Global Banking and Finance Review interview Will Jones, Monitise President EMEA

Hi Will, please begin by introducing Monitise

Monitise is a world leader in Mobile Money – that’s banking, paying and buying with a mobile device, whether it’s a feature phone, smartphone or tablet. We built the world’s first mobile banking, payments and commerce ecosystem and we now serve more than 28 million end-user customers worldwide. To give you a sense of the growth we have experienced, the value of payments and transfers processed by Monitise’s technology platform is now worth $71bn on an annualised basis, compared with $31bn a year ago.

While our corporate headquarters are a short walk from the Bank of England in central London, we also have offices in Soho – staffed by many of our front-end mobile design experts – and in Wales, where one of our leading R&D hubs is based. Outside the UK, we have offices in California, Turkey and Hong Kong as well as joint ventures in India and Indonesia.  Our work is with primarily with leading banks, payments companies, retailers, mobile network operators and media owners – they use our technology platforms and services to securely connect people with their money via mobile.

Our capabilities are designed to enable the financial institutions and companies working with us to leverage the high user engagement delivered by mobile banking solutions and services to create new commerce-related revenue opportunities. We’re an enabler in the Mobile Money space, designing, developing and deploying services that allow you to ‘see it, click it, buy it’ through mobile capabilities that are compelling, secure, and easy to use.

It’s been a busy year for Monitise, revenue is up, you have partnered with several companies and acquired Pozitron, which has provided a gateway for the Turkey and Middle East market. To what do you attribute this success? What does the year ahead hold?

Over the last ten years, Monitise has grown quickly, to the point where we now occupy a unique position in the Mobile Money market.   We are incredibly proud of the partnerships we have forged over the years with more than 350 financial institutions, payment processors such as Visa Inc. and Visa Europe, and our joint ventures involving partners in markets such as Hong Kong, India and Indonesia. These complement our relationships with businesses such as FIS, IBM, Cognizant, CGI, JETCO, Vocalink and BKM, Turkey’s national payments switch. This focus on collaboration has been the backbone of our success.

We’re just a few months into 2014 and we’ve already passed some major milestones in the Monitise journey, not least the recent announcement of our new business model. This will see us move away from licensing to a subscription-based model, which will make it easier and faster to on-board new clients and, by extension, grow our user base.  This is a fundamental shift for us as we look to grow our registered user base from 28 million today to 200 million in five years, focusing on driving user-generated revenue through mobile banking, payments and commerce.

This year we also grew our international network with the Pozitron acquisition, which took place in February. Bringing their best-in-class capabilities into the Monitise Group really reinforces our leadership position within the global Mobile Money sphere and allows us to take the next step in helping businesses navigate that arena.

As for the rest of 2014, we have established a foothold at the centre of this digital payments revolution for the world’s banks and payment networks and now intend to fully leverage our technology platforms, expertise and global network of partnerships to lead the way in what we believe will be the biggest shift in financial services and shopping in a generation.

What role is regulation having on the market?

The global financial crisis six years ago resulted in the increased regulation of financial institutions – this continues to be strengthened to ensure the financial stability and solvency of major institutions to prevent such an occurrence happening again.

This clearly has had a significant and direct impact on banks, which have had to increase their solvency and capital ratios, and many of the larger ‘universal’ banks have had to divest and reduce their market dominance. Within the UK, we have seen the FSA replaced by the PRC and FCA, and the Bank of England being given overall responsibility for financial stability. Major banks are being required to ring-fence their retail operations to ensure that commercial banking operations do not jeopardise them. The Government and regulators are focussing on competition and consumer protection, and a new regulator for payment systems will be in post within the next month or two. In addition, technological developments – particularly the exponential growth of mobile banking and payments – mean that regulators constantly have to play catch-up.

As a result, banks are starting to rethink their business models, cope with the rising cost of increasing regulation and deal with new entrants to the market. At Monitise, we’re not directly regulated by the FCA or PRC. However, our customers are, and we work closely with them to ensure that our products and services are future-proofed and fully compliant with their regulatory obligations. Our business, which incidentally came to market a year before the global financial crisis in 2008, believes that banks are in a key position to provide enabling platforms for the wider rollout of mobile banking, payments and commerce capabilities. At the end of the day, banks and proven payments processors are the primary organisations that consumers trust more than any other to safeguard their financial data. These institutions have the knowledge and experience to handle a huge number of incoming and outgoing transactions every second and are structured completely around the regulated security of the information that they handle. Government regulations stipulate these high levels of security around card data – regulations that don’t apply to the deployment and processing of transactions through entities like PayPal or Google.

How can small businesses benefit from mPos?

For small and micro businesses, a single mPOS app can transform business banking by integrating account management, card acceptance, quoting, invoicing and much more into a single application.

The up-front benefits of mPOS for merchants who are typically dependent on cash or cheque payments are immediately clear – increasing transaction speed, which means more transactions and decreased queuing for customers – and the ability to take payments anywhere.  It has the cost-effectiveness that traditional POS systems can’t deliver, while also helping ensure business continuity.

However, the benefits of a Monitise mPOS solution go far beyond just card acceptance. The data generated by the use of mPOS can help businesses really power their customer engagement, through analysing purchase data and using it to not only manage inventory, but also produce loyalty schemes and targeted offers. The power of analytics can really help small and micro businesses in learning more about their end users and refining their offer to meet customer needs more effectively.

A good mPOS offer can make a huge difference to small businesses, many of whom still operate out of personal retail accounts. You can see the level of value placed on it in the fact that 63% of small and micro businesses – double the number of retail customers – are prepared to pay for mobile banking (The 2013 th Power Mobile Banking Study™).

Why is convergence necessary and what are the obstacles?

In many ways, convergence is an inevitability – we’ve seen it in how you once had to visit your own bank’s ATM in order to withdraw cash, and now you can get off a plane in New York or Jakarta and get instant access to your money. We take that for granted.

There is, however, a great deal of ‘heavy lifting’ that has to happen behind the scenes in order to make this a reality – and mobile technology is no exception. What has to happen – and what is evolving – is the increasing collaboration between device manufacturers, consumer groups, banks and retailers – working together for the good of the consumer.

What mobile is doing is accelerating this convergence of the online and offline worlds of banking, payments and commerce – this is ultimately going to drive new revenue streams for banks and business, and value for consumers.

For example, we’re working with Telefónica, which has more than 300 million end users, pooling our shared experiences and innovations in new ways to create even more compelling and secure Mobile Money services that are easy for consumers to use, every minute of every day.

Can you tell us about your latest innovation “Alerting+”?

Alerting+ is our consumer alerting and engagement solution that we recently launched and will be rolling out over coming months. For our FI customers, it means being able to evolve alerts from one-way notifications to real-time two-way conversations. In concrete terms, this means capabilities such as multi-step conversational alerts, alert aggregations and omni-channel message delivery.

It gives FIs the unique ability to connect with their customers, beyond what other alerting systems can do, developing two-way conversations that resolve critical account issues and help people manage their money more effectively. For example, it can advise customers if there’s any unusual transaction activity or potential fraud transactions and offer them the chance to take immediate action on their account. For more advanced business processes integrated into Alerting+, FIs can introduce cross-sell and up-sell offers.

This helps build trust and unlock new opportunities for revenue generation, customer acquisition and retention, fraud reduction, risk management and customer engagement – regardless of the FI’s core mobile banking platform. This is a real value-add experience and represents a new opportunity for banks to develop a deeper relationship with their customers.