Fintech opportunities in the telecommunications sector

Fintech opportunities in the telecommunications sector

When a company faces obstacles to growth in its field, diversification is often the answer to the problem. In recent years, it can be observed that more and more companies see their future in the provision of financial services.

The rise of fintech plays a significant role in this phenomenon, as following trends and using solutions is an obvious way to enter the financial sector. This is no different in the case of telecommunications companies. Several factors help telecommunication companies to carry out financial projects. Through their business networks, they are able to maintain physical contact, which is not the case with fintech startups. Furthermore, through the smartphones they serve, they are closer to their customers than most companies. Building on these foundations, all that is needed is carefully designed, high-quality financial products and services. Several convincing solutions have already been created at the intersection of telecommunications and fintech.

Orange Bank – the greatest possible commitment

One of Europe’s largest telecommunications companies, Orange, did not skimp on financial development – it opened its own digital bank. The company does not regret the money from the project, despite the initial losses, it spends huge sums on the developments. Orange Bank also offers its customers a bank account, bank card and instant transfers. Just last year, it acquired another neobank, Anytime, which serves micro, small and medium-sized enterprises, as well as sole proprietors. In this way, he was able to simultaneously increase his own potential customer base and bring several residential and corporate customers closer to his parent company as well. Later, Orange Bank also entered into an agreement with Younited, a lending startup that uses artificial intelligence. Within the framework of the cooperation, he was enriched with advanced credit assessment skills. This was necessary because one of Orange’s number one goals is to break into one of the most profitable areas for banks, the lending market. Many neobanks shy away from this step, but the company apparently has big ambitions.

Mobile network instead of a bank

In many African and Asian countries, a significant part of the population does not have access to banking services. Smartphones are also widespread in these countries, which has been noticed by several fintech providers. Mobile payment companies started to offer top-ups, withdrawals and transfers based on existing mobile infrastructure and physical store networks. One of the biggest impacts was M-PESA. The solution was launched in 2007 by Vodafone and Safaricom in Kenya. Easily accessible financial services have drawn millions of people into the formal financial system. Both society and the economy benefited a lot from the introduction of M-PESA, among other things it contributed to the reduction of poverty and crime. M-PESA and several companies have already added many other useful functions to their offer, such as bill payments, savings or loans. However, there are also providers that keep up with fintech trends even better: the Philippines’ GCash has already expanded its services with installment payments (BNPL) as well as playful tree planting projects.

The possibilities are endless.

The mentioned solutions are among the biggest fintech developments in the telecommunications sector, but countless other products, collaborations and acquisitions can also be found at the intersection of the two sectors. Vodacom’s financial super app tries to cover as many of its users’ financial needs as possible. MTN Group expands with microinsurance in Africa. Verizon used Galileo to create its family banking app. Telef√≥nica’s subsidiaries often invest in fintech startups worldwide. Furthermore, in Asia, more and more consortia, which also include telecommunications companies, are getting permission to establish digital banks. The possibilities are therefore almost endless. Each month, Peak’s research and consulting team prepares a comprehensive overview of the trends in the fintech world and their effects on the banking sector, insurance companies, the IT sector and government bodies. In the studies, we deal in detail with developments in the telecommunications sector. If you have any questions regarding the entire circular or its individual elements, we welcome you to the email address [email protected].Hardware, software, tests, interesting and colorful news from the world of IT by clicking here!

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