, risk management, and more successful products to driving revenue.”Social Media During a recent summit, a social business expert shared his success factors for social:Digital Marketing Listen, analyze, and engage, continuously Integrate social into the flow of workCrowd finance Plan for change and the unexpected Turn on the network effectApp ecosystem Remove barriers to participate Enable everyone to participate.New Gizmo era Source: Forbes | March 8, 2012New bankingconceptsJoin & enjoySmart cities +urban mobilityHealth Innovation Edge April 2012 | MOBILE BANKING page 52Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 53. Trending issuesCore bankingplatformNew formatsMobile bankingEnterprise 2.0Mobile paymentsSocial MediaDigital Marketing Cha-Ching!!! There a whole lot of money in NFC!!!Crowd finance Can you say $75 billion US Dollars? That’s the size of the NFC market for mobile payments in 2015, according to Juniper Research.App ecosystem It’s no wonder big players are jumping into the pool for a chance to come out as a serious player in this seemingly lucrative market. Notable NFC projects include Google Wallet, Isis (a carrier-led jointNew Gizmo era venture between AT&T, T-Mobile and Verizon), and Visa PayWave..New banking Source: TechCrunch | March 8, 2012conceptsJoin & enjoySmart cities +urban mobilityHealth Innovation Edge April 2012 | MOBILE BANKING page 53Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 54. Trending issuesCore bankingplatformNew formatsMobile banking Move over CNN andEnterprise 2.0 make room for YouTube and VimeoMobile payments For adults under the age of 30, social media isSocial Media clearly the news source of choice, displacing traditional news media outlets. According to Pew Research, there is “striking evidence that youngDigital Marketing adults and their elders at times have different news agendas and learn about news in different ways. … The Internet was more than three times moreCrowd finance important as a news-learning platform for young adults than traditional media such as television,App ecosystem newspapers, and radio.” Since the release of “Kony 2012” video, there have been more than 110 million views on sites such as YouTube and Vimeo. Also,New Gizmo era social platforms, especially Twitter and Facebook, played critical roles in diffusing information aboutNew banking the Kony 2012 video.concepts Source: MSNBC | March 2012Join & enjoySmart cities +urban mobilityHealth Innovation Edge April 2012 | MOBILE BANKING page 54Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 55. Trending issuescore bankingplatformNew formats When you’re ready to go social,Mobile banking Where do you go? A recent survey indicates that social media marketing isEnterprise 2.0 expected to dominate this year: 81% of CMOs plan to associate revenues to investments in social media. But the question remains, whereMobile payments do you go? To help answer this question, CMO.com turned to 97th Floor, a SEO and social media firm. Here’s the top 10:Social Media Twitter THE CMO’S GUIDE TO:Digital Marketing Facebook THE SOCIAL LANDSCAPE 2010 IS THE YEAR CMOS WILL HEAVILY INVEST IN SOCIAL MEDIA. HERE’S A GUID HELP YOU UNDERSTAND HOW BEST TO LEVERAGE MAJOR SOCIAL MEDIA S GOOD! OK. BAD! flickr CUSTOMER BRAND TRAFFIC TO WEBSITE COMMUNICATION EXPOSURE YOUR SITE SEOCrowd finance LinkedIn A microblogging site that enables users to send ‘tweets’, or Use keyword search monitor- ing through a program such as Hootsuite, TwitJump or Radian 6 to track what people Offers unique opportunities for Web site integration and to engage with customers in a viral way, helping your Potential can be large, but promotion is an art form -- promote your brand too heav- ily and turn off followers, yet Value to your site limited, but twee high in search res for ranking your and breaking new YouTube are saying about you and your company stand out from the dont promote enough and shortened URLs a messages of 140 receive little attention. characters or less competitors. masses. benefit.App ecosystem Facebook brand pages are great Traffic is decent and on the Great for engaging people for brand exposure. Jump-start rise thanks to share buttons Little to no valu Digg who like your brand, want your brand exposure through and counters, but dont blogs picking up A social networking to share their opinions, and the ad platform, or hire a Face- expect massive numbers of your posted link site where users participate in giveaways and book consultant to help you unique visitors to go to your the time expend can add friend, send contests. messsages and build grow your brand presence. site. their own profile StumbleUpon Unnecessary to spend too much time on this, though Participation in industry-related groups might get your photos, Even if you get tens of thousands of visits to a photo Heavily indexed engines, passingNew Gizmo era An image and video properly tagged photosets and thus your brand, viewed by hosting