Jason Simon explains the value FinTech brings to telecom

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The technological revolution has made the telecom industry one of the leaders in digital transformation due to its impact on all other industries. However, increased competition and technological advances themselves have brought them to an important crossroads. The telecom sector and so-called Financial Technology Institutions (FinTech) have demonstrated their resilience by weathering the adverse conditions of the pandemic and emerging stronger. Jason Simon, a FinTech specialist, explains how telecom has managed to increase in value thanks to the arrival of FinTech.


In recent years, communication in several countries has ensured the continuity of productive, educational, recreational and cultural activities. Financial firms maintained their pace of expansion by bringing products and services closer to users.


The merger between telecom and fintech could represent a win-win scenario for both industries. The strategic synergy benefits both parties as they can differentiate themselves in the context of the telecom and fintech industry respectively; The latter has established itself as very competitive, explains Simon.


Simon believes that telcos and FinTech companies have a lot in common, as on the one hand they are intermediaries in their segments (finance and communications). On the other hand, FinTech and Telecom can leverage the strength of their large customer base to generate higher revenues and expand their operations.


The merger of these two industries has a reason. According to figures from Global Market Insights, the global wallet market will surpass $350 billion by 2026, which Telekom could take advantage of.


On the other hand, according to figures from Finnovista and the Inter-American Development Bank (IDB), there are more than 112,000 FinTechs worldwide, and their value is also growing. More than a third of them are considered unicorns. Put simply, this means that their market value is more than one billion dollars. Together they are now worth more than $147 billion.


There are more reasons why telecoms are FinTechs’ best ally. For example, the merger of these industries is doubly promoting financial inclusion. Telcos can offer financial services to the unbanked population, giving middle-class mobile phones the opportunity to get a digital financial solution.


Both industries can have access to new technologies to offer their customers a better user experience, assures Simon. The implications of exchanging large amounts of data between the two markets have specific implications: Existing telecom customers provide valuable information such as: B. the spending behavior, which are very useful when offering financial products. FinTechs can also track customer-facing metrics to improve their services.


The merger of telecoms with FinTechs is beneficial because it brings value to customers. Telcos can reduce the financial burden on customers by offering them free checking accounts, better interest rates, and payments for services, among other benefits already provided by FinTechs.


The alliance between these industries also increases the size of their offerings. Examples are Samsung with Samsung Pay, an electronic wallet, or Orange with Orange Money, which offers payment services for its customers in France. In Germany, T-Mobile offers payment options to its customers who already have a telecommunications service.


In this sense, telecom companies can be the best allies of FinTechs, since their integration helps to offer a unique, differentiated offer in the digital financial market. On the other hand, it offers its users new service options. The FinTech and Telecom sectors have been among the top winners during the pandemic due to the significant increase in remote working and digital collaboration that required remote communications.


In the last year, FinTechs have become one of the preferred options for entrepreneurs to apply for loans due to their lower and more competitive interest rates as well as their additional benefits. On the other hand, the need to avoid branches and face-to-face processes, as well as the growth of e-commerce, have driven the use of digital payment methods and the services of FinTechs.


About Jason Simon


Jason Simon is a fintech and digital payments expert who was involved with cryptocurrencies when they were first introduced. He is passionate about what is happening in the evolving world of finance, excited about the prospects that digital currencies offer to global consumption. When he’s not involved in advancing the digital payments space, he enjoys spending time with his family and improving his community.

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