Here comes the bride… but who is the bride, and why are they getting married?

Two key industry vertical in the Mobile Financial Services domain are Banks and Mobile Operators, to date they have been in a perceived turf war as they battle over who will prosper as mobile technology strives forward as a key enabler for banking and payments.

The battle was first outlined by the success of SafariCom in Kenya, who with little to no help from the banking sector, built a hugely successful payments services driving huge leaps forward in payments convenience, financial inclusion and of course fee revenue. This lead to the hype driven years where innovators and analysts talked up the market opportunity globally. Moments later, Globe Telecom in the Philippines saw accelerated growth with it's business G-Cash, followed by Smart. But this created an industry divide and challenge. Traditionally banks were the only ones to offer payments and banking services, but recent successes opened the door to the possibility that a non-bank organisations could offer financial services to a customer base far greater than the banks have ever experienced through their traditional bricks and mortar business'. Banking analysts and banks responded with an attempt to create a scare campaign based on consumer protection and fraud, but mobile operator lead initiatives thrived through market necessity. Thus creating and 'Us versus Them' debate throughout the industry. Materials in the press continually focused on the question, 'Who will win?' will it be the Banks,  or will it be the Mobile Operators? A debate with a poisonous thread in an industry that necessitated collaboration.

Throughout the debate we were faced with a choice on whose perspective was right. Were the banks justified in their concerns about security, risk and fraud. Or were the Mobile Operators justified in their risk relative market demand approach providing services to people historically excluded from formal financial services? Reminds me of the dating scene, where men and women have different perspective on conduct and interaction. Even though both had the long term goal of procreation, often self indulgent perspectives encouraged each side that their needs and thoughts are superior and the opposite sex is just wrong. Isn't that what the book Men are Mars and Women are from Venus is based on? Variations on perspective.

Hundreds of years of experience have shaped of legacy thinking and beliefs system of bankers(men) throughout the world. Dealing with people's money was a serious business, with serious risk's. Loosing even a single dollar of a customer is considered devastating both from a reputation and trust perspective. The complexities of modern financial products, have meant that banking has become more than deposits, as increasing numbers of consumers took on credit and investment products. Experience with cheque fraud, financial melt downs, defaults and increased operating costs gave birth to practises such as Basel, AML/CTF, Risk Assessments and Regulated Policy. The result is an industry that fears change, particularly change it doesn't understand. Hence they innovate at a slower pace, prioritise risk controls above customer experience and withdrew from perceived risky products. Banks in my opinion are the men. Historically has reenforced their superiority in society, gentlemanly norms regulated their behaviour, they owned the family assets, drove the family car and women went meant to be subservient. In the end game of procreation, their role as a father is known.

Mobile Operators on the other hands are young in comparison. The earliest commercial mobile phones date back to the late 1970's. Hence they are considerably more innovative, and attack markets at a faster pace. In merging markets, it's not unheard of for operators to have double digit year on year growth. They have endured the markets ability to accept small slips in service standards, adopting multiple iterations of innovations such as SMS, WAP, Smart Phones & 3G. The ever growing demand for communications with mobility have driven their success in their contribution to society. While the comparison is a long shot, the age of the mobile movement is very similar to that of the female movement as women moved out of a stereotyped role in society to contribute in ever increasing capacities throughout society. Many would argue that the individuals drove the feminist movement, but in my opinion global demands necessitated more significant contributions from females arose the world. As the role of a woman grew, so did the frequency in which they stepped on the toes of traditional roles for men(Banks). While they may have moved into corporate roles, equal opportunity and business leaders, their role in society's ultimate goal of procreation remained. But they still had to battle the perception that women couldn't be in serious roles, creating concepts such as the glass ceiling.

