By Michael Wallis-Brown, Head of Mobile Financial Services, Ericsson
In a world where connectivity is king, the convergence of banking and telecom companies represents a significant shift in how we engage with money.
Mobile banking has been thriving for almost two decades in its simplest form—holding and transferring funds between phones. Now, banks and mobile network operators are combining forces to offer advanced services to millions globally. This collaboration aims to unlock new markets and meet evolving consumer needs, reshaping the traditional boundaries between finance and communication.
A recent report from Ericsson and Juniper Research revealed that by 2028, Mobile Financial Services (MFS) are expected to revolutionize the financial landscape, with anticipated adoption by 40% of mobile subscribers worldwide and an 80% increase in transaction value. However, fully realizing this potential requires prioritizing collaboration between the two industries.
Both sectors must work together and leverage their unique strengths to achieve this. Technology providers such as Ericsson support both industries with their Mobile Financial Services platforms, acting as bridges that enable telecom companies and banks to combine their value propositions. This collaboration can foster the development of new services, create new revenue streams, and generate valuable consumer behavior insights, driving innovation and growth in both industries.
Mutually Beneficial Relationship
By focusing on collaboration, the banking and telecom sectors can leverage each other’s strengths for growth. Telecom operators provide scalability and extensive networks, which are advantageous for digital banks, especially in remote or developing regions. Financial institutions can help telecom operators diversify their offerings and attract customers looking for comprehensive financial solutions.
Several organizations are already embracing this synergy. For example, Telenor Microfinance Bank is enhancing its easypaisa platform—a leading mobile financial services solution in Pakistan—through a strengthened partnership with Ericsson. This collaboration aims to expand easypaisa’s digital financial services and position Telenor Microfinance Bank as a digital bank. Similarly, Nubank, a prominent neobank in Brazil, plans to launch an MVNO (mobile virtual network operator) in partnership with Claro. These collaborations are redefining traditional boundaries and presenting new possibilities for growth.
Redefining Traditional Boundaries
As we can see, these collaborations are reshaping the landscape and creating new avenues for innovation and expansion. By leveraging this relationship, banks and telecom companies can unlock new markets, bring commercial returns, and embrace the opportunity to connect customers and communities better. This synergy creates an environment where innovation thrives, and both industries can learn from each other’s successes and challenges.
Bringing Financial Services to the Unbanked
One significant benefit of this collaboration is providing financial services to the unbanked population. Mobile network operators and mobile financial services have transformed lives in regions typically underserved by traditional financial institutions. Despite progress, an estimated 1.4 billion adults worldwide still lack access to a bank account, hindering economic growth and personal financial development.
The partnership between banking and telecoms can provide critical financial functions and foster financial technology innovation. For example, MTN Mobile Money has utilized Ericsson’s Mobile Financial Services platform to expand its impact, integrating with third-party providers to offer advanced financial solutions. Far from just allowing people to hold and transfer money, the partnership of banking and telecoms can provide many critical financial services and ignite a culture of financial technology innovation.
Advanced Services
The benefits of this collaboration are not limited to the unbanked or underserved communities. As connectivity and accessibility improve, customers everywhere seek a one-stop shop on their phones, looking for digital solutions to manage their money effectively and safely.
MNOs and digital banks have responded to the demand by creating fintech network platforms, integrating recent technologies as they emerge, overcoming obstacles, and meeting customers’ needs. By introducing advanced services like merchant and e-commerce payments, micro-lending, and buy now, pay later (BNPL) options, these fintech network platforms can empower individuals to have more control over their money. These services also cater to new earning opportunities, such as the gig economy and online businesses.
Enhanced Security Measures
Another critical function of the relationship between financial technology and telecoms is advanced security. Advances in AI have enabled giant leaps in fraud detection, KYC, and digital identity, allowing seamless use for the consumer without sacrificing trust or safety. AI-driven applications can offer personalized financial recommendations based on users’ past usage while enhancing fraud-detection capabilities.
Collaboration over Competition
The expansion of mobile financial services has been remarkable, driven by the focus on serving the vast unbanked demographic and offering a wide range of services beyond simple transactions.
While the market is becoming increasingly competitive with new entrants and existing players racing to innovate and capture market share, this convergence presents a natural opportunity for collaboration, bringing the industry back to its most crucial purpose: connecting people and promoting financial and empowering communities.
About the Author
Michael Wallis-Brown is the Head of Mobile Financial Services at Ericsson, driving innovation and growth in the digital financial sector. With a strong background in founding and leading Fintech and Mobile Communications companies, Michael is skilled in creating cutting-edge platforms that deliver value for CSPs, digital banking, and fintech industries. His career includes key roles at industry leaders like Nokia and IBM, as well as impactful work with start-ups like Prove.com.
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