4. 54 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets
43 Digital Money Sweeps Mexico And Brazil
As the mobile money phenomenon sweeps across Brazil and Mexico banks
aren't the only ones lining up to transform financial services.
By Charmaine Oak, Practice Lead, Digital Money, Shift Thought
50 PART 2: BANKING IN DEVELOPED MARKETS: TAKING CHARGE
OF CHANGE
52 Banks: Evolve, Innovate And Embrace ‘True Multichannel’, Or Be Left Behind
Banks must generate customer-centric insights through advanced analytics
that will allow them to enhance products, personalize service bundles —
or make way for companies that will.
By Simon Paris, Global Head of Financial Services Industries, SAP, and
Matthew Talbot, Senior Vice President, Mobile Commerce, SAP
59 Removing Friction To Build Relationships
At RBS Citizens the goal is to get customers in and out fast — and success
is all about delivering financial services that respect customers' time.
By Scott Manley, SVP, Head of Product – Delivery Channel,
Treasury Solutions, RBS Citizens
64 The Convergence Of Mobile And Online Banking
This is the future of electronic banking that requires a common middle layer
with business logic and messaging infrastructure.
By Jacob Jegher, Research Director, Celent
69 Breaking The Mobile Banking Mold
Organizations must be agile. To keep pace First Tennessee Bank delivers financial
services that empower executives to act fast and conduct transactions on the move.
By TaylorJ. Vaughan, Director of Treasury Management Services, First Tennessee Bank
75 6 Ways To Wring More Value Out Of Multi-Channel Banking
The pressure is now on banks to help their customers make smarter decisions
based on increased visibility into all their accounts as they save, spend and shop.
By Davor Ebling, Director, Mobile Commerce Solutions, SAP
82 PART 3: BANKING IN DEVELOPING MARKETS: PLOTTING THE COURSE
FOR FINANCIAL INCLUSION AND FINANCIAL SUCCESS
84 Advancing New Frontiers For Financial Inclusion
Pakistan is one of the fastest growing branchless banking markets in the
world. AbacusConsulting recounts recent developments in mobile banking
and the impact on the local landscape.
By Abbas Khan, Partner, AbacusConsulting
92 Accelerating Mobile Banking Through Collaboration
Malaysian Central Bank is on a mission to transition Malaysia to a high value-added,
high-income economy by 2020. A big part of the plan involves the widespread and
rapid migration to electronic payments spearheaded by MyClear.
By Siek Kar Teck, Director, Retail Payments Division, MyClear
96 Mapping The Market For Financial Inclusion
HBL is harnessing mobile technologies to do more than enable the delivery of
innovative banking services; it is providing all people, including the poor and rural
populations, access to convenient mobile banking services that put them in control
of their financial future.
By Faiq Sadiq, Head of Payment Services, Habib Bank Limited
101 Creating New Pathways For The Poorest
DBBL launched mobile banking services targeting the unbanked, signing up an
average of 100,000 customers each month since the commercial launch in 2012.
Now the bank is planning additional services using new authentication technologies
to grow that number exponentially.
By Abul Kashem Md Shirin, Deputy Managing Director, Dutch-Bangla Bank Limited
108 Targeting Tomorrow’s Mass Affluent
CIMB Niaga, the number five bank in Indonesia, through innovative services
and social media outreach is preparing for a day when today's unbanked will
be part of the burgeoning middle class.
By Wan Razly Abdullah, Strategy and Finance Director, PT Bank CIMB Niaga Tbk
5. 76 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets
114 Branchless Banking Driven By ‘Disruptive Innovation’
Bank BTPN reveals its plans to disrupt the market with a new and cost-effective
model aimed at empowering people at the bottom of the pyramid to manage an
interest-bearing bank account.
By Donny Prasetya, Head of Business Development, btpnWOW!
122 PART 4: MOBILE OPERATORS: PAVING THE WAY FOR MOBILE
PAYMENTS AND MORE
124 SIM-Based NFC: Enabling A New Level Of Interaction For Latin
American Big Events
A string of NFC trials are taking place in Brazil just in time for the FIFA 2014
Soccer World Cup and the 2016 Olympic Games, enabling consumers to make
payments and access information, and highlighting new business opportunities.
By Valter Wolf, Market Development Director, GSMA
127 Open Solutions Could Help Fulfill The Promise Of Mobile Money
With over 100 mobile money deployments globally, only a handful have reached
meaningful scale. Here are some key examples and learnings revealing what
makes services tremendously successful.
By Sal Karakaplan, Vice President, Mobile Money, MasterCard
131 Preparing To Deliver ‘Advanced’ Services
From enabling merchant payments to driving financial inclusion, Ooredoo
is positioning itself to be a leading provider of mobile money services and
one of the world's top 20 mobile operators by 2020.
By Rambert Namy, Head of Mobile Financial Services, Ooredoo
136 Expanding Mobile Wallet Capabilities To Encourage Customer Loyalty
Celcom has made its mark with AirCash, one of the first mobile wallet services
to launch in Malaysia. Now efforts focus on integrating AirCash into its larger
customer loyalty program.
By Afizulazha Abdullah, Chief Digital Services Officer, Celcom Axiata Berhad
140 PART 5: RETAIL, CONSUMER PRODUCTS: MASSIVE
OPPORTUNITIES AT THE INTERSECTION
142 Mobile Shopping And Coupons Transform Retail
Yankee connects the dots through recent data and surveys to show why — and
how — mobile coupons are becoming the way to lure shoppers.
By Yankee Group
148 Opportunity At The Intersection Of Retail And Mobility
Smart marketers in transportation, utilities and consumer products companies
are exploring how they can deliver relevant, timely information, promotions, and
special offers right to the consumers’ smartphone.
By Colin Haig, Program Principal, SAP Retail
153 Fast Shopper, Slow Store: A Mobile Playbook
Actionable insights and valuable advice to connect with the 'new' mobile consumer.
By Gary Schwartz, CEO, Impact Mobile.
161 Survival Guide: Evaluating The App Vs. Web Debate
Mobile apps vs. mobile Web is a topic of heated debate in the industry today.
A successful approach is one that uses mobile apps and the mobile Web in the
right combination to make shopping across all channels seamless and personal.
By Panagiotis Papadopoulos, Retail Mobile Lead, SAP
166 Mobile Retailing 2.0: Connect With The Customer At The Point of Decision
How retailers can realize the full potential of the greatest marketing tool ever
invented to win the battle for the customer and get the edge on online rivals.
By Mickey Haynes, Global Principal, Mobility Solutions in Retail, SAP
171 Showrooming, Deconstructed
A guide to help retailers build the key capabilities that will allow them to clinch
the deal and stem showrooming.
By Nikki Baird, Managing Partner, RSR Research
6. 98 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets
175 Consumer Focus Key To Closing The Mobile Commerce Loop
Innovative retailers are using mobile to equip their stores and empower their
staff to deliver an omni-channel experience personalized to each customer,
and to accelerate revenues and deliver customer value.
By Rakesh Gandhi, Senior Director, Mobile Application Solution Management
– Consumer Mobile, SAP
182 PART 6: THE ENGAGED CONSUMER: CREATING A PERSONAL(IZED)
CONNECTION WITH YOUR CUSTOMERS
184 Gateway To The Future Of Customer Relationship Management
Examining the customer journey, the purchase funnel and the many moving parts
marketers need to understand to encourage commerce, trigger conversions and
boost customer engagement.
By Michael J. Becker, Managing Director North America, Mobile Marketing Association
192 Reaching The Mobile Consumer
Organizations must be careful not to miss the opportunity to build mobile
into a wider strategy, that is cohesive across all channels, to enable meaningful
— and ongoing — customer engagement.
By Jason A. Oglesby, Director Mobile Solutions Management, SAP
200 The Engaged Retailer: How Mobile And Big Data Improve Revenue,
Retention And Profits
Retailers must take proactive action to turn mobile into an asset that delivers
revenue and customer engagement. They can start by building an information
technology and customer-facing strategy that capitalizes on mobile attributes
such as location, activity, and sensor data to delight customers.
By Maribel Lopez, Founder and Principal Analyst, Lopez Research
204 Detect, Connect And Engage
Technology and analytics are coming together to allow retailers to radically
redefine the relationship they have with their customers in real-time.
By Mark Dahm, Senior Manager, Business Development, Wireless Networking
Group, Cisco Systems and Jason A. Oglesby, Director Mobile Solutions
Management, SAP
210 Public Transport Drives Personal Loyalty
Canadian transport authority STM has launched an innovative mobile
customer rewards pilot program, delivered by a smartphone app, to thank
existing customers and attract new ones.
By Pierre Bourbonniere, Head of Marketing, Société de transport de Montréal
214 Utilities Customer Engagement
Customers are moving to mobile and other channels to solve issues, report
outages or simply check their bill — and utilities companies need to prepare.
By Haridas Nair, Vice President, mCommerce Products and Solutions, SAP
220 PART 7: DO YOU TAKE MOBILE? NEW PAYMENT OPPORTUNITIES
AT RETAIL
222 Starbucks: A Mobile Payments Case Study
Exclusive insights to track and analyze the stellar success of Starbucks'
mobile based payment system called ‘mobile pay’.
By Sam Gellar, Analyst, Portio Research
232 Weighing The Alternatives To NFC
An evaluation of alternative mobile payment technologies shows the
benefits and drawbacks to conclude that the ideal solution may be a
combination of 'all of the above'.
By Mickey Haynes, Global Principal, Mobility Solutions for Retail, SAP
7. 1110 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets
240 A Serious mPOSition
Mobey Forum has seen more than 30 mobile point of sale (mPOS) solutions
launch around the world and considers the implications of this trend for banks
as they forge customer relationships with merchants.
By Sirpa Nordlund, Executive Director of Mobile Financial Services, Mobey Forum
244 PayPal: Enabling Payments Anytime, Anywhere And Via Any Screen
In Germany PayPal has completed a successful trial of its PayPal QRShopping
solution and shares its strategy to change the entire end-to-end shopping
experience across all screens.
