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What's Holding Mobile Money Back?

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Mobile is the channel of the future. Online is very relevant and still growing, but now it's about getting in front of customers via the one device that they rarely put down - the mobile device.

There's no doubt that consumer demand for mobile money services is strong, Gartner predicts that mobile payment transaction values will surpass $171.5 billion this year, a 61.9 percent increase from 2011. Not only has mobile money existed in the Nordics for quite some time but interest in emerging players such as Square and iPass further highlights the demand. And this demand is not only prevalent in the developed world. In fact, mobile money has existed for longer in emerging markets such as Africa (e.g. E-Pesa), India and South America where infrastructures are less complex. There, mobile money has leapfrogged some of the issues we are facing in order to bring mobile money to the masses but, here in the UK, we have legacy infrastructure and systems that we have to overcome in order to achieve mobile money success.

As money becomes increasingly digitised, most businesses need to develop strategic, effective and timely mobile services to remain competitive and to cater to customer demand. While many banks view mobile as a critical part of their strategy, those who have successfully rolled out services across multiple products are still in the minority.

One of the issues that financial institutions face is that with mobile money there is no right or wrong way to bring it to market, or indeed a blueprint - yet - for how to do this successfully. And, as consumers clamour for the enhanced customer experience, the bigger banks run the risk of losing out to smaller and more nimble and agile players who can adapt more quickly.

So, they are looking for solutions. Ones that can be delivered cost-effectively and speedily, with the ability to scale as customer demand increases. Specifically, financial institutions are looking to provide innovative mobile banking, payments and commerce solutions to customers that can be used on any device, across any platform. The ultimate benefit of this is that it will enhance customer relationships by offering easy-to-use payment methods, as money becomes more digitised and customers' acceptance of such solutions increases. Banks are keen to earn customer trust by providing a better customer experience and this is an obvious way to do so.

To compete in a rapidly evolving industry, financial services firms are repositioning themselves for higher performance and new growth opportunities. The credit crisis has emphasised the need for liquidity, cash management, operational efficiency and transparency, as well as the continued importance to focus on what the customer wants.

Mobile technology has real potential to significantly change consumer-facing industries. As a route to market, it reshapes the channel mix; as a computing and service platform, it redraws the ways in which businesses engage with customers; and, as a new technology architecture, it creates opportunities for new products and revenues. The accent in the rapidly changing world of consumer services is on true personalisation, context-aware systems, and real-time services.

Mobile money has arrived and is driving a disruptive shift in channel interaction with consumers, thereby accelerating the replacement of cash and bringing new products/services to consumers. The market is ready to explode and only regulation and controls are rightly holding back the pace of change.

But it's really important that it's not seen as just another IT project. Nor is it about a single app or mobile website. In my experience, mobility is transformational in the same way as the internet has been. The most successful mobility strategies focus on anticipating customer needs and demands in tandem with adapting to how retail is evolving, for example how people prefer to shop. They are also built on a strong collaboration between business, IT and ultimately end users, and it is only by building strong partnerships that banks can ensure they capitalise on the mobile money opportunity. Banks need to learn from the formula that agile organisations such as Apple and Amazon have successfully adopted.