Banks risk losing out to innovators in telecoms and other sectors who can offer comprehensive mobile payment services
Dublin, 8th September 2015: Banks that fail to offer comprehensive mobile services risk irrelevance, or being overtaken by competitors both within and outside the sector, according to leading management and technology consultancy, BearingPoint.
"Mobile banking is still relatively young. Despite the ubiquity of mobile technology, the conservatism of the banking industry, especially in Ireland, has slowed the adoption of new mobile means of transacting money,” said Martin McKenna, Partner, Financial Services at BearingPoint UK and Ireland.
"The danger for Irish banks is the innovative nature of telecoms and internet companies, many of whom thrive or depend on diversification of services. These companies are naturally comfortable with the rapidly evolving nature of mobile payments and how to implement schemes that appeal to consumers with busy lives. Banks, on the other hand, have been late adopters of such technology, with many slow to respond to industry and consumer demands for such services.
“Close to home, in the UK, Vodafone is rolling out “Vodafone Wallet”, which allows mobile users to pay for goods via contactless terminals using a pre-stored Visa debit card.
“Across the Atlantic, banks are beginning to grasp the opportunity. In the US, Softcard began life as a mobile wallet partnership between a number of American banks, credit card companies and mobile operators. Recently acquired by Google, Softcard has now been subsumed into Google Wallet, which allows similar ease-of-use mobile payments.
“Third-party companies, such as BearingPoint, are developing technology services to bridge this gap and facilitate similar partnerships, by providing the tools and knowledge necessary to implement them. Our Infonova software team in Austria helped a major Austrian telecoms company to create mobile payment solutions, including mobile parking vending machine payments and public transport ticketing solutions.
“Ireland lacks a comprehensive mobile payments infrastructure, but it won’t be long before companies traditionally without a stake in finance, like telecoms or internet companies, move to take advantage of the virtually competition-free Irish mobile payments environment.
“In Ireland, businesses and consumers are ever more familiar with these non-bank insurgents. Companies such as PayPal are now a household name with consumers, while Dublin-based internet company Realex Payments has successfully cornered online card payment processing.”
According to BearingPoint, Irish banks should understand that comprehensive mobile banking services will add value; lower long-term costs; drive customers to them; and provide valuable opportunities for cross-selling. Mobile payment offerings such as Vodafone Wallet and Google Pay provide value-adds, like no transaction or account holding fees. Conversely, to make a profit, banks are doing the opposite.
“Full mobile banking is inevitable and evolving globally. Banks in Ireland will benefit hugely from keeping in step with current trends and reaching out to expert, technology-oriented telecoms companies to form partnerships, similar to those in the UK, US and Europe.
“As Irish telecoms and internet companies embrace mobile payments, the potential exists for them to radically transform the financial services sector, leaving banks to fight an uphill battle,” said Mr McKenna.
BearingPoint Ireland’s comments come following the publication of a new special edition, financial services report by the company’s global research wing, the BearingPoint Institute, titled, The future of mobile banking. For more information visit: The future of mobile banking.
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