Innovation Edge. Mobile Banking (English)

APRIL 2012

2

Mobile banking NEW EXPERIENCE IN THE POST PC ERA Mobile (R)evolution Opening the doors for our customers Global snapshots Forecasting for innovation

Trending issues Innovation Edge April 2012 | MOBILE BANKING Technology trends

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Enabling an

Anytime, Anywhere World

New innovations are providing novel ways to enable an “always on” society: mobile, social, and cloud technologies are being interwoven into the fabric of everyday life creating new value or offering new efficiencies. The mobile handheld device is becoming the touchpoint for a wide array of products and services, as mobile devices are the “go to” gadgets for most consumers. Businesses want to be well-positioned to take advantage of the opportunities, including financial services companies.

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The first commercial mobile service was launched 32 years ago in Japan, as NTT DoCoMo began offering mobile communications service to customers on December 1, 1979. Today, we are on the cusp of pervasive, global connectivity, as mobile phones have broken the 6 billion subscription mark in 2011 (See the mobile penetration graphic below). Although much of the technology “under the hood” has changed since the early days, in essence, mobile devices have transformed from a simple phone to a personal computing and communication device in a handheld format. While the world is still exploring and discover-

ing additional opportunities that mobile technologies may offer, it’s clear that we are on our way to an anytime, anywhere economy. With the right business model, companies can serve 6 billion customers using mobile technologies: for creating and maintaining “sticky” relationships with customers; and as the main channel for the delivery of the companies’ value proposition in a customer-centric way. source: Communities Dominate Brands | Celebrating 30 Years of Mobile Phones, Thank You NTT of Japan. 2009. source: ITU (International Telecommunications Union) | Key Global Telecom Indicators for the World Telecommunication Service Sector. November 2011.

Mobile penetration timeline

2000

2005

2011

719 million mobile subscribers

2.21 billion mobile subscribers

6.16 billion mobile subscribers

DEVELOPED COUNTRIES: 469 million (65%)

DEVELOPED COUNTRIES: 990 million (45%)

DEVELOPED COUNTRIES: 1.64 billion (27%)

DEVELOPING COUNTRIES 250 million (35%)

DEVELOPING COUNTRIES 1.22 billion (55%)

DEVELOPING COUNTRIES 4.52 billion (73%)

CONNECTIVITY

mobile technologies. (10’ tour)

Mobile banking and other related products and services would not be possible if our world wasn’t connected. Thanks to telecommunication companies (referred to as Mobile Network Operators or MNOs), 6 billion people can potentially participate in the global

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economy with a mobile phone. That sounds

that our parents and grandparents envision

like great news. However, the connectivity

when they think about a mobile phone. Then

providers are not a happy bunch these days.

there are the smart devices, the ones that are

They are upset because they feel as though

leading the way in the post-PC era. The smart

they weren’t allowed to extract maximum

devices are sub-divided into tablets (such as the

value from their investments in infrastruc-

iPad and Galaxy Tab), smartphones (iPhone,

ture. While Amazon, Facebook, Google, and

Blackberry, Galaxy S, etc.), and handhelds (iPod

a whole lot more were striking gold in the

Touch, PSP, DS3, etc.). Essentially, they are pow-

Internet, the connectivity providers were left

erful computers in an ultra-compact format. At

standing practically empty handed, relegated

the end of the day, the customer will access any-

to the “pipes only” business with unflattering

time, anywhere products and services via these

margins. Put that together with the ongo-

devices. The device manufacturers will spur new

ing shrinkage of their traditional voice busi-

capabilities and, in turn, will spark new business

nesses (both fixed-line and mobile), one can

cases, such as NFC technology (Google’s Wallet

see why the telecommunication companies

is an early example).

are strongly motivated to explore only those business models that make sense for them

OS PLATFORMS

in the mobile space. The telecommunication

The aforementioned devices need an OS

companies are extremely important, as they

(Operating System) platform to run. Currently

are providers of access and bandwidth. If the

there are several OSs in the market, such as

connectivity providers can’t make compel-

Apple’s iOS, Google’s Android, RIM’s Blackber-

ling business cases for the forthcoming ma-

ry OS, Nokia’s Symbian, Nokia/Microsoft’s Win-

jor upgrades, such as LTE (Long Term Evo-

dows Phone, Samsung’s Bada, etc. For smart-

lution, a next generation technology which

phones and smart devices, Android and iOS

provides sufficient bandwidth for 2-way

are clearly leading the pack.

streaming of high-quality live videos); the reality of anytime, anywhere business models

APP STORE PLATFORMS

may be delayed.

Although the most popular and best-known app store platforms are offered by OS plat-

DEVICES

form providers (for example, Apple offers the

There are two main types of devices: “dumb” and

App Store for iOS and Google offers the An-

smart. The “dumb” devices are also known as

droid Market for Android OS), there are also

“featured phones.” They are the familiar phones

other app store platforms, such as the ones

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provided by some MNOs. Also, the concept

Connectivity

of app store platform is also evolving as we Wireless connection to the network

are noticing the emergence of enterprise

KEY PLAYERS:

apps and private apps store concepts.

Mobile Network Operators (MNOs), such as Telefonica, ATT, Verizon, etc

APPS

Devices

The word, “Apps,” automatically provokes an image of these really cool buttons that we tap

Handheld device manufacturers

on our handheld devices to do things. Tech-

KEY PLAYERS:

nically, those apps are known as native apps.

Apple, Samsung, HTC, Nokia, LG, Sony, Nintendo, etc

They are custom-built applications that run on a specific OS platform, often times written for

OS platforms

a specific device or set of devices. They offer a rich experience for the end-user as the device’s

Operating System of smartphones, tablets, or other devices

capabilities are incorporated into the app, such

KEY PLAYERS:

as NFC, GPS, camera, etc. However, there is a

Android, iOS, Blackberry, Windows phone, etc

price to pay for the richness: native apps must App Store

be developed per individual OS platform, which can quickly push up the costs of development.

Virtual Store for app purchases

On the other hand, there is another type of app

KEY PLAYERS:

(although lesser known): web-based apps. In

Apple´s, Google´s Android, RIM´s App World, Nokia´s, etc

essence, any “mobile enabled” site accessed via a mobile browser can be considered a webbased app. The advantage of this approach is

A

Apps

the “write once, publish many times” capability

Native or web apps

as web-based apps are device agnostic. Most

KEY PLAYERS:

people think that web-based apps are unflatter-

App developers

ing but new developments such as HTML5 are quickly blurring the line between web-based apps and native apps; and it may prove to be a robust and cost-efficient way to produce apps that provide a rich user experience.

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Mobile

(R)evolution

Retail Banking industry analysts define Mobile Banking as “platforms that enable customers to access financial services.” There are three main technologies employed in Mobile Banking: SMS, Mobile Browser, and Custom Applications; and collectively, they are referred to as “Triple Play.” In terms of business models, Mobile Banking offers banks new ways to relate to customers (acquisition & retention; and up/cross-selling opportunities) and a new channel (which also happens to be the most cost effective). Depending on geography and footprint, Mobile Banking can be “additive” or “transformative”; in other words, “One of Many” or “One and Only”. source: Juniper Research. White Paper: Banking on Mobile. 2009. Innovation Edge April 2012 | MOBILE BANKING

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echnically speaking, Mobile Banking is

T

 Additive: Mobile Banking as One of Many.

composed of three mobile technologies:

Mostly applicable in developed coun-

SMS (Short Messaging System), Browsers,

tries or metropolitan areas in developing

and Apps. Collectively, they are known as

countries. Markets are highly competitive.

triple play. These virtual customer relation-

Generally, Mobile Banking is one of many

ship touch-points and channels can be devel-

channels and customer touchpoints and

oped “by hand” by the bank or be purchased

offers the highest convenience. Driven by

“off the shelf” from Mobile Banking solutions

Smartphone/Smart device adoption. Gen-

providers. Most banks are going the “safe”

erational issues are influential.

route and adopting off the shelf solutions. In order to differentiate ourselves from our

 Transformative: Mobile Banking as One

competitors, BBVA has chosen “the road less

and Only. Mostly applicable in rural areas

traveled” and we are doing it “by hand.”

in developing countries and out of footprint areas in developed countries. Mar-

Functionally speaking, Mobile Banking is a

kets need to be developed. Mobile Bank-

customer relationship touchpoint and chan-

ing enables (opens the doors to) previously

nel. In other words, it is one of many different

unapproachable, new customer segments

touchpoints and channels a bank may have.

and offers access to banking products and

However, it is the touchpoint and channel of

services. Driven by inexpensive handsets.

choice of an increasing number of retail bank-

Generational issues are less influential.

ing customers, especially Gen Y and Gen X. source: Business Model Generation

source: BBVA | Money for All ( Internal Document). 2011.

