Frictionless finance: payments get closer to mobile customers

Telecoms.com periodically invites expert third parties to share their views on the industry’s most pressing issues. In this piece Albrecht von der Recke, Chief Commercial Officer & Co-Founder of fonYou, explore the potential of frictionless finance in a telecoms concept.

Embedded or “frictionless” finance is emerging as one of the primary disruptive drivers of the mobile communications market. Mobile network operators that can provide seamless access to an array of financial services and payment options through their trusted brand platforms will be the dominant players in this new landscape where – for consumers – convenience, speed and simplicity wins.

AI and machine learning is providing an unprecedented ability for mobile operators to monetize the billions upon billions of actionable customer data events that take place across their networks every day. State-of-the-art data analytics capabilities are empowering operators to cost-effectively find the triggers, touchpoints and incentives that can drive consumer uptake of innovative embedded finance solutions – from digital payments and “Buy Now, Pay Later” services, to micro-loans and other emerging credit modalities.

Harnessing these advances, a whole new tier of mobile users is set to rapidly gain access to transformative digital finances solutions, including nano-credit facilities based on innovative scoring technology – all based on seamless banking technology integration that is completely transparent to the consumer. So, what impact will these disruptive data analytics innovations have on the future of digital payments, and the drive for wider inclusion in the formal financial ecosystem?

Boosting the bottom line through digital payments

Operators have historically marketed to mobile users via largely non-personalised SMS campaigns, pushing one-size-fits-all offers for phone top-up or airtime bundles. Conversion rates for these untargeted campaigns are generally below 1 per cent. Now, data visualization advances are completely transforming operators’ understanding of customer behaviour and buying patterns – and delivering key insights that allow operators to make the right product offers, at exactly the right time, with ease of purchase considerations front and centre. This unprecedented ability to micro-market to customers to meet their real-time requirements for top-up, micro loans and mobile wallet transactions is translating into measurable benefits – driving conversion rates up to almost 10 per cent

The enabling technology that is enhancing operators’ ability to visualise billions of daily customer touchpoints, generated by their network traffic, is cloud-based machine learning and AI. Machine learning and AI is now providing operators with the ability to manage, process and analyse the huge amounts of data generated by their customers far more cost-effectively.

Deep dive data insights

Each time a mobile phone user connects to the operator network – to check email, scroll through TikTok videos, or check the football scores – a data point is generated. Using AI-fuelled data analytics, operators are able to identify patterns in these data events to create timely and relevant customer offers geared to highly specific interest areas. For example, when a major sports tournament is running – such as the NFL Super Bowl or cricket’s Indian Premier League – mobile users may well be using more data than usual to follow events in real-time.

With analytics-driven insights, operators can now pinpoint precisely the right time to offer pre-paid customers running low on data credit a short-term data pack or even a small loan to help them stay connected and on top of the action. With pre-paid customers around the world numbering 5 billion – each engaged in their own lifecycle of data and airtime usage – the ability for operators to accurately predict buying behaviour and instantly get in touch with compelling top-up, product bundle and micro loan offers delivers demonstrable value to both customers and operators.

Driving financial inclusion

This also means that for mobile customers without a credit history or even without access to a bank account, operators are uniquely positioned to assess individual creditworthiness, based on an automated analysis of their own data – for example, whether a long-term customer has a steady, reliable top-up pattern. This opens up the possibility for offering small loans and credit services to customers with limited banking options in a way that simply hasn’t been possible in the past. Operators can identify those unbanked customers who would benefit from mobile wallet capabilities, and can also offer appropriate finance options to enable others to access up-to-date handsets. Operators and data analytics providers are now pivotal players in enabling global digital and financial inclusion – the drive towards which is more important than ever in the post-COVID world.

Harnessing next-generation mobile data analytics generates a tangible return on investment for operators by maximising revenues and boosting customer satisfaction and loyalty. It creates a better service experience for mobile customers themselves as they can benefit from relevant, timely offers that meet their exact needs. Crucially, specialist technology providers can deliver this analysis with no impact on customers’ data privacy – an increasing concern for consumers. All data is owned by the operator, and all data analytics results linked to the customer are hashed, anonymised and encrypted, providing mitigation against privacy breaches and ensuring that the integrity of the customers’ personal data is protected at all times.

Deep, AI-driven mobile data analytics is providing an unparalleled window into customer behaviour and the optimal moments to engage customers and promote ease of purchase through digital finance solutions. With this new ability to explore rich, real-time data about a customer’s interaction with their mobile device, operators can now identify key patterns to help them better anticipate and meet individual needs – creating happier, more loyal and more financially-included customers.

Albrecht is co-founder of fonYou, with more than 20 years’ experience working with mobile carriers. As an employee, he participated in the successful service launches of mobile network operators One (Austria) and Orange (Switzerland) and, as an entrepreneur, in several launches of MVNOs (mobile virtual network operator). Albrecht’s in-depth understanding of mobile carriers needs make him the ideal contact point for acquiring new business for fonYou and executing client projects. Prior to fonYou, he cofounded NextGen, a consultancy specializing in telecoms advising carriers around the world. As part of fonYou’s management team, Albrecht has grown the organization to become a global technology company with teams and offices across Europe, Latin America and Asia, serving some of the biggest carriers in the world. Albrecht holds a degree in economics and international business management from the University of Vienna, University of California Los Angeles and the Ecole Superieure du Commerce Marseille.