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Innovation in Financial Services

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.
A post relating to this item from Finextra:

M-banking network Monilink sees surge in account enquires as crunch bites

11 November 2008  |  7567 views  |  0
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Monilink, the UK mobile banking network launched by Morse spin-off Monitise and VocaLink, says it processed over one million account enquiries in October as customers feeling the economic downturn kee...

No Mobile Transactions, Hello Fee Per Month?

12 November 2008  |  3677 views  |  0

I welcome confirmation of our own conclusions that customers want to use their mobile similarly to ATM usage patterns - primarily for balances. The transaction part they'll have to do without for the moment (with Monitise, until they sort out those stick on NFC thingys?)

Fees?

I expect there will be some downward pressure on fees from customers when the banking industry stabilises and the competition for customers hots up. The recent churn due to loss of confidence has been a real bonus for the big banks in the depositor stakes, although many have come in from their investment management arms.

The Monilink service costs between £1.50 and £2.50 per month? Depending on the bank or type of account? Of course there is definite upward pressure on account fees from the banks. Is is the mobile the means to introduce broad fees? Is the mobile the saviour of monthly fee banking in the UK?

The customers won't notice that they only pay a couple of pence per balance anywhere on their mobile phone and are still being slugged £1 or so at the ATM for the same info from the 'same' people. Will that become an issue for Monitise and the banks?

With the potential for fraud as it is today, perhaps people will be more conscious/paranoid and check their balance at least once a day? The numbers quoted in the article seem to point to that, a big increase in the number of times customers check their balance.

Hmm, another thought, fixed fee per month and no limit to the number of times you can check your balance? Loss-leader with limits coming in later, like fees came in later after 'free' (and in fact some customers were paid £10 to sign up and try Monitise's service)?

I have seen a range of fees and then there is the network data cost. I wonder if the popularity will peak now that the monthly fee has come in, especially seeing as it was initially promoted as 'free' and of course, nothing is.

However with a limited number of 'own bank' ATM's which charge nothing, or at least less than 'other' ATMs for a balance, then a 'free' mobile anywhere-you-are balance check was going to be a winner hands down against £1+ for a single balance at the wrong ATM.

Even the network charges are ok, but when they add that ~£2 per month, those costs and fees start to stack up. Not enough to bother the average banker, unless they just joined the ranks of the under-unemployed.

I'll be curious to see how the usage is sustained in the next few months. Fees are ok by me, (the higher they are the better for new competitors) but it is looking  like basic mobile bank balance checking  will be costing around £3 per week without any transactions.

Based on an average child's balance of £1049, that is £50 in lost income just by leaving it in most accounts. So our mobile savvy child customer pays around £75 and pretty well all they get is their balance on their mobile and they use a card for transactions. The Vodafone data access charges are around £7.50 per month for pay monthly. I don't think that will work for anybody who isn't already getting the data pack.

On the purely mobile front, let's see, how many million Brits @ ~£2 per month/£24 per annum?

Hmm.., of course the kids under 9 won't need one, and perhaps those over 75 for the moment, but that is still a healthy £1.2 billion or so.

Definitely some room for healthy competition in there. A lot of room, and very healthy.

I wonder if customers would be up for one transaction fee (from their bank) when they transfer funds into their 'mobile' account and transact from there with free balances, no transaction fees (and get to do mobile transactions of course), and no penalty fees or bank charges if they try to go over-limit all without disturbing their bank and 'attracting' fees.

ie. no fees?

Market it as no-fee's, no-penalties, no-worries banking. If you want to pay the £100 or so anyway, we'll throw in free mobile minutes and text as well.

Might be worth a shot, but how would one fund that?

Perhaps a lower (than current card networks) fee for merchants might make the plan viable? Could it be done? Perhaps a flat transaction fee for merchants, or sliding scale or percentage? What are they happy to pay?  10-20p? 50p? There would have to be some 'arrangement' for micro-payments, perhaps a a token 5p fee, after all how many payments are micro anyway? The reduced fraud losses might sweeten the deal.

A credit without credit card facility would be handy (Mr Zopa?).

That has to be more sensible than some of the crazy plans we've seen.

I'd be up for a little more sexy than that but I'll leave it there for now.

Nothing is quite free, but I think we'll see some alternatives which come a little closer than what we are seeing at the moment.

How low could it go?

I'm not sure I'd be prepared to go with a plan of paying customers £10 to try my mobile balance service, especially without a whole lot of other sexy thrown in, and then making them ante up £25 per year for it and another £85 to the telco. All without a (penny from a) single merchant transaction. Call me crazy if you like.

I couldn't see anyone raising a dollar on that plan right now.

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