What's the comparative for procreation in the battle of Banks and Mobile Operators in the turf war over Mobile Financial Services? One would argue that the effective collaboration between these two industry verticals. In my opinion recent examples of joint ventures, merges and collaboration agreements are the 'marriage' of industry players Leading to the optimum procreational outcome of profitable, sustainable businesses, the children of collaboration. Only through the proliferation of the next generation with evolved perceptions on the norms that govern society, paving the way for more and more successful collaborations.

In summary, I believe the ultimate success and evolution of of mobile technology as a norm for banking and payments is highly dependant on the ability of banks(men) and mobile operators(women) to realise they both have the same objective of building success mobile financial services businesses(children). Only then with aligned horizons will they fuse their roles in the industry, giving birth to generations of industry success

Google & Motorola.... anything for Mobile Money?

In a bid to strengthen its mobile business, Google announced today that it would acquire Motorola Mobility Holdings, the cellphone business that was split from Motorola, for US$40 (S$48) a share in cash, or US$12.5 billion.(TodayONLINE). The offer - by far Google's largest ever for an acquisition - is 63 per cent above the closing price of Motorola Mobility shares on Friday. Motorola manufactures phones that run on Google's Android software.


But is this deal likely to effect the world of Mobile Financial Services? To gain an insight into the potential we need to look at the history of the two businesses.
Motorola has had a roller coaster history over several decades. Many of us would recall devices such as the StarTAC and the RAZR, under the Helo Moto messaging. But even with these pinacle devices, Motorola was never able to achieve the mass market scale of its competitors Nokia, LG and Sony Ericsson. The first Motorola device to use Google's open source OS, Android 2.0, was released on November 2009, the Motorola Droid. The handset division was then spun off into the independent Motorola Mobility.


Google on the other hand has been on an ever growing distribution base in the Mobile OS space since it's acquisition of Android in 2005. Then with the support of the Open Handset Alliance, Google launched it's first release of the acquired platform in 2007. Since that Android has seen a spike in distribution across some 80 device manufacturers. By the fourth quarter of 2010, Android become the world's best selling Mobile OS.


The challenge for Smart Phone OS providers, has always been the market share limitation globally. In 2011, roughly only 25% of global devices are smart phones. This is where the Google Motorola opportunity comes in.
With Motorola's device experience, Google should be able to create move to penetrate lower down the value chain of the handset market. Thus opening the door for richer distribution of services over the open source OS market. With mid and low end devices powered by Android in the hands of the 700 million mobile users in India, or the 180 million in Indonesia, the distribution of mobile service becomes easier and richer. A perspective very different to Nokia's recent announcement of factory preloaded applications.


A parallel initiative run by the Grameen Foundation, AppLab, who seek to engage with organisations, government entities and socially-minded companies interested in better understanding and meeting the needs of the poor. AppLab has had a long history of building services on the Android platform, particularly in markets such as Uganda, Indonesia. Overlaying Google's OS, Motorola's device experience and grass roots level programs such as AppLab's means a powerful network of organisations with simple tools that can overcome the commercial barriers that Mobile Operators put in place to restrict the success of services trying to access their customer base. Resulting in the easier, quicker and more cost effective creation, distribution and management of mobile services such as Mobile Money.


In summary, with the effective collaboration of open source OS(Google) and a device manufacturer(Motorola), we have for the first time, a complete non-Apple mobile eco-system for the creation of services for delivery over mobile

Recipes to Success #1: Building the EcoSystem

Over the years, I am continually asked what is the 'secret sauce', 'silver bullet' or 'killer app' to ensuring Mobile Money success. And I have to admit, there is no secret, there is only the ability to learn from the repeated mistakes and successes of those that have pioneered before you. Such an approach isn't specific to emerging markets, developed markets, Africa or Asia, but it is a strong set of learnings that one should investigate, understand and consider when making their own play in mobile financial services. One of the key successful factors is understanding and building the eco-system.

