ShareBanking on my phone
You are at a saloon. You've just dropped in for a little trim. Yes, you do look a little shaggy around the edges. You explain the kind of haircut you want – just a touch off the front, tapered off just at the top of the ears, squared off in the back. The hairdresser snips and clips, sprays and combs, snips and clips, combs and blows. He is ready; and so are you.
You don't dip your hand into your pocket and pull out a few bills; neither do you use your cards – you stopped carrying them a long time back. Instead, you whip out your cell phone and punch in a six-digit ID number. In an instant, your phone becomes your bank. Sure, it can't spew out hard cash like an ATM. But otherwise, it's just about as capable or even more, to do anything you ever wanted to do with your bank. You transfer the hairdresser's charge into his account, and in the next instant his mobile phone beeps; he has been paid.
Does this story sound sci–fi or exaggerated? Today may be it does; in the future this could be the obvious!
Though it might take a while before you start paying your hair dresser or your neighbourhood pastrami vendor though your mobile 'into' his mobile phone, both banks and telcos are leaving no stone unturned to help you, your hairdresser and your neighbourhood pastrami vendor among others, to get there!
And why not? Research suggests that payments originating from cell phones worldwide could reach USD 4.2 trillion per year by 2008. Right now, mobile banks promise to take convenience and control to a new level by enabling customers to stay connected with their finances anywhere, anytime.
Currently, almost all leading banks in the world have tied up with various telecom service providers or vice versa, allowing customers to use the browser on their cell phones or smart phones to check account balances, savings and credit card accounts, mortgages and home equity, pay bills, transfer funds between accounts, view transaction details, etc.
The banking and financial services segment has invested in a lot of technology initiatives like centralized banking platforms and multi-channel integration to achieve a convenient banking model for customers. The new model - the mobile bank - has evolved in this context. This is a paradigm shift from the bank-driven traditional model to a telco-driven model.
This potential sector appears quite lucrative for both telcos and banks. For telcos it means increased customers, higher SMS usage, enhanced prepaid reloads and above all, reduced network churn with the customers having more reasons to not shift their operator.
This business model becomes very appealing for banks as well, as it enables them to get into the market rapidly without shouldering the burden of making physical infrastructure investments. And of course, it ensures enhanced satisfaction for the most critical entity - the customer.
To go banking successfully, telcos will have to manage their networks better to accommodate increased SMS traffic and also plug any network linkage breaks, which may cause fatal disruption of monetary transaction. Further, banks will have to secure all transactions.
As they embrace banking, telcos will have to gear themselves up to handle flexible rate plans for customers, revenue assurance challenges, transparent partner and content settlement between banks and themselves and huge volumes of data.
Adopting new technology or business models is not a new paradigm for telcos. For them, the convergence of voice, data, video and wireless has been in sight for some time now. And this only marks the beginning of an even larger confluence that is underway from the banking industry and heading towards the telecom world.
Banks world over are waking up to the fact that the channels through which they communicate with their customers have rapidly shifted from tellers to automatic teller machines and from internet–based banking to mobile banking now. This offers a significant opportunity for telecom operators, who can now participate in the telecom-based banking movement.
SunTec, being the leader in both banking and telecom verticals, is uniquely positioned to bring to bear best practices from both the industries to help telecom and banking companies profit from the cross–industry convergence opportunity. The future is not only about providing pricing and billing solutions for triple and quad play, but also for banking services over the telecom infrastructure.