To clearly understand Mobile Banking and its

source: Juniper Research | White Paper: Banking on the Mobile. January 2009.

implications, it may be best to think of it as “additive” or “transformative”.

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USE. Widespread in developing world, many alert applications and some payment options in developed world.

Mobile banking technologies

PROS. Can be used across platforms and carriers, smart and dumb phones, easy to use and fairly safe. CONS. Not permitted in some regions, some security concerns, reduced functionality.

SMS

Mobile browser

Custom aplication

USE. Widespread in developed world, particulary within regional and 2nd tier banks, mobile browsers connect mobile users to an augmented internet banking site.

USE. Gaining significant traction in the developed world, used for mobile banking, coupons and location based services. PROS. Provides a rich user experience. More secure and stable. Retains loyalty and offers cross-selling opportunities.

PROS. Familiar to internet banking customers, simple integration with existing internet platforms, works across devices and MNOs. CONS. Fairly common practice (no competitive advantage). Takes a number of steps to log in. Adaption to small screen not always done well.

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CONS. Integration issues required for each device. Must be installed by customer. Can be more expensive to deploy.

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doors opening the

for our customers

Like many other industries, the retail financial services industry is in the midst of disruptive changes: mobile, social, and cloud technologies are reshaping industries and creating new ones. Something new seems to be on everybody’s minds: in the retail banking segment, the something new at the moment is Mobile Banking.

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A

s part of an overall retail banking busi-

the experience of many has been that the

ness model, Mobile Banking offers the

mobile channel is an extra cost rather than a

stickiest touchpoint for banking customers

cost reduction opportunity.” Overall, the “val-

and most economical transactional cost for

ue creation opportunity … is neutral at best.”

banks. It also paves the way for new value

source: EFMA & McKinsey. The State and Future of Mobile Banking. p. 7. October 2011.

propositions and new banking models. However, as in other industries, new entrants are

However, for individual banks, the report goes

aggressively entering into the retail bank-

on to say that there are three major opportunity

ing business and posing new challenges for

areas in Mobile Banking:

bank executives as they explore and seek out the right business model.

 Ultra-convienient and innovative banking.

source: Bank Technology News | Banks Seek Sticky Relationships from Mobile Apps. February 2012.

 Digital Commerce.  Disrupting new markets.

According to the 2011 EFMA & McKinsey report, “The State and Future of Mobile Bank-

Once the overall strategy for Mobile Banking

ing,” mobile banking for the retail bank seg-

is formulated, each bank will have to integrate

ment (as a whole) is a “zero-sum” game: “new

the “additive” Mobile Banking into its retail

revenues have been largely captured by non-

banking business model. For banks aiming

banks, most players have yet to reflect the

to be shapers, they will have to resolve the

convenience of mobile in their pricing, and

“transformative” aspects of the model.

Strategy defines Opportunities Ultra convenient

Follower Mobile friendly website and basic application

Digital Commerce

x

110100111001100100010 00111010101001001000 1010101001110101010010

Leader Multichannel to deliver ultimate convenience Drive sales via mobile Reduce cost to serve

Disrupting new markets

x

110100111001100100010 00111010101001001000 1010101001110101010010

Shaper Grounbreaking services Active partnerships First mover in unbanked and new markets

110100111001100100010 00111010101001001000 1010101001110101010010

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Call Centre $4.00

TRANSACTION COSTS BY BANKING CHANNEL

Branch $3.75

Additive Mobile Banking Additive Mobile Banking adds to the existing business model has two main objectives: increase customer stickiness and reduce operating expenses by having a unified infrastructure (for example, CCB). In general, the bank offers Mobile Banking as a complement with its other channels (please see the issue No 1 for more information regarding banking

IVR $1.25

channels). This model is prevalent in developed countries or metropolitan areas in developing countries.

ATM $0,85

BENEFITS OF ADDITIVE MOBILE BANKING INCLUDE: ONLINE

$0,17

 Migration of customer transaction to the lowest cost channel.

MOBILE

$0,08

 Adds to the customer-centric business model.

source: Tower group. Fiserv. Mcom 2009

 May help banks to generate new value propositions and revenue opportunities, such as mobile payments and cross-selling/upselling opportunities.

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In general, transformative mobile banking are prevalent in rural areas in developing countries and out of footprint areas in developed countries.

Transformative Mobile Banking Business Models Transformative Mobile Banking creates new value for banks by providing access to new Customer Segments, thus offering banks new sources of revenues. In other words, they can help banks go where it couldn’t go with existing business models (BM). Transformative Mobile Banking aims to develop new customers (unbanked and underbanked)

BANK-LED MODEL

through the lowest-cost transaction channel via a “branchless” strategy. This model is either led by a bank, an MNO, a 3rd party (for example, a mobile payment provider), or as a joint venture between two or more parties. The concept of ecosystem is important here, as the banks’ skill and experience in

MNO-LED MODEL

ecosystem management will likely become a key skill to operate these BMs effectively. In general, transformative mobile banking are prevalent in rural areas in developing countries and out of footprint areas in developed countries.

3RD PARTY-LED MODEL

Thus far, three main Transformative Mobile Banking Business Models have emerged: Bank-led models, Mobile Network Operator (MNO)-led models, and 3rd party-led models.

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BANK-LED MODEL The banks offer strong capabilities in treasury, risk management, and fraud detection; and access to capital markets and investment opportunities. However, in developing countries with a large share of population lacking financial sophistication, all the aforementioned strengths vanish. Traditional interest rate models do not apply to low-income customer base; the infrastructure is not cost effective; and unbanked customers are not always aware (and may not even care) of the bank’s brand.

FINO Bank (India)

MCB Bank (Pakistan)

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MNO-LED MODEL The MNOs offers their large customer base a easy to use financial transaction services with their own distribution model. MNOs can leverage their customers’ need to buy airtime citizens in developing countries have and facilitate person to person remittances and bill payments to increase their ARPU (average revenue per user).

M-Pesa (Kenya-Tanzania)

G-Cash (Philippines)

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3RD PARTY-LED MODEL 3rd parties, usually technologically driven companies, have strong technology capabilities. However, they lack the bargaining power over larger banks and MNOs and certainly lacks the capillarity of an MNO’s distribution network.

Yellow Pepper (LatAm & Caribbean)

Wizzit (South Africa)

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Half full or Half Empty? Mobile Banking possibly can add to or even transform the retail banking business model by offering anytime, anywhere access to financial products and services. As banks explore the opportunities and benefits, they must be wary of the complications that also come with them.

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W

hen Mobile Banking technologies and its components are “put together” the

right way, according to the EMFA & McKinsey report, they can “collectively turn it into a unique value proposition. … This effectively means that bank customers can ‘meet’ their bank every day, albeit remotely. These features plus a flexible cloud and ‘app’-based technology platform enables a more rapid development and integration with third party products.” The benefits of mobile devices are:

Some of the offers will result in the creation of new value propositions for customers Percentage of banks currently offering these features: Information reporting

77%

Alert messaging 73%

 Anytime, anywhere availability  Unique IDs (and their use), specific

Money transfers 64%

Recurring bill payments 58%

to each customer  Simple to use, usually with rich User

Check deposits 55%

Experience

p2p payments

 Enablement of Location

Bank location services

46% 40%

Based Services (LBS)

Adding payees through a mobile application 35%

 “Go to” devices for consumers

Statements

source: EFMA and McKinsey & Co. | The State and Future of Mobile Banking in Europe. October 2011. p. 5.

