Mobile Communications

Tony Virdi (Global) - Evolution of a Cashless Society: Taking a Lesson from Emerging Markets

There's no doubt that consumer demand for mobile money services is strong - Gartner predicts that mobile payment transaction values will surpass $171.5 billion this year, a 61.9% increase from 2011. While in the UK and other Western markets we are struggling to roll-out a comprehensive mobile money system, not only has mobile money existed in the Nordics for quite some time, but it's also well-established in emerging markets such as Africa (e.g. E-Pesa), India and South America where infrastructures are less complex.

While in emerging markets, mobile money has leapfrogged some of the issues we are facing in order to bring mobile money to the masses, here in the UK, we have legacy infrastructure and systems that we have to overcome in order to achieve mobile money success. Nevertheless, I estimate that we will catch up with other markets in less than two years.

As money becomes increasingly digitised, most businesses need to develop strategic, effective and timely mobile services to remain competitive and to cater to customer demand. While many view mobile as a critical part of their strategy, those who have successfully rolled out services across multiple products are still in the minority.

One of the issues that organisations face is that with mobile money there is no right or wrong way to bring it to market, or indeed a blueprint - yet - for how to do this successfully. And, as consumers clamour for the enhanced customer experience, the bigger businesses, including banks, run the risk of losing out to smaller and more nimble and agile players who can adapt more quickly.

So, they are looking for solutions to catch up with their counterparts in emerging markets. Ones that can be delivered cost-effectively and speedily, with the ability to scale as customer demand increases. Specifically, financial institutions are looking to provide innovative mobile banking, payments and commerce solutions to customers that can be used on any device, across any platform. The ultimate benefit of this is that it will enhance customer relationships by offering easy-to-use payment methods, as money becomes more digitised and customers' acceptance of such solutions increases. Banks are keen to earn customer trust by providing a better customer experience and this is an obvious way to do so.

Mobile technology has real potential to significantly change consumer-facing industries. As a route to market, it reshapes the channel mix; as a computing and service platform, it redraws the ways in which businesses engage with customers; and, as a new technology architecture, it creates opportunities for new products and revenues. The accent in the rapidly changing world of consumer services is on true personalisation, context-aware systems, and real-time services.

Mobile money has arrived and is driving a disruptive shift in channel interaction with consumers, thereby accelerating the replacement of cash and bringing new products/services to consumers. The market is ready to explode and only regulation and controls are rightly holding back the pace of change.

But, it's really important that it's not seen as just another IT project. Nor is it about a single app or mobile website. In my experience, mobility is transformational in the same way as the internet has been. The most successful mobility strategies focus on anticipating customer needs and demands in tandem with adapting to how retail is evolving, for example how people prefer to shop. They are also built on a strong collaboration between business, IT and ultimately end users, and it is only by building strong partnerships that businesses can ensure they capitalise on the mobile money opportunity. The mobile money disparity between developed and developing markets is still vast but mobile money contenders are rushing to close it, and any player hoping to take the lead on this and cash in on the opportunity will need to be extremely agile and collaborative.

By Tony Virdi, Vice President and Head of Banking and Financial Services in the UK & Ireland, Cognizant



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