Banks will become more like telcos: Michael Jordaan

In the future, banks will become more like telecommunications companies, while telecoms players are trying to muscle into banking.

This is according to Michael Jordaan, former FNB CEO and founder of Montegray Capital.

Jordaan said that banks and telcos offer intangible products. “In some cases, airtime functions just like currency. Moreover, airtime – and data billing – is just another form of bank account,” he said.

He predicted that all banking will be mobile in the near future, which closely links banking to telecoms services.

Banks and telecoms networks

Many people have asked whether banks will start to build their own networks, but Jordaan said this is unlikely.

Jordaan said there is little benefit in “duplicating plumbing” when it comes to telecommunications networks.

“In future, there will be far more sharing of telco infrastructure – like towers – to benefit from economies of scale and reduced costs.”

He said the real battle between banks and telecoms companies will be gaining and retaining customers.

“I therefore see telecommunications consolidation as a more likely scenario, with the banks opting for strategic MVNO partnerships.”

Jordaan did say the market was a “fluid space”, and that South Africa is at the forefront of banking and telco convergence. “So expect to be surprised.”

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Banks will become more like telcos: Michael Jordaan