Mobile Phones at the Center of Telco and Digital Bank Partnerships

The integration of mobile phones into financial services is revolutionizing the way consumers interact with digital banks and telcos. As mobile devices become more prevalent, the lines between telecommunications and financial services continue to blur, fostering partnerships that enhance financial inclusion and consumer convenience globally.

The Growing Intersection of Telecom and Financial Services

At the conclusion of 2022, PYMNTS Intelligence highlighted a notable trend: partnerships between telecommunications companies and financial institutions (FIs) or FinTechs were reshaping financial inclusion across both emerging and industrial economies. Mobile phones have emerged as gateways to a wide array of services, with PYMNTS surveys indicating that more than a quarter of individuals show interest in banking services offered by telecom firms.

Global Digital Transformation

The recent PYMNTS Intelligence report, "How the World Does Digital: A Global Benchmark of Consumer Digital Transformation," examined 11 countries to reveal the widespread infrastructure for digital banking and telecom. It was found that most populations surveyed have access to mobile phones, underscoring the pervasive digital transformation. Additionally, the Global System for Mobile Communications Association reported that 4.3 billion people globally possess smartphones, yet a significant opportunity remains with 3.4 billion people untapped.

Cross-Selling Opportunities in Emerging Markets

Delving into specific markets, Brazil emerged as a standout in digital connectivity. According to PYMNTS, Brazilian consumers are highly engaged online, averaging 361 "activity days" annually compared to a sample average of 281 days. Digital banking is also robust, with 63% of Brazilian consumers using mobile banking services weekly.

Nubank, a digital bank owned by Nu Holdings, exemplifies successful cross-platform efforts. In a recent earnings report, Nubank revealed a 22% increase in its customer base, ranking as the third-largest FI in Brazil. The bank also expanded its customer count in Mexico by 91%. Its mobile service, NuCel, launched in Brazil last year, aims to enhance customer experience beyond financial services by offering features like a savings account with attractive yields.

Lyca Mobile and Revolut Partnership

Lyca Mobile's integration of Revolut Pay into its payment systems illustrates another successful partnership. The collaboration facilitates automated payments for subscriptions and bills, with most Lyca customers using Revolut opting for automatic top-ups. This partnership underscores the potential for telecom companies to expand their service offerings through strategic collaborations.

Verizon and Santander Collaboration

In the U.S., Verizon's long-term partnership with Santander’s digital banking platform exemplifies cross-selling initiatives. The collaboration offers a high-yield savings account on Santander’s Openbank platform to Verizon's mobile and 5G customers. The Verizon + Openbank Savings Account features rates ten times the national average, allowing customers to save up to $180 annually on Verizon bills. This initiative enhances Verizon’s financial services portfolio and provides additional benefits for customers, such as earning "Verizon Dollars" through its Visa rewards card on everyday purchases.

Conclusion

The integration of mobile phones into financial services is increasingly driving the synergy between telecom companies and digital banks. By leveraging mobile technology, firms are expanding their service portfolios and enhancing customer experiences. These partnerships not only facilitate financial inclusion but also offer consumers attractive cross-selling opportunities. As the global digital transformation continues, the collaboration between telecoms and digital banks is set to redefine the landscape of financial services.