Wednesday, March 10, 2010

Ubiquitous Computing - Merging Banks & Mobile Providers

I've been fairly swamped this week with meetings so I really haven't had much time to think about writing any blog posts, but some recent news has inspired me. Before I get into my post, I also wanted to let everyone know that I'll be in Santa Clara next week attending & speaking at the Cloud Connect Conference. So if you want to meet up, ping me.

As part of Cloud Connect I'll be on the Ubiquitous Computing panel with Alistair Croll Co-Founder, Bitcurrent. The topic actually relates quite well to some of the latest news coming out of China this week.

For those of you unfamiliar with the concept, the general idea of Ubiquitous Computing is a shift in computing where a small, inexpensive, robust network of processing devices, is distributed at all scales throughout everyday life and generally used in common-place objects and purposes. More simply, computers are in everything and everywhere. From carton of milk to bus passes. For me, this ideal is an obvious first step towards a pervasive use of technology within the more mundane aspects of everyday people's lives. One where you have access to all the information you'll never need when you need it.

Over the last few years many have argued that this ubiquitous transition is either currently underway or a trend that is still years away. From where I sit I believe that this trend is now fully underway and you need not look any further than some of the moves happening in the Banking and Mobile industries as proof.

As further proof of this transition this week China Mobile Ltd., the world’s largest phone company by market value (with over 508 million customers) has agreed to buy 20 percent of Shanghai Pudong Development Bank Co. for ($5.8 billion) in China to expand its electronic-payment business. According to a Businessweek article, China Mobile and Pudong Bank will form a strategic alliance to offer wireless finance services including mobile bank cards and payment services.

At first glance you might say why is a phone company buying a major stake in a bank and more importantly why should I care? First of all, if you've ever traveled to Asia, than you'll instantly know why. In the West we tend to use credit cards and debt cards for most transactions -- and I'm told some actually still use paper money too. But in Asia, mobile phones are quickly becoming the preferred method for buying everything from Subway access to dinner. Through the use of RFID or other means the mobile phone seems to be the way most prefer to pay for things both big and small.

China Mobile isn't alone in seeing the opportunity in merging the more traditional banking aspects with the fast growing mobile market. Last year In South Korea, SK Telecom agreed to buy a stake in Hana Financial Group Inc.’s credit-card unit, while Globe Telecom Inc. agreed to buy 40 percent of BPI-Globe BanKO Savings Bank in 2008. There have been similar deals in Japan and other areas as well. At the heart of this transformation is the concept of ubiquitous network access to computing resources through a pervasive network of mobile devices. It will be interesting to see if others will follow the lead of China Mobile and embrace this new always connected world of computing gadgets.

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