The edge of innovation — Indue CEO Manuel Garcia

How the latest trends in mobile communication will help define the industry’s path to continued growth.

Earlier this year, Indue CEO Manuel Garcia and COO Derek Weatherley attended the Mobile World Congress (MWC) in Barcelona. The world’s largest exhibition for the mobile industry, the MWC brings together prominent leaders and personalities from mobile operators, equipment vendors and mobile app developers.

Since the MWC, the evolution of mobile networks has continued to directly impact the banking and finance industry.

With 89% of Australians owning a smartphone, according to the 2014 Australian Mobile Phone Lifestyle Index (AMPLI), mobile is proving to be an incredible catalyst for innovation. At the MWC, CEOs of some of the world’s leading operators including Vodafone, Deutsche Telekom and Norwegian multinational Telenor discussed how to ensure mobile stays at the edge of innovation.

Manuel Garcia explores the major trends and challenges that impact the industry, and how we need to evolve to meet the demands of the future.

Disruption of telecom industry

Disruption from Internet vendors and Internet app providers (also known as OTT service providers) offering cheaper or better services means telcos need to evolve in order to compete. From a regulatory perspective, it’s more difficult for traditional operators. They have to make large investments in infrastructure to build and sustain communication networks. This includes ensuring networks meet compliance with security standards.

Private telecommunications giant Telefónica has significantly invested in infrastructure across both Europe and Latin America. In contrast, Internet app providers like Whatsapp, Snapchat and Skype don’t have the same outlays and instead use the infrastructure already provided by telcos. Being connected just keeps getting cheaper. To compete, telcos must continue to innovate and think creatively to discover new ways of operating.

Banks and financial institutions will also have to compete against the new contenders in financial services – telephone companies themselves, in particular wireless telecoms. The ubiquitous mobile phone provides both challenges and opportunities for banks.

More mobile devices driving digital payments

The Internet of Things is by no means a new concept. The continued explosion of connected devices will reveal a myriad of opportunities across a number of industries.

The number of mobile devices is expected to grow to a massive 38.5 billion globally by 2020. Driving this increase are a number of factors including the extension of networks, removing the affordability barrier, improved literacy, increased Internet access and content availability.

With more mobile devices, the demand for mobile payments is also set to skyrocket. At the MWC, Visa unveiled plans to use in-car telematics to allow consumers to make mobile payments directly from their vehicle. This is an illustration of how payments can be integrated into the ever-evolving Internet of Things. The opportunities are endless for payment services companies and retailers as more consumers use smartphones to make purchases.

In emerging economies, people are adopting smartphones before they use a laptop or tablet. Even in sub-Saharan Africa, texting, taking photos and banking are already popular uses for phones.

Mobile payment technology is already starting to gain traction in Australia. Samsung is working with financial institutions to make their Samsung Pay technology (launched at the MWC) relevant for an Australian audience. Commonwealth Bank and Westpac allow users to set up their phone as a virtual credit card.

As networks improve, consumers will upgrade to bigger, slicker devices that can do so much more.

Collaboration will pave the way for innovative technologies

When thinking about innovation, we tend to limit it to Internet services themselves or the handsets involved. However, when it comes to an innovation at the carrier level, it’s all about processes, the skill set of the organisations and the investments in the network itself.

Customers, technology and business models are being influenced by changing trends. One driver of change is the principle of sharing. Carriers and Internet app providers all need to collaborate in order to give consumers a better experience. How services and support are given is going to drive differentiation between networks. As mobile technology becomes cheaper, conserving infrastructure resources becomes more important.

Collaboration between financial institutions and payment technology companies including Indue is already happening in Australia with the development of the New Payments Platform (NPP) for Australia. Indue is enabling the unique NPP technology, providing the gateway for real-time payments for our clients.

The next phase of the evolution in digital data and mobile technology will unlock and reveal what’s possible in mobile payments — with benefits to businesses beyond banking, such as retail, electricity and water utilities, public transport, education and health.

For more insights from the Mobile World Congress, click here.

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