By Tobias Zadow, Business Line Manager, Mobile DE, PayPal
251 How Apple’s Passbook Ushers In The Third Mobile Marketing Wave
Learn how to leverage this new mobile marketing imperative to drive sales,
boost loyalty, and increase customer engagement.
By Joe Beninato, General Manager, Digital Wallet, Urban Airship
258 PART 8: CLOSING THOUGHTS: THE ROAD AHEAD
260 Big(ger) Data Pushes The Boundaries
Today, we are arguably on the cusp of a fourth revolution: the age of Trillions.
The impact on all industries will be profound. But the real excitement starts
when these microprocessors join the conversation, communicating with
themselves and with us.
By Mickey McManus, President and CEO, Maya
266 APPENDIX
Company Descriptions
FOREWORD
Sanjay Poonen, President, Corporate Officer
Technology Solutions and Head of Mobile Division, SAP
With nearly 3.2 billion mobile
phone users and counting,
worldwide mobile penetration
has already been remarkable.
But mobility is not only enabling
rich and always-on interactions.
It is also transforming banking
and commerce, creating a new
global mobile marketplace that
is always accessible and always
ready for business.
Indeed, mobile commerce is becoming a
fact of life, driven by the advance of mobile
technologies, a surge of innovation in devel-
oped and developing markets and a growing
consumer requirement for an enhanced,
relevant and — hence — more contextual
retail experience. If we think that the birth
of electronic commerce and the advance
of eBay and amazon.com in 1995 was a big
phenomenon, then the impact of mobile is
going to be transformational.
Mobile has the power to trigger a seismic
shift in commerce because consumers
already live their lives on mobile. Reams of
research documents people — everywhere
— reach to their mobile devices every step
of their daily journey. Already the number of
people using their mobile phone to access
the Internet far exceeds the number using
a desktop PC.
FOREWORD
8. 1312 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets
Another driver is the passion Millennials
have for personal mobility. In many regions
of the world, people under the age of 40, a
segment keen to adopt mobility innovations
and integrate mobile into every aspect of their
lives, will be the majority of the population.
This will create new opportunities, and
new pressures, for companies across the
emerging ecosystem — banks, card issuers,
mobile operators, app developers, merchants
— to enable commerce experiences that
know neither boundaries nor friction.
Mobile is also driving financial inclusion,
allowing banks such as Dutch-Bangla Bank
Limited in Bangladesh to extend their
services to the unbanked. The impact is
profound as financial institutions — and
mobile operators where regulation allows
— empower people at the bottom of the
pyramid to participate in society and
improve their quality of life.
Mobile operators are experiencing similar
success. Ooredoo, a multi-country mobile
operator group has identified mobile money
as a key capability and a pillar of its initiative
to be one of the top 20 mobile operators
worldwide by 2020.
Moreover, mobile is evolving, driven by
companies that have succeeded in
enabling person-to-person payments
and have set a course to transform the
entire retail environment.
It’s new territory that offers new challenges
— and huge benefit to the companies that
can master them.
To help you navigate this new market and
grasp the growth opportunities ahead the
second edition of the Mobile Commerce
Guide has brought together a wide variety
of case studies and success stories,
contributed by the executives who helped
make them reality, to show how mobile
impacts the Retail, Consumer Product,
and the Utilities industries.
As this Guide shows, precisely how compa-
nies can deliver value — and communicate
this to their customers — will depend on a
variety of factors. Banks may encourage and
educate unbanked to see their mobile
wallets as instruments that allow them to
save money and plan their financial futures;
mobile operators may share infrastructure
and best practices to reach and educate
customers faster; retailers and consumer
product companies may refine their models
to enable contextual commerce their
customers genuinely welcome and appreciate
because it is personally relevant and valuable;
and utility companies may harness mobile
to provide customers new visibility into the
services they use and the payments they make.
To wield the transformational power of
mobile for your business, you must first
fully understand its impact. The examples
gathered in this Guide for this purpose are
global and diverse. But — more importantly
— the insights presented here, drawn from
the expertise and experiences of more than
40 leading analysts, professional industry
organizations and futurists, are actionable.
These are exciting and challenging times.
Whether you are eager to start planning your
mobile commerce strategy, or seek guidance
as you expand your existing offer, think of
this Guide as a knowledge resource and
companion on the journey ahead.
9. 1514 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets
The advance of mobile technologies, a surge of
innovation in emerging markets and increased
consumer requirements for enhanced retail and
commerce experiences present opportunities for
the ecosystem. Banks, mobile operators, card
issuers, app developers, and retail chains are all
jockeying for position to establish competitive
offers and grow their footprints. In this section,
we explore the current global ecosystem and hone
on key regions (Latin America, Asia Pacific) and
important offers (mobile payments, mobile
wallets, mobile apps) to shed light on a much
larger trend. It’s all about enabling transactions
(and commerce) that harness mobile to deliver
customers real benefit.
PART 1: Mobile Commerce: Mapping The Competitive Landscape
PART 1:
MOBILE COMMERCE: MAPPING
THE COMPETITIVE LANDSCAPE
10. 1716 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets
Mobile: A License To Thrill
By Tomi T. Ahonen, best-selling mobile author
You may have noticed that the
world’s biggest Internet company,
Google, says the future of the
Internet is mobile. You probably
noticed too that a once hovering-
near-bankruptcy PC maker called
Apple Computer dropped‘computer’
from its name, launched mobile
phones, and today calls itself a
mobile company.
Oh, and you might recall that Apple was
— for a while last year — the most valuable
company on the planet, making the biggest
profits. But did you also know that the
computer-era billionaire Bill Gates is no
longer the worlds’ richest man? That title
was taken by Mexican Carlos Slim.
What could possibly replace computers as
the engine to generate such wealth? In a
word: mobile. By the way, Carlos Slim Helú
runs Mexico-based América Móvil, one of
the world’s largest mobile telecoms empires
stretching across all of Latin America.
Yes, mobile seems to be an engine to deliver
growth, revenues, profits, and wealth for those
technology, telecoms, and IT companies.
Now let me ask you this: Did you hear what
Electronic Arts, the world’s largest game
developer says about the future of gaming?
They declare it is mobile. What about the
BBC, the world’s largest radio and TV broad-
caster? It says that all broadcast content will
become available on mobile phones. What
about Warner Music? It said wireless is the
future of music. What of Sony, the world’s
largest home electronics company? The
CEO there just said that mobile was front
and center of Sony’s future. And Samsung?
The world’s largest tech company said last
year that their mobile unit is the driving
force of their profits. Or Facebook, the
biggest social media company? It revealed
last year that more than half of users now
come from mobile - and that the future of
social media is... (you guessed it!) mobile.
Not to be outdone the Associated Press,
the news agency headquartered, in the U.S.,
announced that it was the mobile phone, not
the traditional Internet, which was the future
of the news media.
I could go on and on. But let’s forget about
the tech and media industries. Take Visa, the
world’s largest financial company by number
of users and obviously the world’s largest
credit card company. They now say that the
future of payments... is mobile.The world’s
largest lock maker,Assa-Abloy is building
locks that are operated by your mobile phone.
The world’s largest airline by passenger miles,
Delta, is now deploying mobile phone based
check-in and boarding passes.
In France Carrefour, the country’s largest
retailer has deployed mobile solutions
so advanced that they will help mobile
shoppers find the shortest route in the
stores. To assist shoppers the shopping
list stored on their mobile phones is even
re-arranged by aisle, depending on which
store you go to. In Japan McDonald’s the
world’s largest restaurant chain, has already
convinced one out of every six Japanese
consumers to sign up to receive mobile
coupons and offers. And speaking of ads,
Coca-Cola, the world’s largest soft drinks
maker, recently ran an international
multi-platform ad campaign with mobile
at the heart of it that achieved a whopping
45 percent response rate!
Mobile is massive
When I wrote my first book about mobile
services and apps over a decade ago, this
whole mobile industry was only an experi-
ment that spanned some random countries
where they spoke languages nobody else
ever bothered to learn, like Finland, Japan,
South Korea and Sweden. It was eccentric
to believe in mobile back then, and an act
of faith to think mobile would ever be big.
When I showed off the ‘cool’ ways these
mobile phones could play elementary music
snippets — known as ‘ringtones’ at the time
- most said it was a fad that would never
catch on. Today mobile data services are a
massive global hit! In fact, they were worth
US$436 billion last year.Yes, bigger than
the Internet, bigger than global radio, bigger
than Hollywood movies, bigger than video
gaming.The mobile data industry is the
fastest-growing industry of all time. No
wonder it turns around companies like
Apple, or creates billionaires like Carlos Slim.
PART 1: Mobile Commerce: Mapping The Competitive Landscape
11. 1918 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets
We are mobile, too
But what about you and mobile in your life?
Let’s look at mobile starting with some very
basic services and abilities, and soon you’ll
see that mobile is already a huge part of
daily life in countries across the globe.
Let’s start with children. Did you know
there are now mobile tools and services
that help kids study better for their school
work? In South Africa, for example, a local
mathematics books publisher released a
mobile math practice solution that helped
South African students using it score
14 percent better in national math exams!
Or what about a farmer in India? The time
to go turn on and turn off the irrigation at
the farm can take hours riding a bicycle
from one irrigation valve to another.
Now there is a mobile solution for that.
The solution, which uses SMS, allows the
farmer to control his irrigation from home
at a few clicks of his phone. It’s not just
saving him time, and water, and the costs
of electricity and money - it also saves
with soil erosion! If you irrigate too little,
the ground is dry and is blown away. If you
irrigate too much, the ground is washed
away - to the farmer downstream who
is only too happy to get your topsoil.
Mobile money prospers
And let’s not forget mobile money. In many
parts of the developing world people have
only managed to save small amounts of
money — if any. They cannot qualify
for a bank account to put their money
away safely because they lack the proper
identification and a permanent address.
Literacy is also an issue.
So what do they do? They try to hide what
little cash they have. It’s a risky business.
It’s not safe — and burglars, thieves, animals
and natural disasters can take the money
way. Your life savings are gone.