34%

Administrative functions 34%

With the aforementioned benefits of mobile

Funding cards 28%

technologies, banks can offer value proposi-

Mobile wallet

tions.

Personal financial management

27% 25%

Location based merchant offers or coupons 20%

Click to call 18%

NFC or proximity payments 17%

Loyalty rewards 15%

Coupon offers 12%

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RISKS Like all goo d things in life, succes to co m e h a s seems nd in hand with challe and Mobile nge s Banking is no exceptio cording to n. Aca recent su rvey condu by KPMG re c te d garding mo bile bankin age; securit g u sy, technolo gy adoption and regulat , cos t , ion are the biggest cha lenges face ld by mobile banking. Th first two ch e allenges ar e related to s u m e r co n c co n e rn s a n d t h e latter two lenges are chalprovider re lated conce source: KP rn s . MG | Moneti z

place in the

ing mobile: How banks are preserv lue chain. J ing their uly 2011. p. 11.

payment va

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Customer related concerns “is it safe?”

wet towel around the warm fuzziness of mo-

Security is the number one risk for banks and

er than making payments (globally): “Nearly

is also a key barrier for consumer adoption.

all the interactions on mobile so far have been

It’s been noted by some industry observers

checking balances, … “That doesn’t sound like a

that the EFMA & McKinsey report fails to

way to make money. ”Adding to this, regulation/

mention security (at all). Nonetheless, both

legislation is also perceived to shrink margins,

mobile banking providers and customers

making mobile banking a bitter pill to swallow.

bile banking, stating that most mobile banking applications are used to check balances, rath-

clearly place it at the top of the list. Mary Mo-

source: ITNews | Gartner casts shadows on mobile banking. July 2011.

nahan, adirector at Javelin Research, also addresses the concern for security. She states,

Specifically in developing markets, banks

“The main reason consumers don’t move to

need to also understand ecosystems and

mobile banking is because of security con-

manage it well to leverage the mobile bank-

cerns, … Consumers want to know that their

ing opportunities. Given this, inexperience

mobile interactions and transactions are en-

and unclear management objectives related

crypted, and they want some assurance that

to ecosystems may pose as risks or barriers

they will be reimbursed for losses associated

for banks, such as not understanding the

with a mobile-banking breach.”

importance of agents or the logic of MNOs’

source: BankInfo Security | Mobile Banking: Consumer Education Needed. November 2011.

business models.

Also, customer education or awareness is a key

In addition, especially in transformational mo-

element for mass-adoption of mobile banking,

bile banking, MNOs pose a risk in that they

both in mature and emerging markets.

need to find a business model that works. As mentioned earlier in the mobile technology

Provider related concerns: “Show me the money!!!”

overview, while they can be valuable partners for mobile banking, they can place detours ahead by delaying anytime, anywhere capabilities.

Gartner analyst, David Furlonger, during the Banktech Summit in Sydney wrapped a cold,

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global

snapshots What´s going on around the world in mobile banking? Conceptual “pictures” of mobile banking practices are presented, covering 12 countries in 4 continents.

the BBVA experience

Mobile World

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GLOBAL SNAPSHOTS

Mobile World

ACTIVOBANK (PORTUGAL) AND MILLENIUM BCP (POLLAND) Recognized as the Best Mobile Banking in Europe award by Global Finance Magazine, ActivoBank and Millenium BCP mobile banking solutions are available via a native app for the Android and iOS devices, as well as a light browser application for other phones. The mobile banking solution offers customers standard banking solutions, such as account balance and activity, payments, and card management. Additionally, the app offers branch and ATM location information, FX rates, information regarding upcoming payments, simplified activation, application update information, and other customer centric features.

SCOTIABANK (CANADA) ScotiaBank is Canada’s most international bank, with global presence across the Caribbian, Central America, Latin America, and Asia. ScotiaBank offers “triple play” mobile banking solutions: “App Mobile Banking” allows customers to check accounts (personal, small business, borrowing and investing), transfer funds between Scotiabank accounts, pay bills, send and receive e-Transfers, send Western Union money transfers, and find nearby branch or ATM on smartphones (iOS and Android) “Browser Mobile Banking” allows customers to check personal and small business accounts, pay bills, transfer funds between Scotiabank accounts, pay bills, send and receive e-Transfers, send Western Union money transfers, and find nearby branch or ATM on WAP enabled phones. “Text Mobile Banking” allows customers check account balances, view the last 5 transactions, and view credit card information (available credit, minimum payment, and due date) via SMS.

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GLOBAL SNAPSHOTS

Mobile World

CITI MOBILE – CITIBANK Citibank’s portfolio of Mobile & Tablet Banking solutions is comprised of “Citi Text” (SMS), “Citi Mobile for Smartphones” (Mobile Browser), “Citi Mobile Apps” (Custom Applications), and “Citi Tablet Apps (Custom Applications); essentially, a triple play. Citi’s solutions support iPod, iPhone, iPad, Android devices, and Kindle Fire. Mobile banking solutions include from making account balance inquiries, transaction history, pay bills and track payments, deposit checks (RDC), see recent activities, transfer money between accounts, perform p2p payments, and track rewards programs.

CHASE MOBILE (JP MORGAN CHASE) Chase offers the complete combo: text, browser, and app based mobile banking solutions. The app offers the most functionalities; as it enables customers to check account balances and transaction history, pay bills and credit cards, transfer money between accounts, make p2p payments, and deposit checks remotely (RDC). Chase supports the iOS, Android, Kindle Fire, and Blackberry mobile operating systems. Furthermore, the app offers a comprehensive contact directory (with autodial) and search for the nearest branch or ATM.

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GLOBAL SNAPSHOTS

Mobile World

BANK OF AMERICA As early as 2007, Bank of America (BofA) launched its first mobile banking services. Today, there are more than 9.5 million customers actively using mobile banking solutions; which includes a mobile website, text banking, and native apps. Currently, BofA offers native apps for the iPhone, iPod Touch, iPad, Blackberry, Android, Windows Smartphones, and (most recently) Kindle Fire operating systems (OS). Regardless of the OS, the BofA’s mobile banking apps offers the same functionality, including account overviews, bill pay, and fund transfers. According to BofA’s mobile channel executive, “customers can expect additional features for its mobile apps in the coming year.”

ICBC (CHINA) ICBC is the winner of two AppStore awards in China: Best iPhone Financial App of the Year and Best iPad Financial App of the Year. Aside from the standard features, such as account management, money transfer, and mobile phone recharge; it also offers value-added features, including foreign exchange, securities trading, investment funds services (it even makes recommendations!!!), and allows users to buy and sell precious metals.

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FINO (INDIA) FINO is an Financial Inclusion Solutions and Services company; which is promoted by public and private sector banks (including the ICICI Bank), insurance companies, and the International Finance Corporation. They are headquartered in Mumbai, India. FINO has two main lines of business: Technology products and business correspondence services. As a technology provider, the company offers solutions which enable financial inclusion, micro-finance, and remittances. As a business correspondence services company, FINO offers its agent network to perform the “last mile” services for financial services companies.

GLOBAL SNAPSHOTS

Mobile World

Transformative bank-led models

FINO employs over 2,500 employess and has a solid agent network (which is 20,000 strong), spread across 239 offices. The agents are equipped with GPRS enabled handheld biometric authentication which reads the customers’ smart card information. By offering “doorstep” banking and other financial services with cost-effective transactional costs, FINO is currently serving 35 million customers across 24 states. The company purports that their customer acquisition rate is around 50,000 per day.

