Mobile banking and financial services are being transformed by deregulation, globalization, and advancing technology. Banks now face increased competition, changing business structures, and higher customer expectations. Mobile devices allow convenient, low-cost access to banking services anywhere through mobile banking, payments, and finance applications. However, issues like network reliability, security, standards, and profitability present barriers that industry groups are working to address through cooperation on technologies and standards. Success will depend on satisfying customer needs for convenience, security, and choice while meeting business priorities for versatility, scalability, and low costs.

1. Mobile in Banking & Finance “What Make Sense and What Not” The 4th Mobiles Malaysia - 2005 4th February 2004, Kuala Lumpur

2. Introduction

6. Changing Face of Banking & Finance In recent years, the banking & financial services industry has been undergoing rapid changes, reflecting a number of underlying developments. Internet, wireless technology, and global straight-through processing have created a paradigm shift - from brick-and-mortar banks to banking virtually across time zones, geographical locations, access points and delivery channels. Customers are increasingly fickle and demanding. Unprecedented advances in technology are changing the rules of the game. New entrants to the industry are picking off profitable niche businesses. A rash of mergers & acquisitions will most probably evolve into massive global consolidation across the industry as a whole. And last not the least diminishing lines between banking and other financial services.

11. Technology Architecture Wide Area Network Local Area Network Mainframe/Parallel Simplex Application Architecture Branch Architecture Branch Banking ATM Call Centre POS ATM Technological Organization & Key Processes Call Centre Program & Project Mngt. POS Mobile Banking Change Mngt. Service Mngt. SWIFT/MERVA Recovery Mngt. Bank Quality Mngt. Wireless Security Mngt. Operations Mngt. Financial Technology

12. Disruptive Technologies Key technologies which completely changed Banking & Financial Services Industry are… Computerization & Automation Payment and Settlement Systems Electronic Funds Transfer (EFT) Real Time Gross Settlement System (RTGS) Centralized Funds Management System (CFMS) Structured Financial Messaging Solution (SFMS) Monitoring of Clearing Systems Imaging of Instruments Electronic Clearing Services And now “Mobile”

13. Branch 2.95 USD CallCenter 0.56 USD Internet 0.04 USD ATM 0.01 USD Mobile 0.004USD Delivery Channels Alternative electronic delivery channels provide a major means to cut costs. The proliferation of ATMs, plastic cards, PINs and a totally revised customer value system. The first renaissance was profound but took about 20 years to fully take hold. The second renaissance is driven by the Internet and is now in the early stages and migrating towards a more convenient wireless banking. The most striking difference between the two periods is the financial customer. In the '70s and '80s, financial customers were being led by the financial industry. Today, financial customers are waiting for the industry to catch up to their expectation levels. Average transaction cost

18. Issues in Mobile Internet

19. SMS SIM Tool kit WAP GPRS EDGE UMTS 1998 1999 2000 2001 2002 2003 Mobile Internet Service Evolution Multimedia service Video communication VOD AOD Game mCommerce Application Transaction-based service On-line betting E-Salary Advertising Auction Broking Shopping banking Content-based service Instant message Ring tone download Directory service Music download Ticket reservation information Wireless infrastructure technologies

22. Java, VOD/AOD multimedia technology

24. Low quality contents& service

25. Limited CP profit model

27. Low speed due to narrow bandwidth

29. Barriers to M-Commerce Technology Aspect Market Aspect Customer Dissatisfaction Security And Privacy Inconvenience According To Mobility Terminal User Interface Weak Profit Structure Compared To Infra Investment Reliability Of Network Poor Quality Of Content Poor Standardization Bandwidth High Price

31. Interoperability

32. Cell Range

34. Upgrade of Device

37. Memory

38. CPU

40. Network

41. Gateway Limiting Technological factors

42. Mobile Advantage : Some Attributes Mobility—users carry cell phones or other mobile devices Broad reach—people can be reached at any time Ubiquity—easier information access in real-time Convenience—devices that store data and have Internet, intranet, extranet connections Instant connectivity—easy and quick connection to Internet, intranets, other mobile devices, databases Personalization—preparation of information for individual consumers Localization of products and services—knowing where the user is located at any given time and match service to them

43. 2000 2003 2005 USA 20 120 224 Africa 4 34 78 Asia/Pacific 29 151 282 Western Europe 101 324 409 Rest of the World 7 64 159 World Total 184 737 1,187 People With Mobile Internet Access ( In Millions)‏

44. House Holds with Mobile/Pc/TV Mobile Subscribers TV Households Millions PCs

45. Seamless Communication 1,000 Wireline 800 (millions)‏ 600 Wireless 400 Internet 200 0 1996 1998 2000 2002 2004

47. Financial institutions are faced with technical barriers when developing mobile banking solutions, such as integrating:

50. Multimedia Messaging

51. Unified Messaging

52. E-mail

53. Chat Rooms

55. Games

56. Graphics

57. Video

59. Broking

60. Shopping

61. Auctions

62. Betting

63. Booking & Reservations

64. Mobile Wallet

66. City Guides

67. Directory Services

68. Maps

69. Traffic And Weather

70. Corporate Information

71. Market Data Marketing & Advertisement

73. Prepaid card

74. Air ticket

75. Bank card

76. Credit card

79. Shopping point card

80. ID card

82. Mobile Application: Financial Tool Mobile Banking Services Mobile Payment Services Mobile Financial Services

84. Dagens Industri - Receive Financial Data and Trade on Stockholm Exchange

90. Customer Proposition Convenience Ease of use & enrolment Speed Price Freedom to choose any bank, operator & handset Wide usability of mobile payment methods Security Protection against fraudsters and hackers Assurance of genuine payment destination Privacy Personal information remains confidential

92. Technical Considerations Independence of different players Banking relationship and operator relationship should be independent of each other - avoid walled gardens Handset independence No proprietary technologies - use of open standards Use of existing standards & systems Existing infrastructure must be utilized as much as possible Security: confidentiality, integrity, authentication, non-repudiation

93. Implementation Keys Cost factors Cost for a bank Cost for a merchant Consumer’s total cost Speed to market Availability of existing solutions Speed of roll-out

94. The Story so Far: Some Clicked some got Kicked

96. E*Trade less than 25,000 registered users

99. Wells Fargo - launched its mobile retail services in Jan 2001. Service required Web-ready phones with Sprint PCS service and Palm VII or i705 organizers. On September 1, 2002 Wells Fargo says it will discontinue its mobile banking service due to limited adoption.

103. Fit it in-wherever possible

104. Anticipate and avert problems

107. Features Merchant acceptances Not operator-specific Use of existing or planned infrastructure Set-up costs per consumer Customer enrolments Cost to implement (merchant)‏ Cost to implement (consumer)‏ Existing solution availability Support of multiple payment products Potential to add brand

108. Market Pull Business modelling Business analysis Concept definition of the product/service Technology Push Yes No Marketing plan Sustainable ok? Market analysis (interest, sustainability, competition, competitive advantage)‏ Service development and investment analysis Definition and use of market analysis Business plan Yes No Stop Sustainable ok? Business Plan - Tool Development Process for new Products & Services

112. High customer loyalty

113. New Technology Innovations

114. Efficient and effective operation know how

115. Close cooperation with partner

116. Capital capacity for investmentCore Competence

117. Thank You Presentation By:- Deepak Pareek Resource4Business +91 98982 69489 deepak@r4b.in