But once the miracle of mobile payments
arrives, suddenly anyone can have the basic
safety benefits of depositing their money
onto something — a card, a phone, a branch-
less bank account — that is permanent,
trusted, and safe. Run by the mobile operator
or the local bank, these services empower
the poor to save and plan a better future.
M-Pesa in Kenya launched six years ago; last
year the Central Bank of Kenya told us the
amount of money that transited mobile
phones was equal to 48 percent of the total
Kenya GDP.Yes, of the total Kenya economy,
nearly half already transits mobile phones,
and this in only six years.The World Bank
counts nine countries in Africa where already
at least 10 percent of the adult population
uses mobile money or mobile payments.
Mobile, mobile everywhere
Vertical industries are also getting in on the
action. An example is Willer Travel, a long
distance bus company in Japan. They had
a popular Website where they sold tickets.
When they mobilized their Website, they
achieved a three-fold increase in their ticket
sales on their mobile sites.
Similar stats come all around the world.
Tiffany’s the U.S. jewelry store decided
to mobile-optimize their Website which
caused their jewelry sales via the mobile
channel to more than double. The Hockey
News, a weekly ice hockey magazine,
launched a pure mobile version of the
magazine and not only found 100,000
new paying mobile readers as an audience,
they observed a positive knock-on
effect on print sales, which increased
by 5 percent! What print title reports
increases in circulation these days?
The moment the decision was official,
Pope Francis sent his first greetings via
SMS. Was that an innovation for a religious
leader to use text messaging to reach
masses of followers? No, the previous
Pope, Pope Benedict XVI, did it too. Was he
the first mobilista-Pope? No. The Vatican
has been sending mobile messages
to the faithful since January 2003.
Politicians are also harnessing mobile to
drive amazing results. President Barak
Obama’s re-election campaign masterfully
utilized new media in many forms. One of
No matter who you are or what you do
mobile is your tool to get ahead.
12. 2120 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets
the highlights was on Election Day, when
Team Obama sent out a text message
to his followers and volunteers, asking
them to make one phone call on behalf
of the President. In total 9.5 million such
SMS text messages were sent to all
those who had given Team Obama their
mobile phone number. This one SMS text
message was estimated to have achieved
1.9 million bonus volunteer phone calls
on Election Day because of the acts of
volunteers who agreed to donate one
phone call to Obama, after receiving that
message that morning of Election Day.
The impact was profound. All the polls in
the last days before the election measured
the vote to be very close, about 1 percent
advantage to Obama. But Obama actually
won by 4 percent. That difference was about
3 million votes. This never-before-used tactic
of sending a text message to call voters to
action (make a phone call to someone
to convince them to vote for Obama)
probably accounted for the lion’s share
of that surprisingly large winning margin.
That, my friends, is the power of mobile.
Mobile to the end
It doesn’t matter if you are a giant company
or a tiny family-run business. It doesn’t
matter if you’re living in the most advanced
digital nirvana or a person carving out an
existence in the developing world. It doesn’t
matter if you are a highly educated MBA or
an illiterate fisherman. No matter who you
are or what you do mobile is your tool to get
ahead. If you are a business you can harness
mobile to get more customers and make
more money — more quickly, more profit-
ably and more reliably. It also helps you
reach better and bigger audiences that will
become more loyal to you, if you get the
value exchange right.
If you’re not a business, mobile can help you
heal the sick, educate the students, get the
votes to be elected and improve your life.
In 2013 there is no industry that is not being
impacted and revolutionized by mobile tech-
nology. From car manufacturers to funeral
homes, mobile is becoming part of their
corporate DNA. Yes, I said funeral homes.
These institutions are now deploying QR
codes to gravestones, so our memories of
our dear departed can be cherished and
shared by friends, relatives and ‘significant
others’ who scan the codes and access the
things the deceased did and held dear.
Yes. Mobile is with us every day everywhere.
It’s the first thing we see when we wake
up and the last thing we look at before we
fall asleep. And now, this industry is even
letting mobile be the way we connect
with the memory of our loved ones long
after they are gone.
Yes,mobile is a wonderful technology that is
completely changing every aspect of our world.
Tomi T. Ahonen is an ex-Nokia executive,
and one of the most published authors in
the mobile industry. He counts over a dozen
books, as well as a regular blog that has
gained him the number one spot in the
Forbes Top 10 Power Influencers in Mobile1
.
Coca-Cola, the world’s largest soft drinks
maker, recently ran an international
multi-platform ad campaign with mobile
at the heart of it that achieved a whopping
45 percent response rate!
FOOTNOTE
1. www.forbes.com/sites/haydnshaughnessy/2012/01/03/who-are-the-top-10-power-
influencers-in-mobile/
13. 2322 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets
The advance of mobile technologies,
a surge of innovation in emerging
markets and increased consumer
requirements for enhanced retail
experiences present opportunities
for banks to expand into new
service areas and extend their
existing services to the unbanked.
But banks are not the only ones
taking note. Mobile operators,
card issuers, app developers, and
retail chains are also jockeying to
establish competitive offers and
grow their footprints. Accenture
describes the current ecosystem
and defines the capabilities mix
that will be needed to serve the
market of ‘less cash’ consumers
of the future.
With nearly 6 billion connections and
counting, worldwide mobile penetration
has already been remarkable. But mobility
is not only enabling rich and always-on
interactions. It is also transforming banking
and commerce, creating a new mobile
marketplace that is always accessible
and always ready for business.
The movement toward this new phase of
mobility — which Accenture calls Mobile
Life — is pushing mobile money offers in
three distinct directions: traditional mobile
banking services (mBanking Services),
mobile payment services (mPayment
Services), and mobile enabled consumer
services (mEnabled Consumer Services).
Often the initial point of entry for banks
into the mobility arena, mBanking links
customers’ bank accounts to their mobile
devices and provides customers with a new
way to manage their finances. Services can
range from basic product information and
Who Will Lead The Mobile
Commerce Charge?
By Pradipto Pal, Executive, Accenture Mobility
PART 1: Mobile Commerce: Mapping The Competitive Landscape
Most banks are in the business of making
money — and they have a huge learning
curve to travel before they can serve the
poorest of the poor.
transaction histories, to more advanced
operations such as loan applications and
inter-bank fund transfers.
Mobile money transfers and purchases,
or mPayments, open the door to previously
unbanked markets. These types of services
can vary significantly in their sophistication,
from SMS-based money transfers, to Near
Field Communication (NFC) payments,
to a full “digital wallet” capable of storing
multiple credit cards, prepaid cards, and
discount cards for mobile transactions
and commerce.
Least understood and not yet widely
adopted, mEnabled Consumer Services
encompass a broad range of mobility
offerings catering to specific consumer
lifestyle needs within and outside the
traditional banking realm. Services can
range from simple SMS-based promotion
alerts to location-based targeted market-
ing. With mEnabled Consumer Services,
banks have the opportunity to venture into
new businesses and further embed their
brand in consumers’ daily lives.
Banks may choose to extend existing offerings
to new customers,branch out into new value
segments or increase the sophistication of
their services in a particular area.
However, banks should be aware that
they are not the only ones with this
ambition. While the banking industry
has dominated banking and payment
services for many years, the recent advance
of mobile technologies and emergence of
new consumer behaviors has leveled the
playing field. As a result, new entrants, new
partnerships and new operating models
are flooding the space and transforming
the competitive landscape.
Asia’s affluent
Thus, many banks find themselves in
an unfamiliar position, struggling to keep
up — or join up — with mobile operators,
card issuers, app developers, and retail
chains that are also jockeying for position
in a value chain that spans activities from
banking to commerce to CRM.
14. 24
Figure 1: Based on data from www.accenture.com/Microsites/accenture-innovation-center-asia-pacific/Pages/index.aspx
Competition is stiff, particularly in Asia
Pacific where a digital wave is creating a
market hungry for mobile money services.
Driven by the advance of a tech-savvy
consumer base and a ‘change of the guard’
that sees Generation X making way for
Generation Y to take the helm, this shift
is happening much faster in Asia Pacific
than in Europe or North America.
Indeed, the youth segment in Asia Pacific
is not only far greater in sheer numbers;
it also has a much greater desire to lead a
Mobile Life. This segment, which I describe
as digital natives’, has a huge appetite for
mobile/digital services. In fact, demand
in the region far outstrips supply of both
services and bandwidth.
Notably, the rapid growth of the middle
class across Asia Pacific presents players
with additional opportunities. Another
70 million households are expected to join
this burgeoning class by 2015, and this
impressive income growth extends all the
way up the social ladder. Between 2010 and
2015, the number of millionaires in the Asia
Pacific region is forecast to increase by
25 percent (compared to 17 percent world-
wide), while the ’ultra wealthy’ segment
will swell by 37 percent (nearly double
the global rate).
The region is not only growing richer; it
is also becoming more passionate about
mobile technologies and services.
The outcome will be an increase in smart-
phone penetration, a trend we already
observe, that will drive more mobile
app downloads and usage of the mobile
Internet. Significantly, NFC will likely gain
serious traction, with an estimated 450
million NFC-capable devices expected to
hit the market over the next three years.
As more people embrace a Mobile Life,
the demand for services — including
banking, payments and commerce —
will skyrocket. In fact, Accenture research
found that 60 percent of mass affluent
customers, which includes the region’s
upper middle class and high-net-worth
individuals, are interested in using digital
channels in conjunction with bank branch
visits. In addition, 21 percent of respondents
would prefer to switch completely to
direct banking.
Four mobility value segments for banks
Mobile as a platform to
improve bank’s operational
efficiency
EnterprisefocusCustomerfocus
Mobility
transformed
banking processes
m-salesforce
m-Salary
m-Allowances
m-Claims
mEnabled enterprise
mPayment servicesmBanking services
Mobile as
a new
interactive
channel to
increase
customer
loyalty and
cross-sell
opportunites
mEnabled
consumer services
Mobile as a conduit to build brand
presence and integration into
consumer’s daily lives
Mobile as a
payment tool to
target unbanked
sections of
society and
expand
mCommerce
opportunities
Mobile wallet
(Stored value
account)
mCommerce
Augmented
reality, for
e.g. real-time
property guide
Mobile Life
White space represents the untapped opportunities as a result of new business and/or operating models
15. 2726
Mobile commerce touch points
Now that I have described the key market
demographics and data points across the
Asia Pacific region, let’s examine how
mobile banking services have evolved
across the region.
