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@Dirk K: 

Congrats!

Many such announcements end with "Android version coming soon". Should we make much out of the conspicuous absence of such a concluding line in yours?

Basic Demand-Supply curves can already provide the underpinnings of a platform that can simulate the effect of price of Product A on the performance of Product A. The real challenge is to come up with a platform that can simulate the effect of price of Product A on the entire portfolio of products A, B, C, etc. belonging to different SBUs of the bank. Even assuming that someone cracks the Holy Grail of relationship based pricing, they'd still have to surmount the walls of the silos in which banks are organized today and will likely be well into the future. What might really work is a rewards and recognition system that works at the level of the entire FI, not at SBU-level - that surely sounds like a pipedream already.

@Finextra Member:

Interesting point!

In the past, due to shortage of computing power or its exorbitant costs, scientists have reached "big conclusions" on the basis of small sample sizes that were often statistically insignificant. With growing computing power and falling costs, we've perhaps reached a stage now when we can actually analyze *all the data* and come to (a) "big conclusions" that are truly applicable for the entire population and / or (b) "micro conclusions" that are applicable for an audience of one or a handful of people. This might explain all the buzz around "big data" these days.  

I've heard of a leading bank in Canada doing the same thing a year ago, and have always wondered why American banks haven't followed suit or, for that matter, led the trend. Isn't it a part of standard bank account contracts that access credentials are confidential to the accountholder and cannot be handed over to third-parties? It should hardly matter that such third parties pass through all the info to Yodlee or protect them securely. The popularity of Mint, Offermatic and other services shows that, despite everything, there are enough people willing to throw caution to the winds if they stand to gain something in return. If consumer behavior in the context of PFMs is any indication, security concerns are grossly exaggerated and any steps to enhance security (e.g. 2FA) at the cost of increasing friction will stunt adoption of financial products.  

We can safely assume that smartphone users (a) have a bank account, and (b) are used to mobile apps. I'm unable to understand, then, why only 20% of them have accessed their bank accounts from their mobile phones. Is it because only 20% of banks offer mobile banking? Or, do we have to accept that 80% of smartphone users won't ever use mobile banking? Either way, it's difficult to reconcile this reality with claims of mobile banking being a great success. 

@MatP and @MattW:

Thank you for clarifying. This sheds more light into the exact nature of MPowa's offering. 

Plastic dongle based card readers for mobile phones have been around before Square. Their suppliers left it to the merchant to sign up directly for a merchant account with any acquirer bank. Square rightly recognized this to be a major pain area - to which I can attest from my personal experience. It disrupted the status quo by signing up for a merchant account in its own name and provided individual merchants with a sort of "sub-merchant-account" whereby the merchant does not have to sign up for a merchant account in its own name but can still accept card payments via Square's merchant account. And do this for a single uniform fee of 2.75% regardless of the acquiring bank, merchandise category, etc. 

Exclusion of merchant fees is a strong indication that MPowa is just another dongle provider and not a Square-equivalent at all. 

"...with mPowa taking 0.25% per transaction." Assuming this figure is not a typo - with the likes of Square charging 11X more at 2.75% - mPowa is a much cheaper option for merchants wishing to accept card payments. 

The real challenge is for banks to be able to think of adequate number of use cases for deploying various existing technologies. For example, it is technically feasible to make a geofenced offer for a checking account on the smartphone of a potential customer walking past the bank branch. But such an offer has limited scale since checking accounts - unlike books, DVDs or sandwiches - are not bought and sold everyday.

On the other hand, stock trading is a great usage scenario for mobile phones and several banks already offer this product.

Mobile payments could be another strong use case for mobile but banks might be thinking that they're doing the smart thing by ceding the m-wallet market to third-party providers. It's quite likely that a typical customer might prefer to store details of their cards issued by Bank X, Bank Y and Bank Z in Google Wallet, ISIS or some other independent m-wallet provider than in the one provided by their bank (if any). As long as the payment eventually happens on the card network rails - as it does with almost all m-wallets today - banks X, Y and Z earn no less interchange revenue than if they'd incurred the cost of providing the m-wallet. While it's difficult to predict the long-term repercussion of their approach, banks' reluctance to jump into m-wallets or mobile payments seems justified from the perspective of topline and bottomline in the short term. 

@BrettK: I never quite understood SOPA and least of all, never thought it had such far reaching impact on banking. Props for this excellent post that throws light on both points. SOPA does sound increasingly draconian now. 

Nice app. Kudos to ICICI Bank. Curiosity got the better of security concerns and I signed up immediately. I'm sure ICICI will use this app as one more channel to target ads at me. But I'm not half as sure about why I'd want to use it after this first time. After all, I've being checking account balances and doing other things on ICICI Bank's Internet Banking website for 10+ years and I don't find any compelling reason to start doing such things on Facebook. But, I'm sure a lot of GenY customers will find enough reasons to do all this via FB. I'm already worried if my PIN # will find its way to my Facebook feed anytime soon. Let me get outta here right now and unsubscribe to the app!