When people pay their bills using mobile technologies, the traditional bank is not always involved in the transaction. New players – from mobile service providers to cyber merchants – are penetrating the market and forcing the traditional financial sector to take action. In our latest study, we shed light on the rapidly growing mobile payment ecosystem and analyse the impact these developments are having on the banking sector.
In many cases, when people are out and about and don’t want to use cash, they no longer have to depend on debit or credit cards. Instead, there are now a number of different payment options which circumvent the traditional bank altogether. These include electronic purse systems, virtual cards, in-app payment solutions or direct carrier billing systems, which basically involve making payments via private phone bills. One side effect: the monopoly financial institutions have enjoyed on payment-related issues will continue to diminish if they don’t react to this trend soon.
The mobile payment trend is both a challenge and an opportunity for financial service providers
Mobile payment is a sensitive subject for the financial sector. To examine the topic more closely, our experts at GFT have now published a new study called “Impact of Mobile Payments on the Financial Services Sector”.
Marika Lulay, Chief Operating Officer at GFT, says: “The international mobile payment market is growing rapidly. As a result, a well thought-out mobile banking strategy has become a business imperative for banks. Payments issues should be at the core of such a strategy.”
The GFT study recommends that, in addition to tracking market developments closely, banks should continuously update their mobile operations to address the specific needs of their customers. In particular, the ‘user experience’ will be central to acceptance and trust. The first step of the entire process will be to convince customers to become actively involved in mobile transactions. This could take place in the form of trial runs.
Another finding from the GFT study: partnerships create potential
Moreover, financial services providers can benefit from thinking outside the box and being on the lookout for the right development and retail partners. Co-marketed mobile payment solutions have more impact and can open up the door to much greater business opportunities.
The market is huge: according to KPMG, more than one trillion US dollars will have been invested in mobile payment solutions by the year 2015. As a result, more and more financial services providers are expanding their business activities in the area of mobile payments. The GFT study shows that banks have a credibility advantage over competitors from outside the industry due to their close relationships with customers. And they should start making the most of this advantage as soon as possible. The best opportunities are open especially to businesses that succeed in combining mobile payment with big data options. The huge amount of information available – data on customers – could be analysed in real time and used to provide immediate recommendations.
Application examples from GFT: authentication via NFC-TAN, security through voice biometrics
Data security is important to our customers, which is why our experts place huge emphasis on this aspect when developing new solutions. One example is NFC-TAN. GFT presented this authentication process, which was developed in collaboration with the University of Tübingen at the recent CeBIT. Another solution promising added levels of security is GFT’s voice biometric prototype. Both applications use two separate data transfer channels to ward off Trojans – a requirement paramount to customers. Additionally, GFT has also already developed apps that are easy to expand with payment functions.