Unlocking New Revenue Streams: How Banks in the CIS Region Can Thrive With MVNO Service

Today’s telecom subscribers demand personalized digital experiences that offer value, quality, and convenience. In recent years, the Commonwealth of Independent States (CIS) region witnessed an increased focus on building a robust and inclusive digital economy. Customer-centric mobile connectivity and various digital services for individuals and businesses are vital to supporting this economy. 

For the past 25 years, money has shifted to the digital ecosystem with the advent of internet banking, banking apps, and digital currencies. Mobile banking services have significantly enhanced the convenience, flexibility, accessibility, and affordability of banking services. Consequently, adding telecom services to their offerings is a natural progression for many banks, aiming to build new revenue streams and reduce operational costs. 

Demand for tailored customer experiences, low switching costs, and flexible regulations fuel the region's mobile virtual network operator (MVNO) growth. The CIS region's MVNO market is forecast to achieve significant milestones, providing a fertile ground for banks to monetize their client base and drive customer loyalty with telecom services.

Why Should CIS Region Banks Offer Mobile Services?

Banks are expanding beyond their traditional role as banking service providers and entering into the MVNO space to diversify their offerings and gain:

1. Increased Customer Loyalty

   Mobile services are tightly integrated with banking ecosystem components, resulting in bank customers actively using services 4-5 times longer. Improved customer care through telecom services leads to better retention and loyalty.

2. Operational Expense Savings

   • SMS notification costs can be reduced by 30% to 40%, eliminating the need to pay SMS aggregators.

   • Lower mobile subscriber acquisition costs as a bank can upsell MVNO mobile services to existing bank customers. 

   • MVNO services provide banks with a new digital marketing and distribution channel to affordably contact subscribers and offer new services without spending significant resources on IT apps and infrastructure.

   • Enhanced cybersecurity without additional cost through integrated telecom services.

3. New Opportunities

   Banks can analyze customer data, including mobile service usage, location, spending patterns, and more, in conjunction with their banking service usage. This data empowers banks to offer new, tailored financial and value-added offerings to meet their customers' needs and drive the customer experience. Additionally, banks can use the data to better optimize their retail branch networks and increase operational excellence and efficiency.

Banking MVNO Success: The Role of Customer Experience

Customer experience is a critical factor for the success of any MVNO. Banks venturing into the telecom sector must ensure that their MVNOs offer seamless, intuitive, and personalized customer interactions with tightly integrated banking and telecom services. This includes an easy activation process, responsive customer support, and tailored service packages that meet individual customer needs.

By integrating telecom services with their existing digital platforms, banks can provide a unified customer experience that strengthens brand loyalty and enhances customer satisfaction. Leveraging a proven business support system (BSS) designed to support such customer-centric strategies can empower banks to deliver superior user experiences and maintain a competitive advantage.

How Can a Bank Launch an MVNO?

Banks have multiple pathways to launching telecom offerings:

• Reseller Model: Partnering with a mobile operator to resell SIMs or eSIMs.

• Full MVNO Model: Building a long-term partnership and acquiring the necessary technology, connectivity, and infrastructure to launch full MVNO operations.

The choice of the MVNO model depends on the bank's business priorities and investment commitment. The first model requires the lowest investment and is the fastest to implement. However, it offers minimal business levers and service value proposition control. On the other hand, the second model requires relatively more investment but provides increased control over the back-office processes, customer plan development, and value-added services definition and operations.

A Look at Bank MVNOs in the CIS Region

Several CIS region banks have successfully launched MVNOs, including:

• Jusan Bank: In Kazakhstan, Jusan Bank launched its MVNO, Jusan Mobile, to offer integrated banking and telecom services, enhancing customer experience and loyalty. Customers can manage financial services and mobile communications, take out insurance, buy shares, or purchase goods and services from the Jusan Store marketplace through the Jusan application. In the first year of its launch, users downloaded the Jusan Mobile app more than one million times, and the number of clients using Jusan Investment services tripled.

• Sberbank: With a vast customer base, Sberbank launched SberMobile, and it has more than tripled its revenue in the first year of launch. It has also reduced its operational expenses on SMS communications by routing them through its MVNO.

• Tinkoff Bank: Tinkoff Bank partnered with Tele2 and launched Tinkoff Mobile. It grew rapidly, capturing regional markets and expanding its subscriber base to more than one million. Banking services, including virtual cards, are tightly integrated with mobile offerings. Modern converged billing and aggressive marketing strategies have enabled Tinkoff’s success.

  
  

Key Business Decisions: Host MNO vs. Owning Infrastructure

A critical decision for banks is whether to rely on a host MNO for all mobile services or build their own BSS and infrastructure. Owning BSS infrastructure can offer banks significant advantages, such as:

• Independence from MNOs allows for customized product development. They will also benefit from the enhanced commercial negotiations.

• Banks can easily offer subscribers AI-powered customer support services, driving customer experience and minimizing the influence of a mobile operator. 

• Banks gain full access to customer data, usage patterns, and spending habits and can leverage AI and analytics to build and offer more targeted and personalized products. 

• Unlimited revenue opportunities and controlled subscriber journey, including onboarding, service provisioning, service usage, care, and more.

• Greater agility and faster time-to-market (TTM) for new tightly integrated offers.

Points to Consider for Selecting Enablement Technology Providers

Integrating telecom services into bank offerings presents a significant opportunity for banks in the CIS region. With the right billing and revenue management technology partners like Optiva, banks can overcome infrastructure challenges and build successful MVNOs that drive growth, improve customer loyalty, and unlock new revenue streams.

In many CIS countries, modern, future-proof MVNE platforms are absent, posing a challenge for banks aiming to enter the telecom space. The right technology partner can help you bridge this gap by providing comprehensive, modern, and scalable BSS solutions. Integrated managed services allow banks to avoid the burden of managing billing and associated IT infrastructure, enabling them to focus on core banking activities while reaping telecom services' benefits.

Owning a cloud-native and AI-powered BSS reduces banks' dependency on MNOs and allows them to enjoy greater control over service offerings, pricing, and customer interactions. By leveraging Optiva’s advanced AI-powered BSS platforms, banks can quickly adapt to market changes and introduce innovative services that meet evolving customer expectations.

Want to know more about Optiva’s 5G-ready proven BSS that powers brands globally? Request a presentation.

By

Sukant Sharma,

Head, Field Marketing,

Optiva