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MCBANK (PAKISTAN) MCB Mobile was launched in 2009, which was a joint collaboration between MCB Bank Limited and Fundamo. MCB Mobile was a pioneer by delivering a cost-effective banking solution outside of their branch footprint area. MCB Mobile offers banking services to the underbanked and unbanked consumers who generally have mobile phones. Customers of MCB Mobile can view account balances, transaction history, pay bills, make payments, transfer funds between accounts, “top off” mobile phones.

GLOBAL SNAPSHOTS

Mobile World

Transformative bank-led models

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M-PESA (KENIA-TANZANIA) Developed by Vodafone and deployed by their affiliate, Safaricom, in Kenya; m-Pesa has been a Cinderella success story for “transformative” mobile banking led by an MNO, surpassing the 14 million customers since its launch in 2007. Not bad for 5 years of work.

Mobile World

M-Pesa offers a wide range of financial services, including viewing and managing account(s), paying bills, making payments, buying airtime, making deposits and withdraws (branchless banking), and transferring funds. Additionally, M-Pesa also allows customer to buy tickets (m-ticketing) and pay school fees. All of the features of M-Pesa is made available via a featured phone.

Transformative MNO-led models

GLOBAL SNAPSHOTS

Swipe to see mo

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G-CASH (PHILIPPINES) An internationally acclaimed micro payment service, G-Cash offers banking services via SMS. G-Cash customers can transfer money, pay bills, buy airtime, and make payments via a network of government agencies, utility companies, cooperatives, insurance companies, remittance companies, universities, and commercial establishments. Also, G-Cash customers can access the service via basic mobile phones or the internet.

GLOBAL SNAPSHOTS

Mobile World

Transformative MNO-led models

Swipe to see mo

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YELLOW BANK Founded in 2004, the Miami-based Company is the recipient of the first IFC (World Bank) equity investment in a mobile financial network company in the Americas. With 3.6 million unique users in nine countries, processing over 18 million monthly transactions, the firm has been selected by more than 40 banks and strategic partners in the region. Yellow Pepper’s most promising product is its mobile wallet, an innovative bank account that the user manages via simple text messages from their mobile phone, never having to set foot on a bank branch. According to Fast Company the company in Haiti had over 110,000 wallets with Digicel, a mobile phone carrier that owns 32 networks from the Caribbean to the Pacific with over 11 million customers and Scotia Bank Haiti. With the fast growth of the service mobile wallets could number in the millions as the service is expanded to other parts of Latin America providing much needed financial inclusion to the bottom of the pyramid.

GLOBAL SNAPSHOTS

Mobile World

Transformative 3rd party-led models

Swipe to see mo

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WIZZIT (SOUTH AFRICA) Wizzit offers a secure and efficient payment mechanism to the unbanked and underbanked consumers in South Africa. The company offers mobile transactional services via a featured phone (and now online). The services allows customers to make p2p transfers, buy airtime, pay bills, make payments, and offers a Maestro debit card. Wizzit was conceived in 2002 and launched in 2005. Along the way, the company had to discover customer needs, while making it affordable, and secure a bank partner, a pretty impressive feat when considering that it is one of “new to the world” innovation (no instructions were included).

GLOBAL SNAPSHOTS

Mobile World

Transformative 3rd party-led models

Swipe to see mo

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Generally, banks have limited choice when deploying mobile banking technologies: DIY (Do It Yourself), Off the Shelf Products, or a mix of the two. Below, leading providers of OTS

Mobile Banking Technology Platforms Providers

FUNDAMO South Africa-based Fundamo, acquired by Visa in June 2011, is a leading platform provider of mobile financial services for mobile network operators and financial institutions in developing economies. Fundamo has more than 50 active mobile financial services deployments across more than 40 countries, including 27 countries in Africa, Asia and the Middle East. Fundamo’s deployments currently have a base of more than five million registered subscribers and the potential to reach more than 180 million consumers with mobile financial services. The Fundamo Enterprise Edition mobile services platform includes Mobile Banking (which delivers Additive Banking and is typically for financial institutions wishing to provide mobile banking as an additional electronic channel to access existing accounts) and Mobile Wallet (which delivers Transformational Banking, typically for mobile network operators and financial institutions who want to address new market segments with a differentiated offering).

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FINACLE (INFOSYS) Finacle solutions address the core banking, ebanking, mobile banking, Islamic banking, treasury, wealth management and CRM requirements of retail, corporate and universal banks worldwide. Finacle mobile banking solution provides banking services through SMS, GPRS/ 3G and USSDenabled handsets, leveraging a single platform. The Mobile Banking and Payments module includes account management, deposits, funds transfer, bill payment, remote deposit capture, Forex, cheque management, ATM/ Branch locator, remittances, peer-to-peer payments, business-to-business payments and contactless payments. The Mobile Financial Management module adds analysis tools, transaction tagging and product comparators. Value added services include mobile commerce, mobile ticketing, mobile top-up for prepaid card, mobile advertising, mobile remittances to charity causes, mobile wallet, stock trading services, and mobile virtual financial advisory through video chat.

MONITISE Monitise plc is a British technology company delivering mobile banking, payments and commerce solutions. As well as partnerships with most UK high street banks, Monitise provides services to over 250 financial institutions in the United States, has more than 6 million users worldwide, with live services in the UK, the US, India and Africa, and has a global partnership with Visa Inc to deliver its services to more than 1.9 billion card-holders. Monitise’s flagship product, Mobile Banking, enables a wide range of services including bank and credit card management, mobile top ups, transfers and payments. In addition, savings and lending products can also be managed. It allows a variety of customer-configurable alerts, delivered either via SMS or smartphone ‘push’ notifications. It can also act as a secure interactive ‘CRM’ channel between the bank and their customers, enabling service and sales opportunities such as card activation, lost/ stolen card management and personalized offers.

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Amongst mobile banking pundits, custom-built native apps are the holy grail, which allows banks to leverage the unique properties of each device to provide the highest level of personalized, customer experience without having to depend on 3rd party providers. BBVA’s award winning mobile banking apps enables anytime, anywhere banking for our customers, making a perfect fit with our Customer Centric Bank (CCB) framework: either as part of an integrated multi-channel strategy (Additive banking: One of Many) or as part of a branchless banking strategy (Transformative: One and Only).

iPhone

Android

Windows phone 7

BlackBerry

GLOBAL SNAPSHOTS

The BBVA experience

iPad

See the screenshots in the next pages

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GLOBAL SNAPSHOTS

The BBVA experience

iPad

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GLOBAL SNAPSHOTS

The BBVA experience

iPad

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GLOBAL SNAPSHOTS

The BBVA experience

iPad

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GLOBAL SNAPSHOTS

The BBVA experience

iPad

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GLOBAL SNAPSHOTS

The BBVA experience

iPhone

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GLOBAL SNAPSHOTS

The BBVA experience

Android

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Windows phone 7

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Blackberry

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“Practice makes perfect,” so the saying goes;

RECENT & FUTURE DEVELOPMENTS

and BBVA has been rather busy perfecting its

Along the way, BBVA picked many “kudos”

mobile banking solutions. Backed by the CCB

from users and we were awarded the “App

framework, BBVA provides customized native

of the Week” honor for the week of Novem-

apps for all major OS platforms for its custom-

ber 3, 2011 in Apple’s App Store (Spain & Por-

ers in developed markets.

tugal). Also, BBVA published a geo-location app for the iPhone and Android OS, which

In the US, the market for mobile banking is

helps customers to find the nearest branch

fiercely competitive. In order to position our-

or an ATM.

selves as market leaders, BBVA aggressively pursued a strategy that provided the high-

In Chile, Contigo BBVA app supports local

est quality native apps for mobile devices,

commerce deals: retail partners can use

including smartphones and tablets (iPhones,

the app to promote specific campaigns, re-

Android devices, Blackberry, Windows Phone

deem coupons, and offer proximity based

7, iPhone, and the Blackberry Playbook). With

advertising.

the apps, customers can find see account information, RDC (remote deposit capture),

For the future, the BBVA Mobility Office is de-

check accounts in real-time, make transfers,

veloping other mobile banking functionalities,

and pay bills.

