Design Requirements for Collaboration Processes to Increase Customer Trust in Mobile Banking Platforms

Banks expect the mobile channel to become more important for collaborating with customers. However, a lack of trust continues to prevent a faster dissemination of such mobile banking services, especially for the private banking customer segment. Hence, this paper discusses various determinants of trust and follows a theory-driven approach rooted in the collaboration engineering methodology. Grounded in the calculativebased, relational-based and institution-based views of trust, we derive the following design requirements for collaboration processes on mobile banking platforms: security, privacy, transparency, familiarity, social presence and normality. By validating these requirements with expert interviews, we contribute to existing theory by adding transparency as a design requirement for a collaboration process that fosters trust. Moreover, contrary to existing theory, we did not confirm familiarity as a requirement in this study

Modes of governance of new service development for mobile networks. A life cycle perspective

This paper focuses on governance modes for service development ofmobile telephone networks (GSM, WAP, GPRS, UMTS). 'Services' refer toservices embodying a specific content. The paper shows that the phaseof the life cycle of the network and the service affects the choice ofgovernance mode of new service development projects. Governance modesinclude internal development by the telecom operator, several forms ofcollaboration between telecom operator and service firm, and onlyproviding a network by the telecom operator to the service firm, whichthen develops and provides its services (external). In this paper amodel is developed for the governance mode of service development indifferent phases of the life cycles of the mobile network and service,based on the degrees of uncertainty and urgency involved in thenetwork and service development processes. Four cases are presented ofservice development projects for mobile telecom networks. These casesindicate that the number of redesigns and the level of communicationcosts in collaboration projects indeed depend on the degree of urgencyand uncertainty involved in these projects, which are in turn affectedby the life cycle of the network and service.portfolio selection;technology adoption;mobile networks;collaboration for service development;product and service life cycles

Bank and Fintech competitive dynamics and the perceived value of partnerships in an open banking market environment

Abstract. This thesis discusses the relationship of banks and Fintech companies in the changing European financial markets. In order to answer this thesis’ research questions regarding bank and Fintech competitive advantages and the perceived value of collaboration, a closer look at the underlying market conditions is required. A literature review of previous research reveals that new regulation in the form of Payment Service Directive 2 (PSD2) is being implemented to correct the poor competitive pressures and consequent lack of innovation in the European financial markets. The regulation aims to create more options for consumers and drive consumer benefit by opening the financial markets to new service providers. As a result, an increasing amount of Fintech companies enter the market space and create competitive pressures towards banks by providing superior customer experiences in specific niche service areas. This thesis provides a perspective on bank and Fintech relationship that goes beyond competition and discusses also the possible value of collaboration. This thesis is conducted as a qualitative case study and the data is collected via theme-based semi-structured interviews with three executive-level bank representatives and six Fintech executives. The interviewees from the bank have extensive experience working with PSD2 and open banking related initiatives and Fintech partnerships. The six Fintech case companies originate from Sweden, UK, USA, Canada and Singapore, and all of them have previous experience collaborating with banks. The key findings of this research conclude that bank and Fintech competitive advantages are complementary in nature. Banks are trusted actors in the market that benefit from an existing customer-base and established distribution channels, whereas Fintechs are fast, technologically capable, and have niche expertise in specific service areas. The complementarity of bank and Fintech competitive advantages creates opportunities for mutually beneficial collaboration models and incentives for the creation of platform solutions, where greater customer value can be achieved. While open banking and platformization are deemed to have significant effects on incumbents, the results indicate that PSD2 alone is likely to have a smaller effect on banks than suggested by previous research, as the effects are restricted to payments. PSD2 is, however, seen as a catalyst for the larger change towards open banking and platformization. The findings of this thesis can be utilized by financial market stakeholders, primarily bank and Fintech executives, to position themselves strategically to the development of open banking and platformization. The results can also help bank and Fintech executives understand the core competences that are emphasized in an open banking market and furthermore, understand how to benefit from complementary competences via partnership. This thesis provides a clear managerial implication that bank and Fintech partnerships can unlock significant value for both parties

