TIM follows Orange into the finance fracas

Telecom Italia and Spanish bank Santander have entered into a joint venture to offer consumer banking products to Italian customers.

The joint-venture, 51% owned by Santander and 49% Telecom Italia, will start rolling out financial services through TIM’s retail footprint in the coming months, beginning with financing plans for devices and progressing into consumer loans, credit and insurance in the future.

Like Orange in France, it appears TIM has spotted an opportunity to disrupt the traditional banking industry with a digital-native finance service for Italian customers.

Launched in 2017, following the acquisition of Groupama Banque, Orange Bank now has more than 500,000 customers, offering a full range of consumer banking products from current accounts to personal credit and insurance. Part of the success of this venture has been attributed to cross-selling opportunities created through the telcos retail footprint. The team aim to have 5 million customers by 2023.

Although diversification is a key trend in the telecommunications industry, the more drastic ventures have more often than not dwindled into obscurity. However, Orange Bank is the poster child of successful diversification, and it appears TIM wants to get in on the act.

Like Orange, TIM will start with simple financing products. Once the relevant authorisations and licenses have been secured, the team will aim to move into additional products such as credit cards and consumer loans.

Perhaps the most interesting element of this story is the potential for success. Digital banking services are becoming increasingly popular with consumers, especially with digital natives taking over society, though the traditional banking companies have been unable to most appropriately capitalise on the trend. Digital products and applications have been largely cumbersome, opening the door for digitally native alternative to gain traction.

Monzo, Revolut, Starling Bank and Doconomy are examples of companies who have adapted the financial services industry for the digital consumer, though there is still plenty of room for disruption. One thing which Orange has shown is that a trusted brand can be translated into a completely unrelated industry.

TIM is of course in a strong position in the Italian market with 31 million mobile subscribers and 7.5 million broadband customers, offering plenty of opportunity to cross-sell services. For Santander, it certainly offers an interesting opportunity to branch out into a market where it has no consumer presence currently. Should TIM and Santander be able to replicate the success of Orange it would certainly be welcomed by the battered financial spreadsheets at the telco.

Telefonica pairs up with Santander for banking 5G usecase

Telefonica Spain has announced a tie-up with Santander to launch a joint-innovation project to test out 5G applications in the banking sector.

The project will focus on three different usecases, 4K video conferencing, low latency cloud storage and virtual reality. The hope is to more readily engage customers and adapt their financial products to meet the new demands of the digital economy.

“The initiative with Santander Spain is the result of the collaboration with our corporate customers to ensure that 5G technology is deployed in a way that fully meets their needs, prioritizing the development of the most demanded capacities,” said Emilio Gayo, CEO of Telefónica Spain. “With initiatives like this we also ensure the early adoption of 5G and the positive impact on the Spanish industrial network.”

“This agreement with Telefónica responds to Santander’s commitment to innovation and to accompanying our customers in the transformation process towards the new generation of 5G communications,” said Rami Aboukhair, CEO of Santander Spain. “The new technology will allow us to have a better connectivity and faster speed of response in transactions and to offer all our customers the best experience and the best possible solutions.”

Starting with the video application, a 4K video conferencing link will be set up between two bank branches to offer ultra-high-resolution image, 4096×2160, and natural motion with zero delay. Secondly, a low latency cloud storage solution will be provided by Telefónica, based on the Hitachi Content Platform Anywhere Edge solution embedded on Telefónica’s edge computing infrastructure.

Finally, the pair will introduce co-working spaces developed in collaboration with Idronia that use Virtual Reality, 360 video and Edge Computing technologies. The aim is to offer an immersive reality service allows customers to remotely visit co-working spaces such as the Santander Work Cafe located at the Santander banking office in the centre of Madrid.

5G is being switched on in numerous locations and now it is the time to focus more heavily on the commercial side of telco. There might be some gain in offering eMBB products to both consumer and enterprise customers, but to see the promised value the telcos will have to explore new areas. European telcos might be behind other regions when it comes to engaging the verticals, but progress is being made.