By: Andries Smit CEO and Founder of Upside
Telcos and fintechs are bringing about new partnership opportunities that are shaping their industries into global powerhouses. Both sectors have worked apart for many years, but now, a new ecosystem is bringing about opportunities for a more meaningful collaboration with a multitude of benefits.
The newfound growth of telco/fintech partnerships
The rapid progress of the telco and fintech sectors has driven these beneficial partnerships to greater heights. The partnerships are transforming access to financial services and are creating new revenue opportunities in both sectors, as well as helping businesses meet soaring consumer demand. The collaboration of these two sectors reaffirms the increasing demand for more frictionless and tailored services and a better customer experience globally.
A recent success story worth noting in this space is the Upside and Tribe Mobile partnership. Upside’s unique access to consumer bank accounts and first-party spend data, will help 9 million overlooked UK adults get access to a mobile contract that bigger networks won’t give them. The partnership will significantly improve the credit check process to measure what consumers can actually afford.
Partnerships like this addresses the need for universal communication and accessible financial services provided by modern technology. Telcos and fintechs are transforming access to financial services through innovation and efficiency and helping to improve financial inclusion globally.
The shared expertise of both sectors colliding will allow for further innovations, customer-driven value, and enhanced risk mitigation from which consumers can only benefit.
Solving sector issues with a collaborative edge
The telco and fintech industries face their own individual issues. As a result of struggling to overcome them, companies within those sectors have turned to partnerships as a mutually beneficial solution. The telco industry has reached a level of saturation within its market and companies are trying to find new ways to uphold their reputation as industry leaders, whilst maintaining a competitive edge.
Telcos used to be known for being highly transactional businesses. However, due to increased competition, the sector has had to come up with new ways to diversify its operation and develop a robust structure to ensure they remain relevant. Telco companies that use out-of-date business systems are unlikely to keep up with consumers that are increasingly focused on convenient digital services and technologies, making it difficult to improve and expand their reach and long-term objectives.
In the same breath, fintech has brought about a big technological change and has disrupted various business verticals. Fintech has arguably replaced many traditional financial methods as well as innovating in others to bring banking services to non-bank sectors, like retail. However, most fintech companies are start-ups, which means some may need to rely on the right partnerships to allow them to scale their technology and access the capital and markets they need for growth and to build loyalty.
Despite the issues the sectors may have as their own separate entities, both sectors have common pursuits that are intrinsically linked to providing consumer-centric services. This has been even more ideal for helping the sectors adapt to the current economic conditions as well as the rise of a cashless society and the emergence of new financial assets like cryptocurrency.
A win-win partnership
Businesses have switched on to the benefits of telco/fintech partnerships which enable growth and solve industry wide problems. Telcos partnering with fintech has proved to be a lucrative collaboration as they can diversify and expand their financial services offered as well as retain their digitally savvy customers and diversify revenues.
Telcos are also able to harness their customer’s data and use it to offer personalised finance-related products.In addition to this, fintech companies enable the business to track customer-oriented metrics which will later help telco companies to improve their range of product offerings.
For fintech businesses, these partnerships provide an opportunity to gain a wider customer base with a telco offering an incomparable customer reach and universal accessibility in both rural and remote areas.
The importance of delivering customer experience
In our recent white paper,The Tipping Point of Loyalty, I flagged that the battle for consumers’ time, attention, and loyalty is fiercer than ever before. Customers demand more and more, and the new telco and fintech mergers are a product of this.
When looking at this from the customer perspective, the main advantage is the opportunity to meet consumer needs by developing and offering new products and services that are much more accessible. Additional perks such as free current accounts, higher interest rates on savings accounts, and cashback features for mobile payments are what customers are demanding. Greater convenience is also on offer as with fintech support, telcos can add financial products to allow customers to purchase, manage and track their payments from one main place. The future of fast and frictionless products and services is now within arm’s reach to provide a competitive advantage.
The future of the telco/fintech revolution
There is no doubt that the telco and fintech discourse is moving in the right direction to truly disrupt the industry. The growing movement of these collaborations will continue to be a cooperative that will benefit customers through the addition of financial services for years to come. As partnerships grow and technology advances, the integration of businesses and services will help both sectors grow exponentially and drive ground-breaking innovations.
The fintech world has proved to be an enabler, and I look forward to seeing how telcos continue to tap into these opportunities intended to drive innovation for the modern, digital world. This is only the beginning. With the telco and fintech worlds finally colliding, it will drive endless possibilities for the two sectors and their customers.