In recent years, there has been a global dynamic shift in how financial services are transacted. Due to digital transformation, consumers have moved away from cash-based services to more FinTech services, specifically digital and mobile payments. These solutions not only offer convenience but also enhance financial and economic inclusion. This has provided Telcos with a unique opportunity to collaborate with FinTech solution providers, like Adapt IT Telecoms, to expand their service to include financial services, ultimately boosting profitability and revenue. In the blog below, we unpack the fusion between FinTech and Telcos and identify how and why these technologies have become so critical to consumers across the globe.
The FinTech Landscape and Digital Transformation
The FinTech landscape has almost complexly evolved, with traditional financial services being integrated with technology. This integration has given rise to innovations that include mobile banking, digital wallets, blockchain transactions, and more, which have ultimately disrupted the traditional banking models.
You may be thinking, why has this shift been so significant? The answer lies in the ability of FinTech solutions to enhance customer experience and ensure financial inclusion for the 1.7 billion unbanked consumers globally.
In explaining these two benefits, it is essential to differentiate between how developed and developing regions are utilising FinTech solutions.
In developing countries, consumers are using these FinTech solutions to address various financial challenges and enhance their overall financial well-being. The widespread adoption of mobile technology has played an essential role in facilitating access to these services. Mobile payment platforms have allowed these consumers to use their phones to make transactions, transfer money, and make payments conveniently. This has proven to be a lifeline for financial inclusion in regions with limited access to traditional banking infrastructure. Other FinTech solutions like peer-to-peer lending platforms and digital microfinance services enable consumers without access to conventional banking to access financial resources more efficiently. A great example of the success of these FinTech solutions is M-Pesa.
M-Pesa is a groundbreaking mobile money service launched in Kenya in 2007 that has revolutionised financial inclusion across Africa by leveraging the widespread use of mobile phones. Through M-Pesa, users could perform various financial transactions directly from their mobile devices, including money transfers and bill payments, bypassing the need for traditional banking infrastructure. This innovative FinTech solution quickly gained popularity and expanded to other African countries, showcasing the transformative potential of mobile technology in bridging financial gaps.
From a developed market point of view, FinTech solutions are being used to create advanced financial economies by integrating innovative technologies to enhance efficiency, security, and accessibility within their financial systems. Mobile banking apps, digital wallets, and online payment platforms have all been adopted across these regions and have provided users with convenient and streamlined ways to manage their finances. These regions are also at the forefront of embracing blockchain technology and cryptocurrencies, which could revolutionise traditional banking processes. Regulatory frameworks in these regions are adapting to accommodate the rapid evolution of FinTech, fostering innovation while ensuring consumer protection and financial stability.
From the above, it is clear that across regions, FinTech solutions have a significant impact on consumers’ lives and how financial services are being utilised. Now, let’s examine why Telcos are interested in providing FinTech solutions.
Why are Telcos Looking to Provide FinTech Solutions?
Telcos are in a strong position to offer financial services to their customers and promote greater financial inclusion. They are strategically positioned to utilise their extensive customer bases and location coverage to provide these services. By offering financial services to their extensive customer base, Telcos can diversify and enhance their revenue streams while providing customers with value-added services. Considering that there are 5.22 billion smartphone users worldwide, representing 66% of the global population and 5.3 billion internet users worldwide, which amounts to 65.7% of the global population, the opportunity to increase revenue and enhance economic inclusion is easily accessible.
How Telcos Are Expanding Their Services Offerings to Include FinTech Solutions
From the above, it is clear that there is an opportunity for Telcos to expand their service offerings within the FinTech space. This strategic business model will allow for the diversification of revenue streams, enhanced consumer engagement and increased competitiveness within a dynamic industry. Within the industry, we are seeing many Telcos choosing to incorporate the following FinTech services as part of their offerings:
- Mobile Payments and Wallets – Telcos are incorporating mobile payment solutions and digital wallets into their services to improve the convenience and accessibility of financial transactions. This integration enables customers to make payments, transfer funds, and manage their finances through their mobile devices.
- Mobile Banking – Several Telcos have expanded their services to include mobile banking, which enables customers to conduct various banking tasks using their mobile devices conveniently. These tasks include managing their accounts, checking their balances, and transferring funds.
