Four topics will dominate the financial services market in 2013, according to Frost & Sullivan. These are: contactless payments, commercial mobile payment offerings, cloud-based solutions and data analytics. Mobile devices have become a vital interaction channel in the FS sector, the company says.

"The European population is moving towards prepaid, online and contactless payments for small amounts," comments global programme director for ICT in financial services, Jean-Noel Georges. "According to Frost & Sullivan, contactless cards growth in Europe will reach a Compound Annual Growth Rate (CAGR) in 2011-2017 of 28.7 per cent. By 2018, 38 per cent of mobile phones shipped in Europe will be Near Field Communication (NFC) enabled, increasing the use of NFC solutions."

Numerous commercial mobile payment offerings will be launched in 2013, and by 2014-2015, greater uptake will follow. The value of transactions made via mobile payment using NFC technology will reach 42.3 per cent in 2015 and 49.6 per cent in 2018. And the commitment of market participants to work together signifies a positive signal for the NFC development. With the massive adoption of smartphones in Europe, SMS and USSD will become less and less relevant. Among the countries covered in the recent Frost & Sullivan study "Mobile Financial Services - A Technology and Market Analysis", smartphone penetration averaged 28.0 per cent in 2011 (from 9.0 per cent in Russia to 46.0 per cent in the UK).

Cloud computing will remain a cost-efficiency driver as these solutions are expanding faster than NFC-based solutions in the m-payments space. Amidst the economic crisis in Europe, many companies are looking to reduce or minimise their investment or functional cost. As cloud uses internet and server storage for payment purposes, associated business models will allow small and medium enterprises to better reach their expenditure objectives.

Social media and data analytics will gain stronger importance in the CIO's agenda. More and more banks and financial institutions will focus on using social media and data analytics for processes to understand their customers better (Know Your Customer, KYC) and, therefore, to target them with specific product/services and pricing offers. The reduction of the total cost for data computing provides an exceptional capability to identify new customer groups, gain greater visibility into their purchasing patterns; and, thus define customised offers and services perfectly in line with their expectations.

"In 2012 regulatory pressures forced financial institutions to rethink their strategies," says Georges. "Market participants have to increase efforts to ensure interoperability and open environments. But 2013 will be an exciting and promising year for technology and innovation. Probably for the first time in the payment industry, all stakeholders are ready to promote new products and to start new services. So the race has already started."

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