“It is high time for mobile network operators to transform”: The CEO of Eko, on bridging the bank/telco divide
There is no love lost between banks and telcos in many countries, as mobile network operators encroach on banks’ markets with mobile money products that meet a growing number of banking needs.
But some companies have found a way to straddle the worlds of banking and mobile networks, providing products that utilize the unique strengths of both to bring needed banking services to underserved customers. In India, for instance, Eko is leveraging existing retail shops, telecom connectivity and banking infrastructure to enable secure and convenient financial transactions among customers that traditional bank branches can’t reach.
As Eko co-founder and CEO Abhishek Sinha describes it, “The Reserve Bank of India has said that a third party, called a business correspondent, can be a special agent of the bank who can source and service customers on behalf of the bank beyond the branches. So on one side we have partnerships with the banks, and on the other side we have partnered with retail shops, and we have empowered the customers and the retailers with the cell phone. The cell phone in the hands of the retailer is like the point of sale terminal, while the cell phone in the hands of the customer is like their debit card. So customers can walk into such outlets, open a bank account for themselves, and also meet their transaction needs, including money transfers and regular deposits and withdrawals.”
In this interview with Mercy Corps’ Kyla Yeoman (Part 5 of our Mobile Money Movers series), Sinha discusses the importance of reaching the unbanked in urban areas (not just rural), the need for telcos to provide a mobile infrastructure that’s open to their banking competitors, and the ways that mobile network operators could evolve by emulating Facebook.
Note: The series has included video interviews with:
- Sitoyo Lopokoiyit, head of Strategy for Financial Services at Safaricom
- Karim Khoja, CEO of Roshan
- Zahir Khoja, CEO of MasterCard’s Mobile Payment Solutions
- Greg Chen, Senior Financial Sector Specialist at CGAP
Upcoming videos will feature:
- Ignacio Mas, mobile money consultant