Please visit the “Trending Is-

such as the integration of fidelity cards, e-cou-

sues” section of this month’s issue of Innova-

pons, and NFC payments, allowing BBVA to

tion Edge to see another BBVA first: opening

offer new value propositions through the mo-

an account with an app!!!

bile channel.

In Spain and Portugal, BBVA went from “zero”

While most of our headlines related to mobile

to “hero” in no time. Prior to February 2011,

banking deal with the “Additive: One of Many”

we had 0 (zero) native apps for mobile bank-

concepts, BBVA has also made contributions

ing and, just one year later, we now offer na-

to “Transformative: One and Only” innova-

tive mobile banking apps for 4 different OS

tions. In Mexico, BBVA Bancomer introduced

platforms: iPhone, iPad, Android, and Black-

“Cuenta Móvil Express” which utilizes the

berry (with Microsoft Windows Mobile in the

mobile phone number as the bank account

works). Yes, a hero.

number. Only proper identification is needed

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to open an account. Due to its simplicity and practicalness, the launch of the product has been a resounding success (especially with the local media). In Peru, BBVA Continental launched native apps for the iPad and Blackberry in April 2011. Subsequently, a new ap-

BBVA has also published a geolocation app for the iPhone and Android platforms that allows customers to find the nearest branch or ATM.

plication was released to the market which further extends mobile banking capabilities. The launch of the pioneer service in Peru was received very well. There are other initiatives in Chile (“Contigo Chile”) and Argentina (BBVA Banco Francés) where the group introduced a location based offers where customers can find the best local deals.

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Forecasting for

Innovation A

s we seen, Mobile Banking is fast becoming key component in a highly complex

and competitive retail banking environment: not only can it increase banks’ efficiency, it can also help banks create new value. As such, Mobile Banking should be an integral part of every bank’s retail banking business model. To sum things up, we’ll start by referring to the recent EFMA/McKinsey report, “The current state and future of mobile banking in Europe” (2011): Mobile has the potential to revolutionize the customer experience in personal financial services, with non-bank organizations often leading the way. Banks expect mobile banking to transform the retail banking landscape, but ad-

BBVA is ready for the Mobile Banking (R)evolution and we are leading the way. The Customer Centric Bank (CCB) offers the overall framework of the business model in which Mobile Banking makes a perfect fit. For retail customers, our award winning Mobile Banking solutions offer BBVA customers anytime, anywhere banking; paves the way for personalized location based offers; and opens up possibilities for branchless banking, especially for customers in “out of footprint” markets.

mit that they are not acting or investing accordingly.

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The unique characteristics of the mo-

So … few opportunities and many challenges

bile device present three distinct areas for

lie ahead for banks as they grapple with Mo-

proposition’ and marketing innovation: ul-

bile Banking. Given the highly competitive dy-

tra convenient banking, digital commerce

namics of the market, no one can blame the

and the opening up of new markets and

banks as they play the “wait-and-see” game

segments.

and seek to position themselves to be in the “leader” group without assuming too much

The opportunities will create significant

risk. However, while the banks are busy neu-

scope for individual players to win (and

tralizing incremental advantages amongst

lose) market share – but the overall impact

themselves, new competitors are entering

on banking value creation will be at best

the market with new business models that

neutral.

create and capture value with Mobile Banking. What do you do when competitors com-

Banks must shape, lead, or follow the mar-

pete with business models? Mobile Banking

ket, they will only succeed if they make a

is transforming the retail banking landscape,

conscious choice on which strategy to pur-

all at once.

sue and take concrete action accordingly. source: EFMA and McKinsey & Co. | The State and Future of Mobile Banking in Europe. October 2011. p.1.

Transformative Mobile Banking Transformative mobile banking, in general, is offered to the unbanked population in rural areas of developing countries. As such, it is related to the financial inclusion of the “bottom of the pyramid” segment of the world’s population. Thus far, very few initiatives have successful (in Africa and Asia-Pacific). However, the successes are credited to very specific attributes and may not be “translated” well into other areas, such as South America. However, there are some key considerations that might be worth considering: Banks and Mobile Network Operators must work together as partners. Distribution networks must include external agents, who provide footprint and significantly reduce costs of operating and maintaining distribution. Educating and offering support to agents are critical success factors. Country specific regulatory concerns must be adequately addressed. In some regions of the world, the rules of the game are not always clear. 3rd party technology providers may greatly speed up the rollout of mobile banking solutions.

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In depth A list of links to other useful tools and resources that you may find useful as a supplement to the information offered on the ‘Simple Bank’ report.

Books & publications Bankable Frontier Associates , World Bank - Consultative Group to Assist the Poor (CGAP) | Branchless and Mobile Banking Solutions for the Poor: A Survey. January 2011. Centro de Innovación BBVA | Innovation Edge 1. January 2012. EFMA and McKinsey & Co. | The State and Future of Mobile Banking in Europe. October 2011. Federal Reserve Board of Philadelphia (Julia Cheney) | An Examination of Mobile Banking and Mobile Payments: Building Adoption as Experience Goods? IDC | Business Strategy: 2011 Consumer Preferences Survey Results - Focus on Mobile Banking. January 2012. Ignacio Mas and Colin Mayer (Said Business School) | Savings as Forward Payments: Innovations on Mobile Money Platforms. September 2011. Javelin Research | 2012 Mobile Banking Vendor Scorecard: Mobile Banking Has Moved from a “Nice-to-Have” to a “Must Have” Channel. 2011. Juniper Research | White Paper: Banking on the Mobile. January 2009. KPMG | Monetizing mobile: How banks are preserving their place in the payment value chain. July 2011. Market Research | Mobile Banking: State of the Market and Future Opportunities. November 2011. Online Banking Report | Online & Mobile Banking Forecast: 2012 to 2021. January 2012. Vision Mobile | Mobile Platforms: The Clash of the Ecosystems. November 2011. Yankee Group | Telefónica Smells the Mobile Banking Coffee. February 2011.

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In depth On the web Aite Group | Fraud The Latest Threats. February 2012. Bank Technology News | Banks Seek Sticky Relationships from Mobile Apps. February 2012. BankInfo Security | Mobile Banking: Consumer Education Needed. November 2011. BankInfo Security | Mobile Banking: The New Risks. September 2011. Communities Dominate Brands | Celebrating 30 Years of Mobile Phones, Thank You NTT of Japan. 2009. GigaOM | The slow rise of the SoMoClo OS. February 2012. ITNews | Gartner casts shadows on mobile banking. July 2011. ITU (International Telecommunications Union) | Key Global Telecom Indicators for the World Telecommunication Service Sector. November 2011. TNS | Mobile Life: Global Telecoms Insight.

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Summaries of the most relevant news of selected topics that have been published over the course of the month based on its relevance to the Banking industry.  The summaries were prepared by the editorial board.  Further information is made available for each given topic.

Trending issues

also in this issue

Technology trends In the following section, we outline the upcoming technologies that will change everything, with predictions on what may come of them in financial industry.

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Trending issues In this section, readers will find summaries of the most relevant news of selected topics that have been published over the course of the month based on its relevance to the Banking industry.  The summaries were prepared by the editorial board.  Further information is made available for each given topic. App ecosystem

Core banking platforms Here you will find articles related to basic IT infrastructure which supports main banking processes, including technologies such as SOA, WOA, digital platforms, etc.

New formats

There are 5 main components in the current Apps Ecosystem: connectivity, devices, OS platforms, app platforms, and apps; along with related products and services providers (MEAPs, Mobility as a Service providers etc.).

Based on design principles focused on customer insights, New formats offers retail banking customers more channels which are more granular and highly functional; a consistent, simple, and collaborative universal user interface; real-time intelligent processes; highly personalized solutions; and is open to social networks and the web. Examples of these new formats are provided here.

