I was received a question about my article published some days before, that can account portability worth to banks? At first sight it’s easy to say yes. If using the analogy of regulatory intervention of cell phone companies, the answer is not obvious. Cell phone companies that forced by regulators to implement phone number portability and roaming fee decrease. Furthermore the Hungarian interconnecting fees have been regulated recently.
The regulation changes had to decrease the company income and profit significantly, but not this happened. Since then cell phone companies can have kept profit and revenue in the appropriate level despite of regulatory interventions. On this basis, could ask, what is the magic that helped these companies? No magic other than innovation. If we consider cell phone companies jointly with manufacturers have conducted continuous product development. Of course not all innovation was successful. Everybody can list big fail (e.g. WAP), huge success (e.g. mobile net) from the past years. And there can be product, like SMS that service providers not ensured of success
The biggest issue of this year is NFC (Near Field Communication) chip implementation on hand held devices. This will help to further develop the contactless payment services in the electronic wallet towards. There are several announcements in the international news about NFC based electronic wallet pilot. In summary, I think that banks will only retain their revenues and their profitability if they can increase the number of transactions. This is only possible with introduction of new innovative products.