Global Mobile Money Perspectives

Cross-Industry Value and Interoperability

II Seminario Internacional de Dinero Electrónico

Lima, Perú

1 © 2013 IBM Corporation

 Agenda

1 2 3
Mobile Money Transforming Smarter Mobile
Landscape for the Future Banking Success

SEPTEMBER, 2013
2 © 2013 IBM Corporation
 The reality of living in a globally integrated world is upon us.

 Together government and

industry must balance
stability and innovation.

 To thrive, firms must

innovate their business
models.

 Daily interactions must

deliver on brand promises

The world is connected:

economically, socially and technically.

3 © 2013 IBM Corporation

As Mobile Adoption Grows….
41% CAGR

Wearable
Wireless
Devices

1
Trillion
Connected
Devices

5.6
Billion
Personal
Devices Sold

2013 2014 2015

4 © 2013 IBM Corporation

 Mobile Money will continue to have a transformational impact.

DELIVERING NEW ECONOMIC

BUSINESS VALUE ADVANCEMENTS
Across Banking, In Healthcare, Agriculture,
Telecommunications Water and Government
and Retail Services
Connected enterprises will
collaborate and share non-
The streamlined agile
core capabilities to drive
enterprise will balance
profitable growth.
growth, efficiency and
business resiliency.

SMARTER COMMERCE
The shift from cash to
electronic will expand across
borders, unlocking new value
by extending working capital to
SME businesses..
5 © 2013 IBM Corporation
 Mobile Money is the on-ramp to smarter commerce; overtime the
mature and emerging markets wallet paradigm will converge
Mobile Banking model
• Micro-loans (Just-in-time, Short term)
• Micro-trade finance
• BC Liquidity Management
• Bank in a shop (eg. petrol station)
• BC core business operations
• Cashless Supply Chain (FMCG distributors,
P&G)

Affluence
Mobile Money Payments Platform

Mobile Utility Model

(High Volume, Low Value) Mobile Commerce model
• Cash-in / cash-out • Transactions & payments
• Top-up • Money Management
• P2P • Informational Services
• Remittance (domestic & cross border) • Coupons, Loyalty etc
• Bill pay
• Retail micro-payments
Time
6 © 2013 IBM Corporation
Source: IBM GBS
6
Imagine a future where users interact, transact and capitalize on the
value of information across industries in the mobile money
ecosystem

75% of costs can be 25% of a farmer’s 45% of

saved by governments costs can be attributed employment is
going electronic, a to cash handling, represented by micro-
significant amount in transportation, and SMEs; total unmet
an era of stretched losses from security and need for credit ranges
resources. theft. from $2.1 trillion to
$2.5 trillion.

7 © 2013 IBM Corporation

To realize this vision and transform, banks must consider:

Business Processes  Business processes must be aligned to link effectively across ecosystem
 New business designs may be required for transformation opportunities
 These business “networks” must be connected to IT systems to achieve
interoperability

Operational
 Ensure an “always-on” bank-grade, carrier-grade platform
Resiliency
 Protection of privacy and confidential information; ensure compliance
 Visibility, security and management of mobile platform requirements
 Gain confidence of user-base thru “trust” and reliability of systems

Interoperability
 Interoperability is required across IT networks and payment systems
 3 levels of interoperability: platform level, agent and customer/merchant.
 Apps must be open and integrate with information across the ecosystem
 Share utilities in the mobile money platform that are non-core

8 © 2013 IBM Corporation

What is the value of interoperability and shared-services?

The Mobile Money industry

should move towards the
creation of processing
utilities which can provide:
 Processes which don’t generate
What to share on the platform:

revenue in their own right

1. Fraud prevention and
 Are costly to implement and run detection that improve
on a small scale with increasing volume

 Require significant operational 2. Centralized switching

expertise platforms that lower unit
costs and provide scale
 Are non-competitive activities
3. Dispute resolution and
 Processes that become more support capabilities, plus
effective and less costly as standards enforcement
volumes grow

9 © 2013 IBM Corporation

Source: IBM GBS Whitepaper Mobile money: What mature markets should learn from growth markets
We have learned that there are multiple phases in a mobile
money transformation - despite unique regulations & markets

10 © 2013 IBM Corporation

Smarter Mobile Banking Success
Leverage a robust platform.

