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The purpose of this paper is to establish the potential that mobile banking offers to both banks and mobile carriers. Acknowledging the inherent difficulties of convergence between large and very different industries, it then explores the merits and shortcomings of existing partnership models and offers suggested best practices.

After in‐depth secondary research about the successes and failures of early mobile‐banking offerings, the report offers best‐practices based on a critical evaluation of partnership models.

Open‐federated models – involving partnerships between large numbers of banks and mobile carriers to provide a shared platform for mobile‐banking services – access the broadest customer base and minimize the costs of developing proprietary software and infrastructures. Qualcom‐owned Firethorn is an early USA‐based adopter of this model. In more mature mobile‐banking markets like New Zealand, upwards of 40 percent of an individual bank's customers use mobile‐banking offerings, resulting in heightened customer retention, increased self‐service, and mobile transactions that do not require additional investments in branches or ATM infrastructure.

As the banking and mobile industries collide, the inevitable complexities of cross‐industry convergence obstruct the paths to productive alliances. Even now, in the early years of mobile banking, there is a wealth of knowledge about partnership models to be gleaned from past success and failures. Forward‐looking executive eyes know that successful navigation will require a map, and an in‐depth look at the advantages and pitfalls of each existing model reveals a truer North.

Success in the mobile‐banking arena will require smart partnering decisions. Banks and mobile carriers have tested these waters timidly, and many of the resulting offerings were expensive to the banks and mobile carriers and less than enticing to their customers. This report weeds out ineffective partnering models that companies stumble into on their way to developing mobile‐banking and identifies the keys to successful partnerships.