Mobile banking and financial inclusion : the regulatory lessons

Mobile banking is growing at a remarkable speed around the world. In the process it is creating considerable uncertainty about the appropriate regulatory response to this newly emerging service. This paper sets out a framework for considering the design of regulation of mobile banking. Since it lies at the interface between financial services and telecoms, mobile banking also raises competition policy and interoperability issues that are discussed in the paper. Finally, by unbundling payments services into its component parts, mobile banking provides important lessons for the design of financial regulation more generally in developed as well as developing economies.Banks&Banking Reform,Access to Finance,Emerging Markets,Debt Markets,Technology Industry

CRM and Mobile Applications:An Overview of Mobile CRM Adoption

Purpose - The purpose of this paper is to summarize articles on mobile apps and mCRM to identify important factors affecting their adoption.  Research limitations/implications – The relatively small sample size limits the generalization of the results. Keywords - mCRM adoption, Mobile technology, Technology Acceptance Model, CRM system, B2B sales, Employee satisfaction, mCRM, Personal performance, System use, E-satisfaction, E-loyalty, Mobile banking, E-trust, Mobile marketing, Technology implementation. DOI: 10.7176/IKM/10-2-06 Publication date: February 29th 202

Banking on Shared Value: How Banks Profit by Rethinking Their Purpose

This paper articulates a new role for banks in society using the lens of shared value. It is intended to help bank leaders, their partners, and industry regulators seize opportunities to create financial value while addressing unmet social and environmental needs at scale. The concepts included here apply across different types of banking, across different bank sizes, and across developed and emerging economies alike, although their implementation will naturally differ based on context

Fighting Poverty, Profitably: Transforming the Economics of Payments to Build Sustainable, Inclusive Financial Systems

The Gates Foundation's Financial Services for the Poor program (FSP) believes that effective financial services are paramount in the fight against poverty. Nonetheless, today more than 2 billion people live outside the formal financial sector. Increasing their access to high quality, affordable financial services will accelerate the well-being of households, communities, and economies in the developing world. One of the most promising ways to deliver these financial services to the poor -- profitably and at scale -- is by using digital payment platforms.These are the conclusions we have reached as the result of extensive research in pursuit of one of the Foundation's primary missions: to give the world's poorest people the chance to lift themselves out of hunger and extreme poverty.FSP conducted this research because we believe that there is a gap in the fact base and understanding of how payment systems can extend digital services to low income consumers in developing markets. This is a complex topic, with fragmented information and a high degree of country-by-country variability. A complete view across the entire payment system has been missing, limiting how system providers, policy makers, and regulators (groups we refer to collectively as financial inclusion stakeholders) evaluate decisions and take actions. With a holistic view of the payment system, we believe that interventions can have higher impact, and stakeholders can better understand and address the ripple effects that changes to one part of the system can have. In this report, we focus on the economics of payment systems to understand how they can be transformed to serve poor people in a way that is profitable and sustainable in aggregate

Mobile payment as a multi-sided platform : Success factors and IT governance practices

