Unleashing The Power of “FinTelco” Framework

Executive Summary

Over the past decade, Banking / Finance and Telecommunication sectors have undergone dramatic IT revolutions. Today, through extensive customer engagement, both these sectors offer more services digitally than ever before. Technology has played its part in continuing to enhance the customer experience and engagement, whilst also helping to control the cost. Banks and Telcos are progressively adopting new technologies to be at the forefront of the competition. These digital transformations are quite similar in nature and their key drivers are almost the same. By taking a closer look at these developments, there are hidden opportunities, when banks and telcos integrate their systems, which we will discuss in this paper.

The below diagram depicts the synergy between Banking and Telco sectors in terms of digital transformation. The “FinTelco” layer is the sweet spot. The features provided with the FinTelco framework add real value for Banks as well as Telcos.

Why FinTelco?

Business alliances are made everyday between companies. These ventures allow them to hold a stronger market position and to bring a set of high quality services to customers. We are now entering a digital age, where demand for mobility and user experience is extremely high. Customers will simply switch to a service provider that is the most innovative and provides the best experience. This is common for any business vertical.

Traditional banks face a new challenge now. Digitalisation is knocking on their door asking for a change. Banking customers are now demanding for services to be at their fingertips.

“Are banks and credit unions keeping up with consumer demands when it comes to digital banking offerings? With 46% of consumers using only digital channels for their banking, expectations are outpacing experiences at most organisations”

In order to keep up with the demands, banks are now being more innovative. For banks to achieve this they are more disruptive in the marketplace and are encouraging new FinTechs to emerge in the banking sector with innovative ideas. Initiatives such as “Open Banking” has been developed as a result of banking innovation. Open Banking creates a massive disruption in the traditional banking arena, firstly, by providing guidelines and specifications to Open Banking information and functionality to third parties, as well as them building more advanced functionality for customers. Some regions, such as Europe, have mandated banks to adopt PSD2 (Payment Service Directive 2) based on Open Banking. This technology revolution is good news to the end customer, as well as emerging FinTechs. It is quite evident that more and more banks are now adopting open standards as we see branchless banking or virtual banking taking the lead.

On the other hand, Telcos are challenged with technology disruption. With the ever increasing devices enabled with data capabilities, Telcos have seen a drastic drop of ARPU (Average Revenue per User) in terms of voice and SMS channels.

“Over-the-top (OTT) players, which offer apps and streaming content directly to consumers through the Internet, have increased their dominance, even in core communication services such as messaging and voice” -KPMG

Given this magnitude of disruptiveness and innovation, traditional Banks and Telcos face bigger challenges ahead. These challenges include, increasing revenue and market share, improving customer experience further and competing with niche players in both sectors.

The FinTelco framework, developed by Mitra Innovation, builds an alliance between Banks and Telcos. The framework could be initiated either by a Telco onboarding Banks or vise versa. The entire framework supports Open API specifications published for Open Banking and GSMA (Global System for Mobile Association). This enables standardisation when adopting the framework. Any bank that has adopted Open Banking and any Telco exposed APIs based on GSMA specs would benefit massively with FinTelco platform. But, this does not discourage those traditional banks and telcos that haven’t done it already. The FinTelco framework comes with a lean adoption model that is based on agile concepts, which allows a bank or a telco to quickly adopt, integrate and publish functionalities to the external world to enhance their capabilities. We look into this in detail in next few sections in this paper.

Unleashing the Power of FinTelco

Imagine a world that a mobile subscriber opens a bank account using his mobile phone by sending an SMS or running a USSD message and from then on, they no longer need to carry actual cash with them ever. Therefore, creating a mobile wallet for everyone, where they could get paid their salaries, bonuses and even lottery winnings etc. It is also a way for individuals to pay bills seamlessly with a simple few clicks of a button on a mobile phone. The ability to buy and sell shares in stock market is also at the touch of peoples fingers.

And all of this can be done so within a highly secured manner without downloading hundreds of apps, even if you don’t use a smart phone and better yet, if you’re not in a 3G or 4G covered area that has only GPRS. The FinTelco platform brings all these and much more capabilities to a subscriber. There are hundreds of innovative use cases that could be implemented once the FinTelco platform is setup and running. Banks and Telcos helping each other to achieve a common goal is no longer a tedious task. A bank could offer all their services to a customer, who is also a subscriber of a partner Telco building the entire service catalog into SIM card or even an eSIM that supports multiple Telco operators. The framework can immediately disrupt and innovate a traditional bank and a telco, leapfrogging them into the future. Since ROI is essential for a lean organisation, it is imperative to get the platform up and running in weeks, not months. FinTelco can revolutionise both Telcos and Banks equally.

