Mobilizing the Billion-Dollar Industry|
by mitali kalita
Fidelity Investments kicked off the wireless revolution
in the financial services industry by introducing the
wireless-accessible trading service to its clients for the
first time way back in 1998. But in the last four years,
an estimated quarter of a billion dollars investment in
the retail wireless banking and brokerage solutions have
not been able to bring the shine as expected. Reports say
that only one-half of one per cent of all mobile phone
subscribers are taking advantage of these wireless
services. Though Asia and Europe are moving up, US has been
left behind in the mobile and wireless technology adoption
According to Octavio Marenzi, Managing Director, Celent
Communications LLC, the number of wireless financial
services users is expected to reach 80 million worldwide by
2004, but only about 3% of them will be US users.
Moreover, the wireless effervescence is visible only in
larger financial institutions while the small and mid-sized
firms are not seen in action. Reports said that only 4 of
the top 10 US banks (Bank Of America, First Union, Fleet
Bank and Wells Fargo) and four of the top 10 US securities
houses (Merrill Lynch, Fidelity, Charles Schwab and
E*Trade) launched retail-mobile services since 1998.
Though wireless and mobile technologies failed to make
commercial success, they have been able to attract
attention as effective communication tools for financial
institutions. Celent reports said that wireless use for
communication purposes within the financial services arena
has zoomed up to 80% among the top 25 securities firms on
Why is the mobile & wireless spree on the wane?
Financial Services institutions had welcomed wireless and
mobile technology into their boardroom to offer their
customers the freedom of paying bills while stuck in
traffic jams, to receive notifications of changes in stock
price while present at a party and to provide more personal
and intimate relationships. But real success seemed a far
cry now, as the massive adoption of the technology did not
prove to be a right choice.
Celent Communications estimates that the total number of
users actively conducting banking and brokerage
transactions peaked around a quarter of a million in 2001,
and has been in steady decline ever since.
This article has attributed the disappointing results of
first-generation wireless banking and brokerage to numerous
factors, such as:
Small screens and slow connection speed that make
it difficult to display complex financial services
information on mobile devices.
Concerns for security that prohibited consumers
from conducting financial transactions.
IT Recession, which has served as the biggest
factor behind the downfall of wireless/mobile adoption.
Excessive reliance on computer-based Internet
Shift to STP hence T+1 has compelled firms to
retrench their mobile/wireless budget.
Contractual agreements that some financial
institutions have with their vendors where they agree to
pay the vendors per user that subscribed for the service.
But the pressure to cut down expenses have encouraged them
to avoid promoting their wireless service, as fewer users
will help keep overall solution costs down.
Myriad protocols, devices as well as costly and
confusing data charges being levied on top of voice charges
by wireless carriers.
Lots of promises but unable to deliver on what the
end user most valued.
New evolving technology like Web services that also
includes such concepts as "any device, anytime, and
However, companies like Charles Schwab had enjoyed the
largest consumer base for their mobile offerings because
they have a perfect blend of investment together with
strong promotional campaigns. They had invested in huge
staff for example ~ they had a wireless team of more than
50, larger than some wireless consultancy firms' entire
A Deloitte survey of 650 business executives showed that
51% did not even understand the benefits and uses of
wireless, 20% were not even confident that wireless was
sufficiently developed for business use and 22% responded
that they had no budget to spend on wireless.
How to bring back the lost luster?
Despite all odds, financial services institutions can still
experiment with wireless and mobile technology to boost
their top and bottom lines by adding revenues, increasing
their customer base and thus develop a more friendly and
intimate bond with their customers. This billion-dollar
industry does have the potential to drive the wireless
industry if it utilizes the right combination of
technology, application and target markets. Applications
that can drive user adoption, solid infrastructure that can
support numerous user-friendly, cost-effective and high-
functionality services for wireless retail banking and
brokerage, can boost the industry.
Celent recommends that financial institutions re-examine
their current wireless strategies and take the following
Firms that currently do not offer wireless services
should not think of investing in the future.
Those that currently offer wireless services can
think of canceling wireless services entirely if there is a
small user-base or insignificant transaction volume.
Those firms, who have already decided to invest,
should ensure that the spending levels are controlled.
Celent estimates that a budget between $250,000 and
$500,000 should suffice even for the largest institutions.
All institutions should look at their current core
retail systems and ensure that they are multi-channel,
cross-product solutions in order to minimize reliance on
unproven, unstable vendors providing pure-play wireless
On the other hand, Gartner has some interesting findings.
They say that the financial services providers that will
survive until 2010 will have made some drastic changes to
how they interact with their customers and hence they will
facilitate mobile commerce.
Gartner believes that our PDAs, phones and other wireless
devices will merge into a "connector" device (around 2006),
which will become a universal productivity tool for
everyday life. The connector, a 3-by-5 inch semi-flexible
color-screen device, may provide an always-on Internet
connection with direct links to conduct transactions with
financial services providers.
For example, before leaving for work, "John" may use his
connector to make sure he made his last mortgage payment as
he eats breakfast with his family. The connector will also
act as a phone and its location sensitive services may
offer special discounts or opportunities based on the
user's proximity to pre-selected retailers.