The aim of this research was to discover factors that lead to mobile payment platform’s success in the Finnish market. Mobile payment research has been ongoing for the past 20 years but no solution has made a clear breakthrough. Research has focused on technological factors, factors concerning consumers and adoption of mobile payment solutions and the majority has been exploratory, early research. Because of the rise of mobile technology and popularity of mobile content, flexible use of mobile phones and growing amount of non-cash transactions is a turning point now possible for mobile payment solutions. Along the success factors this research aimed to consider governance practices and to examine the perceived roles of the ecosystem participants. This is a qualitative study based on a case, MobilePay, a mobile payment platform provided by Danske Bank. Eleven semi-structured interviews (conducted in January 2017) with mobile payment ecosystem participants, industry experts, served as the research data, along with literature and publicly available information. The importance of nine success factors (choice of technology, choice of features, size of the ecosystem and openness, security, service pricing, reliable platform provider, guidance, training and support, successful implementation of service changes and sales and marketing of the platform) was evaluated. Because IT governance has been considered successful in the field of IT, two structures, three processes and three relational mechanisms were chosen to be evaluated to see their suitability in a mobile payment ecosystem. To create a better picture of the ecosystem, the perceived roles and responsibilities of the ecosystem participants were examined. All nine success factors were considered greatly significant for the success of a mobile payment platform. The successful implementation of service changes, the choice of technology and marketing of the platform were seen as the most important factors. User support was perceived the least important. Four success factors, user experience, ease of implementation, ability to use in all channels and loose competition and authoritative control, were added by the interviewees. Both cooperation between the ecosystem participants and clearly defined roles and responsibilities were perceived as critical for success. Solutions should also be based on existing standards. Identified contact persons in the participants’ organizations and a defined development plan were considered well-suitable for governing the mobile payment ecosystem

Trusted integration of cloud-based NFC transaction players

Near Field Communication (NFC) is a short range wireless technology that provides contactless transmission of data between devices. With an NFC enabled device, users can exchange information from one device to another, make payments and use their NFC enabled device as their identity. As the main payment ecosystem players such as service providers and secure element issuers have crucial roles in a multi-application mobile environment similar to NFC, managing such an environment has become very challenging. One of the technologies that can be used to ensure secure NFC transaction is cloud computing which offers wide range of advantages compare to the use of a Secure Element (SE) as a single entity in an NFC enabled phone. This approach provides a comprehensive leadership of the cloud provider towards managing and controlling customer's information where it allows the SE which is stored within an NFC phone to deal with authentication mechanisms rather than storing and managing sensitive transaction information. This paper discusses the NFC cloud Wallet model which has been proposed by us previously [1] and introduces a different insight that defines a new integrated framework based on a trusted relationship between the vendor and the Mobile Network Operator (MNO). We then carry out an analysis of such a relationship to investigate different possibilities that arise from this approach

Open Innovation Opportunities of Open Banking and APIs in the Finnish Banking Industry

