Mobile banking MOBILE PAYMENTS LANDSCAPE is poised to - HSBC · Some people don’t like using a...
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There will be a greater level of visual experiences. So using the technology will feel more engaging. We will also see an increase in con- venience, such as forms for suppli- ers becoming more intuitive. They will pre-fill, only asking for addition- al information when it is needed. I think we will see significant change in the next two years. It is an S-curve. We are in the early-adopter phase for the next 18 months and then we will see a rapid shift. It will become a pervasive phenomenon. Managing finances is going to get easier with mobile banking. Some people don’t like using a desktop PC for analysis and filling in forms. For them using a tablet is preferable, as the experience is just so much smoother. I think users will really appreciate the control mobile banking gives them. They can gain confidence knowing where money has moved and which accounts have transferred which sums. It will get easier for retailers to en- gage your customers too. They will be interfacing with prospects and supporters. This will increase the pressure to adopt. The key point about mobile banking is that it means different things to different businesses. For some it is all about generating rev- enue and customers. For others it is about cost and some care most about understanding their customer base. Our role is to help businesses find out what they want and help them deliver on it. We want to make sure our customers get the most from mobile payments. Mobile banking is poised to revolutionise global business The world is on the brink of a new era in mobile payments which will revolutionise the way businesses operate, says HSBC Consumers are now familiar with using their mobiles to pay each other, and for goods and ser- vices. With a click or two, it is possible to buy a book from Am- azon, send money to a niece for her birthday or split a restaurant bill with friends. The key is the smoothness. Mobile payments mean there’s no need to input bank details for a transaction. The counterparty’s mobile number is all that is needed. Mobile wallets mean payment can be as quick as a single click. Curiously, the corporate world is lagging behind. Business-to-busi- ness mobile payments haven’t yet become commonplace. The tech- nology exists, but has not yet been widely adopted by the business community on the scale seen in the consumer market. Some com- panies continue to pay and receive funds using decades-old methods such as paper invoices, banker’s drafts and paper cheques (sent through the post, then taking days to clear). This will change fast. We are on the brink of a new era of business-to-business mobile payments, which will bring more than mere convenience. Mobile payments will mean the introduc- tion of entirely new ways of do- ing business and generate vast quantities of valuable information about a company’s operations previously unavailable. The revolution will be so pro- found it will redefine the role of fi- nance departments, freeing them from cash and cheque handling, transforming them into the cre- ators and managers of valuable transaction data. The innovations adopted by chief finance officers will allow firms to re-engineer their business models. The first application of mobile payments is to unlock purchas- ing and sales to the millions of executives who prefer to trans- act on their phones or tablets. So a construction site foreman needing to order two more tons of sand and gravel will use a mo- bile to select the supplier, place the order and commit to pay – all without leaving the site. Or a small retailer may prefer to pay for restocking goods to their shop using a mobile wallet, as a direct mobile-to-mobile payment to the delivery driver. But mobile business-to-busi- ness payments can have a par- ticularly big impact on doing business internationally. Here’s an example: many British firms find trading with emerging-mar- ket buyers or suppliers risky and hard work. The complexity of processing payments in major overseas markets, such as South Africa, Brazil, China and Nigeria, is pretty challenging. Posting a cheque to Lagos is inefficient. It may get lost. The exchange rate could change during the lag time. The recipient may not have a bank branch within close prox- imity. Switch to mobile payments and everything changes. A mo- bile-to-mobile payment between countries removes all this addi- tional work. We are on the brink of a new era of business-to-business mobile payments, which will bring more than mere convenience I think we will see significant change in the next two years Marcus Treacher Head of innovation, global payments and cash management, HSBC is the increasing trend of connect- ing machines and objects to the internet without any person need- ing to control them. It exists today with utility company smart