MNO-Bank Convergence – Banks have always found it hard to keep up with new ideas, use technology well, and adapt to change. Banks are not as good at using new technology as some other businesses, like MNOs. MNOs are good at finding and using new technology. Most banks check their system architecture every five years, but MNOs do it more often and in a more active way. MNOs have people called solution architects who work closely with their teams that create new products and come up with new ideas.

MNO and Banks

In the case of New startups, MNO helped boost GDP by helping people with the will to start up their own businesses and grow them with free consultation and support—the “You Grow, I Grow” philosophy. For Distribution channels, Money distribution should be treated as the distribution of cigarettes, coke, and water bottles, which MNOs can do easily with flexibility.

Banks never thought of creating Agent networks where MNOs Key success factor is Agent Banking only. On the limit side, MNO financial services limits are set at the upper limit, and for banks, they are set at the lower limit. So MNO’s whole game is on volume, and the bank only wants value.

MNOs exhibit a higher affinity to retain subscribers than banks. This is observed by the multiple promotions, which may or may not be revenue-generating and encourage customer win-back. An MNO can run as many as three promotions per quarter, while banks could go a year without any activity simulating a promotion.

Banks have generally been found lacking in the areas of innovation, technology utilization, and adoption. A typical bank will review the architecture of their banking system once every 5 years, while MNOs employ solution architects who work hand in hand with their product development and innovation arms to deliver efficient and relevant solutions that meet the needs of the market.

This teamwork helps phone companies provide better and customized solutions that match what people want. By working with solution architects, MNOs keep up with new technology and can quickly meet the changing needs of customers. Banks need to regularly check and improve their designs with expert help to keep up with changes in the business world and stay competitive.

How MNO Playing Their Part

Some countries have adopted number portability, where subscribers maintain their number when they switch operators. Banked customers, on the other hand, have a lot of thinking and clearance to do before changing banks because a number of financial services like loans, investments, and mortgages are tied to their bank account number.

In order to improve profitability and gain relevance in the mobile payment space, banks should invest more in market research and gather the requirements of the markets they operate in. This is easily achieved by setting up a dedicated R&D division and allocating an adequate budget for this cause. Based on the closed nature of core banking systems, banks can separate a mobile money system from the core banking system to achieve the flexibility required from a mobile payment system.

These policies from Ministries of Innovation MNOs are the best admirers and advantage takers. Sadly, for a majority of the banks, this is still an unknown path, and for some, it is not a preferred route. The so-called “haircut” comes along the way and helps in worsening the problem in a negative smiley way. The solution that is hastily designed to fall into large sums in offshore accounts can be avoided very well with MFS.

Mobile Payments Industry

Mobile payments are expected to explode beyond 3 trillion euros by 2020. Mobile Money saves 2 billion USD for a few African countries. Mobile Money is not just cash in, cash out via agents any more, or P2P money transfer. Africa has given a new and very different dimension and speed, like a blink of an eye, to getting Money from the UK, the US, or anywhere in the world within seconds, around 24 hours a day, directly to your wallets, for all bill payments, merchant payments, loans, insurance, etc., and never stopping or ending the story.

Banks need to make a radical change from their current modus operandi in order to beat MNOs in the field of mobile payments or else take a back seat as clerks for reconciliations and accounting units, and regulators should allow MFS companies to innovate and bring new solutions and products in no time and make customers lives easier, less costly, and much faster. I guess banks still look like banks, but there is a shift in paradigm and model if you need to transact more than $10,000. In a nutshell, the retail division is almost underwater, and corporate still has a chance and time.

Their cash or savings were simply scalped and went to help fund the closure of one bank and the propping up of others. Opportunities are countless; whoever seizes them first gets the upper hand. Thanks to regulation and central bank support through the Ministry of Innovation, Get up, spread your wings, and grab as much sky (I guess there is no more land left) as you can.

Food For Though

Personally, I have had the opportunity to participate in programs aimed at building experience and expertise in scenarios involving Mobile Payments or Mobile Wallet-based Cross Border remittances. These initiatives have proven vital in supporting national economies. It is crucial to acknowledge that certain countries, such as Greece, Cyprus, and Italy, found themselves compelled to accept rescue terms that impacted not only bank bondholders and shareholders but also countless private deposit holders.

Suppliers of core banking systems have kept the system ecosystem as complex as rocket science, which makes integration with other systems a nightmare. This is in opposition to the open API approach adopted by MNOs. Most countries have slackened regulation of MNOs, while banks are subject to stringent regulation by their respective central banks and deposit protection bodies. Banks were known to be the center of most economies financial transactions, and in order to ensure stability, most governments maintain a close watch on transactions in the formal payment system.

In Africa, there is a modern mobile payment system in place that includes mobile wallets that allow for various payments, such as merchant payments, bill payments, and purchasing prepaid airtime. Innovative machines are now capable of generating intelligent payments infused with in-built payment knowledge.

What particularly intrigued me in the Payment Intelligence (PI) manual (currently in the works) was the breakdown of intricate PI concepts, including regression and AI components, likened to a teacher imparting knowledge to students in a classroom, recommending linear for continuous outcomes and logistics for binary results.

Books Referred & Other material referred

  • Open Internet research, news portals and white papers reading
  • Lab and hands-on experience of  @AILabPage (Self-taught learners group) members.
  • Self-Learning through Live Webinars, Conferences, Lectures, and Seminars, and AI Talkshows

Points to Note:

If you think you’ve got the right answer around payments and banking services, take a bow and collect your credits! And don’t worry if you don’t get it right; this next post will walk us through neural networks’ “neural network architecture” in detail.

Feedback & Further Question

Do you need more details or have any questions on topics such as technology (including conventional architecture, machine learning, and deep learning), advanced data analysis (such as data science or big data), blockchain, theoretical physics, or photography? Please feel free to ask your question either by leaving a comment or by sending us an  via email. I will do my utmost to offer a response that meets your needs and expectations.


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Posted by V Sharma

A Technology Specialist boasting 22+ years of exposure to Fintech, Insuretech, and Investtech with proficiency in Data Science, Advanced Analytics, AI (Machine Learning, Neural Networks, Deep Learning), and Blockchain (Trust Assessment, Tokenization, Digital Assets). Demonstrated effectiveness in Mobile Financial Services (Cross Border Remittances, Mobile Money, Mobile Banking, Payments), IT Service Management, Software Engineering, and Mobile Telecom (Mobile Data, Billing, Prepaid Charging Services). Proven success in launching start-ups and new business units - domestically and internationally - with hands-on exposure to engineering and business strategy. "A fervent Physics enthusiast with a self-proclaimed avocation for photography" in my spare time.

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