Mobile Banking: Gaining 5X traction

Despite the general downturn in the banking industry, new research from TowerGroup finds that 2009 will be a pivotal year for mobile banking as it turns from a niche channel to a mainstream channel for consumer banking. TowerGroup estimates that mobile banking usage will grow from 10 million active users in 2009 to over 53 million active users in 2013, representing a compound annual growth rate of 51.8%.

As economic concerns prompt consumers to manage their finances more closely, their desire for real-time access to- and control of- their aggregated financial information is increasing the urgency for banks to create a mobile banking channel. More broadly, the proliferation of mobile devices and smart phones symbolizes a pervasive, networked consumer market, revolutionizing many aspects of the consumer lifestyle, including finance. To this end, TowerGroup believes that mobility will be a major disruptive force in the financial services industry.

Financial services executives understand that mobile banking is a bridge to much more feature-rich, value-added mobile payments solutions. The ubiquity of mobile devices, coupled with customers' craving for information on the go, is creating the perfect opportunity for banks to extend the reach of their banking services using the most personal possession for consumers - the mobile phone. At a time when every customer counts, mobile banking is an avenue for banks to reach new audiences and grow their business.

Most mobile banking strategies today are a result of banks' efforts to extend financial services to their existing Internet banking customer base as a next step in the evolution of the self-service business model. As time progresses, mobile banking will flourish and services will continue to evolve, moving beyond basic banking functionality like balance inquiries, location finders and intrabank fund transfers to more sophisticated applications that leverage the rich functionality of mobile devices.

Vendors will continue the battle for market dominance, and the leaders will be those that embrace partnerships, platform integration and a holistic view of mobile financial services. To take advantage of the full potential of the mobile channel, TowerGroup recommends that banks begin now to incorporate mobile banking as a delivery channel with consideration for the following best practices:

1.Leverage other delivery channels to create synergies with the self-service model and utilize the full spectrum of device capabilities.

2.Develop smart integration models that give banks new segmentation and personalization capabilities for true one-to-one customer outreach based on customers' relationship desires.

3.Think outside the bank's customer base to capture new customers such as current unbanked customers with no bank accounts, ethnic markets and new generational users, such as the Generation Y segment, which desires self-service, innovation and paperless electronic transactions with no need for human interaction.

4.Create tight relationships between mobile banking and ATM vendors to build stronger ties with customers that currently do not have a relationship with a bank.

Ref: http://news.prnewswire.com/DisplayReleaseContent.aspx?ACCT=104&STORY=/www/story/05-26-2009/0005032129&EDATE

Juniper forecasts significant increase in open source smartphones by 2014

The number of Smartphones shipped with open source operating systems (OS) will increase from 106 million this year to 223 million by 2014 according to a new report from telecom consultants Juniper Research.

The Open Source OS research found that operating systems and the applications are playing an increasingly important role in the differentiation of new smartphones and a key factor in the choice of which handset to choose from by users.

AppStore and Open-Source The last three years has seen a revolution in the OS market with market leader Symbian moving to open source and Apple leading the way in the distribution of Applications through their innovative, but now widely copied, AppStore approach. The move to open-source OS has also encouraged developers to design new and attractive applications and with over 60% of the OS market is now based on open-source, and a sizeable pool of software design talent out there, there is a massive opportunity for innovation.

However, the real key is not whether the OS is open-source but whether it's easy for a developer to design an application and make money from that effort. The combined changes of Apple's open route to the market and LiMo, OHA and Symbian's open-source OS approach have generated a tidal wave-like effect which even the economic downturn has been unable to reverse.

There is a clear warning for device manufacturers - the choice of OS is now critical and market share will, to a large extent, follow application development. The unexpected side effect however will be a shift in the balance of power towards application developers and end users - they will begin to play the tune!

Indian Telecom Story (Part XI): Return to Grey?

