ABA Banking Journal - September 2008 - (Page 48)
Tech topics Mobile: a channel too big to ignore ob Egan, chief analyst for TowerGroup, spoke with ABA BJ about the developing the U.S. mobile market. As recently as six months ago it was common to hear that the U.S. was behind the international sector, particularly Japan. But top tier U.S. banks and the group’s community bank counterparts have made progress with mobile. Egan offers his thoughts. B Despite the market turmoil that could have slowed the mobile banking train, projects related to the channel continue. What are your thoughts on how the channel is progressing here? Mobile got ample press last year due to announcements from the top ten banks. The leaders—SunTrust, Bank of America—got started on a broad strategy right out of the gate with substantial offerings. So I would describe last year as the trigger point, because technology enablement occurred. We hit the peak of the hype cycle in spring of 2007. Meanwhile, we saw many “me too,” fast follower announcements, many of them supported by the processors. Jack Henry announced goDough, to conduct transactions such as balance inquiries and fund transfers. Metavante announced its partnership with Monitise Americas to make its offering. Open Solutions Inc. licensed the Fundamo solution for its clients here in the U.S. Bob Egan As a result of all these individual rollTowergroup outs, you now have some 300 banks with some form of mobile banking services. Things were getting more mainstreamed and more serious. You finally saw Verizon launch with a third of banks. You finally saw AT&T make a commitment to pre-provision the downloaded applications on the phones. You sound optimistic. Well, I have my skeptical, “voice of reason” side and the part of me that’s optimistic, especially when I consider the potential for the interplay of card payments and mobile services. Initially, I was very curious how the adoption curve would develop, given that this is a new channel and people have been asking tough questions about the business model and what would work. But with 3.5 billion phones in circulation, banks are realizing that this is a channel that can’t be ignored. So what you’re seeing is them introducing the first version of the services and getting experience in this market. At the same time, they’ve got to engage in “back filling” of the appropriate analytic IT to make this channel pay off. Why are analytics so important? You don’t want mobile banking to merely be “internet banking lite,” because that’s not a way banks can make money. Eventually, what banks will have to offer is a full menu of payment functions, TOO BIG TO IGNORE Upward mobility Subscribe at www.ababj.com continues on p.50 By Lauren Bielski, senior editor 48 SEPTEMBER 2008/ABA BANKING JOURNAL
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