At the recent GSM Mobile Money summit, keynote speaker Dickson Chu of banking colossus Citi emphasised the need for banks to play a key role in the emerging mobile money ecosystem and to avoid the threat of becoming “dumb pipes”.
One could say the same thing about mobile network operators (MNOs). Mr Chu remarked that banks enjoy traditional strengths in terms of trust, security and regulatory compliance. As do MNOs. These assets need to be leveraged to ensure that the security demanded by mobile money users is in place. Mobile money needs service assurance and guarantees that banks and MNOs can provide. As a recent article showed, security issues remain a real threat to mobile transactions.
The GSMA recognises the market potential and has suggested that MNOs can play a key role, particularly in growing global remittance commissions. But MNOs also have an advantage in the way in which they can control and police their networks. They need to use their policy and service control assets to determine how they can offer capabilities to other stakeholders that enhance security and the user experience for mobile banking and transactions.
If MNOs extend their network boundary to include handsets and devices, they can offer additional capabilities to other stakeholders in the banking ecosystem, determining application performance and identifying authorised or unauthorised activities. While revenue on a single transactional basis might be low, in the aggregate they could amount to a substantial market as the user base extends to address all mobile users.
MNOs need to carve out a strong niche in the mobile money ecosystem that depends on more than simply providing the connectivity. By forging partnerships with key stakeholders, such as banks, network operators can leverage their assets to create new revenue streams and fully participate in the banking ecosystem, rather than simply being a pipe for transactions.