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An article relating to this blog post on Finextra:

Monitise sees H1 losses widen on product development costs

Shares in UK mobile banking outfit Monitise slumped after it reported a tripling of losses in its fiscal first half due to higher product development costs and slower-than-expected customer uptake.

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A flawed business model?

It comes as no big surprise to me that Monitise are making further losses. With a business model that charges customers for transactions that they can get for free from many other channels, 20p for a balance enquiry, it’s no wonder that the consumers are staying away in their droves.

Today the technology is ready, but it’s not moving towards applications being installed on the phone, it’s moving to thin client. With the likes of the iPhone bringing high quality browsers to the phone, the hand held device is just now getting to the state where it is able to support the demands of the person on the move.

The banks have leapt on this failing bandwagon as a quick way to put a toe in the market that bit them a few years ago when they tried it before the technology was ready. But they will move away when they have their own, better thought through offerings. Banks don’t move quickly, but when they do they have a lot of power behind them.

Not withstanding Alastair Lukies charisma, the product is doomed to failure, in my opinion. The Banks want to brand their product to differentiate their offering in a market that is quickly becoming commoditised. Why would they push a second rate service that gives the banks little, the customers little and unless more people fall for it, will give Monitise little.


Comments: (2)

Paul Penrose
Paul Penrose - Finextra - London 12 February, 2008, 15:31Be the first to give this comment the thumbs up 0 likes


Interesting perspective. 

In its results statement last week, Monitise commented: "We are seeing strong interest from consumers for the service, especially those of the Royal Bank of Scotland Group, and expect its pipeline of mobile banking consumers to grow significantly during the second half due to its major planned marketing activity."

Are Monitise being over-optimistic?

A Finextra member
A Finextra member 27 February, 2008, 11:48Be the first to give this comment the thumbs up 0 likes

I don't think so.

While I personally may not agree that this is the best way to go, the banks in general are moving towards this solution.

What I am trying to say is that there are a number of alternatives that offer the banks a more advanced interface without the need to disintermediate their customers to this third party.

I do not believe that the current model is a sustainable business model.

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