website hyperlinked with your URL, ranks. Also helps of company events can help people with similar interests, click-through rates are among Yahoo where community higher in Google members can share customers put a face on the but numbers will be small. the lowest around. building inbound and comment on team behind your brand. media Effective for personal branding Not the primary focus, but cus- Very high page r Reddit and demonstrating your organi- Unlikely to drive any significant tomer engagement opportuni- guaranteed on t zations professional prowess. traffic to your site, though you ties are possible by answering of search result A social networking Encouraging employees to never know who those few site for business industry-related questions, for your compan maintain complete profiles to visits might be from -- perhaps individual emploNew banking professionals establishing yourself as an strengthen your teams reputa- a potential client or customer. but thats about expert in the field. tion is advisable. Del.icio.us Whether you seek to entertain, inform, or both, video is a One of the most powerful brand- Traffic goes to the videos. If Very good for buconcepts ing tools on the Web when you the goal is to get traffic back to powerful channel for quickly back to your site build your channel, promote via your site, then add a hyperlink A video sharing engaging your customers, rank high. Also a high-traffic sites, and brand your in the video description, but website where users responding to complaints, and dont expect traffic to correlate way for your bran can share and upload demonstrating your social- videos. exposure. closely with video views. Source: CMO | February 10, 2012 new videos media savvy. Opportunities are huge, espe- The grandfather of traffic Very good becaus Not the sites primary strength, spikes, so become active in the though occasionally an objec- cially for promoting objective story doesnt bec community or find someone who then your page w press/blog coverage of your tive third-party writeup as a PR is. If your site is corporate, then indexed quickly. I brand. Make sure content effort, perhaps to counteract consider launching an industryJoin & enjoy A social news site does become pop doesnt read like an ad, or your blog on a noncommercial Web where users can bad press or customer senti- likely the best sit discover and share site might be banned for being domain to establish yourself as a ment, can be promoted. overly commercial. getting linked to content thought leader. Paid StumbleUpon traffic can A paid campaign can be good Enables a diverse range of Very good if you be a very targeted method of for brand awareness, especially people to discover your it to the top pag communicating, but whether following efforts to get free, content and share links via the StumbledUpons organic traffic to your home su.pr link shortener on Twitter. base enables ma A social news youre reaching your existing page. Targeting is very accurate, Tagging helps, but you dont customers is purely random find and link to community where but keep in mind youre paying want the same people repeat- members discover and costly to determine. For vanity name 5 cents per visit ($50 CPM). edly giving you a thumbs-up. profile pages ranSmart cities + and share webpages Noncommercial sites are heavily If you make the Editor-driven and moderated, Get in the moderators good Yahoo, then you favored by moderators, sourban mobility so this shouldnt be your graces, and you have a chance of backlinks, but A social news site business sites should not waste to hit absolutely massive num- where community primary focus. time in this uphill battle. unlikely unless y members can vote bers -- but its a long shot. established bran on stories The community is fickle, and If Reddit loves you, then traffic Unless youre a bacon company, anything perceived as spam is often right up there with Digg Make the front dont try to build your brand will be destroyed. However, and StumbleUpon. Be careful: many reputable here. Youll end up banned from A social news look deep into the categorized Push too hard for votes from up your story, ge the site without even realizing able backlinks an community where "subreddits" to unearth small your friends and risk being what happened.Health users post links to niche communities, and you banned, but dont push at all trust to your site the site’s home page could get valuable feedback. and youll wind up with nothing. Pretty much ever Site is intended for people to Not enough ongoing brand rec- the site helps: Wh Not as big as it used to be, but is bookmarked, it bookmark content. You can ognition to make it worth your informative, massive reference A social bookmark- back to your site. ing site used for see what people tag with your while unless you want to be pieces bookmarked for later on the front page sharing and storing brand name, but communica- known for providing reference use can net