Telcos and Fintech, Blockchain

Caution is a reasonable attitude for most communications services providers to take towards any of blockchain-related or other fintech ventures, though baby steps already seem to be underway.

The best reasons for caution are based on history. “Telcos” in general have a poor track record of creating sustainable new app or platform businesses with scale, beyond their core access operations.

Also, Blockchain is potentially-transformative financial technology (fintech) development, and tier-one telcos have in recent years tried to create a role for themselves in retail mobile payments, without much success.

Fintech generally includes a huge range of functions and applications, all of which essentially could disrupt banking and financial services:
  • Payments
  • E-commerce
  • Credit
  • Ordering
  • Insurance
  • Savings
  • Banking
  • Risk assessment
  • Accounting
  • Remittances
  • Corporate finance
  • Investing
  • Consumer lending
  • Mortgages
  • Crypto currency
  • Mobile wallets

That noted, some mobile payments and banking services have achieved moderate success. Mobile banking services have proven sustainable in several markets (small business lending and consumer remittances and payments) and countries.  Africa, Scandinavia, Eastern Europe, India and Mexico are among regions where mobile operators have had success with mobile banking and payments.  

But there have been big failures--mostly in other developed countries, where telcos have failed in recent years to get much traction in mobile payments.

All that noted, as access providers who wish to survive and thrive, moving up the stack into new platforms, apps and services beyond connectivity is essential. If fintech, like internet of things, proves to be a huge growth area, telcos are almost forced to consider how they will become a bigger part of those ecosystems.


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