Maharashtra state government has upped the Value Added Tax on mobile phones from 4% to 12.5%. This translates to an increase in tax revenues for the government from Rs.12 crore per month to Rs.36 per month. Notably, the Indian Cellular Association (ICA) is displeased and so are the mobile vendors.

This move would open up the grey markets while hitting business and employment in the organized sector. It is noteworthy that the boom in the organized device sector was a result of a reduction of high tax regime in 2002. This move is also being cited as a classic case of not understanding that this is a global market and it takes less than a dollar to transport mobiles across continents. This is a very short sighted move, which would be self defeating in the long run and will reverse the growth in the industry. Since, the organized telecom as an industry has been a cash cow for the government, hurting the revenues and businesses of the organized players would hurt the long term socio economic development of the state as well.

Such counter-productive policy making will negatively impact private enterprise and open markets’ and the very essence of economic growth in the long term in favour of short term subsidy for electoral and populist measures. Our state and our cities are ranked low by international businesses in terms of ease of doing business. Our growth planners, still need to learn from the Chinese model of state sponsored private industry.

Mobile Ads: Apple betters Nokia

Nokia has lost its overall market share leadership in the worldwide smartphone segment to Apple, based on browser calls for mobile ads. The mobile ad share is important because apps drive customer loyalty more than hardware features.

Gartner had noted in its most recent report on the smartphone market that “services and applications are now instrumental to smartphones’ success.” That report, reflecting first quarter 2009 figures, had Nokia still firmly in the lead. But according to numbers from mobile ad service vendor AdMob, Apple smartphones received 49 percent of ad traffic in May, compared with 32 percent for Nokia. Apple offers many more apps, and thus it’s more geared to consumers than Nokia.

Apple's frictionless system and huge customer base, feeds a virtuous cycle of more apps for the App Store leading to more customers for Apple’s iPhone. Apple had the advantage of the years of experience with iTunes and their iPods PLUS their own acceptable billing solution and that has served them well. Industry sources are of the opinion that other stores simply aren’t matching the ARPUs [average revenue per user] of the Apple App store

Global top 10 mobile operators

The following list comprises the top 10 largest mobile operators in the world, according to Wireless Intelligence. The list ranks the world's carriers by total number of connections and number of markets.

Internet Marketing: The challenge in penetrating Asian and African markets.

A recent release of Internetworldstats.com detailing the world internet usage and population statistics (Q1, 2009) points to a compelling opportunity for internet marketers and portal designers in Asia and Africa. With a weight-age of 70% of total population of the world and a lower-than-mean penetration, the internet revolution is waiting to happen here in the next decade. The good thing about Africa and Asia is that barring a few countries, most of these states are supportive of efforts to increase the telecom and internet infrastructure. However, the internet conquest here will have a completely different set of rules compared to North America, Western Europe and Australia. While the big and long term opportunities lie in Asia and Africa, one must not be unmindful of Latin America/Caribbean and the Mid East (or even Eastern Europe), which are the medium term opportunity spots. While N America, W Europe and Australia are the first wave internet states, L America, Mid East and Eastern Europe will be second wave internet states and Asia/ Africa will be the third wave internet states.

The rules of the internet conquest will have to change and will require some fundamental re-thinking of re-packaging the delivery. Here are a few pointers towards the new rules of the game:

1.English got Internet, where it is today, but going forward, English may be limiting. It is not hard to associate a higher penetration of internet with the English world (North America, Western Europe and Australia).
This thus places emphasis on language of internet delivery: Mandarin, Hindi, Malaya, Tamil, Urdu, Swahili and more. English literacy will not drive economic and human development in these states. The mode of deliverance will be the local language.

2.The spread of internet in N. America, W.Europe and Australia has largely been acknowledged to proliferation of personal computing devices
Penetration in the second and third wave states, will depend on Telecom penetration and hence the mobile phone/handheld devices will become the harbingers of the internet revolution. By handhelds, I do not mean the fancy up-market smart-phones but basic $40/60 phones.

