The second staging of the MobeyDay conference was held last month in Barcelona, Spain, despite the best efforts of the French air traffic control strike which made travelling to and from the mobile financial services (MFS) event difficult, reports Sirpa Nordlund, executive director of the organising Mobey Forum. The theme for MobeyDay 2013, held on 11 June at the CaixaForum, was how to monitise the MFS ecosystem. I’d like to share my thoughts on the day and some of the issues discussed by the gathering of senior executives at banks, handset manufacturers, vendors and analysts.
Following the inaugural MobeyDay last year, the bank-led Mobey Forum organisation was delighted to return to Barcelona for its annual 2013 conference. Ron van Wezel, chairman of the Mobey Forum board of directors and head of emerging payment streams at Deutsche Bank opened the day for the 200 plus senior attendees from around the world, all of whom had, by that time, fought their way through the disruption caused by the French air control strike to hear about the latest developments in mobile financial services (MFS) and how to start making money from existing investments.
Chairman van Wezel briefly introduced delegates to the new Mobey Forum logo and website before going on to discuss the association’s two latest white papers; focusing on NFC Security and a Glossary of Industry Terminology.
Van Wezel’s opening MobeyDay 2013 address served as a warning to the industry: “MFS is neither a hobby nor a special interest,” he said. “Driving MFS forward requires hard work, dedication, a clear strategy and a real understanding of monetisation. Banks must put the right people in charge; people with a business focus who are capable of developing valuable, consumer oriented services.”
The first keynote of the MobeyDay2013 conference addressed the issue of mobile wallets and came from Dave Birch, an analyst and global ambassador at Consult Hyperion [Dave is also a bobsguide blogger - aka contributing editor – like the author of this piece Sirpa Nordlund: please see his inaugural blog here -Ed].
With an initially shocking take on the future of mobile wallets and bank interaction, Dave Birch warned that banks should not bring forward their own mobile wallets. Instead, he contended that an ‘umbrella’ style wallet, borne out of collaboration and a mutually beneficial business model, was the way to go because it will ultimately deliver a stronger, more consumer-centric ecosystem that will attract end users. Opening bank MFS application processing interfaces (APIs) to developers - with security of course remaining paramount - has considerable attractions, argued Birch. “It will get the ball rolling on the road towards more valuable mobile wallets for consumers, banks and partners.”
Samee Zafar, director at Edgar, Dunn & Co, was next up during the morning sessions at MobeyDay 2013 chairing a panel that debated this very topic of whether banks or non-banks were best suited to driving forward mobile wallets adoption. The panel included representatives from PKO Bank Polski, VocaLink, HP and Barclays Bank Spain and assessed who was most likely to drive consumer uptake.
The banking industry is seeing a great deal of movement in this mobile wallet area from online brands such as PayPal and Google and therefore needs to act now to mitigate the risk of these players taking over the front line for consumer personal finance provision, confining banks to a back-end processing only role, without access to the valuable front-end data.
The panel discussion at 10am at the CaixaForum in Barcelona, Spain, urged collaboration between banks and mobile network operators (MNOs) in future. Banks have the legacy of risk management that the networks do not and MNOs are well placed in the industry to bring solutions direct to consumer devices. Were they to combine forces, the two stakeholder groups could deliver a strong business case, and potentially rival Google and other technology company plays. However, much work still needs to be done to establish these relationships.
The attendees at MobeyDay 2013 were presented with two case studies to examine at their leisure throughout the day. The first was from PKO Bank Polski, focusing on the success of its IKO project in Poland, which has brought forward the successful deployment of a mobile payments system and a local mobile payments standard. The presentation highlighted Poland as one of the leading countries in MFS due to positive consumer attitudes and modern bank infrastructures with little or no legacy problems. PKO Bank Polski’s work has gone a long way to confirming mobile m-banking and m-payments as the de facto medium moving forward.
The second case study of the day came from Amir Tabakovic, a Mobey Forum board member and head of market development at PostFinance. He focused on the idea of the bank as a retailer, opening up new revenue streams via MFS. The case study analysed the ability to purchase iTunes gift cards directly within the PostFinance mobile app, offering tangible benefits for all parties. It is the kind of monetisation strategy that will help banks justify the development of innovative MFS to their boards, and was precisely the point of the gathering in Barcelona.
Social media can also be an important aspect of MFS and in driving consumer uptake. David Urbano, director of the mobile digital channels at CaixaBank, our hosts for the event, took to the stage next to assess the use of social media for enhancing the mobile banking experience.
