Mobile Banking Crossroads
Investing In Next Generation Mobile Platforms To Support Changing Business Models
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Our successes at Monitise Create have come by applying, almost religiously, the mantra of 'human-first' to our clients' work. We look obsessively at the needs of the customer, and rather than use the channel to sell or advertise, we use it to solve problems and add value. Simply put, we leverage the power of mobile to make life easier for consumers.
Consumers' expectations, and the flurry of mobile banking innovation coming from large, national FIs, are driving a mobile arms race. The lesson is simple: Act now, or customers will seek innovation elsewhere. To compete, FIs need a platform that allows them to keep parity with the largest, deep-pocketed banks by quickly deploying the features that consumers demand.
"Mobile is increasingly complex with different devices and operating systems and fast innovation," said Lisa Stanton, president of the Americas at Monitise. "We can help, whether they need a core platform or just some payment and commerce tools. We have a model where you can consume what you need and add it on to what you are doing."
Monitise is starting with a relatively simple mobile money deployment in Hong Kong, with plans to turn it into a major payments business throughout China. The mobile money platform, called Easy TopUP, enables users to reload prepaid SIM cards with funds taken directly from the user's bank account, rather than purchasing vouchers from stores. Monitise, of London, was one of 100 companies that accompanied British Prime Minister David Cameron on a recent trade mission to China.
Richard Johnson, SVP Strategy, Monitise, discusses mobile commerce and the threats and opportunities for banks in an interview with The Paypers.
Mobile Money – and by that I mean banking, paying or buying from a mobile device - is a particularly exciting part of the mobile revolution. From the consumer point of view, mobile offers 24/7 easy access to your finances, wherever you are. From a business perspective, mobile offers financial institutions, payment processors and other players a level of engagement and repeat usage from a captive audience that other channels, such as the high street or web, just can't match, says Will Jones, President, EMEA at Monitise.
The idea is to steer people using mobile banking apps into a marketplace, essentially located inside the banking app and powered by Monitise. "Mobile banking consumers are using it on average 26 times a month, so we have an assemblage of users who are opening that app every single day," says Lisa Stanton, President of Americas at Monitise. "What we're saying to our partners (banks and credit unions) is that gives you the right to do the next thing with that. It's a destination they're going to anyway, which is why we think mobile commerce is a perfect next step. We've already got all your personal details. We've got your money, your payments financials and now we can help you with targeted offers."
Mobile Money is a particularly exciting part of the mobile evolution. It's simplifying and speeding up the way we bank, pay and shop; opening infinitely more opportunities for people to manage their money around the clock at a time and place that suits them. Mobile offers a level of engagement and repeat usage that a branch, ATM, the web and many other channels just can't match. This is exciting stuff for those in the business of mobile commerce - the browsing, buying and selling of products and services on mobiles. There's a growing audience of captive and connected consumers to engage with, says Alastair Lukies, CEO and Co-Founder of Monitise.
Mobile will continue to accelerate the convergence between the offline and digital worlds of banking, payments and commerce. There's an increasingly evident shift between technology-centric payment schemes and truly disruptive consumer-oriented payment initiatives that will continue to revolutionize money – and set the stage for the future of commerce, said Lisa Stanton, President, Americas for Monitise.
Mobile wallets will need a simple, intuitive interface combined with the ability to redeem discounts and loyalty rewards before customers will feel compelled to adopt them, says Lisa Stanton, executive vice president at Monitise, a banking technology services provider. "(Consumers) won't do it unless they feel like it helped them," says Stanton.
One to watch? Monitise has been grabbing headlines for a year or two now, but there's every reason to believe the best is yet to come. Created by Alastair Lukies, Monitise has software which enables individuals to make payments using their mobile phone. Banks such as HSBC and RBS love the software, using it as the heart of their own mobile services.
Credit unions must balance pragmatic services with a "wow factor" for engaging and surprising their members, adds Carl Tsukahara, chief marketing officer for Monitise. "Mobile offers an opportunity for runaway success in delighting members. We've seen this occur with remote deposit capture. This is a pure mobile service that's ideal for smartphones because of the camera control and always-on Web connectivity."