The Framework

The FinTelco framework is built harnessing the power of many top open source frameworks and libraries. This makes the entire framework fully robust, scalable, secure and enterprise ready. We see a significant paradigm shift in many large enterprises adopting open source technologies. Hence, the FinTelco platform perfectly fits the bill. Security plays a paramount role when it comes to financial systems. The FinTelco framework is built ensuring that the notion of security importance is kept at the forefront of our minds. Exploiting the inherent capabilities Telco’s brings to the table, in terms of mobile identity, with features such as two-factor authentication used to strengthen the framework. It goes way and above providing fraud detection capabilities by harnessing the power of Machine Learning (ML), in which they utilise open source technologies well known to enterprises.

As mentioned earlier, the FinTelco platform could be owned by either a bank or a telco with the lowest TCO possible. In a case of a telco implementation, many banks could be onboarded to the platform by the telco. In this case a telco may have a mobile wallet system in place, where different banks could be integrated to interact with the wallet system enabling mobile subscribers to enjoy services provided by those banks via telco interfaces. On the other hand, when a bank is owning the platform, it can onboard many telcos, by providing a built in wallet capability via bank interfaces for the telcos that do not have a wallet capability. This way bank customers and telco subscribers are able to enjoy extended services. In any use case, both telcos and banks benefit from customer experience as well as new avenues of revenue such as API monetisation allowing new developers to build cutting edge applications using newly exposed APIs.

The below diagram depicts the business architecture of the FinTelco framework. Each of the key components are briefly described with their business benefits.

Community Engagement

The “API Portal” allows new developers to engage with banks and telcos to build cutting edge applications. This would rapidly make traditional banks and telcos thought leaders connecting millions of possibilities never seen before. The community building apps could be empowered to become innovators of the new world and also allow them to market their capabilities while banks and telcos benefit from revenue share via API monetisation.

Admin Portal

A role based, access controlled “Admin Portal” allows both telcos and bank administrators to control the behaviour of the platform. This includes monitoring the health of the platform, receiving alerts on critical events, identifying fraudulent activities and many other administrative features.

FinTelco API

FinTelco API is the key connectivity interface between the platform and the developer community. The API is carefully developed following RESTful standards combining the power of services offered by banks and telcos.

Core Integration

The heart of the FinTelco framework is the core integration capability between telcos and banks. This combines complex systems in banks and telcos so they talk to each other in order to provide a much simpler interface for the consumer to interact with. The superior open source frameworks used for achieve the integration makes the entire FinTelco platform special as it can rapidly onboard even the legacy banking and telco systems enabling them to co-exist with new world applications.

Core Microservices & Business Processes

Since the FinTelco platform is built on standard API specifications, it also implements the underlying business processes recommended by those specifications using Microservices. There could be some situations custom business processes need to be developed in order to achieve a complex scenario. The built-in microservices architecture makes building such custom capability easy. Again, the microservices architecture is built using well-known open source technologies.

Bank & Telco Adapters

Since the FinTelco platform is built on standard API specifications, it also implements the underlying business processes recommended by those specifications using Microservices. There could be some situations custom business processes need to be developed in order to achieve a complex scenario. The built-in microservices architecture makes building such custom capability easy. Again, the microservices architecture is built using well-known open source technologies.

Utility Components

Since the FinTelco platform is built on standard API specifications, it also implements the underlying business processes recommended by those specifications using Microservices. There could be some situations custom business processes need to be developed in order to achieve a complex scenario. The built-in microservices architecture makes building such custom capability easy. Again, the microservices architecture is built using well-known open source technologies.

Utility Components

Since the FinTelco platform is built on standard API specifications, it also implements the underlying business processes recommended by those specifications using Microservices. There could be some situations custom business processes need to be developed in order to achieve a complex scenario. The built-in microservices architecture makes building such custom capability easy. Again, the microservices architecture is built using well-known open source technologies.

API Billing Component

Since the FinTelco platform is built on standard API specifications, it also implements the underlying business processes recommended by those specifications using Microservices. There could be some situations custom business processes need to be developed in order to achieve a complex scenario. The built-in microservices architecture makes building such custom capability easy. Again, the microservices architecture is built using well-known open source technologies.

Fraud Detection

Since the FinTelco platform is built on standard API specifications, it also implements the underlying business processes recommended by those specifications using Microservices. There could be some situations custom business processes need to be developed in order to achieve a complex scenario. The built-in microservices architecture makes building such custom capability easy. Again, the microservices architecture is built using well-known open source technologies.

Fraud Detection

Since the FinTelco platform is built on standard API specifications, it also implements the underlying business processes recommended by those specifications using Microservices. There could be some situations custom business processes need to be developed in order to achieve a complex scenario. The built-in microservices architecture makes building such custom capability easy. Again, the microservices architecture is built using well-known open source technologies.