Dramatic economic growth and rising
household incomes across the region
have created a market of mass affluent.
This segment carries a mobile phone and
is already well accustomed to using mobile
banking services to check balances, pay
bills and make P2P transactions.
The next step is full mobile commerce, a
space where banks and merchants have
an important role to play. Together they
must build on the mobile wallet, a product
banks first provided to make P2P payments,
and extend that functionality to enable and
enhance new retail experiences.
Let’s say I use my mobile wallet, provided
by my bank, to do some shopping and buy
some clothes at Store X, for which I also
receive some loyalty points as part of the
transaction. A few days later I walk into a
shopping mall in a different city, where the
same chain just happens to have an outlet.
I don’t know this, but I do receive a push
notification directly to my mobile phone
that says “Hi Pradip, if you are nearby
and walk into our store, we will give you a
10 percent discount on your next pair of
jeans and you can use your loyalty points”.
Now let’s look at this from the perspective of
the store merchant. First, this is a new retail
experience that only mobile can deliver.
It can’t be done with any other channel
because there is no other channel I have on
my person at all times, even during shopping
and — more importantly — no other channel
can deliver location-based services coupled
with deep customer insight.
The beauty of this is that this channel
allows the consumer to pay from a mobile
wallet and not a credit card, which means
the merchant does not have to pay the
2-3 percent charge to the credit card
company. For the merchant it’s a win-win
all around. They get their money up front
and without having to pay the fee to the
credit card company. What’s more, the
merchant now has a deeper relationship
with the consumer, one that allows them
to grant loyalty points and thereby
encourage a return visit or purchase.
From the perspective of the bank the
mobile wallet currently sits outside the
core banking system. In practice I can
transfer money from my account to a
mobile wallet. However, clever banks are
also taking advantage of the opportunity
to provide me additional wallets for
family members, for example.
In this scenario I have the option to open
up a family wallet, or perhaps separate
wallets for my wife and daughter. I am still
the account holder, but the bank has now
gained two ‘new’ customers — my wife and
daughter — and sees a two-fold increase in
transactions and revenues. The additional
mobile wallets allow us all to conduct
commerce without cash or cards, so we
are happy. The merchant also benefits for
the reasons I mentioned. The result is a
virtuous cycle benefitting the bank, the
merchant and the ‘less cash’ consumer.
But banks are not alone.
Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets
16. 2928 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets
They are confronted by new entrants and
competition from companies across the
merging mobility value chain. Banks must
adjust to this reality, which is why Accenture
has recently surveyed the Asia Pacific land-
scape and developed the Accenture APAC
Banking Mobility Maturity Index1
.
While it is beyond the scope of this article to
discuss the Index and the factors, such as
banking access and mobile subscriptions,
that have important implications on a
bank’s mobile commerce and wider mobility
strategy, it is important to stress that banks
have a limited time to master the capabilities
to deliver a full mobile commerce experience,
one that allows people — especially those
‘born digital’ — to do much more with the
mobile phone they already reach for on
every step of the consumer journey.
Nearly all of the world’s financially unserved adults live in Africa, Asia
and Latin America
Millions of adults
East Asia
Adults who do not use formal financial services1
Millions of adults
South Asia
Sub-Saharan
Africa
Latin America
Central Asia and
Eastern Europe
Arab States
High Income
OECD
Total
Figure 3: Based on data from Honohan. 2008: Human Development Index: World Bank
Percent of total adult population
that is financially unserved
59
58
80
65
49
67
8
53
876
612
326
250
193
60
2,455
136
FOOTNOTE
1. www.accenture.com/Microsites/accenture-innovation-center-asia-pacific/Pages/index.aspx
FOOTNOTE
1. Regional groupings based on UN Human Development Index
Figure 2: Based on data from Accenture Analysis
A day in the life of a 'less-cash’ consumer society of the future
6.30am >
Top up
transport
card/
mobile
Pay for
train
ticket
Gain
access
to office
Transfer
money to
sister
The cycle continues
Incoming transaction Outgoing transaction Transfer Security transaction
Pay for
lunch
Pay for
coffee and
magazines
Pay for
groceries
Pay for
taxi
7.30am > 9.00am > 10.30am > 12.30pm 3.30pm > 7.00pm > 9.00pm >
17. 3130 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets
In the view of Accenture, as the balance
shifts from cash to contactless payment,
banks operating in Asia Pacific have a
unique but fleeting opportunity to extend
their reach across the entire socio-economic
spectrum and position themselves at
the heart of these ‘less cash’ consumer
societies and retail value chains of
the future. Which value segments and
audiences each bank pursues will depend
on the opportunities available in their
markets and their own ability to compete.
Unbanked opportunities
While economic growth across Asia Pacific
has been dramatic, the GSMA reports1
that
2.5 billion adults, just over half of world’s
adult population, are unbanked, meaning
they do not use formal financial services
to save or borrow.
These unbanked populations have quite
basic needs,which first-mover banks such
as Dutch-Bangla Bank in Bangladesh are
meeting with mobile banking services that
include airtime top-up,cash-in,cash-out,utility
payment and remittance — to name a few.
In markets such as China, Indonesia,
Malaysia and the Philippines, where there
is a large population of migrant workers,
the unbanked have a particularly strong
demand for mobile banking services that
allows mobile money transfers within and
across national borders.
Interestingly, this is also a space where
mobile operators, such as Ooredoo, have
a huge opportunity because their footprint
allows them to facilitate remittances on
a large scale. However, that is the catch.
Mobile operators that want to target the
unbanked will not want to do it as single
operators. They will want to do it as part of
a kind of ecosystem so they can benefit from
sharing infrastructure and best practices.
New mindset
Significantly, banks have the capabilities mix
— and the corporate DNA, to extend their
services to the world’s unbanked. However,
not all have the proper mindset for the task.
The unbanked are not unbanked because
they don’t work or earn money. In many
cases, the unbanked lack a residential
address, or fail to earn a salary that covers
the fee structure offered by most banks,
and discourages small deposits. However,
mobile allows economy of scale, increasing
reach and lowering costs and allowing banks
to generate revenues by serving a large
volume of low income customers.
Here the expectation is that the mobile
wallet will evolve to drive financial inclusion
by creating a mobile marketplace where
the unbanked can buy goods and services,
as well as access financial products, such
as insurance, that will allow them to plan a
secure and stable future.
Financial inclusion will also make it much
easier for governments and NGOs (non-
governmental organizations) in developing
markets to disperse aid and so push money
to the mobile wallets of the poor. There is
also a knock-on benefit for NGOs — and
banks that choose to grasp the opportunity
— to provide microfinance. Loans and
credit extended to the poor will not only
help improve their lives; the wealth created
will increase overall GDP and inject new
dynamism into local economies.
Clearly, the role of mobile in these markets
is to facilitate payments. However, it has the
powerful potential to transform entire econ-
omies. In some regions, such as Bangladesh,
it is possible to glimpse that future today.
However, this progress also raises a
question mark over the future role of banks
in enabling commerce in unbanked markets.
While many banks are no doubt defining
the course of mobile commerce, acting as
the ambassadors of mobile commerce, it
is a herculean task that not every bank can
master. Besides, many banks are not able
— or willing — to offer additional services to
encourage commerce at the bottom of the
pyramid. They prefer to focus on serving
Banks have a limited time to master
the capabilities to deliver a full mobile
commerce experience, one that allows
people — especially those ‘born digital’
— to do much more with the mobile phone.
FOOTNOTE
1. www.microfinancegateway.org/gm/document-1.9.40671/25.pdf
18. 3332 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets
the customers at the high-end with large
deposits and high-end devices.
Certainly, the banks, with the exception of
those institutions dedicated to driving
financial inclusion, will likely not be among
the legends in the business. Put simply, most
banks are in the business of making money —
and they have a huge learning curve to travel
before they can serve the poorest of the poor.
New entrants, challenges
Driving mobile commerce requires the
grit and the power to roll services out to a
customer base of 100 million customers and
more. It also demands that the company
undertaking this is not measured by the
same KPIs applied to financial institutions.
Therefore, it is quite probable that large
organizations — such as mobile operators,
governments, NGOs or even large petro-
leum companies — will have the resolve
to accept this challenge and drive the
transformation of commerce.
And we should not rule out the potential
of new entrants to stake their turf in the
global mobile commerce space. Banks may
have dominated with banking and payment
services, but many will soon find themselves
struggling to keep up.
Mobile operators are joining together, and
some are teaming up with card issuers,
such as Visa and MasterCard to offer NFC
and mobile wallet services. At the other end
of the spectrum e-money providers such
as PayPal and Singapore-based NTS and
Korea Smart Card Company, which provides
T Money, are capitalizing on their strong
presence in certain local markets.
Finally, transport companies are also taking
advantage of easy access to customers at
the point of sale to offer mobile payment
services. Hong Kong’s Octopus card,
launched by a local transit company
joint venture to facilitate fare payment on
the city’s mass transit system, is a good
example. The Octopus card has since spread
its tentacles to capitalize on growing demand
for contact-less payments in other areas
of consumer life. Today, this rechargeable
stored-value card can be used to pay for
parking and fares on all modes of transport,
and is accepted by many retailers, including
fast food restaurants and supermarkets.
And there other scenarios, enabled by
new technologies, that are poised to move
commerce to the realm of machines. If we
consider the interactions that lead those
‘born digital’ to an actual purchase, we
begin to see a path that takes them from
one ‘machine’ to another. A typical scenario
could look something like this: The digital
native watches Smart TV, using the app
from the relevant app store to purchase
the item they see on TV using their mobile
phone. For that transaction there doesn’t
really have to be a full-fledged digital wallet;
there only needs to be technology in the
background that can ‘see’ the machine-
to-machine operation between the TV and
the mobile phone and relate this to the
customer and CRM.
Although cash is unlikely to be eradicated
completely in the foreseeable future,
the gradual movement toward electronic
currencies and virtual transactions is
edging us ever closer to a ‘less-cash’
society for both consumers and industry.
