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Banks losing contact with customers

GFT’s CEO Ulrich Dietz: credit sector needs to reposition itself following Google’s entry into mobile payments

Stuttgart, 8 June 2011 – The impending launch of the electronic payment system “Google Wallet” represents the most promising attempt so far to establish mobile payments on the market. The Internet specialist and technology group Google has succeeded in bringing together those factors which are decisive for the success of any launch, according to Ulrich Dietz, CEO of GFT Technologies AG. “Banks run the risk of completely losing their direct contact with customers for the foreseeable future and simply becoming the back-end transaction partners of Internet suppliers,” says Dietz.

Never before has a market-dominant company – such as Google now is – been able to form such a powerful coalition of partners from all key sectors for the launch of a mobile payment system. All previous attempts to use mobile phones for electronic payments failed due to the complexity of the venture. With its partners from the world of finance (Citibank, Mastercard), retail and politics (for a field test in New York), the high-tech company has now forged a strong alliance which might actually succeed in turning the smartphone into an electronic wallet. “Now that global players are involved, local successes can quickly be transferred to further markets – such as Europe and Asia,” states GFT’s CEO Ulrich Dietz.

Banks are therefore advised to carefully review their strategies with regard to mobile banking. “The rules are being redefined,” says Dietz. “The ideas and technologies behind mobile payment systems have long been known and were certainly not invented by Google. However, established banks and even telecommunication companies have so far failed to take a lead in these markets. In view of this change in the parameters, now is the time to play as big a role as possible – or indeed any role at all – in mobile payment services.”

Ulrich Dietz believes there is a danger that banks might lose contact with their customers if smartphones become an increasingly important medium for banking transactions and payments. “Banks will then be relegated to the role of a back-end transaction partner – and as such run the risk of becoming easily replaceable one day,” says Dietz.

Banks should therefore aim to offer their own services for mobile devices and keep themselves in the picture – for example with “Micro Credits”. “The major banking brands also have to establish themselves on the mobile phone as an indispensible guarantee for utmost quality regarding data protection and user privacy,” explains Dietz.

As a consequence, Dietz sees good opportunities for innovative members of the banking community. “The mobilisation of banks’ business processes is only a question of time. If banks fail to take the lead they should at least secure as strong a role as possible within a partner network,” states GFT’s CEO.

He also believes it is still far from certain who will actually add which value in the new markets. In his opinion, this is due to the variety of application possibilities which Near Field Communication (NFC) offers. Ulrich Dietz: “NFC technology not only enables non-contact mobile payments – it can do much more. The search is on for a killer application which will make NFC the standard on every smartphone. This would allow information in shops, museums or trade fairs to be collected by the smartphone, for example, or the exchange of business cards and photos via mobile devices. And there is still plenty of potential for many more good ideas.”

In May 2009, GFT already set up its Mobile Finance Competence Centre, which now plays a leading role in the development of IT applications for mobile banking. NFC was one of the focus areas for the company’s developers right from the start. GFT’s Mobile Finance Competence Centre is currently working on two pilot projects for NFC applications in Germany and the UK.
Ulrich Dietz, GFT CEO
 
Ulrich Dietz, CEO:
"Banks run the risk of completely losing their direct contact with customers for the foreseeable future and simply becoming the back-end transaction partners of Internet suppliers."
GFT Technologies AG
Christian Kleff
Head of Corporate Communications
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