you a few thousand big category tag p bookmarked pages tion with them is nonexistent. content for later retrieval. recurring monthly visitors. trust, which will p your URL. Innovation Edge April 2012 | MOBILE BANKING page 55Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 56. Trending issuesCore bankingplatformNew formats Crowd sourcing goesMobile banking “plastic”!?!? MasterCard and Barclays US join forces toEnterprise 2.0 create “Barclaycard Ring,” the world’s first crowd-sourced credit card. The duo claims that it marks the herald of a new era in e-commerceMobile payments and finance: card customers can negociate interest rates, rewards, and fees. The card offers an 8% interest rate with no annual or balanceSocial Media transfer fees. Additionally, the crowd will have visibility into the card’s financial picture, influence management decisions, and have anDigital Marketing opportunity to share revenues generated by the card. The Barclaycard Ring will be available to consumers this spring.Crowd finance Source: Silicon Republic. December 30, 2011App ecosystemNew Gizmo eraNew bankingconceptsJoin & enjoySmart cities +urban mobilityHealth Innovation Edge April 2012 | MOBILE BANKING page 56Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 57. Trending issuesCore bankingplatform Facebook as an app ecosystemNew formats platform provider?Mobile banking Facebook, during Mobile World Congress, touted their Pay Dialog mobile SDK; which allows “mobile operators to work with app developers to integrate operator billing into their apps.” FacebookEnterprise 2.0 already has partnerships with several telecommunications giants, such as AT&T, Deutsche Telecom, Orange, Telefonica, T-Mobile USA, Verizon, Vodafone, KDDI, SoftBank Mobile, etc. All this is part ofMobile payments Facebook’s plan to “push forward its Open Graph, drawing users away from locked-down platforms like iOS and giving them theSocial Media opportunity to download apps that run freely on the Web and operate on any platform.”Digital Marketing source: The Next Web- Social Media | February 27, 2012Crowd financeApp ecosystemNew Gizmo eraNew bankingconceptsJoin & enjoySmart cities +urban mobilityHealth Innovation Edge April 2012 | MOBILE BANKING page 57Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 58. Trending issuesCore bankingplatformNew formatsMobile banking 3 million iPads sold in 3 daysEnterprise 2.0 The first iPad took 28 days to sell 1 million units; the 2nd iPad sold 1 million during the first weekend; and the new iPad is off to a strong start: 3 million iPads sold in 3 days. At theMobile payments flagship store in 5th Avenue (NY), 13,000 units were sold in the first 12 hours! That’s about 1,100 iPads per hour or 18 units per minute. That translates into revenues of $10,700Social Media per minute at that location..Digital Marketing Source: Apple | March 19, 2012 and Motley Fool | March 21, 2012Crowd financeApp ecosystemNew Gizmo eraNew bankingconceptsJoin & enjoySmart cities +urban mobilityHealth Innovation Edge April 2012 | MOBILE BANKING page 58Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 59. Trending issuesCore bankingplatformNew formatsMobile bankingEnterprise 2.0Mobile paymentsSocial MediaDigital MarketingCrowd finance ATM is still going strongApp ecosystem (& will get stronger)New Gizmo era ATMs are poised for future growth as there will be more transaction per person, more cash in circulation, and less branches (more ATMs); which would result in moreNew banking total ATM revenue and profit for the banks. Specifically,concepts according the ATM Future Tretnds Report 2012, by 2015, ATM transactions are expected to grow 66%.Join & enjoy Source: ATM Marketplace | March 1, 2012Smart cities +urban mobilityHealth Innovation Edge April 2012 | MOBILE BANKING page 59Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 60. Trending issuesCore bankingplatformNew formatsMobile banking 21st century culture: Games as ArtEnterprise 2.0 They’ve come a long way from the earlyMobile payments days of video games (in the late 1970s), where a rudimentarySocial Media “two-dimensional ball that (were) batted backDigital Marketing and forth” provided hours of fun for time- wasting teens. OnCrowd finance March 16, 2012, the Smithsonian AmericanApp ecosystem Art Museum inaugurated the “The Art of Video Games,” the first major exhibition dedicated to this new art form. According to the museum’s curator, Chris Melissinos (formerly the Chief Gaming Officer at SunNew Gizmo era Microsystems) “I believe it’s society’s duty and responsibility to protect and nurture this medium because it will be the next great medium for expression, thought, poetry and art forgenerations to come. That’sNew banking incredibly exciting, and this is just one small step toward that goal.”concepts Source: BBC | March 16, 2012Join & enjoySmart cities +urban mobilityHealth Innovation Edge April 2012 | MOBILE BANKING page 60Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 