Making Sense of Mobile Financial Services: A Proposed Taxonomy

by Bart Narter,  Zilvinas Bareisis, September 8, 2011
Industry Trends
Global, Asia-Pacific, EMEA, Latin America, North America

Abstract

The vast range and diversity of available mobile offerings can be mind boggling. Having an agreed common language and a clear taxonomy is critical for financial institutions developing a mobile strategy.

Mobile phones, and especially smartphones, can be so much more than voice communication devices. Many of those applications are not particularly relevant for a financial institution deciding its mobile strategy. However, Celent believes that financial institutions should care about a mobile phone being used in the following five ways:

  1. As a media channel.
  2. As a channel for banking (account) services--mobile banking.
  3. As a traditional payment instrument acceptance device--mobile point of sale (POS)
  4. As a payment initiation or approval device, enabling mobile payments. These include money transfer
    services, mobile commerce, and retail point of sale mobile payments.
  5. As a repository of “wallet services” (non-payment)

This report, Making Sense of Mobile Financial Services, proposes a taxonomy for mobile financial services to provide a structured way to analyse various services already in existence as well as those being launched in the market. It illustrates the taxonomy with examples from the market. It also demonstrates that the challenges for a financial institution differ in different categories of mobile financial ser- vices. Finally, it discusses the challenges of sizing the mobile financial services market and makes recommendations of how to approach the challenge.

“The diversity of mobile offerings available can blur the lines across categories,” says Bart Narter, Senior Vice President of Celent’s Banking Group and coauthor of the report. “However, without a clear taxonomy as a starting point and an understanding of where overlaps may occur, making sense of any new announcement becomes particularly challenging.”

“Mobile is also blurring the lines between the physical and online worlds and between various payment transactions, which isn’t making the job of sizing the mobile market any easier,” adds Zilvinas Bareisis, Senior Analyst with Celent’s Banking Group and coauthor of the report. “Any mobile market sizing initiative needs to be a carefully tailored effort designed to achieve specific objectives of a particular organization.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

3

Introduction

4

Mobile Financial Services: A Proposed Taxonomy

5

Mobile Phone as a Media Channel

8

Mobile Banking

12

 

Overview of Key Services

12

 

Key Trends and Challenges in Mobile Banking

15

Mobile POS

20

 

Remote Deposit Capture

20

 

Card POS

23

Mobile Payments

28

 

Mobile Money Transfer

29

 

Mobile Commerce

35

 

Retail POS

42

Sizing the Mobile Financial Services Market: Key Challenges

50

Leveraging Celent’s Expertise

54

 

Analyst Access

54

 

Support for Financial Institutions

54

 

Support for Vendors

54

Related Celent Research

56

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