During the last decades, due to digitalization, the financial industry has undergone continuous transformation in service delivery. At the same time, regulation in the financial sector has increased and new players such as FinTechs have entered the industry. The latest advancement in the industry that can have the ability to greatly unlock the potential of these new players is open banking. In Europe and in Finland the catalyst for change and for open banking has been regulation driven and initiated by European Union’s Revised Payment Services Directive also known as PSD2. The directive is forcing traditional banks to give third party providers access to banks customers’ account and transaction information in secure digital form and with customers’ consent. The information sharing is implemented through Application Programming Inter-faces (APIs). The objectives of this thesis are to examine the current state of the open banking in Finland and how PSD2 and open banking has impacted to innovation processes of traditional Finnish banks. In addition, objectives include the examination of the current state of utilizing open innovation practices and co-operation in Finnish banks and one goal is to gain better understanding the innovation and product development opportunities and challenges that open banking and utilization of APIs offers to traditional Finnish banks. This research is based on literature review followed with empirical part. In literature review, the relevant literature from central topics and previous studies of these topics are introduced. Literature review is consisted of three parts which cover the main topics of the study. These main topics are retail banking industry, open banking, and open innovation. The empirical part of the study is implemented by conducting qualitative survey with open-end questions that has been sent to experts of open banking working in Finnish banking industry. The questionnaire of the survey has been built around theoretical framework that has been formed from central findings of the literature review. The results of the study indicate that open banking and APIs can offer new innovation opportunities for Finnish banks as APIs can be used as facilitator of new innovation opportunities including open innovation activities, cooperative development and forming innovation plat-forms. However, as open banking and use of APIs may slowly change the way that Finnish banks innovate, the impact of open banking in Finland has been rather low and development of it has been slow so far. Also, the biggest constraint right now for Finnish banks that is limiting the utilization of open innovation and collaboration in development, is that banks are struggling to find suitable partners that are meeting banks’ strict requirements.Viime vuosikymmenten aikana finanssi- ja pankkiala on kokenut jatkuvaa muutosta digitalisaation vuoksi. Samanaikaisesti finanssialan sääntely on lisääntynyt ja toimialalle on tullut uusia toimijoita kuten finanssiteknologialan yrityksiä (engl. FinTech). Viimeisin muutos alalla, jonka myös uskotaan voivan merkittävästi avata näiden uusien toimijoiden mahdollisuuksia, on avoin pankkitoiminta (engl. open banking). Euroopassa ja Suomessa avoin pankkitoiminta on sääntelylähtöistä ja perustuu Euroopan Unionin tarkistettuun maksupalveludirektiiviin, joka tunnetaan myös nimellä PSD2. Direktiivi pakottaa perinteiset pankit avaamaan kolmannen osapuolen palveluntarjoajille pääsyn pankkien asiakkaiden tili- ja transaktiotietoihin, kuitenkin asiakkaiden suostumuksella. Tämä tietojen jakaminen toteutetaan ohjelmointirajapintojen (API) kautta. Tämän tutkimuksen tavoitteena on tarkastella avoimen pankkitoiminnan nykytilaa Suomessa ja sitä, miten PSD2 ja avoin pankkitoiminta on vaikuttanut perinteisten suomalaisten pankkien innovaatioprosesseihin. Lisäksi tavoitteina on tarkastella avoimien innovaatiokäytäntöjen (engl. open innovation) ja kolmansien osapuolien kanssa tehtävän yhteistyön nykytilaa suomalaisissa pankeissa. Yhtenä tavoitteena on myös saada parempi ymmärrys uusista innovaatio- ja tuotekehitysmahdollisuuksista sekä haasteista, joita avoin pankkitoiminta ja ohjelmointirajapintojen hyödyntäminen voi tarjota suomalaisille pankeille. Tutkimus rakentuu kirjallisuuskatsauksen ja empiirisen osan ympärille. Kirjallisuuskatsauksessa esitellään tutkimusaiheen olennaiset ja keskeiset asiat aiemmista tutkimuksista. Kirjallisuuskatsaus koostuu kolmesta pääosasta, jotka kattavat tutkimuksen pääaiheet. Nämä pääaiheet ovat vähittäispankkitoiminta, avoin pankkitoiminta ja avoimen innovaation teoria. Tutkimuksen empiirinen osa on toteutettu avoimia kysymyksiä sisältävän laadullisen kyselylomakkeen avulla, joka on lähetetty Suomen pankkialalla työskenteleville avoimen pankkitoiminnan asiantuntijoille. Kyselyn kysymykset on rakennettu teoreettisen viitekehyksen ympärille, joka on muodostettu kirjallisuuskatsauksen keskeisistä havainnoista. Tutkimuksen tulokset osoittavat, että avoin pankkitoiminta ja ohjelmointirajapinnat voivat tarjota uusia innovaatiomahdollisuuksia pankeille. Avoimet ohjelmointirajapinnat voidaan nähdä uusien innovaatiomahdollisuuksien, kuten avoimen innovaatiotoiminnan, yhteistyön kehittämisen ja innovaatioalustojen muodostamisen mahdollistajana. Vaikka avoimen pankkitoiminnan ja ohjelmointirajapintojen käytön uskotaan muuttavan hiljalleen suomalaisten pankkien innovointitapaa, niin toistaiseksi avoimen pankkitoiminnan kehitys on ollut hyvin hidasta ja näin myös sen vaikutus on toistaiseksi ollut hyvin vähäistä. Suurin haaste tällä hetkellä, joka rajoittaa avoimen innovoinnin ja yhteistyön hyödyntämistä kehitystyössä suomalaisissa pankeissa on se, että pankkien on haastavaa löytää kumppaneita, jotka täyttävät pankkien tiukat vaatimukset