BANKI NG MV NO

A Case Study
TABLE OF CONTENTS

Mobile Banking Services = Banking + Mobile Communications 1

Major Trends 1

What is a Mobile Virtual Network Operator (MVNO)? 1

Why should banks embrace the MVNO opportunity? 1

10 Good reasons why banks should go mobile 2

Some Stats of MVNO’s Globally 3

MVNO Market Presence is growing 3

Mobile Banking MVNO Options Available for Banks 4

Types of MVNOs 5

What is the MVNO Mobile Banking Business Model? 5

How to create an MVNO Mobile Banking Service 6

MNO offering to the Mobile Banking MVNO 6

The Mobile Banking MVNO Solution Components 6

Additional services to increase revenues 6

Additional Telco Communication Services to Increase Revenues 6

An Example of a Successful MVNO 7

The Case of Equitel- Founded by Equity Bank Groups 8

Equitel is the MNVO that Equity Bank Founded 8

Summary 9

Bank MVNO Critical Success Factors 9

MOBILE BANKING SERVICES = WHAT IS A MOBILE VIRTUAL
BANKING + MOBILE NETWORK OPERATOR (MVNO)?
COMMUNICATIONS
During the last 30 years, communication service providers
Providing mobile banking services allows banks to have been developing on several levels. The most
significantly enhance the convenience, flexibility, common service provider set-ups are:
accessibility, and affordability of their banking services.
MNO | Mobile Network Operator
An operator of a full scale mobile network including
mobile infrastructure (mostly 3G), client service and
MAJOR TRENDS marketing. Examples: Vodafone, Orange, Verizon, AT&T,
Cellcom, Safaricom, MTN, AirTel

Money has been moving to the digital ecosystem for the
last 25 years, with the arrival of internet banking, banking
applications, and even digital money. Banks need to
create a digital and mobile extension to their existing
service model, making sure it is still secure and provides
reliable access to the mobile channel.
MVNO | Mobile Virtual Network Operator
An operator of a virtual mobile network that does not own
the network infrastructure and buys access to network
services at wholesale rates, then sets retail prices
independently. An MVNO may use its own customer
services, billing support systems, marketing and sales
personnel or it may employ the services of a mobile
virtual network enabler (MVNE). Examples: Lyca, Tracfone,
Virgin Mobile

MVNE | A mobile virtual Network Enabler

A company that provides network infrastructure and
related services, such as Network Sub systems, Business
Support Systems, provisioning, administration and
Operations Support Systems to MVNOs. This enables
mobile virtual network operator (MVNOs) to offer services
to their own customers with their own brands. The MVNE
does not have a relationship with end consumers, it
provides a network enablement platform and services

WHY SHOULD BANKS EMBRACE THE MVNO OPPORTUNITY?

EXPANDING SERVICES THE MOBILE PHONE VALUABLE DATA

Expanding services to include a
mobile communication offering
will bring more customers and
make the market position of the
bank stronger. With new market
segments and new business
models, banks can create new
sources of income and get a
dominant foothold in the market of
mobile payments.
The mobile phone is held in the
hands of billions of people around the
world. People who are using their
phones instead of cash to pay for
products and services. They buy goods
in vending machines and shops, they
pay their fare on public transportation,
they even give phone gifts to one
another such as minutes to talk or a
bundle of messages to use. Mobile
devices are even becoming barcode
scanners where needed.
Banks can relinquish financial
reliability checkups without
increasing risk because they
already have the information on
their clients’ economic statuses. In
contrast, mobile operators
attempting to become mobile
banks must go to considerable
expense to qualify their customers
and be sure that they are
financially reliable.

BD innovations | Banking MVNO | page 1

10 GOOD REASONS WHY BANKS
SHOULD GO MOBILE
1. The growth of the mobile telco service providers
threatens conservative banks. They are after the banks
business.
2. Currently in the world there are less bank accounts
than mobile phone accounts.
3. Mobile phones are mobile internet devices. MNOs
will attempt to take the banks out of the value chain.
4. Many bank services are virtual nowadays, and
increasingly fewer customers visit the branch in person,
as virtual services are much more convenient.
5. Telecom and Banking services are getting closer.
Even some terms are similar Debit Card = Pre-Paid
Card, Credit Card = Post Paid account, and more.
6. Banks have an advantage over MNOs – Customer
Trust and long-standing relationships with them. Most
customers have decades of history managing their
accounts in one bank. MNOs have not been around as
many years as banks have.
7. Expanding banking services to be mobile can bring
more customers and create a more stable market
position. The new market segments and new business
models mean new sources of income, and a powerful
foothold on the market of mobile payments.
8. Phones are becoming more versatile. People are
using their phones instead of cash to buy goods in
vending machines and shops, and to pay their fare on
public transportation. Mobile phones can also become
barcode scanners.
9. Macro payments are made to buy goods and
services normally paid for with credit cards. You may
also pay for services with the aid of a handheld POS
terminal; Soon you will be able to enter your bill details
on your mobile, and the payment will be processed
immediately.
10. Mobile operators must go to considerable
expenses to ascertain that their customers are
financially reliable. Banks, on the other hand, can give
up on these costly procedures without endangering
themselves, as they already have the information on
their clients’ financial statuses.
But that’s not all. Make up attractive postpaid packages
with no contracts to be signed, and you will not just
excite your existing customers, but also attract new ones
to the bank, especially those who don’t have to pay off
their mortgages – like students or young specialists…
BD innovations | Banking MVNO | page 2
 SOME STATS OF MVNO’S GLOBALLY
The global MVNO market is expected to reach 80BN USD Annually by 2021

