In a time of technological revolution, the big question is—what do over 5 billion people around the world have in common? They all have access to mobile phones and that is more than the number of people having a bank account, which points to a figure of around 3.8 billion according to the World Bank. In developing economies, internet and mobile penetration is much higher than banking penetration—which provides an opportunity for telcos with a competitive advantage in marketing financial products to develop greater reach. To deliver on the promises of open banking, financial services need to meet their customers expectations through technologies that they are used to. With the rapid increase in mobile engagement, phone numbers have become the primary data currency to identify customers, secure transactions and personalise engagement in boosting revenue growth and customer retention for businesses, including the banking sector.
In today’s mobile-first economy, the relationship between telecom and financial services is symbiotic. Telcos and third-party communication solutions providers like Tyntec offer their services to banks and other financial services companies that need to reach their consumers for on-demand delivery of services. In addition, financial services companies can leverage the conversational user experience of mobile communication channels to improve their customer experience without burdening their internal IT resources. At the end of the day, it is all about providing the ease-of-use and the breadth of services that consumers seek—and scaling up the reach. And there lies a great opportunity for telecommunications and banking providers to create novel services and experiences for mutual customers.
Customer-centric model adds more value to banks and telcos
As telcos are under extraordinary pressure to generate new revenues and justify investments in infrastructure, they are looking at their customer base and mobile transactions as a way to build new services. Banks are displaying keen interest to leverage customers’ mobility needs and combining capabilities of communication channels will help them to create new services and deliver on-demand services. For that reason, they could collaborate with telcos or foray into the mobile market to tap into evolving opportunities. That said, another aspect in focus is how to speed up implementation across different organisations and sectors? That is where application programming interfaces (APIs) are making the difference.
Having gone through many iterations of mandates and compliance requirements for data security and consumer protection, many banks are now focusing on filling the customer experience gap by leveraging internal and external APIs to access data and communication channels. Partly inspired by a new standard set by messaging platforms such as WeChat, banks are now exploring ways to deliver the same ease-of-use and connected experience with the level of security required from the industry. It is important for banks to continue developing customer-centric organisations that build consumer engagement with open APIs and consumer-based retail such as branches, telephone service and digital channels.
Using third-party APIs, banks can identify and validate their customers, engage them through communication channels of their choice and protect business transactions from fraudulent actors. These factors are highly critical for a successful implementation process. When much of the IT resources are still tied to digital transformation projects involving paper-heavy workflows, being able to access external services through easy-to-integrate APIs is key to ensuring a swift process.
The future of combined capabilities
Truth be told, the future marketplace is wherever consumers are. Services will come to them on demand and not the other way around. And all indicators point to mobile in the present day. Mobile devices are where the engagements take place and business transactions are made. This will in turn affect more industries than just banking and financial services. However, the sector is facing new challenges coming from any of the players with online payment transactions in their customer journey. More commerce transactions on mobile means more opportunities for banks to integrate their services with other industries. For the telecom industry, a lot of innovation is brought in through Over-the-Top (OTT) and partners.
Whether the service is delivered through another brand’s app such as a real estate company offering mortgage services, or a rental company offering financing options over WhatsApp, the transactions present new ways to expand banking services to 5 billion mobile subscribers. The telecom industry can massively benefit from this growing volume of mobile transactions while providing services on the basis of what their subscribers want. If telecommunications providers leverage open banking in a way that enables customers to feel empowered and allow them to make quick decisions, they will continue to stay relevant in this changing marketplace.