From CSP to financial services provider: New opportunities for telcos
There has been a paradigm shift in the way products and services are sold, largely driven by the advent of social media, the ability for complaints to go viral, and the availability of unbiased reviews.
This shift catalysed organisations to look at the customer experience, says Animesh Kumar, lead solution consultant, Tecnotree, and the impact it has on the success of any business. Companies are undergoing a fundamental transition to the digital world, not only in delivering what customers want, but how they want it fulfilled in order to provide the stellar customer experience the business differentiator.
This ‘customer first’ revolution has become more evident during COVID-19. Every business is learning to ride the wave or swim with it. Behind the curve, however, was the fintech revolution. Fintech a portmanteau of finance and technology is the use of technology in the design and delivery of state-of-the-art financial utilities. The financial sector is heavily regulated due to the nature of the services that require a highly secure model.
Despite a wide gap between the needs and demands of financial services’ digital-savvy customers and its offerings, change has been slow. The benefits are myriad, particularly in the developing world. They include:
i) Digital services enable financial inclusion – with the ubiquity of the mobile phone, providing equal financial opportunities for all individuals in an appropriate and timely fashion helps to safeguard themselves from financial risks.
ii) Eradication of vicious cycle of illiteracy and poverty – bringing financial tools like banking, loans and insurance within reach can help people move out of poverty with the emergence of micro-businesses.
iii) Reaching out to the traditionally unbanked population – from the unavailability of accessible brick and mortar banks to the lack of any kind of credit score, these issues can be overcome by efficiently using fintech.
iv) Straightforward and quick onboarding journey using digital customer identity – all businesses want to onboard their new customers in the shortest time without compromising the information being captured to identify them in a unique and secure manner. Fintech makes this possible by having digital onboarding reinforced with biometric-based identification and authorisation.
v) Ease of access and convenience in accessing financial services – a truly digital fintech offering eradicates the need to visit a physical bank and offers 24/7 services availability.
vi) Cost savings to the financial operators – digital transformation with fintech in place means banks will reduce both operational and capital expenses.
vii) New technology-based differentiating offerings such as artificial intelligence (AI)-powered tools, robo-advisors etc. – fintech augmented with smart analytics will provide differential and attractive offerings to customers, translating into revenue.
viii) Enhanced security using cryptography to ensure the safety of data – with fintech, security aspects will be further strengthened with features such as cryptography playing a critical role in keeping the data secure.
The enabler for the fintech revolution to be successful is the cutting edge technology provided to the sector by the communication service providers’ (CSP) last mile connectivity. This presents a lucrative and profitable opportunity for the CSPs to capitalise on the investments they have made in their digital transformation strategy and step in to lead the fintech revolution.
CSPs are already serving as the backbone of the fintech revolution in the traditional banking sector. A deep analysis of the voice and demands of customers provides useful insights which mark the improvement needed e.g. – negative customer experience, mandatory physical KYC, monolithic system and offerings etc.
CSPs are perfectly placed to benefit from the fintech revolution by offering fintech services to their own customers. Microservices based architecture, digital onboarding, and a robust customer value management system enables them to offer a plethora of digital financial services and maximise the potential.
Financial institutions will be very different from the past. New-era fintech players are ahead of the game judiciously procuring licenses for profitable portions of financial businesses including peer to peer money transfers, providing loans, investment offerings for funds, selling insurances and even booking doctor’s appointments and taxi services all from the convenience of a smartphone on a highly secure and trustworthy platform.
These new players boast of a substantial customer base with direct touchpoints and have been successful gaining the trust of their customers.
CSPs have the ingredients to become successful as fintech players. Fintech revolution at its heart, has an inbuilt end to end virtual digital wallet management solution that can be ready to integrate to core banking platforms. CSPs can leverage this to launch lucrative and innovative offerings, combining the fintech services with core telecom services and other digital offers and meet the demand of customers at a single point of contact.
With the CSPs at the forefront of digital transformation, they will be leading the way, generating novel financial models to reap the benefits of the fintech revolution.
The author is Animesh Kumar, lead solution consultant at Tecnotree.