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Michael Hornberger and Dr. Christian Kehlenbeck,  e-comes
Michael Hornberger and Dr. Christian Kehlenbeck, e-comes
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Mobile Financial Services On The Rise In Europe

Europeans are ready for the next generation of mobile financial service offerings, according to a recent study published by e-comes, a Dusseldorf-based management consultancy firm.

The following is an excerpt from the executive summary of "Mobile Communications Sales Channel for Banks," a study published by Michael Hornberger and Dr. Christian Kehlenbeck of e-comes, a Dusseldorf-based management consulting firm.

A leap in mobile technology opens new possibilities for banks in to develop mobile communications into a sales channel. Improved mobile devices and higher data transmission rates make mobile financial services more efficient, easier to apply and promise the end user more attractive financial applications than the ones based on early WAP releases.

This study from e-comes gives banks an orientation in planning and aligning their activities for the mobile channel. The study is based on a survey of 39 decision makers from banks in Germany, Switzerland and Austria as well as an online-survey of 793 German end users from the askQ!-Panel of TNS EMNID.

The end user survey shows the following market situation for mobile financial applications:

There is already a market for mobile financial applications. Twenty-nine percent of the interviewed end users are interested in using the mobile for their financial affairs.

Persons interested in using mobile devices for financial applications cited the following reasons: "independence/ flexibility," "control/ ability to react," "ease of use/ convenience" and "saves time." The financial services they would most like to be offered via mobile are "financial data retrieval," "banking" and "payments."

Those who desire not to use mobile financial services listed the following reasons: "missing added value," "insufficient security/ lack of trust," "high costs" and "inadequate technology."

The market is in an early stage of development. High market growth can be expected. The growth will be fuelled by the coming developments in mobile telecommunications, which will allow even better possibilities for financial applications and more attractive interfaces for the customer. At the same time, the end user acceptance for the "new product" will increase according to the product life cycle. Eighty-three percent of the interviewed interested persons intend to use a mobile financial application within the next twelve months.

Men and the young tend to have a higher interest in mobile financial services. Interest is also high among people who are heavily involved with the Internet, and persons possessing sophisticated mobile devices such as PDAs or WAP-phones.

Mobile financial applications offer the potential for customer acquisition. This shows the switch rate of the mobile interested people. Sixty-Five percent would switch to another bank to access special mobile services.

Mobile financial offerings promise revenues, as the willingness to pay for mobile delivered services indicates. Seventy-two percent of the in mobile interested persons would be willing to pay slightly higher fees, if they could handle their financial affairs with a mobile device.

The banking perspective of mobile financial services shows the following:

Bank executives see mobile media mainly as a means to improve "image-building" and "customer loyalty." This perspective is rather pessimistic. The identified willingness of mobile users to switch banks and to pay for mobile financial services indicates that the potential exists to generate both increased revenues and new customers.

The banks consider "communications and marketing to the end user" and "choice of technology" as the major success factors for mobile applications. The importance of communications/ marketing to the consumer is underlined through the identified reasons for disinterest in mobile services. The perceived challenge in technology can be explained by the fact that the mobile operators control many relevant standards and developments. A more intensive dialog with the operators could help the banks to manage this factor successfully.

About 60 percent of the banks surveyed already offer some form of mobile financial service. Most of the applications are "financial data retrieval" and "information services".

Only 5 percent of the interviewed consumers the mobile financial services currently offered by banks. This low usage indicates that most of the existing offers do not meet their interest or are not communicated/ marketed effectively.

Banks list "technology" and "lack of interest from consumers" as the two main obstacles to greater mobile financial service introductions. Although banks can do little to improve mobile technology (which is the territory of the telecoms), the low interest rate from consumers was largely due to disappointments with the first WAP-enabled financial applications. This has changed and banks should rethink the height of this hurdle.

The following actions for banks can be derived from the market analysis and from the comparison with the bank perspective:

1. Immediate actions are necessary - Build position now.2. Check effectiveness of existing mobile offerings. 3. Remove obstacles for consumer usage of mobile. 4. Differentiate approach towards different consumer groups. 5. Mobile services need to be integrated into a holistic strategy with all other channels. 6. Intensify dialog/ co-operation with mobile operators. 7. Follow carefully and make use of the technology- and market developments. 8. Develop new innovative business models based on mobile technology.

For more information on this study, contact e-comes

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