(This is a cross-post of the guest blog I wrote over at Jose HC’s “Mobile Strategy… understanding and navigating the mobile ecosystem” blog.)

Canada is still waiting for mobile financial services. Technology isn’t the problem.

Canadian Flag by Matt Bondy

Most of the big banks have offered mobile web based banking at one point or another. There have also been a number of mobile payment pilots, most notably at RBC. So far, long after the pilots complete, we’re still waiting for announcements of a broader rollout.

Canada has all the infrastructure in place. In many ways, Canada’s infrastructure is better suited to mobile financial services that in the United States, where mobile financial services is flourishing.

For example:

• Canada’s Interac Association provides a single, straightforward mechanism to connect financial institutions to merchant point-of-sale systems.
• Enstream is a consortium created by Rogers, Bell, and TELUS specifically to facilitate mobile financial services in Canada.
• Unlike the U.S., open lines of communication generally exist between the banks and wireless carriers. Nadir Mohamed, the CEO of Rogers, sits on the board of TD Bank Financial Group. George Cope the CEO of Bell Canada and the former CEO of TELUS is on the board at BMO.
• Canada leads the world in Blackberry smartphone ownership. Blackberry devices are well suited for mobile applications like financial services. In fact, Facebook just announced it has 12 million mobile users in Canada. Facebook usage is technically similar to mobile financial services.

So, why are we still waiting?

I personally think the market dominance of a few large banks is a major contributing factor.

Canadian banking is dominated by five large institutions: RBC, TD, BMO, CIBC, and Desjardins. In the U.S., there is more market fragmentation that encourages more competition. The U.S. behemoths like Bank of America, Wells Fargo, and Citibank must use their size to perform a preemptive strike on regional banks like M&T, PNC, and Huntington. Community banks and credit unions like Delta Community Credit Union with assets as small as US$1bn have announced plans for mobile banking. In Canada, the banks have the option to watch a handful of other banks and play wait-and-see.

Secondly, I think the iPhone delay is another major factor.

The long wait for the iPhone in Canada, the concern about data plans afterward, and Rogers-exclusivity, have also slowed the adoption of mobile applications. Mobile commerce consistently shows 2/3 of all usage coming from iPhones. First Canadians had to wait for the iPhone and now limiting iPhone usage to only Rogers subscribers limits the market to roughly 1/3 of the Canadian market at best.

iPhone users have a history of demanding what they want (like opening the iPhone to applications). The delay of iPhones in Canada simply put off the inevitable demands by consumers to their institutions.

The customer requests are visible on Twitter:

georgewenzel @RBC Any chance of you guys getting an iPhone-optimized mobile online banking site up and running? The current mobi site sucks on an iPhone.

stephenweppler @RBC any news on a iPhone app from RBC, the mobile banking site is horrible….?

fuzzylion Dear TD Bank – it’s seriously about time that you get a mobile app or at least a WAP version of your online banking website.

As the demands increase, banks will respond. And if the past is any indication of the future, once one bank releases a well-liked mobile application the rest of the banks will follow. Other financial institutions will join in once the market is tested and the benefits are proven.

Unfortunately, organizations that wait risk losing customers forever to the leaders.

Furthermore, followers that rush their efforts risk releasing failed applications which will likely result in:

• Further accelerating customer churn to their competitors
• Exponentially increase the difficulty and costs of adoption in the future; users that have had a bad experience are probably reluctant to try it again
• Costs associated with the having to do the work again (and again) and the lost opportunity.

These folks are smart people. I suspect we’ll see mobile offerings from these institutions soon.

Mobile commerce is the perfect medium for interacting with consumers in short, bite-sized chunks. When the impulse strikes, consumers can jump in and purchase immediately.

Mobile commerce is creating new markets with existing markets. By this I mean, mobile commerce is taking time that was formerly lost and enabling commercial opportunities that didn’t exist before. This reclaimed time enables new sales to an existing customer base that in many cases wouldn’t have happened.

This new opportunity is important in many industries since their potential market is nearly completely saturated. Ecommerce offered a similar sea-change because it allowed consumers to shop without physically visiting a brick-and-mortar store. Merchants could offer their products to a larger market and consumers were freed up to shop at new times — like when they’re at work, or late at night. Ecommerce also changed the retail experience because consumers were more informed and in many cases more focused.

Mobile is opening up all the little, boredom filled chunks of our day with the opportunity to interact with brands. Sitting at a stoplight is my favorite example, but there are others: waiting at the doctor’s office, sitting in the conference room with a minute or so before others arrive, the list goes on. These little moments are almost forgettable, but they add up.

