THE BOTTOM LINE
Small biz the winner as banks swap places with telecomms
Each industry is simply leveraging its existing platforms and client bases, mainly helping smaller enterprises
The lines between the technology and financial services sectors are rapidly blurring. This week Huge Group said it wanted to start offering financial services products to small businesses in partnership with banks. A week before, Naspers said it planned to start offering lending services in South Africa and other African markets.
And, at the same time that mobile operators are wading into the financial services arena in pursuit of new revenue streams, banks themselves are shifting into communications. FNB has more than 600,000 FNB Connect subscribers, after launching the telecommunications unit in mid-2015. The bank now controls nearly 1% of South Africa’s mobile communications market.The partial integration of the two sectors makes sense on both sides, as each industry is simply leveraging its existing platforms and client bases, often in partnership with their counterparts.
With its client base of nearly 50,000 small and medium-sized businesses (SMEs), Huge Group is well positioned to understand these firms better than a bank might, meaning it can offer financial products that the end-to-end banking industry cannot.
“We’re looking at disruptive service offerings that provide a solution to a community that previously did not have access to it,” says Huge’s nonexecutive chairperson, Duarte da Silva. He thinks that through partnerships the group can give SMEs greater access to the financial services industry and reduce their banking costs.
It would be a win-win, with banks being introduced to new segments of the market, Huge taking on a new revenue stream, and SMEs getting a foot in the door of the formal banking sector.