- Microfinance and Lending – Many Telcos are actively investigating the possibilities of offering microfinance and lending services. These services involve extending customers’ small loans and credit facilities through their mobile platforms. The objective is to provide financial support to underserved populations who do not have access to traditional banking services.
- Insurance Services – Telcos are partnering with insurance providers to offer insurance products through their platforms. This includes mobile insurance, health insurance, and other related offerings to cater to the growing demand for digital insurance solutions.
- Digital Remittances – Telcos are playing a crucial role in facilitating international and domestic remittances through digital channels. They achieve this by collaborating with FinTech providers that specialise in cross-border payments. This collaboration allows Telco customers to send and receive money conveniently using their mobile devices.
- Data Analytics for Financial Insights – Telcos have access to vast amounts of customer data. By leveraging advanced analytics and machine learning, they can analyse this data to gain insights into customers’ financial behaviour. This information can personalise services, offer targeted financial products, and enhance customer experience.
- Digital Identity and KYC Services – Telcos are playing a role in digital identity verification and Know Your Customer (KYC) processes. This is crucial for compliance with financial regulations and enables secure onboarding of customers for various financial services.
- Investment and Wealth Management: Some Telcos are entering the investment and wealth management space by offering digital investment platforms and robo-advisory services. This allows customers to invest in financial instruments directly through their mobile devices.
Â
From the above, it is clear that Telcos are looking to incorporate FinTech solutions to create a complete ecosystem that caters to financial requirements and delivers a smooth and unified experience for their clients. This merging of telecommunications and finance aligns with the overall shift towards digital transformation in different sectors. For this to be a success, Telcos need to partner with the right FinTech solutions provider, like Adapt IT Telecoms.
Adapt IT Telecoms FinTech Solutions
Adapt IT Telecoms’ innovative FinTech solution answers customers’ financial needs in developed and developing countries. This comprehensive financial platform enables direct client-to-client funds transfers and payroll and government disbursements, enables digital collections for the delivery of goods, facilitates micro-lending, and provides you as a Telco with actionable insights, analytics, and more.
With this solution, you, as a Telco, can stay in control of your mobile financial services and money solutions by using advanced analytics. This data will provide insights into consumer behaviour and allow you to track revenue and usage. By using this data, you can adapt service offerings to deepen customer relationships, better target market segments and increase profit.
Over and above this, Adapt IT Telecoms has an anti-money laundering solution that will give you peace of mind by scanning and authenticating personal user documents such as passports, ID cards, and visas. This process automatically detects and reports suspicious behaviour that could be related to various illegal activities such as terrorist financing, securities fraud and market manipulation.
Adapt IT Telecoms has the technology, expertise and knowledge necessary to ensure you have the right FinTech capabilities to add value to your customer base, enhance financial inclusion and increase revenue.
Conclusion
There is no doubt that there is a fusion between FinTech and Telcos. One thing is clear for Telcos, FinTech solutions provide a unique opportunity to grow the business and increase revenue across both developing and developed regions. For FinTech solutions to be successful, Telcos must partner with a service provider with industry knowledge and innovative technology to ensure that the right financial services are accessible to the right consumers. Adapt IT Telecoms can do all of this and more. For more information on how to differentiate your revenue streams and incorporate FinTech solutions into your service offerings, visit: https://telecoms.adaptit.tech/solutions/fintech/Â
Discover the revolution of financial services with FinTech
Steven Sutherland experienced Adapt IT Divisional Executive, dynamic business leader for their Telecoms Division with a demonstrated 25-year history in the telecommunications and IoT sectors. Strong global marketing, sales, and business development professional with 15 plus years focused experience in the Southern and Rest-of-Africa markets and a unique blend of entrepreneurial spirit combined with a passion for both technology and business.
At Adapt IT Steven is responsible for building and growing the Telecoms Division on top of its industry-proven software competencies including but not limited to Customer Experience and Self Service, NextGen VAS, IoT, FINTECH, and Advanced Analytics. Steven is always looking forward to an opportunity to demonstrate the value that his 20 plus years of experience in these disciplines can bring to your business
