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Financial Identity as a Service (FiDaaS): Should MNOs Be Offering It?

With the demand for traditional mobile services, like voice calls and text messages, ever on the decline, customer churn and dwindling revenues are becoming increasing concerns for mobile network operators (MNOs).
February 23, 2024

With the demand for traditional mobile services, like voice calls and text messages, ever on the decline, customer churn and dwindling revenues are becoming increasing concerns for mobile network operators (MNOs).

As an MNO, evolving and adapting needs to be part of your DNA to remain competitive and relevant to customers. As of 27 July 2022, 22 million people living in South Africa own and use a smartphone - opening up a world of opportunities to MNOs looking to diversify their service offerings and thicken their revenue streams.

The proliferation of mobile-based services, such as mobile transactions and purchases, has led to an increased need for a secure means of vetting and verifying digital identities - something that a large portion of the world’s population still doesn’t own.

By offering financial identity as a service (FiDaas) to customers, MNOs are uniquely positioned to assist customers with building credit profiles(many, for the first time ever) and target high-potential customers to offer more personalized credit services as additional, add-revenue services.

What is FiDaaS? 

As an MNO, evolving and adapting needs to be part of your DNA to remain competitive and relevant to customers. As of 27 July 2022, 22million people living in South Africa own and use a smartphone - opening up a world of opportunities to MNOs looking to diversify their service offerings and thicken their revenue streams.

Adopting FiDaas (Financial Identity as a Service) is one service that can help to achieve this.  

So, what exactly is FiDaas ?It’s a service dubbed “the prerequisite for financial inclusion”. FiDaas allows you to build accurate credit profiles on your existing customers’ digital purchases by leveraging access to types of credit. This in turn leads to more products and services that your business can offer to them, thus creating an additional revenue stream for your business.

The Benefits of FiDaaS

Have you heard the saying “those who endure are those who adapt”? It’s no different for your business. Those left standing are those who keep up with change. But how are traditional institutions adapting to digitization? FiDaaS allows your business to do exactly that - adopt change and adapt to digitization.

By leveraging FiDaas and offering it to customers, MNOs can expand their existing bouquet of service offerings, improving customer retention while simultaneously attracting new customers.

Beyond gaining new customers and retaining current customers, FiDaas is one service that can help you differentiate your business from competitors and tap into new business models that will give you an edge within a saturated and competitive industry.

How MNOs Can Offer FiDaas To Customers

Offering customers a means of developing their own digital identities empowers them to do more in the digital sphere - whether that’s purchasing products and services, sending and receiving money or accessing a loan or opening a bank account.

Having a vetted, verified credit profile opens many doors, encouraging greater financial inclusion, particularly for the unbanked and underbanked segments of society who are often unable to secure financial aid.

Building credit profiles requires MNOs to provide access to credit lines and track and record individual customer repayment behaviours. Understandably, MNOs might be hesitant to do this, especially since customers might not have any prior form of credit record or profile that can be reviewed.

The solution is to implement a brick-by-brick approach to creating credit profiles, by offering small, initial credit advancements. Advances in airtime and data are the ideal place to start.

By beginning with incremental advances in smaller airtime and data loans, MNOs can mitigate the risk of providing larger lines of credit to unprofiled customers, while still building profiles.

Customers who build up good repayment records can then be flagged for larger advancements, such as mobile money lending. Finally, customers with the strongest credit profiles can be targeted for service offerings like handset financing, which allows them to purchase and transact even more.

MNOs who offer FiDaas to customers can assist customers in creating bonafide credit profiles that they can use elsewhere while simultaneously improving their bottom lines by identifying high-potential customers for further product and service offerings through their credit profiles.

Conclusion

MNOs who offer FiDaas to customers can assist customers in creating bonafide credit profiles that they can use elsewhere while simultaneously improving their bottom lines by identifying high-potential customers for further product and service offerings through their credit profiles.

Airvantage is one of the largest service providers to MNOs across Africa. We specialize in:

●     Advanced airtime and data lending

●     Mobile wallets and mobile money lending

●     Agent lending and handset finance

●     Financial identity as a service

We take on the risk so you can receive all the benefits.

If you’re ready to find out how Airvantage can help you leverage FiDaas as well as other mobile-based services, book a consultation with us.

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