3.Existing subscription or ad based models may not be useful for these emerging markets. Revenue, Profitability and Sustainability models find the internet business space to be extremely slippery even in English speaking regions where culture, usages and habits are somewhat contiguous.
For the second and third wave states, customization to language, habits, cultures, money usage, and payment mechanisms will pose a significant challenge to marketers.

4.The first wave states browse the internet on computers, laptops, net-books, tablets and smart-phones. There is a high per capita consumption of content, ads, minutes of usage, search for information etc. High Def Content including text, audio, video form a part of the delivery mechanism.
Device limitations will influence content delivery. Content focus has to be sharp and light. One will have to judiciously use the knowledge of the local markets, mix them up smartly with business objectives and keep the content sharp and focused. Content delivery will also be a critical variable. Keeping in mind the infrastructural shortcomings, content delivered may only be uni-dimensional in nature (only voice or only text).

5.The business transactions in the first wave states are credit/debit card based and have a narrow bandwidth of services. Booking airline tickets, buying books, music and flowers, accessing paid information or content is only a privilege of the top 5-7% in the second and third wave states.
The challenge is to cater to the basic needs of the population better. The delivery medium here has to be much broader and involve more public utilities, health services, department of posts, Agriculture and Labour ministries or groups, banking groups etc. This involves a re-defining of the eco-system of delivery.

6.The problem of platforms, browsers and OSs is a vexing one even in the age of computing devices. The adaptabilities and compatibilities will be another challenge when the medium of delivery shifts to a basic phone.
Thus the delivery medium needs to be platform agnostic and will sit on a server preceding the mobile phone in the value delivery chain. For eg. a server that processes a consumer request, links up to the relevant website/portal, accesses information, downloads it on itself and then plays it back to the user after customizing the content. (Eg. The server receives a weather update, visits the local meteorological department portal, downloads data, coverts it into local language text/voice and plays it back to the user.)

7.The purchase mechanism and purchase price is primarily on credit card/internet banking basis. This is a high security risk situation but the most prevalent one because of the purchase habits of the consumer in the first wave countries.
The Second and third wave user is a very cautious spender and frugal as well. He does not own credit cards and the payment mechanism will have to involve the Telecom Operator. Such tie-ups would be critical in bringing internet enabled access to the user. There is a space for MVNEs and MVNAs playing a meaningful role here connecting the Solution provider, Telecom operator, Finance provider, Systems provider etc.

Internet Marketers are yet to meet the real challenge of deep penetration in the Asian and African markets, and the pointers given above would be critical for building sustainable depth.

Demystifying Twitter (Part II):Usage Charecterestics

Contd from earlier post http://technologyandtelecom.blogspot.com/2009/06/demystifying-twitter-one-way-one-to.html

Activity levels of Twitter Users

Data collected from Twitter Grader (4.5 million users) has some interesting inferences that need to be taken note of:

1. 79.79% users failed to provide a homepage URL

2.75.86% of users have not entered a bio in their profile

3.68.68% have not specified a location

4.55.50% of suers donot follow anyone

5.54.88% have never tweeted

6.52.71% have no followers

9.06% of all Twitter users are inactive (less than 10 followers, 10 friends,10 updates). Of the ones, who are thus classified to be active, and have a bio, loaction, hompage URL:

1. Average user tweets .97 times a day

2. An average user has tweeted 119.34 times in total

3. The average user has a following to follower raio of .7738

In terms of content of tweets:

1.1.44% of all tweets are retweets

2.37.95% of all tweets contain an @ symbol (mentions)

3.33.44% of all tweets start with an @ symbol (replies)

Most users stretch the 140 character limit to the max in an attempt to get as much content as possible into every update.The distribution of postings over days and times of day shows us that business hours during the business week in the US are the most popular.

The maximum concentration of Twitter use is in US, followed by Canada and UK. Australia is the next in the list.