Monday, November 24, 2008

My new Touch Screen Phone

I recently started using a new touch screen phone, the Samsung i900 Omnia. I told myself that this is an experiment of how new phones will work, and seeing that I am in the phone application business, had to get one to use myself. (I am not an Apple-person, so the iPhone would not have done it for me).

As with all modern phones the Omnia comes with everything: GPS, FM radio, MP3 player, 5Mpixel camera, Card recognition, support for PowerPoint, Excel and Word... you name it. Ordinary e-mail or Push e-mail either delivered via WiFi or full HSDPA 3G, all of this packed into a phone smaller than my previous Sony Ericsson. And it can do Mobile banking too. The existing Fundamo application for Mobile Money runs seamlessly - even better than on the older phones.

One thing is clear. Consumers will be confronted by so many features and functions on modern phones that mobile banking/payments will definitely be lost in all the noise. Unless mobile banking is used frequently, the average consumer would not know where to find the functionality. As developers of mobile banking applications, we will have to think carefully how we make mobile banking part of the modern cellphone users life. I believe that this is only possible if we use more "push" functionality and integrate mobile payments with more and more of the applications.

Tuesday, November 18, 2008

Counter-Terrorism targets cellphone banking

I have noticed that Cellphone banking is being targeted again as a mechanism to fund terrirism activities (Read here). In a way I have an appreciation for these type of posts. The fear of a payment instrument that is real-time, easy to access and largely anonymous is of course scary. Such a payment eco-system can easily be utilised to fund harmful activities without being able to track the perpetrators.

The reality of mobile banking is that it has not (and will most probably not) create such an eco-system. As a matter of fact, mobile banking would enable much more control, transparency and auditability for international transactions than what is currently possible. As such, it is my believe that counter-terrorism bodies should applaud cellphone banking initiatives.

Internet-based payment systems are much more prone to harmful eco-systems. The difficulty in auditability, authorisation and identification of participants in the payment system makes it much more likely to be miss-used. In the light of this, I find it quite amusing that one can contribute towards funding the Counterterrorism blog using Paypal.

Tuesday, November 11, 2008

Mobile Money Academy

One of the biggest challenges of this fledgling industry is a lack of skills. The deployment and operations of Mobile Money solutions requires a diverse set of skills almost never present in one individual nor in one company. Diverse knowledge and experience is needed covering the following areas of specialisation in order to successfully deploy mobile financial services:
  • High volume and secure transactional systems
  • Marketing and distribution skills
  • Regulatory expertise
  • Skills related to fraud management
  • Operational expertise of a new generation of banking systems
  • Management of banking functionality (reporting, treasury functions etc.)
In order to grow the industry, it is critical that we should produce more and more skilled professionals that can build companies and run operations. One idea that was born in Dubai and that I think is essential to ensure a vibrant industry is to establish an Academy for Mobile Money. Hopefully someone will see this gap and start working at filling it.

The Future of Mobile Banking

It has been some time since the first mobile payment solution was prototyped during the late 1990's. It would be correct to say that next year mobile payments and banking have been around for a decade. Many challenges were overcome and many deployments made. During the past ten years many mistakes were made and a lot of money has been invested (and lost!) to develop the industry to the current stage.

Mobile banking has come of age. The little baby is without doubt a teenager today and many banks and mobile operators have made serious commitments to making mobile banking real. Mobile banking moved from the maverick fringe to maintstream relevance with many success stories and case studies. The question is, what can we expect in the future... next year and (if it is possible to look that far in the future), the next ten years? This is some of the things that I believe will materialise:

In the short term, it is my expectation that the following would happen
  • I expect that we will see a massive increase in the number of subscribers to mobile banking functionality. The penetration of subscribers are already quite impressive, especially in countries like Kenya and South Africa, but this performance will be replicated in other countries as operators and banks get better at the products and increase investments in marketing and services.
  • As the numbers increase towards the end of the year, we ill see an exponential increase in transaction volumes, particularly phone to phone payments. The most important catalyst for this will be the cash-in and cash-out facilities created. With an increase in subscribers, increased value of cash held in values, transactions will follow.
  • I do not expect any mainstream standards emerging as different suppliers offer different solutions, but I expect an increase in the ability to inter-connect different solutions with one another. Even today it is possible to send money from a Western Union system to a GCash system. I expect more of these inter-connections to be built.
  • Most mainstream (relevant) banks would participate in mobile banking. At a stage not to far in the future all banks will realise that they will have to invest in this technology in order to stay relevant and they will.
In the longer term, I expect some of the following to occur
  • Because mobile banking holds the promise of extremely secure authentication (actual implementation of digital signatures), I expect the emergence of dedicated identification devices. These devices will hold your identity in digital format. Any transaction will be unlocked by this device in conjunction with your own private key or even possibly biometrics. This device will become the most important thing that you will have with you all the time. (Some people may even be happy for the device to be implanted in them).
  • With an exponential increase in the number of people with access to bank accounts, more people will be able to receive money, have access to funding and this will lead to a massive increased economic empowerment. This will directly lead to a better life for more.
  • Ultimately, I expect cash to totally disappear as people start recognising the problems associated with cash.

MMT08 Feedback

I was quite critical of the planned MMT08 conference planned for Dubai during Novemebre (Read here). In the end I did attend the conference and must congratulate the organisers. Clarion did a great job of ensuring that many of the key players in the industry got together in Dubai. I specifically enjoyed the networking opportunities - meeting many of my old friends again, but also getting the opportunity to meet key players that I have never had the chance to meet. We need good conference organisers to push the industry forward. If the guys from Clarion can keep it up, they will serve the industry well.