The established players also have an advantage in that their relationship with the customers gives rise to a certain lock-in effect, that is changing from one service supplier to another, for example from one bank to another, may entail certain costs for the customer. It may be the case that the local branch of the new bank is further from the customer’s home, the legal terms and conditions governing the payment services may be different, the customer service centre may be slower, the personnel may be less friendly and so on. Getting private individuals to change their bank has proved to be much more difficult than expected. The new alternative service must be better than the existing payment service by a broad margin in order to make changing from one service provider to another an attractive prospect. This affects what innovators will be able to charge for their new services, and thus reduces their incentives to launch such services. However, despite such difficulties, there are examples of very successful launches of innovative payment methods. One such example is the introduction of M-PESA in Kenya in 2007. M-PESA is a mobile payment service based on SMS and was launched by the leading mobile operator, Safaricom. One of the points here is that a large part of the population had mobile phones but not bank accounts. The mobile operator thus had a large, well-established circle of customers and thus an advantage.
However, we should be aware that at one point in the future their contribution will be overwhelmed and we will need to take appropriate action on time in order to impede any reverse effects. In the policy design and decision making process under the current dynamic environment, the strengthening of analytical tools and the enhancement of knowledge on the policy nexus are extremely important. The interplay of monetary, fiscal and macro prudential policies is a quite new area, seeking for deeper research work to support the decision making process at the central banks and other policy makers, to provide appropriate advices and policy recommendation and therefore, to prevent from underlying risks. The aim of our conference is to contribute towards building knowledge and exchanging views on the policy nexus issue. Having in mind the quality of papers that are going to be presented today, I truly hope that we will make our contribution towards this aim. I wish you a successful conference and fruitful discussion! Thank you. 2  BIS central bankers’ speeches