Mobile banking has gotten more than its fair share of adulatory press coverage this year. Most exciting perhaps was April’s Sunday New York Times magazine piece that looked at the broader opportunities of mobile phones and development through the lens of the work of Jan Chipchase of Nokia fame. Last week we saw the Financial Times consider the state of microfinance with a nod towards how mobile phones could reduce transaction costs and increase the reach of financial services.

This topic is only getting more interesting. Last week I had the opportunity to speak via videolink to a conference in Brazil on how the web could revolutionize - or is revolutionizing - life in developing countries - via cell phones. That was a great conversation, organized by our friends at the World Bank and linked up to the Workshop on the Role of Mobile Technologies in Fostering Social Development, organized by the people who brought you those three w’s in your web browser, W3C.

That conversation touched on issues beyond mobile banking - including health, agriculture, public safety. And there were some fascinating parallels between the different fields. For example, Mark Landry, Office of the U.S. Global AIDS Coordinator talked about a program that his group is working on in Africa that uses mobile phones to reach out to patients to remind them of treatment visits, or send vital information to providers. Mark said something that resonated with me - he said that “mobile heath needs to build on the existing health infrastructure - it’s about getting on the grid.” The same is true for mobile banking. We don’t want to see a bunch of not-connected financial subsystems that leave people out of the formal financial system. That isn’t good for anybody. You can watch the discussion here.

Another comment that was striking came from Brazil - that we all need to be careful to not fall in love with the technology. That we shouldn’t be doing things just because we can. That issues of culture, levels of education, and tradition all have much to do with the speed and efficacy of adoption of new services over technologies such as mobile phones. This is not a new idea - this is something we have been saying at CGAP for awhile, and most recently in Focus Note 46, “The Early Experience with Branchless Banking.” And it’s not specifically about developing economies, either. If you and I trade mobile handsets in a coffee shop, we’re both going to need a few minutes to figure out how to use the unfamiliar device. And if you have an application on that handset for a particular service - that is even more true.

All this has me wondering where mobile banking is on Gartner’s famous (or infamous) hype cycle. If you don’t know it, I’ll let them explain:

Since 1995, Gartner has used Hype Cycles to characterize the over-enthusiasm or “hype” and subsequent disappointment that typically happens with the introduction of new technologies (see Understanding Gartner’s Hype Cycles) for an introduction to the Hype Cycle concepts). Hype Cycles also show how and when technologies move beyond the hype, offer practical benefits and become widely accepted. Read More.

Market momentum is certainly accelerating. There are signs of activity in Latin America, as well as a deepening of the mobile banking work already underway in parts of Asia and Africa. But where are we at in this cycle (hype cycles can be applied to any technology, I’m not just picking on mobile banking). Given the blog buzz, media focus, and parade of conference announcements and press releases, I think we’re somewhere between numbers one or two here (source again, Gartner):

1. “Technology Trigger”
The first phase of a Hype Cycle is the “technology trigger” or breakthrough, product launch or other event that generates significant press and interest.

2. “Peak of Inflated Expectations”
In the next phase, a frenzy of publicity typically generates over-enthusiasm and unrealistic expectations. There may be some successful applications of a technology, but there are typically more failures.

3. “Trough of Disillusionment”
Technologies enter the “trough of disillusionment” because they fail to meet expectations and quickly become unfashionable. Consequently, the press usually abandons the topic and the technology.

4. “Slope of Enlightenment”
Although the press may have stopped covering the technology, some businesses continue through the “slope of enlightenment” and experiment to understand the benefits and practical application of the technology.

5. “Plateau of Productivity”
A technology reaches the “plateau of productivity” as the benefits of it become widely demonstrated and accepted. The technology becomes increasingly stable and evolves in second and third generations. The final height of the plateau varies according to whether the technology is broadly applicable or benefits only a niche market.

So again, I think we’re somewhere between “Technology Trigger” and “Peak of Inflated Expectations” here. Gartner did look at consumer mobile applications about a year ago. The key is to think about getting to numbers four and five, right? To see this through to when it can actually become widespread. Something to remember if we get to the “trough of disillusionment.”