Kelvin Chaffer, CEO, Lifecycle Software
Mobile Virtual Network Operators (MVNOs) have come a long way in just over two decades. Their roots lie in the ability to offer simple and more affordable mobile pricing to certain demographics. But today they are about a lot more than that – enabling brands to offer innovative services to target audiences to gain a competitive advantage, diversify revenue streams, and enhance customer experience.
Revolut’s recent launch of an eSIM to provide customers with roaming access to banking services is a sign of the times: mobile services are no longer solely the domain of mobile operators. Indeed, the MVNO landscape has witnessed huge diversification on a global scale in recent years, ranging from soccer teams launching their networks in Brazil and Spain to YouTube influencers and well-known celebrities such as Ryan Reynolds adding mobile services to their portfolios. These are great examples of the way in which an MVNO can be used to build the connection with an established user base in an increasingly digital age – and there is plenty of scope to take advantage within financial services.
Capitalising on market position
Indeed, the finance sector is particularly well positioned to capitalise on the integration of a mobile offering for customers. As we saw in Revolut’s case, they are able to package up connectivity for the use of their digital services, offering quicker and easier access at the same time as bundling mobile and banking services into one service proposition. By investing directly in a mobile network, financial service organisations are able to relay competitive price points to customers, enabling them to connect to their services at the lowest possible cost.
MVNOs’ flexible and agile business models also allow brands to cater mobile services and SIM offerings to their demographics easily. Just like Zolve, an Indian neobank for immigrants, did a few years ago in the finance sector. Focusing on specific value propositions, Zolve has launched its mobile service, Zolve Connect, to tap into a gap in the market and offer mobile services to a segmented, unserved group of people. Utilising their customer base and addressing the pain points, they provide low-cost connectivity to consumers who frequently make international calls.
Indeed, providing products and services that cater to the unique needs of customer segments is a great way for businesses to create loyal customers. In Revolut’s case, offering mobile banking access while abroad to a UK customer base affected by increased data costs after Brexit is a win-win.
Complementing their existing services, mobile offerings allow the finance sector to build stronger customer bonds. The addition of mobile services offers a new opportunity to build direct relationships with customers in a way that delivers far greater revenue potential than other, more traditional vehicles. Providing eSIM and data services is also helping brands to show their commitment to delivering improved and customised solutions, increasing customer satisfaction.
Making hay while the sun shines
It was not always the case that finance brands could so easily tap into the MVNO opportunity, however. Previously, companies seeking to launch mobile services faced several challenges, including extensive regulatory requirements, prohibitive upfront investments and intricate mobile network operator legacy systems that complicated setup.
Network and cloud technology advances, and new, streamlined processes all mean that MVNO market entry is now more accessible and cost-effective than ever for brands of all sorts. By leveraging ‘telco in a box’ frameworks and off-the-shelf solutions, they negate the need for telco specific knowledge or expertise and minimise IT investments. New modular approaches mean that MVNOs can select the services they need and scale in pay-as-you-grow SaaS models for versatility that future-proofs their new business model. Automated and self-service capabilities meanwhile reduce dependency on the parent network.
The growing trend toward eSIM will further boost a brand’s MVNO potential, providing convenience and flexibility for consumers and removing the logistical complexities relating to physical SIM provision – allowing physical and digital-only brands alike to launch in far shorter timescales and operate at a fraction of historical costs.
Core to MVNO success however is the ability to operate with agility and develop tailored offerings to appeal to specific market segments. A robust back-end system and dynamic operation models that allows a data-driven approach to identify opportunities will catalyse innovation and bring about new business models for MVNO launches in the finance sector. It’s an exciting time.