Urbano stated that consumers like to be up-to-date, especially when it comes to personal finance, galvanising CaixaBank to begin leveraging social media and SMS texts to ensure its customers are in the know about their finances and security. This is a clever piece of risk management, as consumers are rarely separated from their mobile devices and will immediately notice an erroneous transaction where previously it could be a week before the missing funds were noticed online. Schemes like this will allay consumer fears about security, drive adoption and ultimately generate greater revenues for banks.
Big Data and MPoS
Julian Wilson, strategic alliances director at FreedomPay took to the stage next to discuss big data in advance of a panel session chaired by Dave Birch of Consult Hyperion. The combined discussion provided an overall brief on how banks can use big data, stating that consumers are largely unconcerned with a bank’s knowledge as long as they trust the bank. This opens up all kinds of selective marketing and value-add opportunities for banks if data is respected. As a trusted entity, banks are in a position to utilise this data to make consumer’s lives easier by offering useful tailored services and auto-completing as much information as possible - for example, in application forms. Remember, the consumer is king and, for them, convenience is key. The convenience of the mobile channel is one of its key selling points.
After lunch, talk turned to the exciting developments in mobile point-of-sale (MPoS), with PayPal Here, Intuit, Square, iZettle and many others targeting this area for growth it is certainly a topical debate [since the show WorldPay and Lloyds Banking Group/Monitise have also both made MPoS announcements -Ed].
Ignacio Garcia, managing director of the trail-blazing iZettle Spain, which is seeking to rival Square in Europe, opened the MPoS discussion at MobeyDay 2013 before joining myself (Sirpa Nordlund) as chair on a panel to discuss the topic. Also on the panel was the SCCP Group and Monitise. The talk centred around how to use MPoS to maximise sales. The process of buying is changing, as is the retailer experience and mobile-based card payments is one of the driving factors. This is amply demonstrated by innovations such as the deployment of a ‘mobile’ sales team in-store which can process m-payments on the shop floor, catching consumers before they get cold feet in the queue, protecting impulse items from baskets. Devices aimed at sole traders and small-to-medium sized enterprises (SMEs) are also proliferating and possible threatening card schemes established position and role in the payments chain.
Value-added Services (VAS)
The final panel session of the day was about how to use technology and customer data to improve and rollout value-add services (VAS). The chair Zilvinas Bareisis, a senior analyst at Celent, was joined by panellists from ING, Clear2Pay, Banco Sabadell and PostFinance to discuss VAS. The participants agreed that banks are in a strong position to deliver VAS, but warned that if they do not move into this area they could face disintermediation. Banks risk losing revenue, relationships and relevance if they don’t get involved in MFS.
Streamlining of multiple value tokens - for example, money, mile tokens and reward points - onto one card or mobile wallet was given as one instance of what is possible. Good VAS enables consumers to manage multiple aspects of their lives conveniently and easily and some services might even be chargeable if they are good enough. Services must be valuable to consumers, or else the ‘V’ of VAS is lost and banks will lose credibility.
Conclusions: The Future of Digital Money
Our final presentation in Barcelona focused on the future of digital money and was presented by Tomasz Smilowicz, managing director and global head of mobile solutions at Citi. I listened to Tomasz’s assessment of the future of emerging markets with particular interest as I believe technology is no longer an inhibitor. According to the GSMA, for instance, there are already over 150 mobile money services aimed at the unbanked worldwide and there were 224 million transactions worth $4.6 billion during June 2012 alone [to see the show report for the GSMA’s Mobile Word Congress (MWC) 2013 click here -Ed].
In the long term, Citi’s Smilowicz sees the digital and mobile money model for emerging markets shifting from basic transactions towards more complex tailored services, which are driven by data. VAS is the future and once way that the mobile channel can be monitised.
• I’d like to thank all of the speakers at MobeyDay 2013, on behalf of the organisers Mobey Forum, and our hosts CaixaBank, plus the lead sponsor Vocalink, and other corporate sponsors at Clear2Pay, HP, Monitise and Swiff, for helping to put on this event. Of course, a big thank you goes out to all the 200 plus delegates that attended too, especially those that battled through the French air traffic control strike to still make the conference despite the numerous flight delays around Europe on 11 June. On a personal note, I also enjoyed the impromptu post-conference networking event that took place in Barcelona airport as many of us waited for our delayed flights home! Sometimes spontaneity really is best. I’d also love to hear your feedback from the event so please use the Email me button in the top right-hand corner or use the comments box below.