Post on 17-Aug-2014
description
Mobile banking & innovative payments –
technologies, trends and strategies
Special for Axiom Groupe
- 4th Innovative Mobile Payments, Security & Cards conference, Brussels
Alexey Kazakov
Head of Electronic banking, OTP bank, Russia
March, 2014
Is a Mobile bank is ONE MORE "window" to client's account?
NO! - Mobile world - Mobile apps - M-wallets - M-payments - M-commerce
Mobility landscape in Russia
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184% - Mobile penetration in Russia
36% - Mobile internet penetration (0.6-1% monthly growth)
6,6 mln Russians pay from mobile at month
LiveInternet, May 2013
Markswebb Rank and Report e-finance User index 2014
37% - Smartphone penetration in Russia 18,5 mln. devices were sold in 2013 (51% yearly growth)
Wearesocial.sg, 2014
“Svyaznoy” research, 2014
Sources: - Nielsen report - Mobile consumer, Global snapshot, Feb 2013
Mobile - Incredible opportunity for banking
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Smartphone is always with a
client
Mobile internet connection, and
SIM access
Hard/Software interfaces (BT,
NFC, QR)
Geo-positioning and geo-location
data (GPS)
Social media (SM) and text-
messaging APPs
Unique user experience across Apps
IN OPPOSITE TO WEB-BANKING Mobile banking have advantages, based on unique combination of hardware technologies, are native for Smartphone and universality of Mobile Apps
• P2P and P2B transactions in a chat/messaging fashion
• Bill payments from service providers
• Scheduled transactions in one-click-action
• Physical goods purchasing on QR-codes/NFC or other technologies
• Special offers and discounts with a usage of geo-location data
• E-invoicing - bank fills up a payment bill with received requisites, and client just may to accept or decline it in one click
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Mobile Apps - “born to do sales”
Instant P2P transfers on QR, BUMP, or Card-2-Card
Discounts and special offers in physical shops nearby
Extra quick payments on templates WITHOUT authentication
EXAMPLES:
SHARED PRACTICES in sales:
Mobile wallet – client acquisition channel
Electronic wallets (EW) become finally legal in 2011, and in 2013: • 16 mln. Russians use EW for everyday purposes (56% of internet
audience) • 7 mln. - do regular online transactions/payments using EW • $4500 mln. – total yearly turnover on EW (72% - growth)
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ELECTRONIC WALLETS – technical “account” in IT systems, with prepaid “balance”, which might be opened, credited and debited without KYC.
• There is a huge own self-serviced network (kiosks, etc.) being utilized (e.g. “Russian Standard Bank”, QIWI)
• Permanent focus to e-commerce development is present
• Payments business is developed enough to become attractive for non-clients
• There are partners with significant P2P traffic for cash (e.g. money transfer services like Western Union, etc.)
• OR if there is a brilliant marketing idea
Sources: - Markswebb Rank & Report, e-finance User index 2014 - ARG Обзор рынка электронных платежных систем. Март 2013 - Price free agency 2013 / www.futurebanking.ru
ELECTRONIC or MOBILE WALLETS to be launched if:
Providing “absolutely free” payment tool for non-identified users of Tinkoff Mobile Wallet, TCS bank attract new clients for Credit and Debit Cards, are
delivered by couriers directly to a client
BEST CASE – Tinkoff credit systems
Mobile operators – “out of the game”
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M-PAYMENTS without MNO – is a today’s reality: Host Card Emulation
• No SIM or particular device dependency (only OS is matter)
• No Mobile network operator dominating
• Any Interface: NFC or QR … • Any Applications; Finance transactions,
Loyalty programs, Couponing … -
“First bird”: PRIVATBANK (UA) had presented own HSE wallets on FinNext – 2014 in February
Bank’s cloud”
BEST CASE – Privatbank (UA)
Mobile NFC - “dead on arrival”
PAYPAL have announced its technology in Q4’13: • No additional equipment - "beacon" is connected to
USB (and Bluetooth exists in each Smartphone); • Hands-free payments – it is enough verbally confirm
a payment from PayPal account • Individual offers and discounts – right at a time
when they may excite the customer (based on inside-building geo-positioning)
• Safe (it's PayPal!)
APPLE had featured IOS 7.0 with BLE support, shell we expect mobile payments system from TOP1 player on technologies market?
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M-PAYMENT APP with a BLE (Bluetooth low energy) technology support – is a revolutionary solution of “lack of infrastructure” issue in contactless
Is your Bank ready for NEW challenges in online business?
