Firstly, I want to apologize to any and all readers of this blog. We have been a bit busy preparing for our big event on November 22nd and have neglected to add insightful posts. I hope to remedy this now, and get back on schedule...
The story of Jibun Bank, and what it is trying to achieve is really fascinating to me. For those of you who do not know the company, Jibun Bank ('My Bank' in Japanese) was founded officially in late 2008, through KDDI and the Bank of Tokyo-Mitsubishi UFJ (see the press release here). What makes this particular offering unique is that its main platform for communication and transaction is the mobile phone, not the internet webpage.
Here's Makoto Shibata, Business Analyst with Bank of Tokyo Mistubishi UFJ, briefly discussing the offering:
The key to the mobile bank is a focus on the Gen Y market, who have supplanted the PC with the mobile phone for all communications and even basic internet access. Japan was an ideal market to test this model, primarily because of its high percentage of 3G phone users, the strong 3G Network availability around the country, and the early adopter mindset of Japanese youth.
The technology platform used by Jibun Bank was Oracle's FLEXCUBE Core Banking system. In May of 2009, Jibun Bank won the Asian Banker IT Implementation Awards for “Best Core Banking Project” (click here to read about it). Clearly the adaptation of the core banking applications for use in a reasonable mobile GUI was quite an innovation, and something that will likely be used as a model by others attempting to target the Gen Y consumer (iPhone App).
Further analysis of the bank's entry into the market can be found in this BS&T article. To date, the bank has over 500,000 customers, or roughly 5% of the direct banking market in Japan.
As we watch the adoption of mobile banking and mobile payments increase amongst banks of all sizes around the world, it is not difficult to see a future in which the mobile phone plays an even greater and more intricate role in our daily banking activities.
A bit of a sidetrack - If you remember Bill Gates's book from 1995, the Road Ahead, you'll recall this Business Video on the attached CD-ROM:
While Bill might have envisioned a wireless PDA managing those routine transactions, its interesting to note how many of those elements are already available to us via current mobile phone technology.
So, the mobile phone has arrived, and is now another banking channel, offering account balance, some basic bill pay, SMS transaction notifications, and other basic banking functions (including USAA's Deposit@Mobile, which can be viewed here:
The real question is how do we move the mobile to forefront of banking channels, ahead of the brick and mortar, and even the pesky desktop? Key elements of the banking relationship, from new account opening to check deposits to foreign exchange transactions and wire transfers must be possible using the mobile phone, in line with market regulations. Innovative solutions, like those offered by Jibun and USAA will help move us forward.
Once a 'bank in your pocket' model can be proven, will it become the medium of choice for all customers? Potentially over time, but in the meantime, the window for offering this innovative option, lowering the cost to serve customers dramatically further than existing internet and brick and mortar models, is a critical path every bank should be considering right now...