"After scheduling his bill payments, John begins to read
the financial news streaming to his connector. From the
list of 15 or so stocks in his profile, John can
immediately see that the selling price of his favorite
stock has reached an 18-month high. He says, "Call Bob,"
and within moments John can hear his broker's voice through
his earpiece and see him on his connector screen. John asks
to see the stock's three-month performance graph, which Bob
pushes to John's screen. John decides to sell 100 shares of
the stock and have his profits deposited in his various
accounts according to his instructions."
We know that every action has an equal and opposite
reaction. In the same way, the evolution of any new
technology wave creates lots of hype and hope but at the
same time may bring some adverse side effects too. However,
financial institutions have been known to be very
enthusiastic in accepting any new technology that is
around. They have tasted what wireless and mobile
technology is all about, though the taste didn't linger
long. Will they think twice before embracing another new
technology? May be the experimentation with new
technologies will always keep this billion-dollar industry
in the news.
About Pinnacle Systems, Inc.
Pinnacle Systems, Inc. is a technology consulting and
solutions provider to Capital Markets firms.
Pinnacle's in-depth domain expertise via its Capital
Markets Excellence Center (CMEC) in conjunction with its
Efficient Delivery Model (EDM) delivers cost-effective
project-based solutions to major global banks.
The company is headquartered in Piscataway, New Jersey,
with offices in New York City, and development centers in
Chennai, India.For more information visit www.pinnacle-
sys.com. You may also contact our Capital Markets experts
at: 275, Madison Avenue, 6th Floor, New York, New York,
10016, USA. Tel: 212 880-3737Tom Pilitowski
Coin Market Report
Dealers were left frustrated at last weeks long beach
convention. The biggest problem with the coin business at
this stage is lack of fresh material coming into the
marketplace and that means a lot of material goes from
dealer to dealer, back and forth searching for a home.
What does this tell you? Well what we know is that once
the material is passed on from 2nd and 3rd tier dealers,
it means that this is material that fails to meet the
criteria of the end marketplace, ie: collectors and
investors. Hence the ol' let's see if someone new stops
buy who doesn't know" and we'll offer it. Not good if you
just happen to be that person stopping by.
Dated St Gaudens. Where are they? Oh there are a few coins
out there that were in lesser grade "holders" not
miraculously appearing in higher grade ones at higher
prices but a lot of us see this and pass accordingly.
There are also a few nose bleed high end coins ( at nose
bleed prices too) available but the better dated Saints
for under 25,000.00 just don't appear often and when they
do, there seems to be a long line waiting to be the lucky
ones to write the check and own them.
Early ( pre-1838) gold. A 1st tier dealer in the northeast
just picked up a VERY interesting deal on a few of these.
( shhhhhh). Should be on the marketplace in a week, and if
you are seriously interested in making a fine investment
and have the ability to act quickly, you should call us
NOW as these won't last long and the ones that get
shuffled around in a few weeks will most likely be at a
price that will be looking for the same guys mentioned in
the first paragraph.
Commems. Where is the demand on these??? Only your dealer
knows for sure and he's not talking. There seems to be a
psycho mentality on the modern stuff as well as state
quarters and common material in high grades that have
seemingly taken the center stage in this area~~why? There
are incredible values on these coins to be had and
although we at US Rare Coin Investments have our favorites
( and are securing positions in them), these coins are
just so damn cheap in the real world, it's baffling why
the phone isn't ringing off the wall with people looking
to pick up 10-20-50K worth of these to make what many of
us think will be a great medium term buy-sell at a good
Patterns. Wow are these bringing home the bacon price
wise. If you have these and they don't need to be
surgically removed, you should seriously sell them as
quickly as you can before the bubble bursts. Honestly
folks, we've liked Pattern coins for a long long time, but
at these prices we like selling them even more..
That's the way we see it from here.
On other news, lots of changes are happening at our new
website http://www.usrarecoininvestments.com please visit
us today and if there's something you'd like to see added,
tell us and if it's not already in the loop, we'll
certainly look at it. Our web master, Mike Covili is
putting the final touches on the Client surveys (Win a
free St Gaudens!) and it should be online this week along
with our new Want List form. The new forum that Mike has
uploaded isn't quite what we really wanted and so poor
Mike is going to be creating one that we are familiar with
and implementing it hopefully next week along with some
fancy flash on the homepage. We are also going to be
releasing quite a lot of information specifically geared
to the investments of rare coins, so be on the look out.
We've been known to tick off many a dealer with our up
front reports that go contrary to the same ol same ol most
of us read. And we have been indexed by the two largest
search engine/directories ( google, yahoo) in the top 5
and top 10 for related keyword searches. Good man Mike! We
are also starting to work with an expert on this
optimization thing for websites, who hails from Minnesota,
Chris Nielsen, who will be working his magic on the
website traffic in coming days. Welcome aboard Chris.
We'll be reporting on that more in depth as it happens.
That's it for this week. Keep your heads up and hope to
see you in a good trade soon.
US Rare Coin Investments
Investor Line: 1-800-624-1870
Dealer Line: 1-941-629-4765
This article courtesy of http://www.investment-index.com.
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