"The reason wireless has not taken off is that we have not made it easy to do," Joseph G. Ferra, chief wireless officer, Fidelity Investments (Boston), told attendees at this week's Financial Technology Expo & Conference in New York City. However, according to keynoter Ferra, with the growth of wireless-related technologies and a technologically savvy customer-base, aggressive financial services companies are well placed to take advantage of wireless opportunities.
Wireless adoption hasn't taken off yet because, "there hasn't been a complete solution," Ferra said. "Users have been give information without being given the ability to take action," he continued. "It's important to have a full set of functionality. You have to marry the right capabilities to have a complete solution and be successful in this space."
Adoption has also hampered by technological limitations, but the situation is changing extremely rapidly, according to Ferra. Growth possibilities today are far greater than were anticipated when Fidelity first launched its wireless Instant Broker product in 1998. "In '98, 96 percent of online financial services were done on PCs. But in '98 there weren't the devices we have today. In a very short time we've seen a proliferation of devices," he told the FTCE audience. Adding to that factor continued growth of the Web and the appearance of wireless digital networks constitutes what Ferra described as the "wireless data opportunity."
Among the challenges companies face in taking advantage of that opportunity are those relating to wireless technology, such as cost, coverage, encryption and battery life; those relating to the balance struck between "pushing and pulling" the consumer; and those relating to wireless devices and networks, according to Ferra. "In the future we need a lot more standardization and simplified ways of delivering these technologies," he said.
Ferra described Fidelity's strategy as enhancing functionality, while locking up key partnerships and strategic alliances with device and network providers. "We want to be on all prevalent devices and across all nationwide networks," Ferra said, while affirming that Fidelity would "focus on our core competency and deliver the best content and information."
For example, Ferra recounted a Fidelity partnership initiative with Palm whereby the latter embedded a Fidelity application directly onto a Palm hand-held device with which users could experiment. The thinking behind the initiative, Ferra said, was "We think if you try it and use it, you will elevate up into being a Fidelity user."
Using information on adoption rates of widely marketed devices, companies can concentrate on those most commonly used, thus jumping an important hurdle in acquiring a customer. "In order to use a service or application, they don't have to use a device they had no intention of buying," Ferra said.
He identified four business opportunities around wireless: customer retention, customer acquisition, cost reduction and cross-selling. As an example of the latter, he spoke of a partnership with General Motors, whose 401(k) business Fidelity owns. Fidelity is able to cross-sell to the wireless-enabled among those employees, but the partnership extends to other ventures, including the incorporating of wireless devices and services into GM automobiles. Citing statistics demonstrating the amount of time Americans spend in their cars, Ferra called the wireless-enabled automobile "a server on wheels," detailing how a "captive audience" of drivers can be engaged using interactive voice response rather than visual screens.
While Fidelity had originally embarked on wireless services to differentiate itself from its competitors, the technology has become nothing less than a necessity, according to Ferra. Compared to other industries, he said, financial services is better positioned than most to move forward with wireless services because "a financial services customer is more likely to have wireless devices available to them." In relative terms, according to Ferra, wireless subscribers represent a small proportion of overall financial service customers, but they are the most desirable ones. "We are talking about a much more affluent and technologically competent customer," he said. "This is a very desirable customer for our future business."
Companies that succeed in wooing those customers will be those that can provide information personalized to the user, with services that are easy to use and rich in content.
Some companies may balk at pursuing wireless service initiatives since related technologies are in relatively early stages of development, according to Ferra, adding that some decision-makers may ask, "Should we be waiting for cheaper devices and faster networks?" But for those who wish to succeed in this rapidly evolving business, "The answer is 'No,'" he stressed. "You need to evolve with this technology. As you get better, you establish your brand and you take advantage of it."
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio