Wireless technology is paving the way for consumers to be in charge
Sixty percent of the world's leading financial institutions have a wireless
strategy and consider mobile or wireless banking as a core element of their
service delivery strategy.
With South Africa's inherent strengths in the financial environment and its
reputation of leading the world in strategic financial areas, it's likely that
these technologies will soon be embraced in this country, believes Stefano
Mattiello, managing director ofSun Microsystems SA.
"Operators are busy upgrading their networks for next generation wireless
services: bandwidth and speed will steadily increase for next generation
wireless services.. Many telcos have shelled out billions in the recent
third-generation wireless license auctions and they are now eager to launch
services that will potentially refill their coffers.
"Unfortunately, however, mobile commerce remains something of a gamble. Nobody
can say for sure which services the market will be willing to pay for. They're
all looking for a killer application," says Mattiello.
Research has shown that mobile banking and brokerage services are relatively
high on most users' wish lists.
A Datamonitor report published last year suggests that by 2004, there will be
more than 16 million WAP-enabled customers in Europe and large numbers of them
will be trading shares via their phones.
Mobile banking services may also provide an answer to customer concerns about
losingaccess to traditional channels in the wake of branch closures. The
challenge for banks is to persuade customers that mobile banking is a safe and
reliable alternative to a branch.
The report goes on to predict that more than 2.2 million Scandinavians will
have a "bank in their pocket" by 2004. They will be followed by Germany, Italy,
France and the UK.
"Mobile banking is going to transform the way people access their finances
during the next two years," says Datamonitor author HamishDunn. "Our
predictions haven't changed. In terms of the numbers of customer for mobile
financial services, we are only predicting 214 000 by the end of this year. I
still think 16 million users by 2004 is not too unbelievable."
Mobile services are not immediately going to impact banks' revenue - it's more
a way of showing they are in tune with technology and moving towards a
multi-product, multi-channel model, says Dunn. "Launching mobile services may
affect their share price, but it'snot going to impact their margins for the
next couple of years."
Longer term, brokerage is likely to be a profitable area. If banks get people
trading online and find ways to get them to increase the number of
transactions, that is the way to be profitable.
Having web-enabled its Java-based core banking system, Habib Bank is now
deploying a clutch of new access channels including web, WAP and GSM short
messaging. It allows its customers (who reside mainly in the United Arab
Emirates) to access their accounts not only from any web-enabled PC, but also
via WAP-based mobile phones.
Those with regular GSM phones can now subscribe to a customised SMS service
that uses push technology to send out messages whencertain events occur in
their accounts.
Habib Bank executive Reza Habib says: "Today we can offload more and more
services to the web, which means customers have better control of their
accounts and easier access, and at the bank we save a lotof labour."
The bank's chief concern has been security. It currently has two different
types of commercial firewalls from Cisco and Sun and it has its own firewall
bridge written in Java.
"Once we had deployed the security, the great upside is that the entire banking
system is now web-enabled. I can sit in Los Angeles and do my work as if I was
in Dubai. With the security in place, we have proper digital certificates to
ensure that I am who I say I am when I log in. Bank employees too can roam
around freely and still keep up to date in their work."
In the US, Wells Fargo is using the net to deepen relationships and implement
new services for its corporate clients. With 2.4 million online customers, and
another 100 000 joining each month, the bank lays claim to one of the most
active US web sites.
"More of the bank's transactions flow through the Internet than any other
channel," says chief executive Steve Ellis. "We're one of the largest Internet
banks on the consumer side while on the commercial and wholesale side we see
the net as another channel to augment our existing sales delivery and service
models.
One of Wells Fargo's net-based B2B projects include Commercial Electronic
Office (CEO): a Java-based financial services portal through which it is
offering an array of net-based tools and services for corporate and wholesale
customers.
New tools are scheduled to come online every 90 days. Services include
e-procurement, which enables corporations, to run purchasing departments
online.
"The Internet is no panacea for a poor business model," says Ellis. "You've got
to understand your business processes and how the net is going to impact what
you do. The Internet is changing how we build deeper relationships and
communicate with our customers."
Credit Suisse is among the first banks in Europe to offer private clients the
ability to trade stocks from a Palm Pilot. It is preparing to unveil a solution
that will allow clients to access their accounts and trade a variety of stocks
from a Palm Pilot.
Developed jointly by the bank and a Zurich-based software house Ergon, the Java
and html-based solution will enable customers on the move to access their cash
and securities accounts, to transfer money and to trade equities, warrants and
bonds on the Swiss exchanges, Nasdaq and NYSE in real time. Using a Palm Vx.
users place their mobile phone in front of the Palm's infrared interface to
gain a wireless connection to Credit Suisse's server.
"For us the key priority is to give our customers the tools for trading," says
Alfred Castelberg, director at Credit Suisse. "For example, if you buy or sell
stocks on the NYSE, you see your tradeexecuted within 20 seconds on your Palm
Vx.
Norwich Union is addressing the needs of net-savvy customers looking to control
their finances from a single, integrated site. Bob Scott, its group's chief
executive says it is investing $362.5 million in a net-based wealth management
service that will eventually be extended to include access via digital TV and
WAP-enabled mobile phones.
Norwich Union, which merged with CGU top become the UK's largest insurance
group - CGNU - is using a Sun high-end server solution at the back end.
"We decided to build a new system rather than using legacy systems. Although at
some point we may link in some of the legacy systems," says Christine Bakewell,
head of technical services for mid-rangesystems.
"It's vital to get the system right before launching it to the public. The
challenge is to build a system to meet the requirements of a 24x7 operation."
About Sun Microsystems, Inc.
Since its inception in 1982, a singular vision -- "The Network Is The Computer"
-- has propelled Sun Microsystems, Inc. (NASDAQ: SUNW), to its position as a
leading provider of industrial-strength hardware, software and services that
power the Internet and allow companies worldwide to take their businesses to
the nth. With $19.2 billion in annual revenues, Sun can be found in more
than170 countries and on the World Wide Web at http://sun.com.
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