61. Trending issuesCore bankingplatformNew formats The End of Parking Woes?Mobile banking It’s the reality of urban life: 33% of the cars on the road areEnterprise 2.0 circling around city blocks, much like vultures, hoping to find parking space. Aside from the stress, the situation also adds to city pollution, trafficMobile payments congestion, and accidents. Future promise: a smart city with networked sensors installed inSocial Media a city’s infrastructure helping drivers find the parking space,Digital Marketing faster and smarter. A pilot project is underway in San Francisco, California which hasCrowd finance magnetic sensors installed in street parking spaces, garages,App ecosystem and smart parking meters; the parking information is made available to the public via an appNew Gizmo era on smartphones. Source: MIT Technology Review |New banking January 25, 2012conceptsJoin & enjoySmart cities +urban mobilityHealth Innovation Edge April 2012 | MOBILE BANKING page 61Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 62. Trending issuesCore bankingplatform Socio-Economic Impact of mHealthNew formats Telenor commissioned BCG to analyze the possible socio-economic impact of mHealth.Mobile banking Key findings of the study include:Enterprise 2.0  Everyone (almost everyone) will have access to a mobile infrastructure: 7.4 billion mobile subscriptions projectedMobile payments by 2015.  The technology and bandwidth isSocial Media sufficient, both simple and smart phones  There are more than 500 mobile healthDigital Marketing projects being executed globally  Elderly care costs can be reduced byCrowd finance 25% with mobile health projects  Maternal and perinatal mortality can be reduced by 30%App ecosystem  Twice as many rural patients can be reached by a doctorNew Gizmo era  Tuberculosis treatment compliance can be improved by 30-70%New banking  By 2015, 30% of smartphone users areconcepts likely to use “wellness apps”  Data collection and related costs can beJoin & enjoy reduced by 24%  Among MDs, smartphone is theSmart cities + most popular technology since theurban mobility stethoscope Source: BCG/Telenor | February 28, 2012Health Innovation Edge April 2012 | MOBILE BANKING page 62Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 63. Technology trendsThe following section outlines the upcoming technologies that will change everything,with predictions on what may come of them in financial industry. Someone Is Replaying Inside: SIRI The dream of any artificial intelligence-based application is to under- stand and predict accurately the needs and preferences of the user, transforming intent into actions to perform tasks. Researchers and companies working on personalization technologies have been trying to address this issue for more than ten years. In order to do that, the sys- tem first would have to obtain information about the user, get behavior patterns and learn what will be the next best action that the user would need or would want to do. Sounds good, but we are still quite far from it. gS o far we have Siri, the digital personal assistant that Apple has included in itsiPhone 4S launched on fall 2011. Siri performsactions under user requests, interacting byusing voice recognition and natural language.It lets the user to ask questions, obtain infor-mation and perform actions using the nativefunctionalities of the phone, that is send mails,make calls, check, schedule and change ap-pointments in the agenda, etc. Innovation Edge April 2012 | MOBILE BANKING page 63Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 64. A LITTLE HISTORY... their preferences and their frequent actions,Siri appeared as a simple iPhone app in 2010. adapting its response to them.At that time there were some other similar butless advanced apps, like MyBantu or Zokem, BUT WHY IS (OR COULD BE) SIRIalso supposed to be personal assistants and SO IMPORTANT?recommendation services, but they finally Because it could be the top of the iceberg ofcame to nothing. However SIRI was a big thing. the future of the devices and its applicationsIt is based on the DARPA funded SRI research based on AI.project CALO (Cognitive Assistant that Learnsand Organizes), the largest Artificial Intelli- The phone becomes sensor of the usersgence project in U.S. history. With $150 million and their environment: it utilizes informationof DARPA investment, the CALO Project was available on the user’s calendar, email sys-focused on helping individuals manage an tem, address book, social network, enhancesextensive amount of task related information(specifically emails) in an office assistant andgenerate actionable tasks for situations suchas forming ad-hoc teams in military scenarios.When it was an app, it had also more than 30different partners whose APIs can plug intowhen answering a request. These includeservices like OpenTable, MovieTickets.com,Eventful, StubHub, Taxi Magic, Rotten Toma-tos, Bing, Google Maps and