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To: D.J.Smyth who wrote (163162)	12/8/2000 11:50:30 AM
From: D.J.Smyth	Respond to of 176387

mBanking Gathers Momentum in Europe Western European banks are moving to provide banking services to users of mobile devices such as wireless application protocol (WAP) phones. Figure 1 - WAP-Enabled Mobile Banking Accounts, Western Europe 2000-2004 (M) This market is going to be interesting to watch because although many banks are aligning with telcos, they tend to regard telcos as potential competition in this sector. The number of mbanking accounts in Western Europe should grow from a minuscule 1.8 milllion in 2000 to a credible 31.8 million in 2004, IDC forecasts. This forecast recognizes that an individual may have more than one mbanking account. Currently, mbanking accounts represent about 14% of the total online banking accounts in Western Europe, according to Mobile Banking: Western Europe Analysis and Forecast (IDC #MB27G, September 2000). Why Mobile? Banks are jumping on the mobile bandwagon partly to protect their base from the types of incursion that occurred when they were relatively late to the Internet party, according to IDC Italy analyst Barbara Blesio. They are also looking at mobile services as a way to expand beyond the PC base to the larger population of mobile phone users. Some banks have allied with yet another potential competitive force - the horizontal portal players. Yahoo! Finance enables customers of NatWest, Deutsche Bank 24, Banca 121, and Banque Directe to view their account balances and transactions. Others, such as Abbey National's Cahoot, are launching their own versions of portals, complete with links to "lifestyle" sites. mBanking is evolving; many banks now offer static account information and a growing number of institutions offer transactional capabilities. Banks should develop transactional capabilities if they want to prevent account erosion. IT Dollars Banks are spending increasing amounts of money to provide mbanking services. IT spending for mbanking will increase at a 68% compound annual growth rate (CAGR) from $43 million in 2000 to $344 million in 2004. mBanking efforts reflect healthy expectations for the total number of WAP users in Western Europe. The number of such users is expected to grow from 91,600 in 1999 to 77.2 million in 2004, according to Mobile Data Forecast - Q3 Update, 2000, (IDC #HW28G, October 2000). Almost all of the major Scandinavian banks are offering wireless access to their financial products, and U.K. banks are actively pursuing WAP strategies by giving away WAP phones, among other efforts. For example, MeritaNordbanken, SEB, and SkandiaBanken offer mbanking. In the United Kingdom, Halifax, Woolwich, and Abbey National offer WAP phones. Whither WAP? WAP has significant support from banks, telcos, and handset makers. Several major European financial institutions, along with Nokia and Ericsson, have formed Mobey Forum to develop common mcommerce business models. WAP will evolve to take advantage of the higher bandwidth services coming, and will continue to serve as the bridge between the small-screen mobile device and desktop environments. There have been some hurdles to widespread adoption, such as unrealized promises from mobile providers, expensive prices, and temptations to postpone purchase of a WAP phone until faster service is available. Eventually, there should be a number of pricing models, including flat-rate and charging per megabyte as well as for individual applications, according to The Evolution of Mobile Internet Services in Western Europe, (IDC #HP23G, November 2000). mBanking solutions are expected to evolve. The leaders in the mbanking arena will be those banks able to redefine their mbanking value proposition, offerings, and competitive strategy in a way that is consistent with the emergence of new business opportunities.