Far too many mobile money businesses go head first into launching products that have little market research and little consumer understanding on the chance that 'build it and they will come' or 'copy M-Pesa' will ensure success. Operations like these are continually faced with disappointing adoption rates, or low active utilisation. Thus leaving executives puzzled or disillusioned on around the hype of mobile for financial services.

Building the Eco-System is at the top of my list of insights as a theme that many forget. This may sound simple and straight forward, but one needs to be aware this is not something you can buy, outsource or ignore. It's a constant journey of discovery, adaptation and refinement. It doesn't finish upon launch, nor does it finish within the first year. Best of all, it a journey that will engage you in the fascinating exploration of cash and transaction flows within your market. It involves understanding the various actors within the community, how and why they interact, where they interact, what is the relationship between them. Only with this level of understanding will the market opportunity for Mobile Money be obvious. This could be as simple as witnessing the amount of cash that friends or family send between each other via trusted couriers, or huge queues at a factory on payday. This is your secret sauce, engaging and understanding the world people live in, then finding the points in the ecosystem that could be better.

I have such a recipe, which I have used dozens of times to guide the industry towards success. Engage, Penetrate, Accessibility, Control, Sustain & Learn, Re-Plan, and re-Execute. Let's take a look at each step:

1. Engage: 

First and foremost you must find a way to get amongst your target market. Spend time understanding their everyday needs, pressures, movements, etc. Find out how much cash they carry, and why that amount. Where they travel regularly to buy things, get services, or exchange money? Document everything you find, take photos, exchange contact details. These people will be key in your journey of market understanding and service refinement.

2. Penetrate: 

With a clearer understanding of the market, document your theories on where you feel a service can penetrate the ecosystem. Remembering commerce and financial transaction already happen, your just looking for gaps where you feel a service might enhance or benefit those involved. Start by listing just a dozen. This list is where you make a soft launch of the service. Get those people deeply engaged, because they will be your champions over time.

3. Accessibility: 

Okay, so now you have a few theories on getting into the ecosystem, but you have to remember, once you convert transactions from cash to virtual money, such in the cause of Mobile Money. Those individuals brave enough to be early adopters will need assurance that they can still get access to their money. There is no point trying to address the payday queues at a factory, if the only way they can get cash is to travel to a bank or ATM to make a withdrawal. The access needs to be within their current life & ecosystem, but of course you already know where their life happens from your engage findings.

4. Control: 

While hyper growth is fantastic, it also means you have to scale your service foot print to meet the demand, which creates a risk that you have poor customer experiences outside your existing field of service. Take Facebook for example, they executed a carefully controlled launch, one university at a time. During the initial phases of your launch you will learn ten fold from your original market engagement findings. The ecosystem in which you activate needs to be readily accessible so you can quickly collect market feedback. Make sure you document this feedback, as it will be extremely valuable as you refine the service offering.

5. Sustain & Learn: 

As the ecosystem organically grows, you need to maintain your engagement so that you may observe it grow patterns, behavioural usage, challenges, etc. Ongoing observation and documentation.

6. Re-Plan: 

Revisit the theories you had during the penetrate phase and add to the list, no doubt the number of theories you now have are double or even triple. You need to link your findings in the field in a cyclical manner enabling a highly engaged feedback mechanism into your market planning, service planning and penetration plans. These will be key as you enter more and more ecosystems. Don't be afraid you remove the theories that didn't work, just don't forget why didn't work.

7. Re-Execute: 

This is where the model completes the cycle. Go back and re-engage, whether that is engaging a new ecosystem, or reengaging the same but broader community. You'll enter with an enhance understanding, which will make you more observant and in tune with the community.

This all may seem fairly straight forward, but you'd be surprised how often companies looking to enter the Mobile Money space forget to engage the ecosystem and learn through a repeatable process. The process is scalable, so as your team size grows the process remains with a greater power as you gain more and more perspectives on the market.

So there you have it. A Jamie Oliver style recipe for success in launching Mobile Money. If you'd like ore details, I am always not to far away.