All indicators suggestAsia Pacific may be first
to fully embrace Mobile Life.Now it is up to
companies across this emerging ecosystem
to adapt to the fast-paced nature of mobile
technology and secure their position in this
increasingly competitive mobility landscape.
Pradipto Pal is responsible for driving
Accenture’s Mobility footprint in Asia across
different industry groups and business
functions. He charters new Mobility solution
offerings and builds assets by cultivating
an ecosystem of leading software vendors.
19. 3534 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets
At the Money2020 Conference,
much of the discussion centered
on various types of mobile pay-
ment schemes, from person-to
-person fund transfers to digital
wallets that allow a mobile phone
to be used in place of a payment
card or cash.
It soon became clear that most of these
mobile payment schemes were dependent
to one degree or another on merchant-
funded offers to finance their operation.
In our opinion, the simple replacement
of a payment card with a phone does
not provide enough value to persuade
the average consumer to switch to mobile
payments. While mobile payments do have
advantages over payment cards and cash,
there is a learning curve and switching costs
that inhibit adoption. Therefore, consumers
must have a powerful incentive to try the
new technology.
As it happens,“daily deals” programs such
as Groupon and Living Social have already
provided an example of the sort of incentive
that merchants are willing to finance: a
coupon worth 50 percent of the value of
a purchase of a certain size. The value of
these incentives far exceeds what payment
card issuers have traditionally been able to
offer based on merchant payment card fees
(typically 1 percent or less of the value of a
purchase), and even those minimal rewards
have provoked a class-action lawsuit and
major legislation.
The crucial difference between ‘daily deals,’
or (more generally) direct merchant offers
and payment card usage rewards (also
known as ‘earn and burn’ programs) is in
the restrictions: direct offers are restricted
both in which consumers receive them as
well as how they can be used. Therefore, a
merchant can offer a substantial discount
in confidence that it will result in additional
sales, and that it can track the return on its
marketing investment.
Figure 1 shows payment card usage rewards
and direct merchant offers as two poles of
a spectrum, with a hybrid system of card-
linked offers in the middle.
Card-linked offers are like traditional
“earn and burn” programs in that they are
associated with a particular payment card,
but are restricted in the same way that a
direct merchant offer is.
Money 2020 And The Business Case For
Mobile Payments: The Role Of Rewards
by Aaron McPherson, Practice Director, Worldwide Payment Strategies,
IDC Financial Insights
From the merchant perspective, financial
institutions have data about overall spending
patterns by their customers, not just their
spending with that merchant.
PART 1: Mobile Commerce: Mapping The Competitive Landscape
The spectrum of rewards programs
Figure 1: Base on data from IDC Financial Insights, 2013
Standard
exchange rates,
little targeting
Limited
merchant
involvement
issuer and
merchant
- funded
Variable
exchange rates,
little targeting
Multiple
merchants
Mostly
merchant-
funded
Targeted
offers based on
spending history
Multiple
merchants
Merchant-
funded
Targeted
offers based
on consumer
behavior
Multiple
merchants
Merchant-
funded
Standard
discounts, little
targeting
Single
merchant
Merchant and
manufacturer
-funded
Merchant-centric
Bank-centric
“Earn and
burn”
“Offer
malls”
Card-linked
offers
“Daily deals” Loyalty
programs
Single
issuer
Multiple card
issuers, with
cosmetic
customization
Consumer portal
(groupon, living
social)
No issuer
involvement
Single
issuer
20. 3736 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets
Benefits
The main benefit of a card-linked offer for
a card issuer is the additional revenue it can
provide in the form of a commission from
the merchant (or more accurately, from an
offer syndication network). This revenue can
not only offset legally-mandated reductions
in overdraft and interchange revenue, but
can provide funding to support mobile
payment services.
From the merchant perspective, financial
institutions have data about overall
spending patterns by their customers, not
just their spending with that merchant. This
allows more precise delivery of customer
acquisition offers than is possible through
direct mail or advertising.
Considerations
At the Money2020 conference, there was
considerable controversy about the card-
linked offers model, for several reasons:
• Both financial institutions and merchants
had concerns about their customers’ data
being used in ways contrary to their inter-
ests; for example, financial institutions
feared reputational damage if a merchant
failed to fulfill an offer, while merchants
worried about their data being used to
generate competitive offers.
• Financial institutions are sensitive
to charges that they are selling their
customers’ financial data, so the
programs have to be clearly
documented and presented on
an ‘opt-in’ basis.
• Merchants are still uncertain about the
value of card-linked offers, since they do
not have much experience with them, and
there are many competing programs with
different terms and conditions.
• Both sides see mobile payments as an
opportunity to increase their influence
over consumer purchasing behavior, and
perceive any increase in influence by one
side as a loss of influence by the other.
• Merchants believe that the current payment
card system costs them more than it
benefits them,and are anxious to prevent
financial institutions from re-creating this
situation in the mobile context.
Overcoming these concerns will require
both sides to proceed cautiously but
deliberately in order to establish trust and
a common understanding of the value of
personal financial data.
Conclusion
Financial institutions need to more effectively
leverage the consumer data that is locked in
their debit and credit card products so that
they can obtain new revenue streams and
reduce their reliance on interchange and
overdraft fees. Doing this will require a new
willingness to actively partner with retailers
to drive new business to their stores. While
financial institutions obviously do this today,
transaction-based marketing requires that
they redefine their customer relationship
goals from‘ownership’to influence. The more
a financial institution increases its influence
over its customer’s economic decisions,
the more it will secure its own position.
In addition, the financial institution will
gain more influence over the retailers and
manufacturers with which it does business,
helping to offset the commoditization of
business banking.
Adapted from “Business Strategy: The Strategic Opportunity in
Transaction Marketing Programs”
Copyright Notice
The analyst opinion, analysis, and research results presented in this
IDC Financial Insights Executive Brief are drawn directly from the
more detailed studies published in IDC Financial Insights subscription
services. Any IDC Financial Insights information that is to be used in
advertising, press releases, or promotional materials requires prior
written approval from IDC Financial Insights. Contact IDC Financial
Insights at 508-620-5533 to request permission to quote or source
IDC Financial Insights or for more information on IDC Financial
Insights Executive Briefs. Visit www.idc-fi.com to learn more about
IDC Financial Insights subscription, consulting, and Go-to-Market
services.
Copyright 2013 IDC Financial Insights. Reproduction is forbidden
unless authorized.
Since 2000, Aaron McPherson has led the
global payments research program at IDC
Financial Insights. Aaron writes and consults
with clients on a wide array of subjects,
including enterprise payments, financial
supply chain management, mobile and
emerging payments, card regulation and
international payments.
The more a financial institution increases its influence
over its customer’s economic decisions, the more it will
secure its own position.
21. 3938 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets
As banks across the region are
warming to mobile apps, strategies
and offerings are becoming con-
siderably more ambitious. Some
are releasing apps full of features
and functionality to impress cus-
tomers and achieve differentiation;
others are seeing the opportunity
to develop a mobile app strategy
as a chance to revamp their overall
presence via the mobile channel.
And let’s not forget the vast
populations of unbanked or under
banked who do not have access
to a smartphone. No matter the
approach, and the bank taking it,
it's clear that the endgame is
about enabling financial services
that harness mobile to deliver
real benefits to all customers.
Throughout 2012 mobility continued
to be a key area of focus for financial
institutions in Latin America, with
smartphone apps emerging as the
preferred channel for banks seeking to
project a more sophisticated image. In
fact, banks enthusiastically embraced
smartphones’ inherent advantages
despite the reality that a vast majority
of the population still relies on feature
phones with limited data capabilities.
Due to the growing proliferation of
both Android and iOS devices, coupled
with mobile network operators’ offers
of compelling monthly plans, banks
increasingly saw mobile apps as a way
to drive mobile banking adoption and
create differentiated brand and service
offerings. This mobile app phenomenon
held true for leading financial institutions
throughout the Latin American region,
where it was treated as a priority, more so
than targeting the unbanked populations.
That said, rural banks and the majority
of microfinance institutions continued to
offer rudimentary mobile banking services
that leveraged the SMS channel. Mass
market-focused financial institutions,
such as Davivienda in Colombia and Caixa
Econômica in Brazil, also proved to be
the exception, targeting the unbanked
with mobile wallet solutions.
Apart from the proliferation of
smartphones, other factors that drove,
and will continue to drive, banks’
interest in mobile apps include security
considerations, the general lack of a viable
USSD alternative, and the penchant of
mobile operators to dramatically increase
the cost of SMS messages. In some
countries banking regulators’ insistence
on the use of a second authentication
mechanism (2FA), in some cases
involving IVR callback, for SMS banking
transactions caused financial institutions
to appreciate the benefits associated
with offering banking via the mobile app.
PART 1: Mobile Commerce: Mapping The Competitive Landscape
Mobile Commerce And Financial
Institutions In Latin America:
An Evolving Ecosystem
By Mary A. Gramaglia, Director of Sales, Latin America, Mobile Commerce, SAP
Requirements to leverage
location-based services
have grown substantially
and it is not uncommon to
see marketing campaigns
emphasize the importance
of social media integration.
22. 4140 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets
Despite the challenges, as banks continue to
place significant emphasis on mobile apps,
service offerings are becoming considerably
more ambitious. Requirements to leverage
location-based services have grown
substantially and it is not uncommon to
see marketing campaigns emphasize the
importance of social media integration.
Many banks leverage the channel to cross-
sell new products and give consumers
the opportunity to apply for, and receive,
on-the-spot credit line increases. Mobile-
app-enabled person-to-person transfers
leveraging consumers’ Facebook contacts
are also gaining traction.
In countries ranging from Costa Rica to
Chile, interest is growing in enabling card-
less cash-out at ATMs so that consumers
who receive funds via P2P transfers, but
who are not existing bank customers, can
still gain access to their funds via ATM
networks. Some services, such as remote
deposit capture, a popular feature in the
U.S., have been absent in Latin America.