NEW … - clients - financial behavior - lifestyle - process innovations - user experience - business models - market players
New clients & new ideas
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• Like to do payments on regular basis • Have a lot of needs in banking products during life
(card -> cash / auto loan -> mortgage -> PFM …) • Will become an “affluent” in close future • Might be “on-boarded” easily regarding
innovative technologies or products • Spread out new banking experience on others
(friends, parents) and influence them
A lot of Banks worldwide focused on getting new, young, active client segments, because they:
BANK should earn Y-GEN respect on a new ideas, but not on adaptation of old ones
NEW CLIENTS have no loyalty and trust to old (“granny”) brands
New financial behavior
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NEW CLIENTS do not ever think (or have no time) about financial planning. They are thinking about financials, but … backward
BANKs don’t even try to give them “living advice”, just provide a honest support and fancy solution:
BEST CASE - Westpac bank (NZL)
How to sell term deposits widely - make a “virus” App
1. Download the application to your Smartphone
2. Open deposit account remotely 3. …. 4. Press the RED button, and top up you
deposit on $5 instead of "impulse buying“ during shopping
5. Share your success with friends thru Social media
New lifestyle
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BANK should provide them familiar workflow: funds transfers – as a text messaging, balance check – as social media follow
NEW CLIENTS bring first “online experience” out of finance area
That is why Facebook acquires WhatsApp!
Innovations pipeline
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BANKs should follow up simplicity, and proper market positioning of online tools – proposing “APPs supermarkets”:
NEW CLIENTS are looking for “killing feature” but not universality of financial tool
Alfa bank propose different online tools and Apps under separate trademarks for different audience, but all solutions
based on general technologies, invented in Alfa Innovation LAB
BEST CASE – Alfabank NEW CLIENTS change their minds rapidly, always request for an new innovations
BANK should be ready to accomplish “cool-not-cool” rhythm and follow up trends.
Loyalty rocks!
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BANKs should do a business on loyalty and brand recognition, but not on direct fees …
NEW CLIENTS pick up “awesome” things, which are not highly priced at all
BEST CASE - Starbucks
1. $1,4 bln. – cumulative turnover on STARBUCKS cards in Q4’2013 2. 10 mln. ppl uses IOS and Android STARBUCKS Apps worldwide 3. 5 mln. transactions goes thru Apps in a week only in Northern
America 4. $146 mln. were embezzled by STARBUCKS in last 3 years
(unclaimed balances) 5. STARBUCKS and SQUARE - joined opportunity for mobile
payments in 7000 locations in U.S.
IF STARBUCKs being a BANK, it would be listed in first 170 retail banks in USA
Social media – new look
Social media are not for DIRECT SALES, because there are no BUYERS in SM …
HELP, CARE, ENTERTAIN – use different social medias for appropriate tasks: • for being transparent and getting more respect • for teasing and getting customers to be
involved • for education and advertising
KNOW YOUR CLIENTS, be aware where they are staying online and be a friend to them, especially, when advice is needed.
GAMIFICATION – it is not a “GAME”, is a power tool to explain complex things (or products!) on a most simple language for widest audience
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E-commerce – new era
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Cash
Card (AN+secure code)
Mobile\mPOS
Card, linked to e-wallet
Internet bank (e-invoicing)
Card, linked to account
41%
34%
Innovative e-commerce
“Classic”
e-com
Sources: - e-commerce User index 2014, Markswebb Rank and Report
• Online experience: do the deal like on Apple or Google (i.e. built-in purchase)
• Convenience: no need to remember a lot of digits & letters
• Secure (mentally): no need to fill up card details • Secure (visually): 3DS + additional personal controls
In ONLINE SHOPPING world card branding is disappearing
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Client chooses better:
New merchants
MERCHANT is a major “customer” for payment innovations
• Merchant resists to payment innovations in acceptance, if there isn't long-term and transparent value (lower MDR, loyalty features)
• Any acceptance equipment brings freedom restriction for a Merchants and exchange it to a dependency on external factors (internet connection, physical damages, etc.)
Customers Merchants
Banks Banks
Devices
(HW)
Devices (HW)
Issues Acquirers
Apps (SW) Apps (SW)
Card systems
Banks
MS, Chip, NFC
Alternative PS
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U.S. and Canada based payment acceptance network, with extra low fees (FREE for <$10, $0,25 FIX for else) and convenient
Web, Tablet and Mobile Apps
Cards acceptance enough expensive for a Merchant
BEST CASE - Dwolla
New competitors
Finance aggregators: • IT start-ups, but not finance organizations • … able to modify online products very fast , according new
trends and technologies • … may choose Partners (banks, micro-lending orgs, payment
providers) and create value proposition combining different finance products
• … keep marketing and advertising efforts on desired client segment
• ... have no bureaucracy • ... have less operational expenses • ... have no social obligations or "historical products" which
need to be supported
In PAYMENTS WORLD banks are competing with new players – finance aggregators
BANKs should resist these expansion, by using their TOP-3 STRENGTHs:
• Physical presence – as a visible symbol of stability and reliability in customers eyes • Accumulated customer data and behavior information - banks can successfully handle these
data forming successful product offerings, using industrial CRM • The opportunity to buy complete solutions, technologies and even teams - banks can, though
not as quickly form a scalable and efficient IT landscape.
Future of payments - to be invisible
IDEAL PURCHASE:
Come in – Choose – Take away …
… Some settlement stuff (which nobody really doesn't want even to think about)
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О группе ОТП
Дирекция розничных бизнес - технологий, ОАО
«ОТП Банк»
Thanks for your attention!
Alexey Kazakov, a.kazakov@otpbank.ru