Wednesday, February 21, 2007

The Mobile Banking Concept

The lifespan of all good ideas can be broken into five phases: concept, prototype, pilot, pre-production, commercial deployment. Few ideas ever reach the stage of commercial deployment, because they are just not viable, or have been ill conceived or badly deployed. For some or other reason, mobile banking has been over-saturated with concepts and to some degree with prototypes. The idea of utilising the phone for financial transactions are so obvious that every man and his dog have developed a new concept or have submitted a patent somewhere. Everyone of them believing that they have stumbled on the ultimate approach.

The reality is that very few of these ever progress past the rudimentary prototype stage. And it is actually quite easy to demonstrate simple mobile banking functionality in a prototype environment. Some of the challenges that often have not even been identified and hence solved are issues related to integration, regulatory/legal and usability. These are sometimes addressed in the few prototypes that migrate to pilot.

A pilot usually consists of a few hundred, maybe thousands of subscribers performing transactions in a controlled environment with limited functionality. Even if pilots work, they often don't address important aspects like scalability and system responses to unpredicted actions or break-downs. What happens in the case of transactions that have been lost and how does the system respond to situations where a component is not available. Important legal aspects are also often not addressed yet at this stage. Pilots seldom uncovers the real system challenges and at best highlights key elements regarding user experience.

During the pre-production stage business processes and system reliability and robustness should be attended to. Many different business processes are required if a system is to be deployed in a production environment. This should include registration, dispute resolutions, service activation to name only a few. In examples that we have seen in the market some deployments have neglected key processes leading to very difficult deployments and disillusioned clients. What looked easy during pilot now turns out to be a nightmare of realities.

It is only when a solution is deployed commercially that they most important element of any idea is tested: Can it make money? Mobile banking solutions that are not profitable will fail ultimately. An this is where we at Fundamo can really contribute to making a difference in deploying successful mobile payment/banking solutions. We have seen what works and what does not. We have built powerful business modeling tools and have helped many customers to culminate with commercially successful deployments of novel ideas. We have seen many competing products fail because they were not commercially viable.

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