This is due to regulation that does not
permit virtual deposit of a physical instru-
ment, and not because of a lack of interest
on the part of either banks or consumers
Different approaches
gain traction
With the widespread focus on mobile apps
among many banks who had previously not
emphasized the channel, leading banks such
as Brazil’s Banco Itau and Banco de Chile
— who were at the forefront in deploying
mobile banking apps — are now re-visiting
their strategy around how applications can
best be used to maintain differentiation and
deal with escalating costs associated with
realizing ambitious plans.
Use of a hybrid container approach for
application deployment has gained traction
as banks seek out vendors with broad
product offerings in an effort to control costs
associated with customization. Ambitious,
feature-rich offerings are being planned
in multiple phases as banks try to quickly
make available differentiated mobile apps
they can steadily expand and improve upon.
In the midst of all the attention given to
the importance of a more sophisticated,
app-driven presence, has come the realization
for the region’s banks that, for the most
part, the mobile channel remains one that
is not easily monetized. The mobile channel
was originally seen as a means for reducing
costs, and only recently, as a new way to
help banks increase revenue through
cross-selling products. In the card-less
ATM cash-out option, banks with significant
physical presence are seeking to reinforce
that differentiation through seamless
integration with their mobile offerings.
Internet banking offerings are being
similarly re-examined, with many
banks convinced that superior mobile
solutions will highlight deficiencies in their
online presence. During 2012 it was not
uncommon to see the region’s financial
institutions launch Internet banking projects
inconjunctionwith,orinparallelto,app-focused
mobile projects. While the majority of initia-
tives had the consumer in mind, during the
past year Latin American banks increasingly
sought to target corporate customers with
enhanced, integrated Internet banking and
app-driven mobile solutions.
With the mobile momentum continuing its
push throughout the region we can expect a
variety of trends to accelerate in the coming
years. Banks facing limited budgets and the
possibility that their IT teams may not be
able to manage increasingly sophisticated
mobile offerings are expected to opt for
SaaS solutions. This will particularly be
the case in the smaller countries of Central
America, where actual numbers of mobile
users are quite low and banks find it hard
to justify significant mobile app related
expenditures and the ongoing effort
required to maintain them.
The reverse will also be true. In those
countries such as Colombia and Argentina,
where outsourced mobile banking solutions
are already in place, local providers
(Redeban and Banelco, respectively) will
be challenged to remain relevant in increas-
ingly competitive, mobile app environments,
in which differentiation will be key. There are
also those financial institutions affiliated
with a strong retailer – such as Chile’s
Banco Falabella and its sister department
store chain Falabella, and Mexico’s Elektra,
which shares the same corporate owner
as Banco Azteca – that will re-imagine the
mobile opportunity by leveraging these
relationships to develop mobile commerce
ecosystems that expand mobile banking
offerings to include point-of-sale purchases
and encourage customer loyalty.
Requirements to leverage location-based services
have grown substantially and it is not uncommon to
see marketing campaigns emphasize the importance
of social media integration.
23. 4342 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets
Overall, mobility is likely to take different
forms depending upon a bank’s level
of ambition in the channel, desire for
differentiation, size of actual and targeted
market, and available budget. What is
certain is that Latin American banks will
increasingly perceive the mobile app as a
key tool for reaching customers now and
in the years to come.
Mary A. Gramaglia is responsible for driving
sales of the SAP’s mobile banking, mobile
payments and online banking solutions in
Mexico, Central and South America and the
Caribbean. She has extensive international
experience in both the telecom and financial
services sectors and has worked in sales,
marketing and business development for
a broad range of blue-chip companies
that includes Lockheed Martin, Sprint
International and Citibank.
Latin America and the Caribbean
region (LACA)1
, has been one of
the last regions to get swept up
by the mobile money phenomenon.
Within this region, Mexico and
Brazil are the two largest countries,
both classified as ’Advanced
Emerging’. While Brazil was the
first country to introduce branch-
less banking on a large scale,
Mexico is now poised to transform
financial services through the new
mobile accounts. In this article,
we analyze the similarities and
contrasts, which are useful in
understanding how digital money
initiatives are unfolding in the region
in 2013.The analysis is based on the
continuously updated Digital Money
SAGE knowledge base, and the Shift
Thought Digital Money Series.
Although Mexico has done much to bring
down the costs of remittances from the
U.S., the financial crisis is now affecting the
volumes. Remittances fell by 1.5 percent in
2012 as compared to 2011, with December
2012 marking the sixth consecutive month
of reduction. Meanwhile Brazil, though
relatively unaffected by rising unemployment
in the U.S., does feel the pinch through the
effect on its major trading partner, China.
For Brazil, domestic and regional money
transfers are bigger drivers than in Mexico.
What is common though is that in both
these countries digital money innovations
stand poised to deliver value to mass
markets and, in particular, small enterprises,
which currently drive innovation and
recovery around the world.
Since 2007, when M-Pesa Kenya became
the wallet that launched a 100 others,
Latin American countries largely remained
an untouched “black spot” in the mobile
money revolution. So it is really interesting
to see the picture changing now.
PART 1: Mobile Commerce: Mapping The Competitive Landscape
Digital Money Sweeps Mexico
And Brazil
By Charmaine Oak, Practice Lead, Digital Money, Shift Thought
FOOTNOTE
1. LACA here refers to Latin America (all of the Americas south of the USA) and the Caribbean
While the majority of initiatives had the
consumer in mind, during the past year
Latin American banks increasingly sought to
target corporate customers with enhanced,
integrated Internet banking and app-driven
mobile solutions.
24. 4544 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets
Over 2013, Pakistan, Bangladesh, India,
Nepal and many other countries in
Asia Pacific are rapidly reducing the
‘leakage’ in reaching money to the poorer
population. Mexico is poised to do the
same with knock-on effects on both North
and South. Looking north, the change
in the way remittances are disbursed in
Mexico is tipping the balance from cash-
to-cash operators to new entrants like
Xoom. Looking south, towards Central
and South America, if Mexico does for
its domestic money transfer what it did
for the international remittances, a lot
of other countries are likely to follow
with a cookie cutter approach based
on these recent developments.
Key enablers
Mexico has already achieved remarkable
transformation in one area. It managed
to bring down the average cost of
remittances from the U.S. to Mexico to just
US$5.57, as against US$11.95 from the
U.S. to Brazil1
. This was achieved through
remarkable collaboration with the U.S.
and implementation of direct-to-account,
highly competitive services for migrant
transfers. This is significant as Mexico is
the fourth largest recipient in the world.
But even more transformative could be the
next set of changes that unfold over 2013
and affect the way money is transferred
domestically, and in the region.
The driving force behind taking banking
services to the masses is the remarkable
ruling from Mexico’s Ministry of Finance,
requiring all Opportunidades2
payments
to be deposited direct to bank accounts
by December 2012.
Considering that as recently as 2011, over
66 percent were paid in cash, this seems
an incredible feat to expect. However, the
new mobile accounts that are allowed
since mid-2012 are the key enablers that
make this possible. Also, Brazil is a shining
example, having earlier achieved a
transformation to non-cash payments,
so that a mere 1 percent are now paid
in cash through Bolsa Familia, the social
cash transfer scheme equivalent to
Mexico’s Opportunidades.
Another key driver towards the transition
to non-cash payments in Mexico comes
from the Mexican Finance Ministry,
Secretaría de Hacienda y Crédito Público
de México (SHCP). This is by way of anti-
money laundering (AML) regulations that
restrict the amount of physical U.S. Dollars
that can be deposited in Mexican banks, in
an attempt to control money laundering.
It is important to compare the access
that markets in Mexico and Brazil have
to channels and financial services, in
order to understand the need for digital
money initiatives.
Figure 1 compares access channels
available for outreach in each country.
Brazil is already feeling the pain of the
mobile operators in developed countries,
with mobile penetration reaching historic
highs. Mexico, however, still has some
Access channels in Mexico and Brazil
Brazil
Mexico
255
91
82
43
203
115
92
25
InternetMobileBankedPopulation
Figure 1: Based on data from The Shift Thought Digital Money SAGE
What has been labeled as ‘elitist banking’ from foreign banks
that dominate the financial services scene in Mexico leaves
a gap, sought to be filled by the entry of large retailers.
FOOTNOTE
1. World Bank Remittance Prices, Third quarter 2012
2. www.oportunidades.gob.mx/Portal/wb/Web/oportunidades_a_human_development_program
25. 4746 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets
way to go to put a mobile into the hand
of every person. While online payments
have taken off in Brazil, it is mobile that
has the real potential in Mexico due to
the paucity of Internet connections.
Payments and ecosystems
More importantly, what has been labeled
as ‘elitist banking’ from foreign banks that
dominate the financial services scene in
Mexico leaves a gap, sought to be filled
by the entry of large retailers. Financial
services with a new business model are
now available from large retail groups
that have set up banks in Mexico. Banco
Wal-Mart and Banco Azteca encourage
people to bank-while-they-shop. There are
also a number of initiatives underway to fill
the gap left by a paucity of ATMs and POS.
Brazil, however, has successfully used the
banking correspondent route to create strong
bank outreach and widespread availability
of POS machines. It has also put debit cards
in the hands of lower income consumers.
Now Mexico aims to follow that path, through
the use of non-bank agents. Since 2008
Mexico has allowed banks to use agents,
and since 2010, mobile operators can be
the agents for banks. However, concern
arises from the dominance of a few players,
not unlike the situation in the banking side.
From Figure 2, it is clear that América
Móvil owned Telcel, and to a lesser extent
Telefónica, could have economies of scale
from existing top-up agreements to build
new agent networks that may further
skew their advantage in the marketplace.
Comparatively, the Brazil mobile market is
much more evenly distributed between the
top four players, as can be seen in Figure 3.
Nature of services
So, the need for the new mobile accounts
in Mexico is there. But how fast will the
services achieve traction? Do the new
services have characteristics that can
transcend long established business models
of the providers and truly deliver value that
attracts daily use? To answer this requires
an analysis of the services as they unfold.