Yelp. Now, as partof the operational system of the iPhone 4S,it has acces only to Yelp, Wolfram Alfa, andGoogle. However, it is integrated with email,calls, sms, calendar, it learns from user ac-tions: it may know for example who is impor-tant for you without need to tell, based onyour actions with the phone. Siri gets betterthe more you use it, learning from the user, Innovation Edge April 2012 | MOBILE BANKING page 64Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 65. it with geo-location based activity trackingand information declared explicitly by theuser, and generates context dependent userprofiles. At some point, Siri will have accessto databases and will be able to search andobtain external information of third partiesto enrich the context, and delegate to otherapps to deliver services and perform tasks.IN THESE ARE APPLE’S PLANS FOR SIRI,WHAT IS THE CHALLENGE?As always, the challenge is the combinationof big-data gathering and its analysis to pre-dict the activity the user to deliver contextand relevant information, the improvementof the semantic intent understanding, andthe increase of the capability of apps anddevices to talk to each other and talk backto the user.Now Apple has given the first step to de-liver it to consumers, who’s next, Microsoft?Google? Innovation Edge April 2012 | MOBILE BANKING page 65Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 66. Work Smarter, (Not Harder) with Business Intelligence Gartner defines Business Intelligence as, “an umbrella term that includes the applications, infrastructure and tools, and best practices that enable access to and analysis of informa- tion to improve and optimize business deci- sions and performance.”(1) Or simply, it can be expressed as: Information Management + Analytics = Business Intelligence. With Social, Mobile, Cloud, and Big Data coming, g companies should really think about BI. The latest information related to Business In- telligence keeps this macro trend as a priority Your for BBVA for the medium term time frame. BI business initiatives can reduce cost, increase the qual- ity and availability of information and analy- sis, and help user make better decisions. Business Intelligence Corporate use of BI includes: financial analy- Your Information sis, business activity monitoring, forecasting,management technology sales tracking, customer relationship man- agement, operational process optimization, competitive analysis, corporate governance, product marketing, risk management, prod- uct development, and fraud detection. The Data Warehousing Institute says that using Innovation Edge April 2012 | MOBILE BANKING page 66 Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not be reproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 67. mobile BI improves customer sales, service and support in a 65% and increase customer self-service benefits in 45%. Despite the challenging environment, BI is expected to continue to grow during 2012. International Data Corporation (IDC) states that “the worldwide business intelligence tools market generated more than $4 billion in revenues in the second half of 2010”. Driv- en my market demands, “the BI platform mar-The proliferation of ket’s compound annual growth rate (CAGR) through 2015 is expected to be 8.1%,” accord-tablets and mobile ing to Gartner analyst James Richardson.devices will lead tothe development of The future direction of BI is heading towards social, mobile, and cloud. For example, the pro-mobile BI. liferation of tablets and mobile devices will lead to the development of mobile BI. According to the market study of, seniors managers using Dresner Advisory Services mobile BI exceed 82%, and middle managers 55%. Innovation Edge April 2012 | MOBILE BANKING page 67Disclaimer: This is confidential information for internal use only. This information must not be disclosed to any third party, must not be used for advertising and/or promotion activities and not bereproduced in whole or part unless authorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012
  • 68. BBVA Innovation Edge is the result of a collaborative work done by all the people who are involved in innovation at BBVA Group. CONTRIBUTORS TO THIS ISSUE Reyes Bolumar Fernando Esteve Antonio García Eugenio García Rafael Hernández Miguel Angel Iñesta Manuel Jimenez Carmen López Luz Martin Samuel Martín Manolo Moure Marcos Pastor Gerardo Ponte Jay Reinemann Alicia Sánchez Marcelo Soria Maria Tena Luis Uguina Jose Manuel Villa Gustavo Vinacua Sang Gu “Phil” YimPublished byDisclaimer: This is confidential information for internal use only. This information must not be disclosed to any third Produced byparty, must not be used for advertising and/or promotion activities and not be reproduced in whole or part unless Prodigioso Volcánauthorized in writing by an authorized representative of BBVA group. © copyright BBVA 2012 (www.prodigiosovolcan.com)

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