Banks are waking up to the B2B opportunities in Mobile Financial Solutions

Everyone who has flown the flag for Mobile Financial Solutions has long focused on the consumer market - in mobile banking and payments. Now we are seeing the emergence of even more attractive propositions in the Financial Services B2B market.

Corporate Banks are beginning to offer their corporate customers information – and transactions – on the move. These services are integrated into corporate cash management offers, such as currency rates and positions, balances and transactions - but others help improve the efficiency of the customer’s financial supply chain – for example in invoice payment and trade finance. This market has huge potential, not just for its size and expansion potential, but because transaction fees are relatively inelastic. We are also seeing corporate banks using devices like the iPad, for face to face client meetings – as relationship management aids.

Buy Side firms (including wealth management) are beginning to provide their clients with mobile apps, developed in house and white labelled, so that higher net worth clients can review and even act on their portfolio on the move. We can expect increased use of third party technologies targeted on providing aggregation and intelligent display for mobile devices.

We are seeing an explosion of interest in Investment Banks, starting with ‘information out’ apps. The business case is a little uncertain, built to date mostly on a ‘brand visibility’ ticket. These apps involve the publication of prices and data, deployed internally and branded to customers. This is a first wave of maturity, as technology policies mature to embrace mobile, to manage latency and to overcome security concerns. The next generation will include client-contextual alerts on market movements, dashboards with simple scenario analysis and modelling tools, and limited transaction initiation.

The potential applications for capital markets players go beyond this. Market analysts can capture, model and share research data on iPads. Traders on the same virtual desk can share prices instantly on iPhones and Blackberries. Collateral Managers can monitor liquidity and portfolios wherever they are.  Risk managers can answer questions on exposures to Greece or Toyota - and potential mitigation strategies - in an instant on iPhone and iPad. Middle and back offices can mirror steps in conventional workflow enabling decisions to be made on the move increasing operational efficiency. We have seen all these applications already - the possibilities are endless.

This explosion in mobile applications is almost developing virally. In the City of London it is increasingly common for people to have two devices: Blackberry for email and meeting requests, iPhone for everything else. The iPhone may be a private device, but people port much of their professional life on to it, circumventing corporate policies.

This is only going in one direction – the market rules. Banks are trialling and rolling out smart devices such as iPhones and iPads, and some are already committed to switching. The form factor with immediacy, with the best user experience, which gives them best edge – and which are ‘cool’ – will win.

Real life though, is not quite that simple. Systems need to be designed with the user interface and the user experience as top of mind. Native apps on the phone are clearly superior to web apps. These new types of applications also require new web infrastructure capable of “pushing” price updates and executing transactions over the internet securely. Resilient and integrated data warehousing and service management are required, depending on the application. We foresee the emergence of mobile oriented architecture (MOA) principles through which organisations govern the deployment of smart mobile devices, and their relationship with ‘conventional’ technical architectures and business operating models. New skills are required.

This is an exciting time, much like the advent of the Internet, when governance and ownership were unclear – as were the best business models – when the technology moved on quickly, and when having ‘proofs of concept’ and a flexible strategy across the organisation became necessary to learn and maximise returns.

The lessons learned from this experience are now proving invaluable, with new ‘disruptive’ technology, skills and concepts bringing new potential value in the Financial Services B2B market.

Biography

Larry Mindel is Partner for Mobile Financial Solutions at Rule Financial, a technology and business consulting firm based in London and New York. Larry has a background in building and delivering bank strategies for new business initiatives, including new product launch, post –merger integration, large scale outsourcing, operating model transformation. Larry is based in London.