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Telecommunications companies in the banking business – The goal: more quality service at more affordable prices
Tuesday, 28.06.2016.
11:56
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The benefits to banks are clear – e-banking and m-banking reduce expenses considerably, which is especially important at a time when they are struggling to remain profitable.
The situation is clear for bank’s clients too, as e-banking enables them to deal with their banking activities whenever and wherever they want to. Waiting in front of counters, except in special cases when going to the bank is inevitable, is a thing of the past. Already now, the number of electronic transactions exceeds those carried out on banks’ premises.
It is, at the same time, cheaper. Banks used to justify their high interest rates with operational expenses and material expenses of opening branches. E-banking is free of these activities, so there’s room for saving money and reducing interest rates.
Of course, banks are not the only ones who have recognized the opportunity to get a piece of this financial “pie”.
All over the world, digital transformation has well taken the financial services sector, so that loans and credit cards are issued by institutions traditionally not linked to banking. Moreover, there are “banks” which exist neither physically nor as web pages, but only as mobile apps.
In Serbia, as usual, world trends tend to come with a delay. Such was the case with the public distrust which was shown when the Norwegian Telenor decided to offer the Serbian citizens banking services, in addition to telecommunications services. The question was: can telecommunications companies provide quality banking services at all?
Although Telenor has great experience in the financial sector in Asia and Europe, the question is even more pertinent when one takes into consideration the fact that Telenor Bank in Serbia recorded a loss of RSD 1.2 billion in 2015, according to NBS data.
Nevertheless, there should be no doubts about the success of Telenor Bank’s operations in Serbia, says Marko Carevic, marketing director of the bank, for eKapija. He states that the loss was planned and expected as a part of a total investment of EUR 40 million.
- Considering that the bank started from zero, it is necessary to invest in the development of software solutions and ATM network above all. We are pleased with the fact that we have opened over 150,000 accounts and we remain focused on the growth of the pool of our clients and the continued development of our portfolio – says Carevic and reminds that the bank has been active for a little over a year and a half and that in this time it has opened more than 150,000 accounts.
Carevic also says that telecommunications companies have good chances in the competition with traditional banks. He points out that the biggest benefit to the clients is the fact that, for telecommunications operators, “the online channel, whether for mobile or electronic banking, is the main channel for which all services have been optimized”.
- It’s not necessary that the clients go to the bank to open their accounts, nor is it necessary to sign additional contracts to use mobile applications, like the contract on opening the savings account and such – says marketing director of Telenor Bank.
Telekom Srbija, which, too, has its own MTS Bank, also believes that the future belongs to telecom operators. As they say, the symbiosis between telecommunications and banking services brings more favorable conditions to clients, so that they are getting more quality services at more affordable prices.
In following these trends, they say, Telekom Srbija is currently working on updating the system so that by the end of the current year they can put into operation the new digital services of MTS Bank, so the future clients can expect “quality innovative services and new exclusive services in the local market”.
On the other hand, Sasa Todorovic from the consulting company PricewaterhouseCoopers (PwC) believes that the quality infrastructure which telecommunications companies do have is certainly not reason enough to trust their ability to run banking operations.
Todorovic explains for eKapija that, for this exact reason, such companies need to meet all the requirements prescribed by NBS in order to receive a banking license in Serbia.
It seems, he adds, that the trend is that there will be more and more online banks, but also that conventional banks will increasingly opt for the introduction of new products and technologies and the adjustment to the “mobile competition”.
The company Vip Mobile also believes that the Serbian market has great potential for the development of electronic and mobile banking.
Smart devices have changed clients’ habits and needs, both in communication and in everyday activities such as making payments, the company says and adds that in the coming period they will continue to support similar solutions through partnerships, but also that they will offer their own innovative services.
Vip explains the fact that many people still wait in queues to make transactions with their distrust towards new solutions.
On the other hand, they say, “everyone who gets proof of the advantages of mobile services, above all flexibility, availability and efficiency, continues to actively use these services”.
- Clients seek additional value and we, as operators, need to transform ourselves into providers of additional digital services which make their lives and their business activities easier and save their time – concludes Vip Mobile.
J. Djelic – M. Vlahovic
Yettel d.o.o. Beograd
Yettel Bank ad Beograd
A1 Srbija d.o.o. Beograd
Telekom Srbija a.d. Beograd
PricewaterhouseCoopers d.o.o. Beograd
mts banka a.d. Beograd
Narodna banka Srbije Beograd