One of the earliest to be announced was
Transfer, the joint venture launched in
Nextel (NII) 4%
Nextel (NII) 2%
Others 0%
Telcel (America Movil)
69%
Vivo (Telefonica)
28%
Telecom Italia (TIM)
25%
Lusacell 4%
Oi (Telemar) 20%
Movistar (Telefonica)
23%
Claro (America Movil)
25%
Indicative market share - Mexico
Indicative market share - Brazil
Figure 2: Based on data from the author
Figure 3: Based on data from the author
26. 4948 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets
October 2011 by Citi Group and América
Móvil. Through Telcel, América Móvil
controls close to 70 percent of the mobile
connections in Mexico. América Móvil,
through the Claro brand, is also a dominant
player in Latin America. América Móvil has
stated ambitions of converting 9 percent
of its base to mobile banking by 2012.
The other significant joint venture is
Wanda, the brand announced in February
2012 for the Movistar-MasterCard initiative
earlier announced in January 2011. The
Telefónica Movistar brand has more than
100 million customers in 12 countries in
Latin America.
In Brazil the joint venture targets 65 million
Vivo customers with a mobile wallet. It will
offer an alternative approach to Paggo from
Oi, a relatively simple mobile credit card
SMS-based payment service supported
by an OTA downloadable SIM application.
But where there is a wallet there must be
cash in-cash out agents, and this is where
the retail sector comes in. When the world’s
largest retailer is also a bank, as in the case
of Mexican Banco Wal-Mart, it adds a whole
new dimension for offering value bundles
to the consumer. Further advantage stems
from the availability of better consumer
insights, loyalty offers and the creation
of multiple revenue streams.
Unsurprisingly then, there are interesting
partnerships developing involving players
from the banking, mobile and retail industries.
One of the most important of these is the
launch in Mexico of mobile accounts by
BBVA Bancomer and Coca-Cola Femsa,
the largest soft drinks manufacturer in
Latin America. Through the Coca-Cola
chain store Oxxo, branchless banking
services can now be offered to support a
range of services including money transfer,
bill payment, prepaid mobile recharge and
in-store payment.
What lies ahead?
In the competition that is developing in
each of the markets, it seems the retail
payments outreach in Mexico and Brazil
could start to become more alike. Mexico
stands to benefit with more points of
transaction, ATMs and point of sale devices,
while implementing agency models already
prevalent in Brazil. As prepaid cards
become the ‘mobile accounts’ in Brazil,
consumers stand to gain by getting more
control when they manage them via their
mobiles. This will supplement the debit card
services currently offered with the low value
accounts. Altogether, there promises to be
a great deal of learning for Latin America,
and indeed the world, from the services
rolled out in these two markets over 2013.
The devil lies in the detail, and in the process
of our continuous analysis of digital money
initiatives covering more than 32 services
around the world, one thing we at Shift
Thought have learnt is that no two markets
are alike. Ultimately, there is no substitute
for taking the time to understand each, in
terms of the history and ecosystem, in
order to have a better chance of delivering
appropriate services and staying relevant.
Charmaine Oak brings a unique perspective,
having contributed to the global development
of digital money through the leading money
transfer company Western Union, a leading
bank (Royal Bank of Scotland), a global
mobile operator (Orange FT), LogicaCMG
(the pioneer in SMS) and Wipro a leading
IT provider. Her area of expertise is in
mapping opportunities in digital money and
providing consulting services based on Shift
Thought’s Digital Money SAGE technology.
Digital money innovations stand poised to deliver value to
mass markets and, in particular, small enterprises, which
currently drive innovation and recovery around the world.
27. 5150 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets
Smart banks are winning customers by putting
them in control of their experiences and the
channels that deliver them. Some banks are
achieving this through advanced analytics that
will allow them to enhance products, personalize
service bundles and respect customers’ rising
requirements for visibility into all their accounts
on their terms. Others are leveraging ordinary
smartphone apps to achieve extraordinary
results. At the other end of the spectrum, banks
are delighting customers and keeping them loyal
by delivering services that deliver convenience
and utility. We bring together the key learnings
offered by banks (RBS Citizens, First Tennessee
Bank) and industry authorities to provide
guidance as you map a multi-channel strategy
that removes friction and boosts engagement.
PART 2: Banking In Developed Markets: Taking Charge Of Change
PART 2:
BANKING IN DEVELOPED MARKETS:
TAKING CHARGE OF CHANGE
28. 5352 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets
Out with the old and in with the
new. The 'old school', which was
all about pushing one-size-fits-all
marketing and offers at customers,
does not resonate with the customer
of today. It’s the customer that
now has all the power and access
to technology, so the 'new school'
is about winning these customers
by giving them control of their
experiences 24/7/365 days
through the channels of their choice.
To make this transformation possible
most Banks must change their
operating model, and generate
customer-centric insights through
advanced analytics that will allow
them to enhance products,
personalize service bundles and
respect customers' rising
requirements for visibility into all
their accounts on their terms.
In decades past banks were in quite an
enviable position. The power of control
was with the bank, and customers adapted
their schedules to make visits only during
banking hours, accepted bank fees and
pricing driven by internal KPIs, not individual
needs. Customers avoided switching banks
because they had limited access to which
products were on offer with the competition
unless they actually visited those banks.
Fast forward, and the shift of power has
moved 360 degrees, and customers are
increasingly in control. Always-on, always-
connected, these empowered consumers
are doing their banking whenever and
wherever they want. Customers also have a
desire for more visibility and more services.
As a result of this power shift and the fact
banks are being forced to service customers
at a lower cost, physical branch banking is
in decline. It will soon join 'one-size-fits-all'
marketing and advertising on the scrapheap
of outdated business models that have failed
to accept today's hard truth: consumers
want what they want the way they want it.
Increasingly, banks are seeing a clear
shift from physical to digital channels.
In fact, Citibank has reported that
95 percent of all transactions for Citi
in Asia occur outside a branch office1
.
But it's not just about flexibility in how
customers access information and advice.
Customers also want visibility into all
their accounts, a one-stop view into their
finances that will allow them to make
smarter decisions and manage their
money whether it’s related to their saving,
current, trading, or insurance account.
It's a demand banks must meet to remain
truly relevant in the 21st century.
(Re)build trust
Addressing the requirement that customers
have unique needs that merit attention
also sends a strong signal that banks are
resolved to serve their customers better.
This is critical at a time when trust in banks
is at an all-time low, especially after the
financial crisis and the continuing issues
we are seeing throughout Europe and
other parts of the world
From the allegations of mortgage fraud at
Deutsche Bank to news of rogue traders
at UBS, hardly a month in 2012 went by
that the financial services was not rocked
by scandal or a crisis in management. The
industry's reputation has suffered, and
now banks must work to rebuild trust.
This is one of the key takeaways offered by
the 13th annual Edelman Trust Barometer2
.
The report, based on a survey of more
than 31,000 respondents in 26 markets
around the world, measures public trust in
institutions, industries and governments.
Specifically, the Trust Barometer shows
a steep decline in trust in banks from
56 percent in 2008 to 45 percent in 2013.
What can banks do to regain their footing
and restore trust? While there are no simple
answers here, the Trust Barometer stresses
that all industries and governments face the
same task and suggests that 'trust building'
attributes are clustered around actions that
encourage engagement.
Banks: Evolve, Innovate And Embrace
‘True Multichannel’, Or Be Left Behind
By Simon Paris, Global Head of Financial Services Industries, SAP,
and Matthew Talbot, Senior Vice President, Mobile Commerce, SAP
PART 2: Banking In Developed Markets: Taking Charge Of Change
FOOTNOTE
1. www.theasianbanker.com/press-releases/citi-mobile-clients-top-one-million-mark-in-
asia-pacific-region
2. www.edelman.com/trust-downloads/press-release/
29. 5554 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets
Breaking barriers
Listening to (and responding to) customer
needs, acknowledging customer feedback
(positive and negative) via social
media and offering solutions that help
customers in planning their financial
futures are items that top the agenda for
banks in both developed and developing
markets. Many CEOs today talk about
‘customer centricity’ as a key focus.
Banks must be more customer-centric
and trade-in their outdated product-oriented
processes and legacy systems for holistic
approaches that address individual needs,
and encourage consumers to invest more
of their wallet
Clearly, building the right backbone
and capabilities to enable multi-channel
banking is key, especially as many banks
are restricted in what they can change in
the core due to the cost and ‘heart surgery’
involved. It is not about implementing silo
solutions that allow customers to conduct
banking regardless of their preferred
platform. This approach may bring the
customer in, in the short term, but it does
not address the problem at its roots.
Voice, ATMs, mobile phones, smartphones,
mobile apps, tablets, PCs, personal
navigation devices, games consoles —
and the list goes on. Banks must not only
implement new channels, but they must
also develop solid cross product integration
to achieve consistency across all customer
touch points. Success means a true multi-
channel architecture that also provides
a consistent 360-degree view of the
customer and the various lines of business.
In many cases we have observed first-hand,
banks have jumped on the mobile app
bandwagon, adding mobile as just another
digital channel. While some banks have
built bespoke applications and platforms
that enable banking and other extremely
valuable services using technology
like location-based services, there is
no underlying platform in place to give
banks a consistent user interface or
360-degree view of the customer and
products across all platforms.
Our experience shows this is a flawed
approach that breeds yet more siloed
channels and adds additional costs and
strain to the banks, which they cannot
continue to justify or support. It results
in a fragmented and inconsistent view of
the customer across products and lines
of business. For one Asia-based bank this
approach is now costing it tens of millions
of dollars to just support the release of
new mobile applications!
What’s worse, underestimating the need
for customer data to be accessible and
integrated through all channels may ultimately
cost banks competitive advantage.Their
decision to build on top of the legacy
systems, rather than take the necessary
steps to integrate all channels, leaves the
door open to new entrants and online giants.
Google, Apple, Facebook and Amazon
are just a few of the companies moving
full-speed ahead on aggressive customer-
centric strategies, aimed at piecing together
the clues customers leave behind across all
channels (profiles,preferences,past purchases,
browsing patterns), develop a single view
of the customer and drive commerce with
personal and relevant offers. And there
are other payment companies and mobile
operators that also aspire to take a bigger
chunk of the wallet, and they do not have
‘legacy’ systems to weigh them down.
