Swedish telecoms equipment maker Ericsson and U.S. computer group IBM said on Thursday they were teaming up to enable financial services groups to reach customers via the mobile Internet.
The two groups hope to take at least 10 percent of a market estimated to be worth $5-6 billion in two years' time.
``The alliance will combine the wireless telecommunications expertise of Ericsson with the financial services and information technology expertise of IBM,'' Telefonaktiebolaget LM Ericsson said in statement.
They will provide services allowing groups such as Deutsche Bank AG, already a customer of both partners, to offer sophisticated financial services to clients through mobile phones.
Many banks already allow customers to access their accounts, pay bills, and trade securities via the Internet.
Some also offer e-banking through mobile phones, but these services are in their infancy and typically involve just information rather than transactions.
``From the user's perspective, the usability of today's services is not particularly great,'' Andy Cash of IBM's mobile Internet financial services group told a teleconference.
The mobile channel
But banks are convinced that wireless will become an important channel for their customers to reach them in a few years, and Ericsson and IBM intend to allow them to let customers perform the full range of banking services, including trading and wealth management.
The key here is security, but banks also need a solution that allows customers to communicate with them smoothly via telecoms operators and several other software providers.
The services to be offered by IBM and Ericsson will not only benefit the banks. They are likely to generate increased traffic for telecoms operators and fuel demand for computer hardware and mobile phones.
Financial services providers are already investing in both information technology and telecoms to provide up-to-date services to customers. The new venture will allow them to integrate these investments.
The two companies will concentrate this year on integrating their products for the venture, which should be done by the end of this year, Mark Greene of IBM's global financial services sector told the teleconference.
But their technology is already available, and can be accessed by mobile handsets that are already on the market.
``We're in business as of now,'' he said.
Cash said the market for mobile Internet services to the financial industry was estimated at $5-6 billion by 2003.
``We intend to take a fair share of that market, something of the order of 10 percent plus,'' he said.
Both IBM and Ericsson declined to say how much they were investing in the venture, but said they would each devote 100-200 people to it this year.
The services will be primarily targeted at consumers, but Greene said they could eventually be used by company executives for Treasury management.