meters or basic car park meters and, as all parts of global supply chains are linked to the internet, the impact on company logistics de- partments will be huge. Machines in warehouses will pay for deliver- ies and even goods aboard ships will communicate any defects en route. Vending machines at music festivals will process payments and report stock levels, using mo- bile technologies. The shift to mobile in the cor- porate world will complete the circle, establishing end-to-end digital ecosystems that combine manufacturing, international trade, distribution and finance with the activities and demands of individual consumers. This will unlock enormous potential for UK businesses and exporters, but will also be disruptive, creating a host of new hurdles for the corporate world to overcome and altering the nature of many firms, changing the roles of their workforce, eliminating some disciplines and creating en- tirely new ones. Going mobile will also cause an enormous increase in the amount of data and information that must be processed and managed, plac- ing an additional load on critical payment infrastructures and con- trol mechanisms. In addition, it will bring data security challenges, as firms demand increasingly so- phisticated data protection servic- es to guard valuable insight from their competitors. The most nimble organisations will thrive with this change, gaining at the expense of rivals who are slower to embrace mobile and all that it entails – mobile for business is both an enabler and a powerful force for change. With mobile payments, UK sales representatives working abroad can sell to businesses and con- sumers on the road without han- dling cash. They can close a deal with a company in Jakarta, invoice electronically and take the first in- stalment payment moments after shaking hands on the deal. The money can be processed before the sales representative has re- turned to their office. There is a long list of other ad- vantages. Fraud is likely to be re- duced when cash and paper forms are taken out of the payments loop. Vulnerability to crime is cur- tailed. By using mobile payments, sales representatives and their clients can avoid carrying cash around and eliminate the personal risk this can bring. Mobile payments can improve the financial health of a business. Using traditional payment meth- ods, weeks can go by without transactions being completed. Mobile payments mean there is instant reconciliation. Being paid faster improves a company’s li- quidity and cash-flow performance by extending their ability to pay their own creditors faster. Improv- ing cash-flow performance enables opportunities to increase credit ratings, improve credit terms and elevate a company’s reputation, all of which enable growth. Digitising payments also en- hances visibility over the work- ings of a business, because much more comprehensive and accurate information about payments is captured and re- tained. Finance directors can, at a glance, better gauge the fi- nancial position of their trading partners and contractors, making more informed buying decisions and extending credit with greater counterparty awareness. Mobile payments will transform marketing. Clients can use sophisti- cated mobile apps which cross-sell, offer account information, and gen- erate valuable data for marketers to use to identify the best leads for follow-up, and learn more about the preferences and nature of their client base. Even trivial issues will be re- solved by mobile. Need to pay for parking while travelling on busi- ness? Pay by mobile and then be notified when expiry time nears. This is a concrete reflection of the way business is changing in dozens of countries. In Asia, Latin America and Africa, entire econ- omies are leaping from cash and coins to mobile payments. The State of the Industry 2013 report by the mobile networks associa- tion GSMA reveals there are nine African nations where mobile bank accounts outnumber traditional bank accounts. Mobile banking is routine in Brazil, Indonesia and Vi- etnam, three very attractive export markets for British firms. Business adoption of mobile payments will pave the way for possibly an even bigger disruptive change: the internet of things. This A question of business banking HSBC’s global head of digital Josh Bottomley answers a Q&A and forecasts an exciting future for business mobile payments What developments in mo- bile banking can we look forward to in the next few years? Will people feel secure using mobile banking? How will the interface of mo- bile banking improve? What time frame do you pre- dict for mass adoption? What do you say to business- es that are reluctant to act? How can HSBC help? We can expect to see a richer user experience that allows us to make increasingly sophisticated decisions about our finances in an informed and intuitive way. We can also look forward to improved secu- rity and access. There is a trade-off between security, which involves things like inputting codes, and sim- pler user experiences. We will see better solutions in that area and much faster feedback loops. If you use a mobile payment, you want to see confirmation of that transaction in your account as fast as possible. Speed is vital. And we can expect to see more joined-up experiences between things such as special of- fers, loyalty programmes and your bank accounts. There are some great solu- tions, such as two-factor authen- tication and biometrics, which are being rolled out. There is also a lot of work we do in the background to counteract parties with less than benign intentions. And on the com- MOBILE PAYMENTS LANDSCAPE GLOBAL UNIQUE SUBSCRIBERS UNIQUE SUBSCRIBER PENETRATION BY REGION: 2020 FORECAST Source: GSMA 2014 ASIA-PACIFIC 52 % MIDDLE EAST & NORTH AFRICA 54 % SUB-SAHARAN AFRICA 42 % EUROPE 84 % LATIN AMERICA 60% NORTH AMERICA 70% Source: Finalta Digital & Multichannel Benchmark 2013 219 SERVICES in 84 different countries at the end of 2013 13 SERVICES have more than one million active users 52 MARKETS have two or more mobile money services Source: GSMA 2014 16 38 66 116 175 233 251 100 2008 2009 2010 2011 2012 2013 2014F 150 200 250 50 0 MOBILE MONEY DEPLOYMENTS BY REGION Middle East and North Africa South Asia CUSTOMERS USING MOBILE BANKING Global average of customers actively using the channel for at least 90 days Source: Finalta Digital & Multichannel Benchmark 2013 GLOBAL M-PAYMENTS TRANSACTIONS in billions Banks Non-banks Source: Capgemini Financial Services Analysis 2014 25.4 39.9 7 3.8 2.2 1.1 0.6 15.8 10 6.4 2012 2013 2014F 2015F 2011 1 bn 2003 equivalent to just under one in six of the entire global population 3.4 bn 2013 equivalent to just under half the entire global population Source: GSMA 2014 GLOBAL MOBILE MONEY MARKET 60 m+ active mobile money accounts worldwide East Asia and Pacific Europe and Central Asia Sub-Saharan Africa Latin America and Caribbean 11 % 7% 2013 2012 F Forecast mercial side, there are permission levels which allow different users in different roles to access and control varying aspects of the accounts. Article source: Raconteur
Transcript of Mobile banking MOBILE PAYMENTS LANDSCAPE is poised to - HSBC · Some people don’t like using a...
There will be a greater level of visual experiences. So using the technology will feel more engaging. We will also see an increase in con-venience, such as forms for suppli-ers becoming more intuitive. They will pre-fill, only asking for addition-al information when it is needed.
I think we will see significant change in the next two years. It is an S-curve. We are in the early-adopter phase for the next 18 months and then we will see a rapid shift. It will become a pervasive phenomenon.
Managing finances is going to get easier with mobile banking. Some people don’t like using a desktop PC for analysis and filling in forms. For them using a tablet is preferable, as the experience is just so much smoother. I think users will really appreciate the control mobile banking gives them. They can gain confidence knowing where money has moved and which accounts have transferred which sums. It will get easier for retailers to en-gage your customers too. They will be interfacing with prospects and supporters. This will increase the pressure to adopt.
The key point about mobile
banking is that it means different things to different businesses. For some it is all about generating rev-enue and customers. For others it is about cost and some care most about understanding their customer base. Our role is to help businesses find out what they want and help them deliver on it. We want to make sure our customers get the most from mobile payments.
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MOBILE BUSINESS ONLINE: WWW.RACONTEUR.NET/MOBILE-BUSINESS
Commercial Feature
Mobile bankingis poised to revolutionise global businessThe world is on the brink of a new era in mobile payments which will revolutionise the way businesses operate, says HSBC
Consumers are now familiar with using their mobiles to pay each other, and for goods and ser-vices. With a click or two, it is possible to buy a book from Am-azon, send money to a niece for her birthday or split a restaurant bill with friends. The key is the smoothness. Mobile payments mean there’s no need to input bank details for a transaction. The counterparty’s mobile number is all that is needed. Mobile wallets mean payment can be as quick as a single click.
Curiously, the corporate world is lagging behind. Business-to-busi-ness mobile payments haven’t yet become commonplace. The tech-nology exists, but has not yet been widely adopted by the business community on the scale seen in the consumer market. Some com-panies continue to pay and receive funds using decades-old methods such as paper invoices, banker’s drafts and paper cheques (sent through the post, then taking days to clear).