SMART IS
Driving inclusive growth in India’s rural
areas by extending the core customer base
with a single mobile development platform
strategy.

SMART IS
Delivering a stable, scalable platform
which generated over $522 billion KES in
P2P transactions with 17M active
customers through a network of 60,000
agents.

11 © 2013 IBM Corporation

 Smarter Mobile Banking Success
Integrate processes and data for insights.

SMART IS

Saving on initial investments in IT and

lowering costs by deploying an IBM
SmartCloud platform for Banks, Retailers,
Telcos and Merchants in Pakistan.

SMART IS
Leveraging mobile phone data to build
innovative credit scoring models, extend
micro-finance to small businesses, and
loaning nano-credits for airtime in Africa.

12 © 2013 IBM Corporation

The key characteristics of Mobile Leaders were defined in a recent
global study conducted by IBM and Oxford Economics

They BUILD apps that unlock core

business knowledge for mobile uses

They secure and manage the mobile

enterprise
to OPTIMIZE performance

They use insights to ENGAGE their

customers wherever they are

They use mobile to fundamentally

TRANSFORM the way they do business

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Read the report: http://ibm.co/ibvmobile
© 2013 IBM Corporation
 We also learned that global CxOs across 70+ countries are
shifting to more collaboration and open business models

Shifting ground: business landscape changes

11% 73%
Smaller partner base Bigger partner network
20% 68%
Face-to-face interaction Social/digital interaction

25% 61%
Partnering to increase
Partnering to increase value
efficiency
33% 54%
Focus on customers Focus on customers as
as segments individuals
28% 52%
Operational control Organizational openness

Neutral

Mobile will be a key factor to drive this success!

Source: IBM Global CxO 2013 Study: Question E9–How do you see the landscape changing over the next 3 to 5 years?; n=2,919 to 2,944

14 © 2013 IBM Corporation

 IBM has been investing and expanding our mobile capabilities to
deliver client value across the mobile money ecosystem

IBM Mobile & Social Strategy Overview Value for Clients

Industry- enabled

 Solutions for mobile that deliver

The Broadest The Deepest Set New Industry value for the business
Portfolio of Mobile of Services Partnerships &  Faster time to value
Solutions Expertise Resources for
Developers
Efficiency
 Eliminates “hand-offs” and risk
of “finger pointing”
IBM Social Business  Expertise the reduces time to
market
IBM Interactive Centers
Mobile Enterprise Services
Delivery & Support Centers Global Digital Agency Scale
Networking Delivery & Deep
Support Centers
Deep expertise
expertise in
in mobile
mobile strategy,
strategy,
user
user experience
experience design,
design, and
and  Access to expertise and
application
application lifecycle
lifecycle management
management
capacity to address enterprise
30+ research labs
11 mobile enterprise 48 networking needs
services delivery & supporting mobility
delivery &  Creative thinking that drives
support centers support centers innovative solutions to market

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15 IBM GBS - Retail Mobility Webinar - November 2012 © 2013 IBM Corporation
In conclusion, remember these key Mobile Money points

1
Mature and Emerging Markets are distinct, but will converge
Leapfrogging is already occurring - lessons transferred from south to north

2
Collaborate across the Ecosystem – not simply the standalone industry

Ability to deliver extended and adjacent customer services & offerings

3 Establish an agile platform and create inclusive business models

prepared for change, stay informed and leverage data for insights
Be

4
Mobile is forcing the shift from “owning” to“enabling” the channels
Mobile money must be leveraged in the context of omni-channel strategy

5
Drive high volume, low value transactions profitably and securely
Start simple utility based capabilities to drive adoption and scale to larger value
added offerings

16 © 2013 IBM Corporation

 Muchas Gracias
17 © 2013 IBM Corporation
According to the GSMA, the Mobile Ecosystem is expected to
contribute more than $10 Trillion to the Global GDP by 2017

Source: http://www.atkearney.com/documents/10192/760890/The_Mobile_Economy_2013.pdf
18 © 2013 IBM Corporation