Mobile Operators | Unwieldy Marriage.
Two key industry vertical in the Mobile Financial Services domain are Banks and Mobile Operators, to date they have been in a perceived turf war as they battle over who will prosper as mobile technology strives forward as a key enabler for banking and payments.
The battle was first outlined by the success of SafariCom in Kenya, who with little to no help from the banking sector, built a hugely successful payments services driving huge leaps forward in payments convenience, financial inclusion and of course fee revenue. This lead to the hype driven years where innovators and analysts talked up the market opportunity globally. Moments later, Globe Telecom in the Philippines saw accelerated growth with it’s business G-Cash, followed by Smart. But this created an industry divide and challenge. Traditionally banks were the only ones to offer payments and banking services, but recent successes opened the door to the possibility that a non-bank organisations could offer financial services to a customer base far greater than the banks have ever experienced through their traditional bricks and mortar business’. Banking analysts and banks responded with an attempt to create a scare campaign based on consumer protection and fraud, but mobile operator lead initiatives thrived through market necessity. Thus creating and ‘Us versus Them’ debate throughout the industry. Materials in the press continually focused on the question, ‘Who will win?’ will it be the Banks, or will it be the Mobile Operators? A debate with a poisonous thread in an industry that necessitated collaboration.
Throughout the debate we were faced with a choice on whose perspective was right. Were the banks justified in their concerns about security, risk and fraud. Or were the Mobile Operators justified in their risk relative market demand approach providing services to people historically excluded from formal financial services? Reminds me of the dating scene, where men and women have different perspective on conduct and interaction. Even though both had the long term goal of procreation, often self indulgent perspectives encouraged each side that their needs and thoughts are superior and the opposite sex is just wrong. Isn’t that what the book Men are Mars and Women are from Venus is based on? Variations on perspective.
Hundreds of years of experience have shaped of legacy thinking and beliefs system of bankers(men) throughout the world. Dealing with people’s money was a serious business, with serious risk’s. Loosing even a single dollar of a customer is considered devastating both from a reputation and trust perspective. The complexities of modern financial products, have meant that banking has become more than deposits, as increasing numbers of consumers took on credit and investment products. Experience with cheque fraud, financial melt downs, defaults and increased operating costs gave birth to practises such as Basel, AML/CTF, Risk Assessments and Regulated Policy. The result is an industry that fears change, particularly change it doesn’t understand. Hence they innovate at a slower pace, prioritise risk controls above customer experience and withdrew from perceived risky products. Banks in my opinion are the men. Historically has reenforced their superiority in society, gentlemanly norms regulated their behaviour, they owned the family assets, drove the family car and women went meant to be subservient. In the end game of procreation, their role as a father is known.
Mobile Operators on the other hands are young in comparison. The earliest commercial mobile phones date back to the late 1970’s. Hence they are considerably more innovative, and attack markets at a faster pace. In merging markets, it’s not unheard of for operators to have double digit year on year growth. They have endured the markets ability to accept small slips in service standards, adopting multiple iterations of innovations such as SMS, WAP, Smart Phones & 3G. The ever growing demand for communications with mobility have driven their success in their contribution to society. While the comparison is a long shot, the age of the mobile movement is very similar to that of the female movement as women moved out of a stereotyped role in society to contribute in ever increasing capacities throughout society. Many would argue that the individuals drove the feminist movement, but in my opinion global demands necessitated more significant contributions from females arose the world. As the role of a woman grew, so did the frequency in which they stepped on the toes of traditional roles for men(Banks). While they may have moved into corporate roles, equal opportunity and business leaders, their role in society’s ultimate goal of procreation remained. But they still had to battle the perception that women couldn’t be in serious roles, creating concepts such as the glass ceiling.
What’s the comparative for procreation in the battle of Banks and Mobile Operators in the turf war over Mobile Financial Services? One would argue that the effective collaboration between these two industry verticals. In my opinion recent examples of joint ventures, merges and collaboration agreements are the ‘marriage’ of industry players Leading to the optimum procreational outcome of profitable, sustainable businesses, the children of collaboration. Only through the proliferation of the next generation with evolved perceptions on the norms that govern society, paving the way for more and more successful collaborations.
In summary, I believe the ultimate success and evolution of of mobile technology as a norm for banking and payments is highly dependant on the ability of banks(men) and mobile operators(women) to realise they both have the same objective of building success mobile financial services businesses(children). Only then with aligned horizons will they fuse their roles in the industry, giving birth to generations of industry success