This will change fast. We are on the brink of a new era of business-to-business mobile payments, which will bring more than mere convenience. Mobile payments will mean the introduc-tion of entirely new ways of do-ing business and generate vast quantities of valuable information about a company’s operations previously unavailable.
The revolution will be so pro-found it will redefine the role of fi-nance departments, freeing them from cash and cheque handling, transforming them into the cre-ators and managers of valuable transaction data. The innovations adopted by chief finance officers will allow firms to re-engineer their business models.
The first application of mobile payments is to unlock purchas-ing and sales to the millions of executives who prefer to trans-act on their phones or tablets. So a construction site foreman needing to order two more tons of sand and gravel will use a mo-bile to select the supplier, place the order and commit to pay – all without leaving the site. Or a small retailer may prefer to pay for restocking goods to their shop using a mobile wallet, as a direct mobile-to-mobile payment to the delivery driver.
But mobile business-to-busi-ness payments can have a par-ticularly big impact on doing business internationally. Here’s an example: many British firms find trading with emerging-mar-ket buyers or suppliers risky and hard work. The complexity of processing payments in major overseas markets, such as South Africa, Brazil, China and Nigeria, is pretty challenging. Posting a cheque to Lagos is inefficient. It may get lost. The exchange rate could change during the lag time. The recipient may not have a bank branch within close prox-imity. Switch to mobile payments and everything changes. A mo-bile-to-mobile payment between countries removes all this addi-tional work.
We are on the brink of a new era of business-to-business mobile payments, which will bring more than mere convenience
I think we will see significant change in the next two years
Marcus Treacher Head of innovation, global payments and cash management, HSBC
is the increasing trend of connect-ing machines and objects to the internet without any person need-ing to control them. It exists today with utility company smart meters or basic car park meters and, as all parts of global supply chains are linked to the internet, the impact on company logistics de-partments will be huge. Machines in warehouses will pay for deliver-ies and even goods aboard ships will communicate any defects en route. Vending machines at music festivals will process payments and report stock levels, using mo-bile technologies.
The shift to mobile in the cor-porate world will complete the circle, establishing end-to-end digital ecosystems that combine manufacturing, international trade, distribution and finance with the activities and demands of individual consumers. This will unlock enormous potential for UK businesses and exporters, but will also be disruptive, creating a host of new hurdles for the corporate world to overcome and altering the nature of many firms, changing the roles of their workforce, eliminating some disciplines and creating en-tirely new ones.
Going mobile will also cause an enormous increase in the amount of data and information that must be processed and managed, plac-ing an additional load on critical payment infrastructures and con-trol mechanisms. In addition, it will bring data security challenges, as firms demand increasingly so-phisticated data protection servic-es to guard valuable insight from their competitors.
The most nimble organisations will thrive with this change, gaining at the expense of rivals who are slower to embrace mobile and all that it entails – mobile for business is both an enabler and a powerful force for change.
With mobile payments, UK sales representatives working abroad can sell to businesses and con-sumers on the road without han-dling cash. They can close a deal with a company in Jakarta, invoice electronically and take the first in-stalment payment moments after shaking hands on the deal. The money can be processed before the sales representative has re-turned to their office.
There is a long list of other ad-vantages. Fraud is likely to be re-duced when cash and paper forms are taken out of the payments loop. Vulnerability to crime is cur-tailed. By using mobile payments, sales representatives and their clients can avoid carrying cash around and eliminate the personal risk this can bring.
Mobile payments can improve the financial health of a business. Using traditional payment meth-ods, weeks can go by without transactions being completed. Mobile payments mean there is instant reconciliation. Being paid faster improves a company’s li-quidity and cash-flow performance by extending their ability to pay their own creditors faster. Improv-ing cash-flow performance enables opportunities to increase credit ratings, improve credit terms and elevate a company’s reputation, all of which enable growth.
