For most banks, entering the world of Mobile Money has gone from nice-to-have to business necessity – for those on the cutting edge, it’s since become a new revenue stream. The ‘why’ behind the Mobile Money opportunity is now self-evident, but the ‘how’ - less so.
Experience tells us that mobile is not the add-on to internet banking that many assumed it would be – it’s a new paradigm that needs a new skillset. This is among the many reasons why integrating it into banking IT systems is a complex endeavour, and one that demands calling in a partner that can not only ease the transition, but really add value.
By expanding beyond in-house development teams to the wider ecosystem, banks stand to benefit not just from sector expertise and existing platforms; the right partners bring with them a connection to a new world of content and capabilities, helping transform mobile banking from added service to revenue stream.
Of course, opening up to external partners is often a challenge in itself to many financial institutions, which have often developed their IT systems in-house, piece by piece, as needed. Whether it’s in opening Application Programme Interfaces (APIs) for developers to work into, or buying in cloud-based services from other providers, the variety of options means that banks can easily find the perfect solution for both their systems and their customers.
So, how to decide on that perfect partner? The key touch points lie in their connectivity, their agility, their ecosystem, regulatory compliance and partnership-readiness. And much like the dating game, it’s about compatibility and shared ambitions.
Many banks still operate on legacy systems, which are often incredibly complex and closed-loop. The right partner must be able to connect with a bank’s infrastructure or deliver through Service Oriented Architecture (SOA), easing the burden on in-house teams to maintain these systems and ensure they run flawlessly. By this same token, it’s often beneficial to choose a partner that adopts an agnostic approach, rather than one tied to a specific technology solution – with the complexity of working around existing systems, flexibility in a provider is key.
The deployment of new, innovative services almost inevitably leads to fluctuations in development demands. Banks should identify partners with the agility to scale services up or down as new solutions are developed and brought to market. This ability to add and remove capacity when needed is a crucial component to managing costs effectively and a key benefit of outsourcing the work.
In addition, the right partner will be able to provide a comprehensive roadmap of their vision for future services, which should correlate to the bank’s ambitions for growth and remaining competitive.
Position in the Mobile Money ecosystem
Forward-thinking banks will recognise that Mobile Money is much more than providing a simple suite of mobile banking services – in fact, these are the beachhead for a world of potential new opportunities and revenue channels. This is where it’s important to find a partner that brings not only technological expertise, but a strong and straightforward connection into the complex Mobile Money ecosystem.
This network represents a wide selection of technology providers, retailers and MNOs, across multiple territories. Such relationships can extend a bank’s reach and opportunities, and act as a gateway to mobile commerce and new revenue streams.
Financial institutions function within strict regulatory parameters and it is vital that partners are compliant across all territories that the bank operates in. A solid understanding of the regulatory climate and adherence to Payment Card Industry (PCI) Data Security Standards is key, and acts as a good indicator of a partner’s understanding of the banking and payments industry as a whole.
The best Mobile Money partners will understand that working together is not a short-term endeavour but a collaborative, long-lasting partnership. If a provider is ready to enter into an arrangement where there’s a shared risk and reward model – such as subscription-based services - it’s an indication that they know and understand the true potential of the partnership and are in a position to commit to the complex delivery at hand and the journey ahead.
Mobile Money solutions developed with partners give banks the chance to innovate and meet evolving customer needs without burdening in-house teams with the sole responsibility for building and maintaining services in an increasingly competitive market. The very best mobile alliances work when both parties share a vision and each bring essential skillsets and added value to the relationship. Having the best chance at success begins with making the right match.
By Will Jones, Managing Director, EMEA & AP, Monitise