Meridea: what's in it for Nokia and Accenture?
06 December 2001 | 63 views | 0
Philip Carnelley, Ovum's technology research manager, comments on the launch of Meridea and examines why Nokia and Accenture would wish to support mobile banking.
Meridea, a company providing mobile banking software, was launched in London on November 29, 2001. What makes this new company so interesting is its financial backers. Two of them are fairly conventional: 3i, a venture capital company and Sampo, a Finnish bank. But the other two are more surprising: Nokia and Accenture.
What motivates these companies to invest EUR48.5 million in yet another software company? The reasons are more complex and interesting then just hoping to turn a profit when Meridea ultimately floats.
3i and Sampo
3i's investment is the most straightforward - it's in it to make a buck. But presently, 3i's technology portfolio is not its greatest asset, so it is hoping that investment in mobile commerce will make keeping its interest in the whole TMT sector worth its while.
3i is also seeking to improve its position in technology sector investment, relative to its peers, many of whom are nervous of technology investments in the wake of the dotcom collapse. As 3i is perhaps the largest and oldest venture capital firm in the world, its vote of confidence in mobile commerce is a boost to the whole sector.
Sampo is Meridea's first and only customer (so far), as well as a founder investor. It's investing in Meridea because it wishes to get ahead of its rivals in offering online banking. Sampo believes that in a country where some two-thirds of customer interactions are now via online channels, this is clearly an important point of differentiation. The Finnish experience does provide evidence that banking in other more conservative (or less online-aware) countries will go the same route, albeit more slowly.
Accenture draws parallels with Siebel Systems
Accenture draws parallels between its investment in Meridea and its early investment in customer-relationship management pioneer Siebel Systems. This investment has rewarded it richly, as Siebel now has revenues and a market capitalisation numbered in billions of dollars. However, straight profit on its investment is not the only way that Accenture has benefited from Siebel.
Accenture benefits from the halo effect, supporting the company's efforts to demonstrate that it is even more technology-aware than its peers. More directly, Accenture also picks up business in implementing and advising on the use of the software suite because the closeness of the partnership means that it is more closely involved in its production and development.
Accenture is hoping to repeat this success with Meridea, raising its profile and boosting its credentials for implementing e-banking among its customer-base - which already encompasses some 77 percent of the world's largest 500 banks and half the largest insurers. Conversely, Accenture's backing should also make the more conservative of its customers feel more comfortable about moving into the world of mobile banking.
Nokia wants to boost mobile data usage
Nokia, like Accenture, is also looking for indirect benefits. Through a series of strategic investments - often through its Nokia Ventures arm - Nokia is hoping to give a boost to mobile data usage. This promises to boost the uptake of advanced handsets, thus speeding up the replacement cycle. (Meridea software looks a lot better on next year's phones with their larger, colour screens and GPRS connections). This will increase phone usage thus giving more money to operators - so they can continue to commission networks and handsets from Nokia.
These developments will also give impetus to Nokia's Open Mobile Software architecture. This software aims to ensure a common platform for mobile applications across different handsets and thus further enable the mobile data market, as application developers will naturally target the largest audience. This will, in turn, fend off the disruption and potential threat from Microsoft's attempts to gain a position of strength similar to that in the fixed computing world.
Meridea's blue-chip backing will seed mobile banking market
Ultimately, the success of Meridea is less than assured. It has to compete in a fierce marketplace where many established software providers will want a slice of perhaps the only growing part of the financial software pie. It also has to persuade financial services companies that its software provides best-of-breed functionality in the various domains it covers - banking, investment and insurance. And also that it supports online channels of digital television, mobile telephony and the fixed Internet - if they are to run it alongside their current systems or rip them out.
Whether Meridea succeeds or not, its very existence with its blue-chip backing will undoubtedly seed the market and help to establish online and mobile banking.
This will benefit the mobile market, the banking industry and, ultimately, the consumers for whom the convenience of 'anytime, anywhere' banking is surely a benefit worth having.
Related Ovum reports
Wireless Internet Business Models: Global Perspective, Regional Focus
Consumer Portals: Multi-access Strategies