New Gizmo era

Mobile banking

New banking concepts

Relevant news about mobile banking platforms (which enable customers to access financial services, such as transfers, bill payments, balance information and investment options) can be found here.

Enterprise 2.0 Enterprise 2.0 is the integration of Web 2.0 technologies into business processes. Information regarding implementations of Enterprise 2.0, which generally involves a mix of social software and related collaborative technologies, can be found here.

Mobile payments The process of using a hand-held device to pay for a product or service, either remotely or at a point-of-sale. Up to date information is provided.

Social Media A group of Internet-based applications that build on the ideological and technological foundations of Web 2.0 that allows the creation and exchange of user-generated content. Enabled by ubiquitously accessible and scalable communication techniques, social media is substantially changing communication between organizations and communities, as well as individuals.

Digital Marketing Digital Marketing of brands use all forms of digital advertising channels to reach consumers, including social media, via a wide range of delivery mechanisms such as mobile phones, sms/ mms, display / banner ads, etc.

Crowd finance A process where small amounts are money raised for a definite purpose, Crowd finance sources funds collectively from individuals. In other words, the money comes from a wide range of individuals and not from a single entity. Read more about it here.

A combination of Smart Sensors and Robotics will give rise to the New Gizmo Era, ushering in a new age of efficiency and productivity. It is believed that by 2013 there will be a trillion interconnected devices with embedded Smart Sensors, and some with Robotics capabilities.

Banks around the world continuously explore new approaches to strengthen customer relationships, both in the virtual and the physical worlds; including Virtual assistants, natural language search tools, new marketing tools, different segmentation (children, gen Y,…) etc. This section will cover news along these lines.

Join & enjoy Entertainment is an integral part of our lives. Not only do we want to live longer, but we also want a better, fuller life. In short, we want to enjoy our lives. Access to entertainment will become instantaneous instantaneous, both digitally and globally. Gamification could be one way to foster health education on prevention.Infotainment and social networks are already an established trend, and news abound.

Smart cities + urban mobility Cities are continually growing and urban life is changing. In a Smart City, we find smart infrastructures with plenty of sensors, allowing agents (citizens, governments, and companies) to make better decisions based on real time information. The agents not only use RTI, but also contribute towards it. As a key agent, we will be exploring opportunities. An example of such change is the urban transportation system. The current system is unsustainable, and we foresee a future where we will be able to design a transport that fits the needs of the city and its citizens. This is achieved through changing vehicles physically and using information, integrated as an additional piece of the city transport.

Health Healthcare systems around the world will certainly go through a profound transformation. Financial pressures, along demographics and citizen expectations, will demand massive adoption of new technologies to maximize efficiencies and create new value. Read about it here,

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Trending issues Core banking platform New formats Mobile banking Enterprise 2.0 Mobile payments Social Media

An iBank App Store?!?! The concept of the app store will revolutionize core banking solutions, according to Don Free, a Research Director at Gartner. “Using an app store approach, you can break down the core banking system into smaller parts and drive significant innovations for the business. The app store approach allows you to access components without developing them. You can now change business processes without involving IT.” With the growing popularity of handheld computing, this approach may help banks find new revenue streams without straying too much away from core competencies. source: Don Free (Research Director) Gartner | February 2012

Digital Marketing Crowd finance App ecosystem New Gizmo era New banking concepts Join & enjoy Smart cities + urban mobility Health

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Trending issues Core banking platform New formats Mobile banking Enterprise 2.0 Mobile payments Social Media Digital Marketing Crowd finance App ecosystem New Gizmo era New banking concepts Join & enjoy Smart cities + urban mobility

“Branch Today, Gone Tomorrow: The Case for the Death of Branch Banking” King sure knows how to share his ideas clearly and boldly: all bank branches will die (soon), “Stop arguing that the branch is still critical to the average customer. Realize it is just one channel for them to choose from, and increasingly of minor importance in their day-to-day banking relationship.” According to King, by 2015 the primary channel for day to day retail banking will be (in order of usage): Mobile, Web, ATM, Call Centers and Branches source: Brett King, “Branch Today, Gone Tomorrow” | January 2012

Health

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Trending issues Core banking platform New formats Mobile banking Enterprise 2.0 Mobile payments Social Media Digital Marketing Crowd finance App ecosystem New Gizmo era New banking concepts Join & enjoy Smart cities + urban mobility

Solving the Gen Y puzzle: BBVA Compass First to Allow Mobile Enrollment from an iPhone Younger customers are going straight to mobile and they are bypassing online banking altogether. In a groundbreaking move, BBVA Compass’s new app allows customers to open a mobile banking account directly from their iPhone; providing a truly anytime, anywhere banking experience for customers. According to Alejandro Carriles, Executive VP and Director of Mobile and Online Strategies of BBVA Compass, “we think we’re creating a groundbreaking user experience.” At BBVA, mobile banking is not only an effective customer touchpoint but also a complete channel; accompanying clients during the each channel phase: awareness, evaluation, purchase, delivery, and after sales. Source: Bank Technology News American Banker | March 5, 2012

Health

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Trending issues Core banking platform New formats Mobile banking Enterprise 2.0 Mobile payments Social Media Digital Marketing

Be Social or Die! The lifespan of organizations today, according Dachis (a social business), is about 15 years. Social business drives adaptation by solving real business problems; by offering a more effective way of “doing talent management, supply chain collaboration, business agility, risk management, and more successful products to driving revenue.” During a recent summit, a social business expert shared his success factors for social: Listen, analyze, and engage, continuously

Crowd finance

Integrate social into the flow of work

App ecosystem

Turn on the network effect

New Gizmo era

Enable everyone to participate.

Plan for change and the unexpected Remove barriers to participate

Source: Forbes | March 8, 2012

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Trending issues Core banking platform New formats Mobile banking Enterprise 2.0 Mobile payments Social Media Digital Marketing Crowd finance App ecosystem New Gizmo era New banking concepts

Cha-Ching!!! There a whole lot of money in NFC!!! Can you say $75 billion US Dollars? That’s the size of the NFC market for mobile payments in 2015, according to Juniper Research. It’s no wonder big players are jumping into the pool for a chance to come out as a serious player in this seemingly lucrative market. Notable NFC projects include Google Wallet, Isis (a carrier-led joint venture between AT&T, T-Mobile and Verizon), and Visa PayWave.. Source: TechCrunch | March 8, 2012

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Trending issues Core banking platform New formats Mobile banking Enterprise 2.0 Mobile payments Social Media Digital Marketing Crowd finance App ecosystem New Gizmo era New banking concepts

Move over CNN and make room for YouTube and Vimeo For adults under the age of 30, social media is clearly the news source of choice, displacing traditional news media outlets. According to Pew Research, there is “striking evidence that young adults and their elders at times have different news agendas and learn about news in different ways. … The Internet was more than three times more important as a news-learning platform for young adults than traditional media such as television, newspapers, and radio.” Since the release of “Kony 2012” video, there have been more than 110 million views on sites such as YouTube and Vimeo. Also, social platforms, especially Twitter and Facebook, played critical roles in diffusing information about the Kony 2012 video. Source: MSNBC | March 2012

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Trending issues core banking platform New formats Mobile banking Enterprise 2.0 Mobile payments Social Media

When you’re ready to go social, Where do you go? A recent survey indicates that social media marketing is expected to dominate this year: 81% of CMOs plan to associate revenues to investments in social media. But the question remains, where do you go? To help answer this question, CMO.com turned to 97th Floor, a SEO and social media firm. Here’s the top 10: Twitter

Digital Marketing

Facebook flickr

Crowd finance

LinkedIn YouTube

App ecosystem

Digg StumbleUpon

New Gizmo era

Yahoo Reddit

New banking concepts

THE CMO’S GUIDE TO:

THE SOCIAL LANDSCAPE

2010 IS THE YEAR CMOS WILL HEAVILY INVEST IN SOCIAL MEDIA. HERE’S A GUID HELP YOU UNDERSTAND HOW BEST TO LEVERAGE MAJOR SOCIAL MEDIA S

GOOD!

