Telcos used to be a highly transactional business with increased volumes. They used to have an upper hand in terms of stability, and regulatory protection. But today, all of these areas have become more challenging due to the increased competition. So if Telcos can merge with FinTechs, they can get an opportunity to expand their operations along with getting a robust financial infrastructure.
So if you are a telco service provider, then you should think of merging with a FinTech company by making a telco mobile wallet solution. But, making a telco wallet solution is not an easy task, you would have to study the current market trends of telecom business. However, if you still want to make a mobile wallet solution for your Telcos business.
In this blog, we will discuss why the merger of FinTech businesses and Telcos is a win-win situation. Also, we will provide you with an outlook of the FinTech-Telco partnership in the global markets.
Why should FinTechs and Telecoms merge?
Telcos and FinTech companies have a lot of things in common. Firstly, both are the intermediaries in their respective segments viz. finance and communication. If we look at the identification of both FinTechs and Telcos are also quite similar.
FinTech companies identify their customers with account numbers while Telcos will identify their customers with phone numbers. Also, FinTech and Telcos can harness the power of their large base of customers for getting higher revenues and expanding their business operations.
Also, the digital payment segment is increasing rapidly across the whole world. As per statista, the digital payments will grow at the rate of 12% (approx.) by 2025. So this is the best growth opportunity for the Telco businesses to integrate digital payments in their business. Apart from these, telco operators and Fintech companies can expect lots of benefits from this cross-industry merger along with the transformation in their operational models.
Benefits for telcos
As per Global Market Insights, the global mobile wallet market will surpass $350 billion (approx.) by 2026. So to cope up with such a high demand Telcos can consider shaking hands with the FinTech solution providers. Fintech service providers can also earn extra revenues by making a mobile wallet for the Telecom industry. Apart from this, this merger is also very beneficial for the telcos in many other ways which are as follows:
1. Boosts Financial Inclusion
Telcos can build their creditworthiness by providing financial banking services to the unbanked population. Also, the growth of smartphones can support the growth of financial services. So now the telecom companies are not just limited to providing data or telecom plans but they can contribute to the financial inclusion through the use of data science and innovative technological tools.
2. Access to the latest FinTech tools
By Partnering with the FinTech companies, telcos will not only get extra support from other business segments a new business segment but also they can get access to robust financial technologies that are used by the FinTech service providers. With the help of these technologies, Telcos can provide a safe and hassle-free experience to their customers.
3. Telcos can harness their customer’s data
Customers bound by more products will not change the service providers frequently. Due to which the company’s costs of maintaining clients will be reduced. However, data sharing is more important.
The existing clients of Telco businesses provide valuable information, such as spending habits, which is very useful when offering finance related products. By using this data, telecom companies can make their services more customer-centric.
Along with this, FinTech companies can track customer-oriented metrics which will later help them to improve their services.
4. Ease of providing values to customers
The best thing about the merger is that telcos can reduce the financial burden of the customers by providing them with free current accounts, better interest rates, offers and cashback, etc. With these features, telcos can provide value to their customers.
Whether you are operating a business or providing services, the convenience of customers is a top priority for you. So along with offering above benefits Telcos can offer better convenience to the customers by allowing them to track and manage their payments at any time from anywhere in the world.
Telecom-FinTech collaboration in the international markets
Until present, the tie-up between the FinTech companies and Telcos was limited to developing payments services and mobile related technologies. But now the scope of their offerings is increased and that can be seen in the following examples.
Telecom service provider Samsung has launched a mobile wallet called ‘Samsung Pay’ to provide payment services to their customers. Also, a France based telecom company Orange has launched ‘Orange Money’ to provide payment services to its customers. German company T-Mobile has also started providing payment facilities to its customers along with providing telecommunication services.
Above are just a few examples of the merger of telecom and payment service providers. But the list doesn’t end here, there are also similar other telecom companies who are earning great revenues by creating a merger with FinTech services providers.
Final Words
The answer to the above question is yes the banks and telcos must join hands with each other as integrating the financial services into the business can help the telcos to explore a new business sector apart from offering recharge and telecom services.
Apart from these, FinTech businesses can also get an opportunity to reach a wider customer base by merging with Telcos. So make a telco business solution for your business today to partner with a successful FinTech company.
