No Signal: North American Wireless Retail Banking & Brokerage

June 18, 2002

Abstract

 

New York, NY, USA June 18, 2002

Aggregate usage drops more than 20%; IT spending by more than two-thirds.

Those involved in the banking and brokerage industry already know that the initial wireless hype has not resulted in widespread adoption by financial institutions and customers. Celent research shows that not only have usage and spending rates peaked, but they have been steadily dropping over the last several quarters. In Celent痴 latest report, , Celent offers the first comprehensive look at the current disappointing state of wireless retail banking and brokerage in the North American market.

Celent 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. Spending rates by financial institutions, including banks, brokerage houses, and credit unions, on wireless technologies and related services actually peaked in the previous year, and has dropped more than two-thirds, causing many pure-play wireless vendors to radically shift their business models and target markets, or even go out of business altogether. In several cases, banks have stopped or indefinitely postponed their wireless projects. For all the promise of mobile technologies, only 40% of the leading US financial institutions currently provide retail mobile services today.

"Now that the competitive pressure to go wireless has been removed, financial institutions have the luxury of waiting for the technology to mature, and to devise innovative new services that truly leverage the unique capacities of wireless," says

Michael Haney, a senior analyst at Celent and lead author of the report. Very few of the firms offering mobile services have created transactional solutions taking advantage of the distinctive characteristics of wireless solutions, namely extreme personalization, timing, and location. The Celent report highlights the current offerings from the leading North American institutions, and provides a brief comparison with offerings provided in international markets.

"The current recession, in conjunction with a nascent but immature technology, and a huge misunderstanding of consumer behavior and wants, has brought wireless banking and brokerage into a state of rapid decline," says Haney. The report examines these factors in more detail, and includes recommendations for how financial institutions should proceed with their wireless endeavors in the short term.

The report includes 7 figures and 8 tables, which are listed in an appendix.

A Table of Contents is available online.

 

 

of Celent Communications' Retail Banking and Retail Securities & Investments research services can download the report electronically by clicking on the icon to the left.

 

        

Send mail to info@celent.com with questions or comments about this Web site.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

 

  New York, NY, USA June 18, 2002

No Signal: North American Wireless  Retail Banking & Brokerage

Return to report Abstract

 

EXECUTIVE SUMMARY 3
INTRODUCTION 4
DECREASING DEMAND 5
  Where are the Users? 5
  Stop While We're Ahead 7
  International Comparison 8
NOT-SO-DIVERSE OFFERINGS 10
THE STRUGGLE TO SURVIVE 13
THE CYCLICAL ECONOMY 18
  Wireless No Longer The Priority 18
  Online Pure-Plays No Longer Hot 19
  Drastic Drop in Consumer Trading 20
  The Telecom Bubble Bursts 20
THE MOBILE AMERICAN 21
  High Fixed-Line Penetration 21
  Low Data-Capable Phone Penetration 22
  Excessive Mobile Data Costs 22
  Strong Existing Distribution Channels 24
  Banking and Driving Do Not Mix 24
THE WIRELESS PUZZLE 25
  No Clear Answers 25
  Weak User-Experience 26
THE NEW TRENDS 28
  Wan to Lan and Pan 28
  B2C to B2E and B2B 28
  Alerts and Messaging 29
  Telematics and Voice 29
CONCLUSION & RECOMMENDATIONS 30
FIGURES & TABLES 32
  Figures 32
  Tables 32
 

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