Mobile Commerce Experts

Mobile banking allows financial institutions to reach new customers outside of their branch and ATM networks. (Source: istockphoto)

Mobile commerce is one of the hottest growth sectors of the mobile market. To capture the rapid developments and innovations happening in this sector, Sybase publishes an annual Mobile Commerce Guide. The first edition in 2011 focused on identifying and explaining the many sides of mobile commerce, from mobile financial services to mobile CRM. See “5 Facts about Mobile Commerce” for more information.

This year’s guide provides an in-depth look at how leading organizations worldwide are using mobile to innovate and grow their business. Readers will find real-life examples of mobile commerce deployments by financial institutions, mobile operators, and enterprises, in both developed and emerging markets. Over two-thirds of the articles are from external contributors, including Citi, Royal Bank of Canada, GSMA, Globe Telecommunications, IBM, RBS Citizens Bank, Dutch-Bangla Bank, Informa Telecoms & Media, Mobey Forum, Telefónica, TowerGroup and the Mobile Marketing Association. They share their own experiences and insights into the mobile commerce market as it is today.

To give you a taste of the wealth of information the guide has to offer, we highlight a few real-life examples from each of the following chapters:

You can access even more strategies, expert advice, and case studies by downloading the Sybase Mobile Commerce Guide 2012.

The Opportunity

This section addresses the multi-faceted aspect of mobile commerce that makes it at once complex and full of potential. In the area of marketing, for example, mobile is still a much under-utilized channel. In the U.K., only 0.5 percent of all advertising spend is for the mobile channel, while mobile accounts for an estimated seven percent of consumer time spent across print, TV, radio and other media. Furthermore, Google has found that mobile advertising can deliver an 80 percent increase on click-through rates over desktop-based advertising – and at a lower cost.

The area of mobile financial services is also opening up as more and more banks start to offer mobile payments. This can entail money transfer services (such as bill payments, account transfers, or international remittances), mobile commerce (buying physical or digital goods via a mobile phone), or mobile point of sale (using a mobile phone to purchase something at an actual store).

There is enormous opportunity for growth here, but banks aren’t the only ones interested in tapping into that potential. Mobile operators are also big players in the mobile commerce market. Keep reading to find out how both financial institutions and mobile operators are increasingly connecting with their customers via mobile.

Financial institutions

Financial institutions use and profit from mobile commerce in different ways depending on their region and customer base. In the developed world, most banking customers see a mobile banking app as the norm, not an optional offering. Nevertheless, banks can stand out by offering value-added services, such as fraud alert or credit monitoring. In the developing world, mobile banking technology, together with the proliferation of mobile phones, is enabling financial institutions to reach new customers beyond their branch and ATM networks.

In Bangladesh, for example, 87 percent of the population does not have a bank account. This is due to a lack of bank branches in rural areas where the majority of the population lives. Building and staffing additional branches in these regions would be extremely costly, and even installing ATMs would require regular, expert maintenance. Without the alternative of mobile banking, there would be no cost-effective way to address the unbanked population in Bangladesh or similar regions.

However, since 50 percent of the unbanked in Bangladesh has a mobile phone, Dutch Bangla Bank Limited (DBBL) was able to introduce a solution that allows customers to make deposits, withdrawals, and transfers all from their phone. Mobile operator agents (usually local shop owners or retailers) help new customers open accounts and provide cash-in/cash-out services. Account holders can also arrange to have their paychecks deposited directly into their account.

DBBL plans to support mobile airtime top-up, merchant payment, ATM withdrawal, and micro financing in the next phase. In addition, the solution will be available on all mobile devices with subscriptions to any of the six mobile operators of Bangladesh. This focus on openness allows financial institutions like DBBL to reach the largest number of customers.

Download the complete Mobile Commerce Guide to read more about financial institutions and mobile commerce, including the changing regulatory landscape for mobile remittance, the move to mobile banking 2.0, and more.

Mobile operators

The very nature of mobile commerce is to combine financial services with mobile services. So it makes sense that mobile operators are playing as big a role in the mobile commerce market as banks. The best-known example is perhaps that of Safaricom, a mobile operator in Kenya. In 2007, Safaricom launched M-Pesa, a mobile payment service that allows subscribers to transfer money via their mobile phone. According to an article in the Kenyan newspaper, Daily Nation, M-Pesa now has over 14 million subscribers and well over 28,000 agents across the country.

Today, numerous mobile operators in countries around the world are doing the same. In the Philippines, GXI, a wholly-owned subsidiary of Globe Telecom, has several mobile commerce solutions. They include GCASH, which supports phone-to-phone transfers, GCASH REMIT, which supports mobile remittance services, and Conditional Cash Transfer, which disburses government-sponsored cash grants to remote areas of the country. Previously, the country’s poorest families, who receive these cash grants, were spending as much as 40 percent of their grants on transportation costs to pick up the money. Now they can receive their grant at the closest GCASH outlet.

Telefónica is another mobile operator that is focusing more and more on mobile financial services. The company is introducing a mobile wallet service in eight countries in Latin America and Europe. It will allow customers to make local and international money transfers, check account information, buy goods online, make purchases in-store using near field communication technology, and receive offers and coupons for later use.

Over the next three years, Telefónica plans to expand the service to their entire customer base. That is nearly 300 million people in 26 countries. To put things in perspective, Citibank has 200 million customer accounts worldwide. The trick is to offer services that match market needs. In Latin America, for example, Telefónica will mostly provide banking services for the unbanked. In Europe, it will offer advanced financial services.

Other articles in this section cover mobile operators in Iraq and Latin America, new payment options for businesses and nonprofit organizations, and scalability.

Customer engagement

The mobile phone provides companies with a much more personal and immediate connection to their customers than is possible via other communication channels. And once you combine mobile with other trends, such as the growth of social networks around the world and the increase in location-based services, you have a new approach to customer engagement known as MoSoLoCo. This mouthful of a word stands for mobile, social, local, commerce.

MoSoLoCo is leading to the creation of new types of services that weren’t possible before. For example, RBC Royal Bank offers a mobile banking app that, along with the expected financial services, also includes a branch and ATM locator service. It uses the phone’s built-in GPS function to find the nearest branch or ATM to a user’s current location. This has proven to be one of the most-used tools in the app.  Commerce marks the completion of the interaction either through a transaction or a process.

The Sybase Mobile Commerce Guide covers more new and innovative examples of customer engagement in the mobile channel. Download the guide to get a list of best practices, a case study of the development of a mobile banking app, and an overview of near field communication technology.

Disruptive players:  Prepare for steady change

It’s clear that the mobile commerce market is undergoing rapid change. Banks, for example, have acquired mobile networks, and mobile networks have acquired banks. The last section deals with the very newest technologies and developments in the landscape and calls for the industry to embrace the unexpected.

The glossary at the end of the Guide also provides a good source of information about industry terms and acronyms relevant to the mobile commerce ecosystem.