Financial Services | Merging Lanes.
The past six months have seen some interesting changes to the industry of Mobile Financial Services. Over the past 5 years I have endured the long haul of taking an immature experimental industry as it drives towards the ambition of one day going mainstream. Recently, large brands have made public announcements to commitments to either implement or acquire. The vendor space has seen a succession of acquisitions, such as Sybase into SAP, m-Com into Fiserv. The line between Banked and Underbanked has been blurred, as wallet based transactional businesses strive to increase the financial intuitions share of the consumer’s wallet.
But what has this translated to on the ground? Realistically, nothing. The industry challenge of scale still remains. Hence the question remains: which one of these moves will eventuate in a highway to scale, and eventually the mainstream adoption of Mobile as a means for Financial Services.
I think the answer to this question lies in understanding the history of the industry. The past ten years has seen several successes and failures, but there are some very key themes to success. First and foremost those who have succeeded appreciate the difference between bank based architecture and telco based architecture. As the number of consumers in the market increases, bank principles such as financial integrity, reconciliation, risk management and consumer protection have ensure businesses avoid some of the traps of the mobile operator approach to transaction processing.
Secondly, a senior commitment to vision is critical as a player enters the market with a new service, as this commitment will be essential for the business to drive consumer engagement, effective launch campaigns and ongoing consumer adoption. This stuff doesn’t happen overnight, nor does it happening easily.
So what’s my tip for the year to come, look for players/partners that have:
1. A strong commitment to the vision of the industry.
2. Have a strong deep history in launching these Mobile Financial Services businesses
3. Understand the principles required in the manufacturing of Financial Products, financial integrity, scalability, risk management, transaction life cycling and consumer protection.
4. Have past experience in consumer understanding and consumer adoption for your specific market
They may sound simple, but you’ be surprised how often people miss the obvious.