WEBSITE A microblogging site that enables users to send ‘tweets’, or messages of 140 characters or less

A social networking site where users can add friend, send messsages and build their own profile

An image and video hosting website where community members can share and comment on media

A social networking site for business professionals

Del.icio.us Source: CMO | February 10, 2012

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A video sharing website where users can share and upload new videos

A social news site where users can discover and share content

A social news community where members discover and share webpages

Smart cities + urban mobility

A social news site where community members can vote on stories

Health

Innovation Edge April 2012 | MOBILE BANKING

OK.

BAD!

CUSTOMER COMMUNICATION

BRAND EXPOSURE

TRAFFIC TO YOUR SITE

Use keyword search monitoring through a program such as Hootsuite, TwitJump or Radian 6 to track what people are saying about you and your competitors.

Offers unique opportunities for Web site integration and to engage with customers in a viral way, helping your company stand out from the masses.

Potential can be large, but promotion is an art form -promote your brand too heavily and turn off followers, yet don't promote enough and receive little attention.

Value to your site limited, but twee high in search res for ranking your and breaking new shortened URLs a benefit.

Great for engaging people who like your brand, want to share their opinions, and participate in giveaways and contests.

Facebook brand pages are great for brand exposure. Jump-start your brand exposure through the ad platform, or hire a Facebook consultant to help you grow your brand presence.

Traffic is decent and on the rise thanks to share buttons and counters, but don't expect massive numbers of unique visitors to go to your site.

Little to no valu blogs picking up your posted link the time expend

Unnecessary to spend too much time on this, though properly tagged photosets of company events can help customers put a face on the team behind your brand.

Participation in industry-related groups might get your photos, and thus your brand, viewed by people with similar interests, but numbers will be small.

Even if you get tens of thousands of visits to a photo hyperlinked with your URL, click-through rates are among the lowest around.

Heavily indexed engines, passing ranks. Also helps higher in Google building inbound

Not the primary focus, but customer engagement opportunities are possible by answering industry-related questions, establishing yourself as an expert in the field.

Effective for personal branding and demonstrating your organization's professional prowess. Encouraging employees to maintain complete profiles to strengthen your team's reputation is advisable.

Unlikely to drive any significant traffic to your site, though you never know who those few visits might be from -- perhaps a potential client or customer.

Very high page r guaranteed on t of search result for your compan individual emplo but that's about

Whether you seek to entertain, inform, or both, video is a powerful channel for quickly engaging your customers, responding to complaints, and demonstrating your socialmedia savvy.

One of the most powerful branding tools on the Web when you build your channel, promote via high-traffic sites, and brand your videos.

Traffic goes to the videos. If the goal is to get traffic back to your site, then add a hyperlink in the video description, but don't expect traffic to correlate closely with video views.

Very good for bu back to your site rank high. Also a way for your bran exposure.

Not the site's primary strength, though occasionally an objective third-party writeup as a PR effort, perhaps to counteract bad press or customer sentiment, can be promoted.

Opportunities are huge, especially for promoting objective press/blog coverage of your brand. Make sure content doesn't read like an ad, or your site might be banned for being overly commercial.

The grandfather of traffic spikes, so become active in the community or find someone who is. If your site is corporate, then consider launching an industry blog on a noncommercial Web domain to establish yourself as a thought leader.

Very good becaus story doesn't bec then your page w indexed quickly. I does become pop likely the best sit getting linked to

Paid StumbleUpon traffic can be a very targeted method of communicating, but whether you're reaching your existing customers is purely random and costly to determine.

A paid campaign can be good for brand awareness, especially following efforts to get free, organic traffic to your home page. Targeting is very accurate, but keep in mind you're paying 5 cents per visit ($50 CPM).

Enables a diverse range of people to discover your content and share links via the su.pr link shortener on Twitter. Tagging helps, but you don't want the same people repeatedly giving you a thumbs-up.

Very good if you it to the top pag StumbledUpon's base enables ma find and link to For vanity name profile pages ran

Editor-driven and moderated, so this shouldn't be your primary focus.

Noncommercial sites are heavily favored by moderators, so business sites should not waste time in this uphill battle.

Get in the moderators' good graces, and you have a chance to hit absolutely massive numbers -- but it's a long shot.

If you make the Yahoo, then you of backlinks, but unlikely unless y established bran

Unless you're a bacon company, don't try to build your brand here. You'll end up banned from the site without even realizing what happened.

If Reddit loves you, then traffic is often right up there with Digg and StumbleUpon. Be careful: Push too hard for votes from your friends and risk being banned, but don't push at all and you'll wind up with nothing.

Make the front many reputable up your story, ge able backlinks an trust to your site

Not enough ongoing brand recognition to make it worth your while unless you want to be known for providing reference content for later retrieval.

Not as big as it used to be, but informative, massive reference pieces bookmarked for later use can net you a few thousand recurring monthly visitors.

Pretty much ever the site helps: Wh is bookmarked, it back to your site. on the front page big category tag p trust, which will p your URL.

A social news community where users post links to the site’s home page

The community is fickle, and anything perceived as spam will be destroyed. However, look deep into the categorized "subreddits" to unearth small niche communities, and you could get valuable feedback.

A social bookmarking site used for sharing and storing bookmarked pages

Site is intended for people to bookmark content. You can see what people tag with your brand name, but communication with them is nonexistent.

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SEO

Trending issues Core banking platform New formats Mobile banking Enterprise 2.0 Mobile payments Social Media Digital Marketing Crowd finance

Crowd sourcing goes “plastic”!?!? MasterCard and Barclays US join forces to create “Barclaycard Ring,” the world’s first crowd-sourced credit card. The duo claims that it marks the herald of a new era in e-commerce and finance: card customers can negociate interest rates, rewards, and fees. The card offers an 8% interest rate with no annual or balance transfer fees. Additionally, the crowd will have visibility into the card’s financial picture, influence management decisions, and have an opportunity to share revenues generated by the card. The Barclaycard Ring will be available to consumers this spring. Source: Silicon Republic. December 30, 2011

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Trending issues Core banking platform New formats Mobile banking Enterprise 2.0 Mobile payments Social Media Digital Marketing

Facebook as an app ecosystem platform provider? Facebook, during Mobile World Congress, touted their Pay Dialog mobile SDK; which allows “mobile operators to work with app developers to integrate operator billing into their apps.” Facebook already has partnerships with several telecommunications giants, such as AT&T, Deutsche Telecom, Orange, Telefonica, T-Mobile USA, Verizon, Vodafone, KDDI, SoftBank Mobile, etc. All this is part of Facebook’s plan to “push forward its Open Graph, drawing users away from locked-down platforms like iOS and giving them the opportunity to download apps that run freely on the Web and operate on any platform.” source: The Next Web- Social Media | February 27, 2012

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Trending issues Core banking platform New formats Mobile banking

3 million iPads sold in 3 days

Enterprise 2.0

The first iPad took 28 days to sell 1 million units; the 2nd iPad sold 1 million during the first weekend; and the new iPad is off to a strong start: 3 million iPads sold in 3 days. At the flagship store in 5th Avenue (NY), 13,000 units were sold in the first 12 hours! That’s about 1,100 iPads per hour or 18 units per minute. That translates into revenues of $10,700 per minute at that location..

