The first option is fraught with many limitations ranging from the size of the potential partner in case of purchase to the complexity of technical integration and obtaining the necessary data about the subscriber in the case of a strategic partnership. Therefore, good decision for banks is the creation of own virtual operator with a low barrier to entry in related industry and the ability to build individual product solutions.
Boom the launch of virtual operators in the banking sector in the world was in 2000-e years. One of the pioneers was BancoPosta (Italy) in 2007, which quickly occupied a share of more than 50% on the national market MVNO. Equity Bank Kenya has launched a similar service in 2014, and he managed in 6 months to gain a subscriber base of 600,000 subscribers.
Bankinter of Spain has created its operator in 2008 and quickly achieved penetration of the service among private banking customers in 25%. The most successful was the product M-Pesa / Safaricom (Vodafone group) in Kenya, which, taking into account national peculiarities of the emerging market has become one of the largest international case studies the integration of mobile payment system M-Pesa and MVNO. The product was launched in 2007 and currently has over 30 million users in 10 countries around the world, through service goes through about 6 billion of transactions.
A lot of similar stories around the world, but they can hardly be called ambitious and radically changing industry. Only now the level of technology, the penetration of online lending, the ability to work with big data and finally the changed model of consumer behavior open doors to real success in this field.
The advantages of when
If I were to identify motifs that may be used by banks when creating a MVNO, they can be divided into three parts: short, medium and long.
In the first case, the MVNO for banks can be a source of additional non-interest income and savings on the reduction in churn of the customer base (churn rate). Average revenue per subscriber in Russia mobile operators is of the order of 300-350 rubles, this figure could navigate banks, launching virtual mobile operator. MVNO usually half the monthly payment for the provision of infrastructure.
Sberbank, which has about 140 million customers-individuals (46 million people use the app “Sberbank Online” every month), the service penetration is 10% in customer base could bring to the Bank from 25 to 30 billion of net income annually.
Given that the Commission income of the savings Bank in 2017 amounted to 394 billion rubles, the mobile operator can provide a tangible increase in non-interest income of credit organizations. Will it be possible to achieve such penetration and subscriber base, time will tell, but the background in the form of the largest network of branches make such a figure is achievable on the horizon of 3-4 years. We must remember that this market is in its infancy and estimated at TMT Consulting, the number of MVNO subscribers in Russia in 2018 will have around 7 million.
Medium-term motives of banks more complicated. The ability to do cross-selling additional products — special competence, which are increasing both banks and mobile operators hanging on your root service additional services. Keeping a client through a larger set of services, which bind him to the Bank and increases its transactional activity in the medium term will lead to growth of revenues from this segment.
According to Allied Market Research the global mobile payments market in 2016 amounted to $601 billion, and by 2023 will increase to $4.6 trillion, while the share of transactions via SMS confirmation will occupy a significant portion. In Russia the niche of payments from mobile phone accounts, according to estimates of InPlat, amounted to 42 billion rubles in 2016 and is growing by 15-20% annually. The integration of the MVNO with mobile banking eventually will strengthen the position of banks in the segment of mobile payments and will allow to gain additional competence for the formation of future digital mobile strategy.
Long-term explanation associated with the collection and analysis of big data, which have become daily tools for banks and mobile operators. The player who can snap in your own ecosystem of information about the banking transactions on a mobile subscriber (location, frequently visited sites, the structure of the consumption of mobile traffic), will have a huge competitive advantage in the market of electronic financial services and lending.
For banks MVNO with proper technical integration is a tool build the most competitive credit scoring model. According to Data Insight, the Russian domestic online sales amounted to 945 billion in 2017 (18% more than in the previous year). The share of purchases using a smartphone (at least at some stage) is 59% and in the category of young people up to 25 years smartphone device for online purchases. Thus, improved with a mobile operator scoring, the Bank will be able to offer users electronic stores instant online loan by phone number or email address during the payment process purchases.
So what’s on the horizon of 10-15 years for us as consumers, will likely erased the boundaries between the mobile operator and the Bank.