* Three bank/telecoms alliances make Poland a test ground
* Mobile banking seen as growth source in saturated markets
* EU single market drive could encourage alliances elsewhere
By Adrian Krajewski
WARSAW, June 20 (Reuters) - Polish banks and telecoms firms are joining forces to offer low-cost banking on mobile phones, in what could be a test run for similar tie-ups across Europe as companies look for new ways to win and keep customers in saturated markets.
European banks and mobile companies have so far been wary of sharing their customer bases, and put off from alliances by onerous regulations in some markets, as well as a reluctance among some consumers to hold multiple bank accounts.
But that may be starting to change as sluggish growth in both of their industries push them to consider new options, and as the European Union standardises regulations and promotes competition in its drive for a single market across the region.
In Poland, where regulations are comparatively light and multiple bank accounts already commonplace, the local arm of German telecoms group Deutsche Telekom and Alior Bank have teamed up for a mobile banking service which they think could provide a blueprint for the rest of the continent.
“It should show the way in which banking and telecoms are heading,” said Miroslav Rakowski, chief executive of T-Mobile Polska, Deutsche Telekom’s Polish business.
Broadly speaking, the relationship works like this: T-Mobile gets access to Alior’s financial services and online banking technology which it can offer to its clients, giving them a reason to stay loyal to the operator in a competitive market.
Meanwhile Alior, a mid-tier lender which at the moment has over 250,000 Internet banking clients, gets a chance to persuade T-Mobile’s 15.6 million users to open a bank account with it.
As for customers, they get a free bank account and a debit card - which contrasts with the charges levied on some accounts in Poland and elsewhere in Europe - as well as the ability to make online money transfers and payments, and to take out loans.
They can also get up to 500 zloty ($160) cashback if they use the account to pay telephone bills and make at least one monthly card payment using so-called “near-field communication” - which allows shoppers to buy items by tapping their phone on a specialised reader.
Early signs are good, with 1,000 customers a day signing up for the deal since its launch last month, according to Rakowski.
Tibor Bokor, a London-based analyst at investment bank Wood & Co, believes it could be harder to make a splash with such an offer in some western European markets. In Britain, for example, most bank accounts are already free, while in many markets there are an array of banking and payments apps to choose from.
However, he added the forecasts for banking tie-ups made by Polish mobile firms during recent roadshows were “more bullish than I imagined.” The forecasts have not been made public.
“We’re at the testing phase. Once we learn from it, it could maybe be replicated in the West and definitely should be replicated in eastern countries that are directly comparable to Poland,” Bokor said.
Deutsche Telekom board member Claudia Nemat said experience from the Alior tie-up would be applied in comparable projects in the Czech Republic, Macedonia and Slovakia, and also in its home market of Germany.
It is not alone is using Poland to try out a bank alliance. France’s Orange has said it is planning a similar offer in conjunction with German lender Commerzbank’s Polish business mBank - Poland’s fourth-biggest lender.
Meanwhile, Poland’s third-largest mobile operator Polkomtel , a unit of Polish media group Cyfrowy Polsat, is already bundling its offer with a small lender, Plus bank. The bank and Cyfrowy have the same controlling shareholder.
“ONE PLUS ONE EQUALS 2.2”
Some telecoms firms have been experimenting with financial services for a while, and many banks already offer mobile banking. But working together can share the costs.
Last year, Spain’s Telefonica and lenders CaixaBank and Santander announced a venture to develop new business opportunities, while in the United States, T-Mobile has launched a Visa card with banking features, including allowing consumers to deposit cheques using smartphone cameras.
The crossover between banking and telecoms has been greatest in Asia and Africa, tapping into markets where many people do not have bank accounts, yet mobile phone use is widespread.
Vodafone’s M-Pesa service, for example, is growing rapidly in Africa. It partners with banks in some countries, and Vodafone said this year it was extending the service to Europe, starting with Romania.
The flurry of activity in Poland, however, marks it out as a particular test ground. Rather than focused on reaching customers relatively new to banking, it is about seeing whether telecoms firms and banks can work together in saturated markets to win customers from rivals, and then keep them.
With around 57 million SIM cards and 38.5 million bank accounts in a country of 38 million people, Poland is becoming a tougher market for both banks and telecoms firms.
Polish lenders expect only a 1.1 percent rise in their net profit this year, with the effect of an improving economy likely to be offset by low interest rates which squeeze banks’ margins.
Last year, Poland’s biggest bank PKO BP and second-largest Pekao both launched mobile payment systems that do not involve direct partnerships with telecoms operators, which have together attracted around 130,000 users.
But for mid-tier or smaller banks, without the marketing resources of the bigger players, such investment is much harder, making a tie-up with a telecoms firm an attractive way to offer customers the cutting-edge services that can help them compete.
“Clients don’t live for banking, they bank to accomplish their goals. So a bank cannot be cocky anymore,” said Wojciech Sobieraj, the CEO of Alior Bank, which is controlled by Carlo Tassara Group, a holding company for French financier Romain Zaleski.
The Alior/T-Mobile service is backed by the marketing muscle of Deutsche Telekom: it is running an advertising campaign fronted by Polish soccer star Robert Lewandowski, who from next season will play for German champions Bayern Munich.
Like rival offers, it sees potential in a market where almost half of mobile customers own smartphones, but only about 14 percent of bank customers use phones for banking.
As for the telecoms sector, it is also struggling for growth, and across Europe regulators are cutting the fees mobile operators charge rivals for using their network. According to audit firm Audytel, revenue in the Polish mobile phone sector will fall 1.3 percent this year to 22.9 billion zlotys.
That has resulted in cut-throat competition among operators, and a search for new services to attract customers from rivals and persuade them to stay.
“Our observations show every new service limits the need (for customers) to change operators,” said Mariusz Graca, who sits on the board of Orange Polska, the unit preparing a tie-up with mBank. “We aimed for a partnership in which one plus one equals 2.2, and we’ll split this 0.2 with our partner.”
$1 = 3.0500 Polish Zlotys Additional reporting by Marcin Goclowski in Warsaw, Gergely Szakacs in Budapest, Leila Abboud in Paris, and Eric Auchard; Editing by Mark Potter