Mobile payments Social Media Digital Marketing

Source: Apple | March 19, 2012 and Motley Fool | March 21, 2012

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Trending issues Core banking platform New formats Mobile banking Enterprise 2.0 Mobile payments Social Media Digital Marketing Crowd finance App ecosystem New Gizmo era New banking concepts Join & enjoy

ATM is still going strong (& will get stronger) ATMs are poised for future growth as there will be more transaction per person, more cash in circulation, and less branches (more ATMs); which would result in more total ATM revenue and profit for the banks. Specifically, according the ATM Future Tretnds Report 2012, by 2015, ATM transactions are expected to grow 66%. Source: ATM Marketplace | March 1, 2012

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Trending issues Core banking platform New formats Mobile banking Enterprise 2.0 Mobile payments Social Media Digital Marketing Crowd finance App ecosystem New Gizmo era New banking concepts

21st century culture: Games as Art They’ve come a long way from the early days of video games (in the late 1970s), where a rudimentary “two-dimensional ball that (were) batted back and forth” provided hours of fun for timewasting teens. On March 16, 2012, the Smithsonian American Art Museum inaugurated the “The Art of Video Games,” the first major exhibition dedicated to this new art form. According to the museum’s curator, Chris Melissinos (formerly the Chief Gaming Officer at Sun Microsystems) “I believe it’s society’s duty and responsibility to protect and nurture this medium because it will be the next great medium for expression, thought, poetry and art forgenerations to come. That’s incredibly exciting, and this is just one small step toward that goal.” Source: BBC | March 16, 2012

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Trending issues Core banking platform New formats Mobile banking Enterprise 2.0 Mobile payments Social Media Digital Marketing Crowd finance App ecosystem New Gizmo era New banking concepts

The End of Parking Woes? It’s the reality of urban life: 33% of the cars on the road are circling around city blocks, much like vultures, hoping to find parking space. Aside from the stress, the situation also adds to city pollution, traffic congestion, and accidents. Future promise: a smart city with networked sensors installed in a city’s infrastructure helping drivers find the parking space, faster and smarter. A pilot project is underway in San Francisco, California which has magnetic sensors installed in street parking spaces, garages, and smart parking meters; the parking information is made available to the public via an app on smartphones. Source: MIT Technology Review | January 25, 2012

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Trending issues Core banking platform New formats Mobile banking Enterprise 2.0 Mobile payments Social Media Digital Marketing

Socio-Economic Impact of mHealth Telenor commissioned BCG to analyze the possible socio-economic impact of mHealth. Key findings of the study include:

 Everyone (almost everyone) will have access to a mobile infrastructure: 7.4 billion mobile subscriptions projected by 2015.

 The technology and bandwidth is sufficient, both simple and smart phones

 There are more than 500 mobile health projects being executed globally

 Elderly care costs can be reduced by

Crowd finance App ecosystem New Gizmo era New banking concepts Join & enjoy Smart cities + urban mobility Health

25% with mobile health projects

 Maternal and perinatal mortality can be reduced by 30%

 Twice as many rural patients can be reached by a doctor

 Tuberculosis treatment compliance can be improved by 30-70%

 By 2015, 30% of smartphone users are likely to use “wellness apps”

 Data collection and related costs can be reduced by 24%

 Among MDs, smartphone is the most popular technology since the stethoscope Source: BCG/Telenor | February 28, 2012

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Technology trends The following section outlines the upcoming technologies that will change everything, with predictions on what may come of them in financial industry.

Someone Is Replaying Inside: SIRI The dream of any artificial intelligence-based application is to understand and predict accurately the needs and preferences of the user, transforming intent into actions to perform tasks. Researchers and companies working on personalization technologies have been trying to address this issue for more than ten years. In order to do that, the system first would have to obtain information about the user, get behavior patterns and learn what will be the next best action that the user would need or would want to do. Sounds good, but we are still quite far from it.

g

S

o far we have Siri, the digital personal assistant that Apple has included in its

iPhone 4S launched on fall 2011. Siri performs actions under user requests, interacting by using voice recognition and natural language. It lets the user to ask questions, obtain information and perform actions using the native functionalities of the phone, that is send mails, make calls, check, schedule and change appointments in the agenda, etc.

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A LITTLE HISTORY...

their preferences and their frequent actions,

Siri appeared as a simple iPhone app in 2010.

adapting its response to them.

At that time there were some other similar but less advanced apps, like MyBantu or Zokem,

BUT WHY IS (OR COULD BE) SIRI

also supposed to be personal assistants and

SO IMPORTANT?

recommendation services, but they finally

Because it could be the top of the iceberg of

came to nothing. However SIRI was a big thing.

the future of the devices and its applications

It is based on the DARPA funded SRI research

based on AI.

project CALO (Cognitive Assistant that Learns and Organizes), the largest Artificial Intelli-

The phone becomes sensor of the users

gence project in U.S. history. With $150 million

and their environment: it utilizes information

of DARPA investment, the CALO Project was

available on the user’s calendar, email sys-

focused on helping individuals manage an

tem, address book, social network, enhances

extensive amount of task related information (specifically emails) in an office assistant and generate actionable tasks for situations such as forming ad-hoc teams in military scenarios. When it was an app, it had also more than 30 different partners whose APIs can plug into when answering a request. These include services like OpenTable, MovieTickets.com, Eventful, StubHub, Taxi Magic, Rotten Tomatos, Bing, Google Maps and Yelp. Now, as part of the operational system of the iPhone 4S, it has acces only to Yelp, Wolfram Alfa, and Google. However, it is integrated with email, calls, sms, calendar, it learns from user actions: it may know for example who is important for you without need to tell, based on your actions with the phone. Siri gets better the more you use it, learning from the user,

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it with geo-location based activity tracking and information declared explicitly by the user, and generates context dependent user profiles. At some point, Siri will have access to databases and will be able to search and obtain external information of third parties to enrich the context, and delegate to other apps to deliver services and perform tasks. IN THESE ARE APPLE’S PLANS FOR SIRI, WHAT IS THE CHALLENGE? As always, the challenge is the combination of big-data gathering and its analysis to predict the activity the user to deliver context and relevant information, the improvement of the semantic intent understanding, and the increase of the capability of apps and devices to talk to each other and talk back to the user. Now Apple has given the first step to deliver it to consumers, who’s next, Microsoft? Google?

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Work Smarter, (Not Harder) with Business Intelligence

g

Gartner defines Business Intelligence as, “an umbrella term that includes the applications, infrastructure and tools, and best practices that enable access to and analysis of information to improve and optimize business decisions and performance.”(1) Or simply, it can be expressed as: Information Management + Analytics = Business Intelligence. With Social, Mobile, Cloud, and Big Data coming, companies should really think about BI.

The latest information related to Business Intelligence keeps this macro trend as a priority Your business

for BBVA for the medium term time frame. BI initiatives can reduce cost, increase the quality and availability of information and analysis, and help user make better decisions.

Business Intelligence Your management

Corporate use of BI includes: financial analyInformation technology

sis, business activity monitoring, forecasting, sales tracking, customer relationship management, operational process optimization, competitive analysis, corporate governance, product marketing, risk management, product development, and fraud detection. The Data Warehousing Institute says that using

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mobile BI improves customer sales, service and support in a 65% and increase customer self-service benefits in 45%. Despite the challenging environment, BI is expected to continue to grow during 2012. International Data Corporation (IDC) states that “the worldwide business intelligence tools market generated more than $4 billion in revenues in the second half of 2010”. Driven my market demands, “the BI platform mar-

The proliferation of tablets and mobile devices will lead to the development of mobile BI.

ket’s compound annual growth rate (CAGR) through 2015 is expected to be 8.1%,” according to Gartner analyst James Richardson. The future direction of BI is heading towards social, mobile, and cloud. For example, the proliferation of tablets and mobile devices will lead to the development of mobile BI. According to the market study of, seniors managers using Dresner Advisory Services mobile BI exceed 82%, and middle managers 55%.

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BBVA Innovation Edge is the result of a collaborative work done by all the people who are involved in innovation at BBVA Group. CONTRIBUTORS TO THIS ISSUE

Reyes Bolumar Fernando Esteve Antonio García Eugenio García Rafael Hernández Miguel Angel Iñesta Manuel Jimenez Carmen López Luz Martin Samuel Martín Manolo Moure Marcos Pastor Gerardo Ponte Jay Reinemann Alicia Sánchez Marcelo Soria Maria Tena Luis Uguina Jose Manuel Villa Gustavo Vinacua Sang Gu “Phil” Yim Published by

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