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M-Commerce WorldSummit 2011<br />06-07 April, Singapore<br />

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Mobile Banking and Payments are Mainstream<br />

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Mobile Banking and Payments are Mainstream<br />Mobile Banking<br />Approximately 700-800 banks with mobile banking applications live in the marketplace right now.<br />Popular channels include: SMS, USSD, SIM Toolkit, Mobile Web/WAP, Apps, IVR, IVR call-back<br />Mobile Payments<br />Payment @ Distance Models: SMS, USSD, SIM Toolkit, direct mobile billing/PSP billing, direct operator billing, Mobile Web/WAP, Apps, Credit Card, online wallet systems, IVR, IVR call-back<br />Payment @ Proximity Models: (all of the above, plus…) NFC, RFID, Bluetooth, Zigbee, Wifi, IrDA, UWB, TransferJet, etc.<br />Combined market for all types of mobile payments is expected to reach more than $600B globally by 2013 (double of the current figure.<br />Mobile payment market for goods and services, excluding contactless NFC transactions and money transfers, is expected to exceed $300B globally by 2013.<br />Mobile Money<br />Dozens of GSM operators world-wide providing money transfer, payments and prepaid services.<br />Mobile Banking is growing in popularity in all markets<br />

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Rabobank Mobielbankieren : Usage in 2010<br />HUGE growth in mobilebankieren with the launch of “Apps” in place of WAP-based mobilebankieren<br />2006-2009 level<br />

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But what are we talking about?<br />IVR Banking & Payments<br />SMS Account Activity Alerts<br />Multi-ChannelBalance-Checking<br />Full-Service Mobile Banking<br />Remote Payments & Electronic Wallets<br />Mobile Contactless / Proximity Payments<br />“Mobile Money”<br />Mobile Remittances<br />???<br />= banks deploy<br />= public transportation-led models<br />= bank-led models<br />= cooperative models<br />= mobile operators deploy<br />= third-parties deploy<br />= mobile operator-led models<br />

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There are plenty of possibilities and combinations.<br />

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How do we characterise these guys?<br />

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How do we characterise these guys?<br />

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and of course, full-service mobile banking …<br />

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How do we characterise these guys?<br />

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Mobile Banking and Payments SWOT<br />Opportunities<br /><ul><li>Low internet penetration & high mobile penetration make great MB opportunity

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Other direct banks may not be highly active currently in MB

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MB applicable to almost all segments, and certainly the high-growth areas (current, checking, savings, under-banked, other regions)

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Bundled packages (e.g. incl. debit card) can be sold / distributed independent of branch locations </li></ul>Strengths<br /><ul><li>Low-cost development

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High scalability

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Revenues and cost-savings possible

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Innovative, cost-effective tool for bank customers

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Bank “on the go” reinforces virtualisation (alternate channels) strategies

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Great way to increase customer #s substantially

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MB works well as bundled addition to almost all account types</li></ul>Threats<br /><ul><li>Time-to-market critical, to maintain differentiation vs. other banks

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Unilateral initiatives may be popular if pushed strongly. Banks must stay ahead/in-line with (e.g.) bill payment partners </li></ul>Weaknesses<br /><ul><li>Bank / mobile operator product portfolio somewhat limited, thus limitations possible in MB functionality

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Limited transaction account capability, so barrier to scale on transactions, if billed; however, customers expect MB for free, so no charging likely possible

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Functionality of MB is extensive, but can never enable everything a bank would want to deliver</li></ul>= especially for developing markets<br />

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Why do it?<br />Churn reduction?<br />Money transfer revenues?<br />Lack of infrastructure? (power, connectivity, computers)<br />Because our competitors were doing it?<br />Convenience?<br />… Banking the Unbanked? Hmm.<br />Not everyone is a sustainable banked customer (banks do have a bottom line)<br />You probably do, but let’s look at why do you need a bank account …<br />Is “Mobile Money” banking the unbanked?<br />Is the “consumer marketing” predilection and ATL marketing messages we are so quick to champion as “changing the rules for access to finance” actually doing us good in the long run? <br />SUGGESTIONS FOR THE CONFERENCE:<br />1.) Let’s explore our real motivations & associated benefits.<br />2.) Let’s look at the real revenue potential for MFS in our markets.<br />