30. 5756 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets
Ironically, banks are very well equipped to
deliver customers more relevant (hence
valuable) bundles of products and services
provided they take steps to become the
authoritative source of consistent customer
data across all channels. The ability to move
from a one to 1000 offer to customer to a
1:1 offer can become reality with the right
architecture in place.
Bright spots
Fortunately, many banks are now seeing
the opportunity ahead. They are competing
smart, armed with comprehensive strate-
gies that harness multi-channel banking
to satisfy customers and grow their
business. We are seeing this with some of
the Tier 1 banks in Australia, including ANZ,
and the Commonwealth Bank of Australia,
as well as in banks across North America
and Europe. This change though is not just
evident in developed markets, it is also
happening in developing markets like
South Africa and Bangladesh.
Standard Bank in South Africa, one of our
core banking partners, is one of the most
innovative banks in the world. The growth
they have seen around ‘Inclusive Banking’
is centered on a multichannel approach.
From offering customers remote account
opening in the field, hundreds of kilometers
from the nearest physical bank, to creative
services like ‘funeral plans’, Standard Bank
is pushing the boundaries around customer
centricity by embracing multichannel.
In a country where over 85 percent of the
population has a mobile phone, the
digital channel is critical for its future.
Another customer Dutch-Bangla Bank
Limited (DBBL) is among the pioneers in
mobile innovation. Some 87 percent of the
population in Bangladesh, a country with
a population of 160 million and a mobile
penetration rate of just around 60 percent,
do not have ‘official’ bank accounts.
Determined to drive financial inclusion
DBBL made the decision to harness
mobile, the channel the unbanked have
made an integral part of their lives.
In early 2012, DBBL launched a suite of
mobile banking services — and 12 months
later — it counted more than 1.2 million
new customers with 5,000 to 6,000 new
customers joining per day. These customers
have deposited more than $7.75 million
using the mobile banking platform, not
the legacy core banking system.
DBBL's suite of mobile banking services
use a technology platform that it currently
operates as a separate platform from its
core banking system. However, there are
plans underway to link these systems to
enable a single, integrated view of the
customer across all channels. The goal is
to use these insights to extend lending
services, in the form of microfinance, to
the unbanked and the underbanked.
In the more developed markets banks
increasingly see multichannel as an
essential step in a wider strategy to
add value (and encourage loyalty) by
providing offers that are completely
aligned with the needs of key customer
segments. It's all about winning the race
to power payments and commerce.
From coupons and vouchers, to location
-based services and proximity payments,
banks are taking advantage of advances
in technology to deliver on the promise
of one-to-one marketing. We are seeing
first-hand how many of our customers like
ATB Financial and CIMB in Canada and
RBS Citizens Bank in North America look
to use digital channels for new services
like QR code payments, remote check
deposit and location-based services.
To this end banks in North America, Europe
and Australia are adopting customer-centric
models that allow them to forge a new value
web with them at the center, a position they
can claim because they have begun to use
analytics to gain deeper customer insights
across all channels. Sharing this information
with merchants and other players — adhering
to personal privacy laws, of course — builds
a robust and sustainable business ecosystem.
It's a critical next step as the mobile phone
morphs into a mobile wallet to ultimately
become everyone's new portable and
personal point-of-sale.
Break away
The evolution of banking mirrors the evolution
of technology. IVR, ATMs, the Internet and
now mobile banking — each channel was
implemented as part of a wider strategy
to improve customer access to products.
In today's increasingly customer-centric
world this outdated approach short
changes both customers and banks.
Research shows that consumers demand
a single view into their accounts — and
every aspect of their relationship with the
bank — across all channels. This demand
Banks must be more customer-centric and trade in their
outdated product-oriented processes and legacy systems
for holistic approaches that address individual needs,
and encourage consumers to invest more of their wallet.
31. 5958 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets
will only grow as consumers embrace
digital channels to pay bills, conduct
commerce, purchase transport tickets
and manage their daily lives.
Will customers vote with their feet if banks
fail to offer them a single, consistent view
of their financial services? Let's just say that
the barriers to switching banks (or moving
to a new entrant that offers a helpful and
more holistic view of consumers'
transactions) will be quite low.
For banks, enabling a single and consistent
view into customer data on multiple
channels not only satisfies customers.
It also paves the way for them to generate
additional sales, enhance products, refine
pricing and improve CRM.
French writer Victor Hugo once famously
said, "There is nothing more powerful
than an idea whose time has come."
After decades of building on top of legacy
systems, the arrival of the digital channel
being led by mobile and the emergence
of the empowered consumer have come
together to create a new urgency for new
models. Banks must tear down the silos and
replace their product-driven mindset with a
singular and sincere focus on the customer.
Evolve or get left behind. It’s time for true
multichannel platforms.
Simon Paris leads SAP's end-to-end
footprint in the Financial Services Industries,
that today covers more than 5,700
customers. Previously, Paris served as vice
president at HP, where he was responsible
for the P&L of a US$17 billion division.
Matthew Talbot is responsible for mobile
banking, online banking, mobile consumer
payments and mobile inclusive banking.
Talbot joined SAP in 2004 via the acquisition
of Sybase Inc., where he played a key role
in developing the company’s mobile
commerce initiative. Previously, he was
based in Beijing and Sydney, as CEO
of Mobile Internet Group, a Wireless
Application Service Provider and publisher.
Business school dogma may dictate
that companies must consistently
exceed customer expectations to
beat the competition. But studies
show that delivering simple conve-
nience — not bells and whistles —
results in satisfied customers and
lasting loyalty.This is why RBS
Citizens has purposely chosen a
solid approach to mobile banking
that streamlines important decision
-making and removes the friction
from moving money.
Research suggests that mobile corporate
bankingisinitsinfancy.But,turnthatstatement
on its head, and it’s clear that there is also
a first-mover advantage for banks that
deliver the services customers appreciate
— and use — the most.
Indeed, a strong business case for mobile
corporate banking services exists, and
research, including a string of surveys
conducted by the Aite Group, sheds some
interesting light on what customers expect
— even demand — from their banks.
For example, a survey of 300+ treasury
executives conducted by the Aite Group
highlights key requirements that are just
as pertinent today as they were when the
research firm published them1
in 2010.
Among the findings: approximately two-thirds
of businesses would be at least “somewhat
likely” to perform basic transactions over
corporate mobile banking services in the
next 12 months, while 42 percent described
themselves as ‘likely’ or ‘very likely’ to do so.
More importantly, the Aite group found that
over half (56 percent) of survey participants
expressed interest in performing more
advanced functions, such as approving
transactions and initiating payments.
Fast forward, and these observations,
combined with the results of focus group
research conducted on behalf of RBS
Citizens, underlines the importance of
delivering mobile corporate banking
Removing Friction To Build
Relationships
By Scott Manley, SVP, Head of Product Delivery, Channel Treasury Solutions,
RBS Citizens
PART 2: Banking In Developed Markets: Taking Charge Of Change
It's all about winning the race to
power payments and commerce.
FOOTNOTE
1 www.aitegroup.com/Reports/ReportDetail.aspx?recordItemID=719
32. 6160 Mobile Commerce Guide Engage Customers and Build Loyalty in Developed and Emerging Markets
services that allow decision-makers to
get more done faster using the smart-
phones and connected devices that have
already become part of their daily routine.
Mobile explodes
Obviously, mobile plays a central role, which
is why RBS Citizens launched accessMOBILE
in 2010, a mobile corporate banking offer
catering to the needs of commercial customers,
ranging from small businesses to large
corporations. It currently exists as an
iPhone application, allowing customers
to approve wires, make transfers and
check balances. In the next phase there
are plans to offer an Android app, as well
as a Web browser experience that works
for both Android and iPhone users.
Of course, the meteoric rise of tablets has
also had an impact on the mobile roadmap.
Research documents the massive increase
in tablet sales, showing that shipments have
more than tripled.
Against this backdrop, an increasing
number of corporations, our target audience
for mobile banking services, have started
to issue their executives iPads and tablet
devices. It’s a seismic shift that we have
observed over just the last 12 months, and
clearly one that will continue to impact the
banking business. Small business owners
are also large users of tablets using them
for everything from administrative tasks
to cash registers.
Convenience pays dividends
But it’s the customer, not advances in
technology, that guide strategy, serving
as what we like to call the ‘North Star’ for
RBS Citizens’ mobile banking offerings.
And it’s this singular focus on the customer
that confirms we deliver real value when
we provide mobile banking services that
remove friction and boost efficiency.
Put simply, an approach aimed at merely
replicating online services is sure to fail.
At RBS Citizens we know that the majority
of our online customers who use corporate
banking services are cash management
professionals that are in front of their PC
from 8 to 5 Monday through Friday. However,
What to offer via mobile?
How likely would your business be to consider making the following
types of business
2009 2011
Check bank account balance Already do this
Definitely/probably would consider
13%
24%
33%
31%
Make internal bank funds
transfers
Already do this
Definitely/probably would consider
5%
22%
26%
28%
Pay bills Already do this
Definitely/probably would consider
5%
21%
29%
26%
Approve debit or credit
transactions
Already do this
Definitely/probably would consider
2%
22%
17%
32%
Make expedited payments Already do this
Definitely/probably would consider
1%
22%
19%
33%
Make transfers between
external bank accounts
Already do this
Definitely/probably would consider
2%
18%
15%
31%
Approve wires Already do this
Definitely/probably would consider
1%
17%
14%
26%
Capture and send check images
for remote check deposit using
mobile device camera
Already do this
Definitely/probably would consider
2%
15%
13%
37%
View and make pay/no-pay
decisions on positive pay
exceptions
Already do this
Definitely/probably would consider
1%
15%
12%
32%
Approve payroll batches and
other ACH payments
Already do this
Definitely/probably would consider
1%
13%
15%
23%
Figure 1: Based on data from Aite Group study “The ROI of Small-Business Mobile Banking” 2009 and 2011
The purpose of these mobile banking services, which we
offer customers free of additional charge, is to deepen the
customer relationship thus keeping existing customers loyal.
