Standard Bank has no plans, at least for the foreseeable future, to launch a mobile virtual network operator (MVNO).
The banking group’s chief executive for personal and business banking Peter Schlebusch said in an interview with TechCentral that it had looked at the MVNO model “extensively” but had decided against it.
“There are a lot of competent players in the telecommunications space already,” Schlebusch said. “FNB, clearly, has taken a different view, and they have their own reasons.”
First National Bank last year launched FNB Connect, an MVNO aimed at its banking customers using Cell C’s network.
FNB remains the only bank in South Africa to launch an MVNO.
MVNOs piggyback on existing networks’ infrastructure, but typically provide their own backend billing and customer support.
MTN interim executive chairman Phuthuma Nhleko revealed recently that a large financial services company will launch an MVNO on MTN South Africa’s network.
With Standard Bank’s denial that it intends launching a mobile service, it now seems likely that one of South Africa’s remaining large banks — Absa, Nedbank or Capitec — is planning to launch an MVNO on top of MTN’s infrastructure. Until now, only Cell C has made its network available to MVNOs.
Schlebusch said Standard Bank wants to focus on delivering a “fantastic customer experience in banking and financial services”, rather than being side-tracked by a venture into telecoms.
He said that to launch an MVNO, Standard Bank would have to commit to high fixed costs upfront. The problem, he said, is that “you’re not sure how many customers are going to come across to your platform”. And the market “can be quite saturated at the top”.
He warned that the mobile networks would likely defend their turf aggressively. “They won’t lie down and have their tummies tickled,” he said.
He admitted, however, that the mobile operators have begun presenting a very real challenge to banks, if not in South Africa, then certainly in many markets elsewhere on the continent.
“A lot of the mobile money platforms are being run by mobile network operators. It certainly is a challenge for us, and they could broaden their scope into financial services,” he said. “They have lots of customers and lots of regular interaction with customers.”
Standard Bank’s strategy, he said, is to make sure that no matter which country in Africa a client happens to be in, and no matter what device they’re using or network they’re connected to, they’ll get the same banking experience. — © 2016 NewsCentral Media