Mobile commerce is the perfect medium for interacting with consumers in short, bite-sized chunks. When the impulse strikes, consumers can jump in and purchase immediately.

Not surprisingly, Pizza delivery companies are on the leading edge of this movement. The CEO of Domino’s Pizza called mobile growth “astounding” in an interview this month. Pizza Hut also has had success with mobile technology. Consumers can quickly place an order when they’re thinking about it on the way home from work. In the past they might forget, or change their minds before they get home (or make the phone call and get placed on hold).

Other Quick Service Restaurants like Burger King and McDonald’s are also leveraging mobile. Other retailers like HSN and AutoNation are blazing paths in other industries.

Aberdeen Group recently validated this theory in the context of Mobile Marketing. They found that leading mobile marketers were 1.6 times more satisfied with their mobile ROI than with traditional media and that 62% of companies are increasing their budgets for mobile, despite an environment of overall budget cuts.

My take is that mobile marketing is but one tactical tool. Companies should look to make the sale with consumers not just communicate their brand. Increasingly, this means providing a unique, succinct, and transactional experience.

“Getting mobile marketing right is a great challenge,” says Jeff Zabin, Research Fellow at Aberdeen Group, “It’s also an opportunity with enormous upside in terms of driving customer acquisition, retention and profitability on an ongoing basis.”

Photo Credit: Disappointed by Tamir Khason

Mobile Commerce, and Mobile Banking in particular, uses a lot of complicated technology.

It’s hard, but your customers don’t care. Your customers just want to connect with you on their mobile phone.

Your customer is just sitting at a stoplight and has thought about you and needs to do business in 20 seconds or less.

You have a dilema:

• Do you pick a platform and serve those customers (“The Chosen Ones”) really well, ignoring the rest?
• Do you go for a lowest common denominator solution that serves all your customers equally bad?
• Do you tailor solutions for individual platforms and invest a lot of resources in maintaining multiple solutions?

Almost every organization considering mobile has to make these critical decisions. Customers feel alienated when they respond to your marketing blitz and find out they’re not part of the select few you targeted. Meanwhile, it’s almost worse than doing nothing if your user experience isn’t great. You DO NOT want to be the banks at the bottom of this recent mobile banking report card.

Waiting isn’t an option either. Customers generally aren’t telling companies they’re doing business elsewhere because of mobile. They’re just going. Waiting isn’t likely to help anyway. Historically, mobile continues to become more and more fragmented. Waiting just means you’ll have less experience and less of a competitive advantage.

What do you do?

It depends. Like a chilly pool, it’s probably just best to jump in and deal with it. It’ll get better. But that doesn’t mean you should jump in without a plan. Every organization has its own unique circumstances. In general, it’s probably best to do a bit of everything. That’s what the banks at the top of that report card did.

Not all companies can do a number of projects at once. In fact, many of the companies with multiple approaches, quietly built, piloted and tested their systems through multiple iterations before doing the big media blitz. The “Fast Followers” probably don’t have that luxury.

The best thing to do is probably to find someone (like me) that’s been there to help you. Then, jump in.

Mobile Commerce and Social Media merging?

Increasingly, I’m seeing Web 3.0 (aka the “Next Big Thing”) as the collision of two mega-trends. Mobile commerce and social media are intertwining and are becoming indistinguishable. Or, at least, it’s hard at times to tell where mobile commerce ends and social media begins.

Facebook, for example, is the killer mobile application. As of April, there have been nearly 7 million downloads of the Facebook Mobile iPhone application representing more than 25% of the iPhone and iPod Touch market. Personally, I use Facebook more on my mobile phone than on my computer (despite the lame user interface).

Is Facebook on a mobile phone mobile commerce or social media?

Facebook Mobile is definitely social media and it’s definitely mobile. Facebook is hardly alone in not figuring out the commerce part in mobile.

Interestingly, the public sector seems to get it. Lately, I’ve spent a lot of time talking to Universities about mobile commerce. Universities understand that their alumni, fans, and of course, their students all use both mobile phones and social media. After all, Facebook started out as a student-only application.

All university outreach, from recruiting to fund raising to athletics, involves relationships. Social media and mobile commerce technology fit perfectly with university goals to build lifelong relationships.

Universities embracing social media on a mobile phone allows them a very intimate, always-there, reminder to the user of their relationship and how the university has affected their life. Social media also lets users share university info with classmates and friends.

Universities can monetize this through their annual fund raising and recruiting efforts. For example, users can challenge classmates in their social network to donate. Both Vanderbilt and the University of North Carolina Chapel Hill already have basic mobile sites.

Look for social media and mobile commerce to more directly support university advancement in the future.