Friday, October 31, 2008

Collaboration between Banks and Mobile Operators

Call me a skeptic, but I have seen it too many times in the mobile banking industry to not believe it this time. The latest attempt at collaboration between banks and mobile operators was announced in France recently (see here and here). While it is a logical way to go for the industry to really get traction, history is cluttered with many failures for banks and mobile operators working together in a formal way. At the risk of being contradicted, I will not list the many attempts here, but readers are welcome to search the web for examples.

I believe that the differences between these types of organisations are so fundamental that it is not possible for them to collaborate formally. Of course, it is important that they work together, but the most effective is by working through defined interfaces that exist already. (for instance clearing and settlement interfaces already exist in banking, standard API's to connect to network services already exist). By establishing organisations to formally collaborate nobody will benefit and a lot of time and money will be lost.


José Luis Campanello said...

I really don't understand why a bank will try to make an arrangement with a phone carrier (carriers are rapacious birds) and it doesn't seem reasonable for a bank to explose it's clients to a TELCO.

Ohhh, yes, security! Well... Do banks have agreements with ISPs in order for clients to use Home Banking? Do they have arrangements for IVRs to operate? Why a phone is different than my home PC? If i'm responsible for the antivirus in my PC, i should also be responsible for my bluetooth configuration. Banks should educate in this matter (as they did on the internet).

It is my opinion that security can (and should) be provided by the bank. I barely trust my bank, but definitely DO NOT TRUST my phone carrier (every one i talk to seems to think carriers are charging overfees in every invoice).

I'm in the Financial Software industry.

Hannes@Home said...

Jose Luis, I love your comment! So true. I would love to talk to you off line. Why don't you send me an e-mail?

BRUBAKER said...

Hi Hans,Guess I miss this blog be fore posting on the Mobile Money Academy.
Couldn't agree with you more on this subject.
Customer should be given a choice of who the choose to subscribe for mobile payment. It should not be telco centric ,after all the phone belongs to the customer and telco is just another channel. As jose said let the security be and should be provided by the bank. Banks have spent millions of dollars on security.
I believe there are ways to leverage on this ?

Me I am trying to facilitate mobile payment in the country.



Miguel Arce said...

Right now i´m in the middle of the construction of an alliance between a telco and a bank in a market that has 95% of prepay 8 million telcos´s customer and the bank has 2 million customer. The objetive is to bancarize (only a 27% of banking penetration nationwide) and to serve as an alternative channel as well.
Will you please share with me the pro-con of this goal.The technology
will be reside in the simcard.