Tim Attinger, group vice president of strategy and innovation at Blackhawk Network, said that working with Monitise helps bank partners bring great retail brands and consumers together with new revenue opportunities and marketing applications. "We are also excited about the overlap between certain of Blackhawk's global content and Monitise's international footprint and aspirations," Attinger said.
"If banks listen to the consumer, the results will be amazing," says Alastair Lukies, CEO and founder of Monitise. "If they facilitate special offers from both national and local merchants and enable this new type of commerce, they will rebuild their brands and the trust people have in those brands."
Banks today have a golden opportunity to use this frequent mobile engagement to regain the trust of their consumers. As the plethora of new companies come onto the scene touting mobile payment offerings or mobile commerce content, it's important for banking institutions to leverage their foundations and offer consumers the peace of mind of trust via regulated, safe, guaranteed, consumer-centric experiences in delivering payment and commerce services.
"Consumers need to trust the infrastructure that underlies the mobile-commerce transaction long before they use a service," says Alastair Lukies, CEO and founder of Monitise. "When voice over IP came along, people immediately gravitated to the Internet to make phone calls. That won't happen with mobile payments in the same way, because people require a higher level of trust in the infrastructure that manages their money and financial information."
"There are so many folks still engaged in (mobile) commerce, there won't be one winning industry. But we do believe with great conviction that the financial services entities, the banks and payments companies, will have a very, very strong, dominant role in this," said Carl Tsukahara, chief marketing officer at Monitise.
"Mobile is showing overwhelming value as a tool to drive new account openings as well as cement existing account relationships. It also increases the reach for smaller regional and community organizations where having complete physical coverage is not possible," said Carl Tsukahara, chief marketing officer at Monitise.
Monitise executive vice president Lisa Stanton explains the evolution of the Monitise service offering: "It's changed quite a lot but always remained true to the original concept: bank anywhere, pay anyone and buy anything. That's been our strategy over the years, but it's certainly more tangible today than it was in the early stages. This nascent industry that we chose to become involved in has actually become almost mainstream."
"Our aim, with our evolving interoperable platform and ecosystem of partners, is to enable consumers to bank anywhere, pay anyone and buy anything," said Carl Tsukahara, Monitise's Chief Marketing Officer. "There's a lot of disruption in the marketplace, so our role is to enable banks and payment companies to defend their position and extend their service offerings. As a white-label offering, we are the picks and shovels in the mobile money gold rush. We deliver the tools to enable them to bring their innovations to market."
Lisa Stanton, executive vice-president of Payments, Monitise, calls 2013 "the year of mobile commerce." "Consumers are comfortable with using mobile, so this is a great opportunity for banks to augment payments with the commerce side of the equation, and bringing merchants and consumers together."
Visa believes that by 2020 more than half of all payments made in Europe will be done through mobile devices, so it is continuing to put more investment into how it will remain a central part of those transactions. In the latest development, mobile money specialist Monitise has announced an extended deal in which Visa Europe will license all of Monitise's technology in an agreement it says will bring in a minimum of €45 million ($59 million) in the next three years, "with greater revenues as certain user generated thresholds are achieved."
A rapid overseas expansion, achieved by forming partnerships with some of the world's biggest finance companies, has been key to the success of Monitise, the AIM-listed mobile payments firm that is one of the UK's brightest technology prospects. Read the definitive profile of Monitise.
Only 40 per cent of Indonesians have a bank account, but over 90 per cent have a mobile phone. That represents a big opportunity for both entrepreneurs and multinational companies such as Monitise, which is partnering with Astra. In this video, Calvin Lim, Director of AGIT Monitise Indonesia, discusses the importance of consumer trust and how the industry will quickly accelerate once consumers become used to the process.
BlackBerry may be launching a new platform in certain markets to try to win back users, but it's focusing on service additions in other places where the BlackBerry install base remains strong. Today it's officially launching BBM Money in Indonesia, in partnership with PermataBank and Monitise to bring real-time mobile payments to BlackBerry's platform-specific social network and messaging service.
Richard Johnson, strategy director at Monitise, looks back over the history of the Mobile World Congress show, the mobile financial services arena and what can be expected at the 2013 show, with many young hands still on the tiller of this fast-developing new channel.
