From Turfing to Crystal Balls

Nope, it was a new one on me too. Turfing cropped up in the latest communications survey in the UK, run by Ofcom, the regulator for that sector. Turfing – obviously! – refers to the ability to surf and watch TV simultaneously on the same device. You might think then that report tells a tale of sexy new technologies, and the death of old ones. Not so. There is always a danger in interpreting data, let alone someone else’s, but here’s what caught my eye. The report is well worth reading – my comments certainly don’t do justice to the 400+ pages. At first, it's the headlines catch the eye. For the first time, over half (52%) of all call volumes were made from a mobile phone, with 92% of adults personally own/use a mobile phone. That’s an awful lot of mobile phones – indeed, there are 81.6m mobile subscriptions. The average cost of making a mobile voice call fell to broadly the same level as a fixed line call in 2011 which may partly explain the increase and why 33% of 16-24s, and 26% of 25-34s, now live in mobile-only households. So the future is mobile then? I’m not so sure it’s as simple as that. Firstly, the overall time spent on the phone fell by 5% in 2011. This reflects a 10% fall in the volume of calls from landlines, and for the first time ever, a fall in the volume of mobile calls (by just over 1%). Then when you consider that there are “only” 23.8m landlines, you realise that there must be roughly 4 times the calls made by landline than mobile. It's not just voice either - use of mobile internet fell, as did revenues for the mobile operators. I’m not suggesting that mobile is in trouble. It’s more that whilst sexy new technology continues to appear, it’s yet to replace any existing method to a sufficient extent that we can exclude it. Even post is the same. Use fell by 30% by individuals (depending on what you measure), but remains a massive number (16.6bn letters annually), with significant volumes still relating to transactional mailings such as statements and bills. And of course, face-to-face remains the preferred communication of all. So what can the payments world take-away from this? There are undoubtedly some exciting new technology frontiers being explored. But the reality is that these developments are alongside existing methods and channels, at least for the foreseeable future. We tend to forget that many things that are part and parcel of our daily life, such as debit cards, have taken decades to get the point that they are today. The challenge for banks is identifying which of the new developments will still be around in 5 years, let alone decades. If we look back 5 years, there are many developments that have fallen by the way side, that bear little resemblance to their initial guise or that have been bought by bigger companies. Whilst Celent can (and do) help with that process of identification and planning, it does sometimes feel that a crystal ball would be the best investments in payments technology planning!