The service from Polaris Software Labs will allow the Chennai-based financial technology company to offer its infrastructure and banking products on a pay-per-use basis.
Polaris built the infrastructure in partnership with IBM and IdenTrust, an identity provider.
The service is designed in large part for emerging markets. It has three components. There is a core banking option that will offer consumer services, mobile banking and pre-paid card solutions for global banks in developing economies, such as India, Bangladesh, African countries and Vietnam.
Services will also be offered for capital markets and corporate banking in Europe, the United States, Canada and Australia.
It’s the opportunity for reaching people ont their mobile phones in emerging markets that will lead to more services such as what Polaris has developed with IBM.
McKinsey&Co. published research last year that showed by 2012 there will be 1.7 billion people in emerging markets who have a mobile phone but no access to banking services:
Today, only about 45 million people without traditional bank accounts use mobile money, but we expect that this number could rise to 360 million by 2012 if mobile operators were to achieve the adoption rates of some early movers. By that year, the opportunity could generate $5 billion annually in direct revenue, primarily from fees for financial services such as transactions and cash out, and an additional $3 billion annually in indirect revenue, including reduced churn and higher average revenues per user for traditional voice and short message service (SMS).
That’s a sizable market and reason enough to show that the banking world will soon go through its own disruption. A new wave of banking customers are entering the market in ways that will require a scalable infrastructure built for mobile devices and apps.