Monitise, the world's biggest mobile money company, has more than tripled the value of transactions flowing through its systems over the past year. As the digital banking revolution gathered pace, some $31 billion moved through Monitise's systems in two billion transactions in 2012, compared with $10 billion in 480 million transactions a year before.
The alliance between the two companies combines Logica's – now part of CGI – established IT and consulting services, payments expertise and local market knowledge in Europe with Monitise's bank-grade Mobile Money capabilities.
Mobile wallets will live or die on the utility they provide. The winners will be those with digital wallets that are compelling, intuitive, integrated to all a consumers' key needs, secure and regulated, says Monitise CEO Al Lukies in this opinion piece.
Andrew Irvine, senior vice president, BMO Bank of Montreal said that a growing mobile money opportunity presented the bank with a new opportunity to serve customers. "We are extremely pleased with the response we've seen to our mobile banking and payments services so far and, with the support of Monitise and its technology platform, we look forward to delivering more innovative solutions across this space and beyond," he said.
American Savings Bank plans to add a number of payment-related mobile capabilities in the coming year as it penetrates further into electronic commerce, adding marketing alerts and special offers. Most of its mobile technology is hosted by Monitise.
BMO Bank of Montreal and Monitise have entered into an alliance to develop mobile money services via the latter's platform. The collaboration builds on an agreement formed in 2010 with Clairmail, the US-based mobile banking and payments provider acquired by Monitise in 2012. The two will work with together across the bank's smartphone applications, mobile web offerings and SMS services.
"Our feeling is when you start to think about mobile payments and mobile wallets, Mint brings another element of personal financial management," says Carl Tsukahara, head of marketing for Monitise Americas. Tsukahara says the use case for PFM in mobile banking includes the ability to check finances and budgets while redeeming merchant offers that are becoming increasingly mobile and an important part of merchant acquisition strategy for card issuers in a more heavily regulated industry.
Offering a view of all of the customer's financial data (loans, credit cards, savings, etc.) with Mint as part of the bank's mobile app could be a huge weapon for banks in the budding digit wallet wars, says Carl Tsukahara, Monitise's chief marketing officer. "One advantage for the financial institutions is the info they have about a customers' financial health," he points out. "If I [as a customer] have a mobile offer for a purchase, I can look at my accounts, and see if I can afford this… A stand-alone wallet can't do that."
Richard Johnson discusses the Monitise approach to issues in the Mobile Money market.
Card networks are also taking stakes in innovative firms to keep an eye on potentially disruptive technologies. Visa owns part of Square, which recently struck a deal with Starbucks to make its mobile-payment service available in 7,000 of the coffee chain's outlets in America. Visa has also invested in Monitise, a mobile-banking specialist.
Alastair Lukies, Monitise CEO and co-founder, likens Monitise to sellers of picks and shovels during the Gold Rush in this interview on CNBC.
Desert Schools pulled the trigger this summer – uploading apps to the Apple Apps Store, Android Play, and even the BlackBerry Apps store – and 90 days later it has a stunning number to report: "30% of our online banking users are now using our mobile apps," said Cathy Graham, vice president at Desert Schools Federal Credit Union.
"Mobile is, without question, the channel of the future," said Alastair Lukies, chief executive of Monitise Group, in a statement. "Our strategy involves extending our Monitise Enterprise Platform to the world's leading banks and payment companies to help them improve and expand their customer relationships. As money becomes increasingly digitized amid exploding demand in the highly-competitive mobile money space, we look forward to collaborating closely with Cognizant to support financial institutions across the world in developing strategic, effective, and timely mobile services."
The acquisition of Clairmail for $173 million gives Monitise a strong customer list, solid management team and strong sales momentum in the important U.S. market.
British mobile banking technology and services firm Monitise has agreed to buy privately held U.S. rival Clairmail for $173 million, expanding its reach on the key North American market.
"It seems like a big development," says Aaron McPherson, practice director of financial services at IDC Financial Insights. "Combining the [companies] gives them more scale, which is always good in an emerging market. You want this to happen."
One more sign of the mobile money space continuing to grow up: some significant consolidation underway. Today, the UK-based mobile banking specialists Monitise announced that it is buying Clairmail, a U.S.-based competitor, for $173 million, as part of its global expansion.
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