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How do we characterise these guys?<br />

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Some NFC Trials & Products: Ready for Prime Time?<br />= proposed for, or existing commercial roll-outs<br />Italy<br />France<br />USA<br />Netherlands<br />Czech Republic<br />Slovenia<br />France<br />Canada<br />United Kingdom<br />Georgia<br />South Korea<br />Japan<br />Netherlands<br />Netherlands<br />France<br />Poland<br />Switzerland<br />Spain<br />Guatemala<br />Spain<br />Turkey<br />Taiwan<br />Thailand<br />Singapore<br />Indonesia<br />Australia<br />Japan<br />Taiwan<br />Italy<br />Romania<br />Malaysia<br />Norway<br />

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Some NFC applications categories<br />1. Card Emulation Applications<br />replacing contact cards, magstripe, contact-chip cards, bar code products<br /><ul><li>payment cards

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loyalty, discount and membership cards

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access control (e.g. schools, office buildings, etc.)

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public transportation cards </li></ul>2. Elimination of Other Physical Goods <br />in lieu of paper tickets, coupons, etc.<br /><ul><li>coupons, in-store formulas and tours, bonuses, recommendations, “recycling receipts”, etc.

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redemptions of other received mobile coupons or loyalty points

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linked NFC applications between stores, locations and in time (“I was there and gathered points.”)

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event ticketing, flight ticketing

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tourist info., maps and recommendations</li></ul>3. New Business Models<br />enabling new end-user tools by providing NFC-aware applications and intelligence in the mobile phone<br /><ul><li>smart-posters delivering information, coupons or links to end-users at specific locations

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in-store shopping formulas (shopping lists, allergy warnings, recommendations for alt. products)

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asset management applications, logistics apps

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Location-based games using NFC

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NFC P2P applications</li></ul>4. Combinations w/Connectivity <br />1, 2 or 3 combined with a mobile application or online connectivity to all more value than a card transaction<br /><ul><li>triggers that provide value-added info. (e.g. membership levels, spending overview, etc.)

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combining loyalty and special offers at POS moment (e.g. receiving a coupon based on profile, purchase)

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combinations with other connected application features (shopping list + payment + loyalty)</li></li></ul><li>How do we characterise these guys?<br />

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Sea Change<br />Traditional Sea Changes (old school)<br />Fixed line telecommunications mobile<br />Usage of bank branches as cash in/out points ATMs and electronic funds transfer (EFT) <br />A new sea change? The “intelligence” in mobile phones<br />first generation mobile phones, address books, SIM card vs. handset – who owns the data? Nokia or SingTel?<br />App stores vs. operators? Will your bank issue your credit card in the future, or will T-Mobile or will the Apple Appstore?<br />NFC and the “secure element” – GSMA is pushing for SWP and the UICC as the SE choice, but with appstore dynamics and these consumer electronics manufacturers able to securely provision card personalisation information to NFC phones directly and world-wide, will the local MNOs be able to play a role? History says no, they will be always marginalised? <br />However, what of banks? How are national banking regulators going to deal with this?<br />SEA CHANGE<br />http://en.wikipedia.org/wiki/Sea_change_(transformation) <br />

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The Challenge: How to generate successful formulas?<br />Inexpensive, Standardised Savings Products<br />Currently has / uses another financial product<br />Redistribution Zone<br />Too poor<br />Target / Addressable Market<br />Excluded by design<br />Does not have access to the product<br />Agents, Branchless Banking, Mobile<br />Development Zone<br />Excluded by default<br />Does not have / use a financial product<br />Awareness & Usability Campaign<br />Does not want the product<br />Has access to the product, but does not use it<br />Enablement Zone<br />Potential users<br />Based on: http://www.bankablefrontier.com/assets/pdfs/access-frontier-as-tool.pdf<br />

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Have a great two days!<br />Dan Armstrong<br />Takashi Mobile | Financial Services<br />Rapenburgerplein 81<br />1011 VJ Amsterdam<br />The Netherlands<br />www.takashimobile.com<br />dan.armstrong@takashimobile.com<br />+31 652 085 071<br />