Digitising payments also en-hances visibility over the work-ings of a business, because much more comprehensive and accurate information about payments is captured and re-tained. Finance directors can, at a glance, better gauge the fi-nancial position of their trading partners and contractors, making more informed buying decisions and extending credit with greater counterparty awareness.
Mobile payments will transform marketing. Clients can use sophisti-cated mobile apps which cross-sell, offer account information, and gen-erate valuable data for marketers to use to identify the best leads for follow-up, and learn more about the preferences and nature of their client base.
Even trivial issues will be re-solved by mobile. Need to pay for parking while travelling on busi-ness? Pay by mobile and then be notified when expiry time nears.
This is a concrete reflection of the way business is changing in dozens of countries. In Asia, Latin America and Africa, entire econ-omies are leaping from cash and coins to mobile payments. The State of the Industry 2013 report by the mobile networks associa-tion GSMA reveals there are nine African nations where mobile bank accounts outnumber traditional bank accounts. Mobile banking is routine in Brazil, Indonesia and Vi-etnam, three very attractive export markets for British firms.
Business adoption of mobile payments will pave the way for possibly an even bigger disruptive change: the internet of things. This
A question of business bankingHSBC’s global head of digital Josh Bottomley answers a Q&A and forecasts an exciting future for business mobile payments
What developments in mo-bile banking can we look forward to in the next few years?
Will people feel secure using mobile banking?
How will the interface of mo-bile banking improve?
What time frame do you pre-dict for mass adoption?
What do you say to business-es that are reluctant to act?
How can HSBC help?
We can expect to see a richer user experience that allows us to make increasingly sophisticated decisions about our finances in an informed and intuitive way. We can also look forward to improved secu-rity and access. There is a trade-off between security, which involves things like inputting codes, and sim-pler user experiences. We will see better solutions in that area and much faster feedback loops. If you use a mobile payment, you want to see confirmation of that transaction in your account as fast as possible. Speed is vital. And we can expect to see more joined-up experiences between things such as special of-fers, loyalty programmes and your bank accounts.
There are some great solu-
tions, such as two-factor authen-tication and biometrics, which are being rolled out. There is also a lot of work we do in the background to counteract parties with less than benign intentions. And on the com-
MOBILE PAYMENTS LANDSCAPEGLOBAL UNIQUE SUBSCRIBERS UNIQUE SUBSCRIBER PENETRATION BY REGION: 2020 FORECAST
Source: GSMA 2014
ASIA-PACIFIC
52%MIDDLE EAST & NORTH AFRICA
54%SUB-SAHARANAFRICA
42%EUROPE
84%LATIN AMERICA
60%NORTH AMERICA
70%
Source: Finalta Digital & Multichannel Benchmark 2013
219SERVICES
in 84 different countries at the
end of 2013
13SERVICES
have more than one million
active users
52MARKETS
have two or more mobile
money services
Source: GSMA 2014
16
38
66
116
175
233251
100
2008 2009 2010 2011 2012 2013 2014F
150
200
250
50
0
MOBILE MONEY DEPLOYMENTS BY REGION
Middle East and North Africa
South Asia
CUSTOMERS USING MOBILE BANKING
Global average of customers actively using the channel for at least 90 days
Source: Finalta Digital & Multichannel Benchmark 2013
GLOBAL M-PAYMENTS TRANSACTIONS
in billions
Banks
Non-banks
Source: Capgemini Financial Services Analysis 2014
25.4
39.9
73.82.21.10.6
15.8
106.4
2012 2013 2014F 2015F2011
1bn2003
equivalent to just under one in six of the entire global population
3.4bn2013
equivalent to just under half the entire global population
Source: GSMA 2014
GLOBAL MOBILE MONEY MARKET
60m+active mobile
money accounts worldwide
East Asia and Pacific
Europe and Central Asia
Sub-Saharan Africa
Latin America and Caribbean
11%7%20132012
F Forecast
mercial side, there are permission levels which allow different users in different roles to access and control varying aspects of the accounts.
Article source: Raconteur
