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    Operators missing out on mobile banking

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    Immigrant and youth communities form unexploited sweet spot for m-banking 

    Mobile operators in Europe are missing out on a business opportunity by viewing mobile banking as something best suited to developing markets, according to Aletha Ling, executive director of Fundamo, a provider of mobile banking platforms.

    Ling said that operators are ignoring communities in developed markets that would respond well to banking and financial services offered under an operator brand.

    “One thing that fascinates us about this market is that is has interesting segments that lend themselves to mobile services. There are large migrant populations, and large youth sectors, that are a great fit to the medium,” Ling said. “But the issue is these sectors are not relevant to their [the operators’] thinking around value added services,” she added.

    “Sometimes operators can address communities that the banks are ignoring, Richard Bailey, product manager for Fundamo, said. “It’s the mobile operator that has the brand that these communities can associate with, that has the distribution network to launch any shape of service it thinks suitable.”

    Fundamo’s people see a model working where the operators could act as a “front” brand for a bank, which means that the bank can bring its compliance and regulatory know how, as well as back office systems to play. But in other markets there have been examples where telcos have bought a banking license, Bailey said.

    As for operators launching mobile banking services to their mainstream users, Ling admitted that there had been little progress. At the moment, she thought, we are more likely to see banks launch mobile services than mobile operators launch banking services.

    Frost & Sullivan yesterday publicised a report outlining some of the recent growth, but also the challenges, of the mobile payments and banking sector.

    Ling said she recognized some of the challenges identified, notably the concern that “There is great risk in the industry in the context of point solutions, in particular, not being scalable/suitable for wide scale deployments.”

    That was why Fundamo has developed its Fundamo Enterprise Edition, she said, to meet the needs of large scale service providers, be they banks or telcos, as they scale demand. She also said it was important that operators retain service flexibility, with the ability to launch new services not constrained by their choice of platform provider.

    There is another alternative distribution model that is gaining ground, and that’s the apps model. Banks, financial services providers, even retailers with store cards can launch mobile apps that go direct to the consumer from an app store. PNC Bank become the first financial institution in the USA to offer more than one app when it released an app for its Virtual Wallet in August this year.  Wells Fargo launched a cash management app for larger businesses, CEO Mobile, last week.

    And earlier this week RBS launched an iPhone app, developed by Monitise, hiring 4th Screen Media to promote the app. Plus, of course, although it's not a banking app, Barclaycard shifted huge numbers of its Waterslide Extreme app.