In the current Covid-19 environment, connectivity has proved more critical than ever.
By Stephen Bailey, executive head at Standard Bank South Africa
With the accelerated transfer of social interaction, education, and commerce from the physical to the virtual world, demand for online capabilities has skyrocketed, fuelling dramatic increases in network traffic and data usage.
This shift to doing everything online has seen companies across almost every industry fast-track their digital transformation efforts. But access to connectivity is required in driving adoption of digitalised services.
The growing demand for online communication, streaming and education has lifted demand for mobile virtual network operators (MVNOs). Various companies across sectors including financial services are collaborating with network providers to unlock added value for customers, and to enable connectivity to digitalised services that now form a critical part of our everyday lives.
What is a MVNO?
MVNOs are companies that do not own a mobile network but rent capacity on an existing network instead.
They purchase this capacity in bulk and, as a result, can negotiate much better rates from the network owner than an individual consumer could, which means that MVNOs can pass this price benefit onto their own customers.
Why would a bank become a MVNO?
Banks are seeking to digitalise their services but to use these services, clients require connectivity. Operating a MVNO enables the bank to package connectivity with their digital services, at a very low cost or even for free, helping customers access these digital services more effectively.
This allows banks to package mobile products together with banking products, which makes sense for them to do so as it makes it easier for customers to access their services. That said, it is also within the interest of financial services providers to ensure that customers can connect to their services at the lowest possible cost. Banks can do this by passing on pricing benefits of buying in bulk from telecoms networks to their customers.
It then makes sense for customers to buy their mobile and banking services together, because it is cheaper to do so.
Another reason MVNOs make sense for companies is their focus on personalisation. The large mobile operators generally offer one-size-fits-all packages. While some may be satisfied with a generic plan, an increasing number of individuals want something that is more tailored to their specific needs.
Therefore, having a MVNO enables the bank to package products to clients’ needs, instead of the one-size-fits-all product from an existing operator.
Standard Bank has created an ecosystem of custom developed airtime and data solutions, tied into clients’ banking.
This is because we understand that everyone needs to bank, and that everyone needs to be connected to participate in an increasingly inter-connected world where we are consuming massive amounts of data. In the last 18 months, the number of customers making use of Standard Bank’s Mobile Money offering has trebled.
In the broader financial services industry, there is an increasing convergence with telecommunications, and vice versa. As banks continue to ramp up the digitalisation of their services, a telecoms capability becomes essential.
Ultimately, promoting access to financial services requires promoting access to connectivity. The two fit together. In the old days, you visited a branch to conduct banking. Now, almost every banking activity can be managed via your phone. To provide more people with access to banking services, we must enable access to connect with the bank via telecommunications. This will ultimately help to bring more people into the financial system, and to drive economic growth in SA and across the rest of the African continent.