Size of the global MVNO market

from 2012-2022 (in BN of USD)
88
Source: Technology & Telecommunications / Mobile
Virtual Network Operations Market Size Worldwide 80
2012-22
73.5
66.5
60.5
55.5
51
46
42.5
39
36

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

MVNO MARKET PRESENCE IS GROWING

The number of MVNO subscriptions has increased by 63% between 2012 and 2018. This is huge
growth. Global MVNO subscriptions in 2012 were 1.9% and grew to 3.1% in 2018.

MVNOs 1.9% MVNOs 3.1%

Operators Operators
98.1% 96.9%

2012 2018

BD innovations | Banking MVNO | page 3

 MOBILE BANKING MVNO OPTIONS AVAILABLE FOR BANKS

Not owned by an MVNO Owned by an MVNO Sometimes owned by an MVNO

Functional Brand Service Enhanced Full MVNO

Model Reseller Provider Service Provider

Radio
Enabling Spectrum
infrastructure
and network
provisioning Network
Switching

VAS
Content
and Service
Applications
Service
Platform

SIM card

Billing

Operations Pricing
Capability

Provisioning

Customer
Care

Own Brand
Branding,
Sales and
Marketing
Distribution

BD innovations | Banking MVNO | page 4

 MVNO TYPES

Applications
Radio Access Core Network Billing Customer Care Marketing Sales
and services

MNO Reseller (Thin MVNO)

MNO Service Provider MVNO

MNO Enhanced Service Provider

MNO Full Infrastructure MVNO (Thick MVNO)

Discount MVNO Niche MVNO Brand MVNO

Retail MVNO Advertising MVNO

WHAT IS THE MVNO MOBILE BANKING BUSINESS MODEL?

MOBILE OR HARDWARE AND VOICE SERVICES ADVERTISING

MULTI-PLAY S.P. SOFTWARE

Keep your banking Sell mobile devices and Monthly fee for mobile Use mobile platform to
customers withourt losing generate one-off revenue subscription advertise banking
them to others products and services
Device placement Charge for additional
Decrease new customer usage Audience
aquisition costs
Charge for premium Increase the audience of
Cross selling and services (roaming, the software and portal
retention browsing, tv) cloud and turn it into
advertising
Subscription - Monthly fee

Traffic

Premium services

BD innovations | Banking MVNO | page 5

HOW TO CREATE AN MVNO
MOBILE BANKING SERVICE SERVICES OFFERED BY A MOBILE MONEY
MVNO
Mobile money
⊲ P2P transfers (individual transfers)
MNO OFFERING TO THE MOBILE BANKING
MVNO
⊲ P2B transfers (bill payments / utility payments)
⊲ RF ⊲ P2G transfers (payments for government
services; subsidies distribution)
⊲ MSC/STP
⊲ B2B transfers (electronic transfers for the goods)
⊲ SGSN/GGSN
⊲ P2cash transfers (cash withdrawal / cash
⊲ HLR
deposit)
⊲ P2A transfers
⊲ Microloans
THE MOBILE BANKING MVNO SOLUTION
COMPONENTS
Mobile wallet
For the BANK
⊲ PayPal
⊲ BSS
⊲ E-comm acquiring
⊲ CRM
⊲ Cash-in kiosk
⊲ Customer Care
⊲ Mobile API
⊲ Invoicing
⊲ Goals / Savings/ Deposits
⊲ Rater
⊲ VAS
⊲ IN
ADDITIONAL SERVICES TO INCREASE
REVENUES
For the Aggregator ⊲ Add security to traditionally insecure (but cheap)
⊲ SMSC channels, like SMS/USSD (e.g., Secure
messaging)
⊲ Mobile Wallet
⊲ Add the possibility of reliable authentication for
⊲ Mobile Money
various services (e.g., Online banking,
⊲ Reports m-banking)
⊲ Order Management
⊲ POS
⊲ Self-Care for Android/IOS/ Web ADDITIONAL SERVICES TO INCREASE
REVENUES
(An Example for a Bank of a Converged MVNO)
For the Dealer
⊲ Voice, SMS and Data services
⊲ Mobile API
⊲ Pre-Paid and Post Paid
⊲ Payment GW
⊲ Real-time rating and charging
⊲ Provisioning
⊲ Airtime and Data top-up
⊲ Various value-added services (FRBT, MCN,
Callback)
⊲ Roaming services
⊲ Multi-country support

BD innovations | Banking MVNO | page 6

 Country Partner network

AN EXAMPLE OF A SUCCESSFUL Australia Vodafone

MVNO Denmark Telenor

Lebara is a telecommunications company providing France Bouygues Telecom

services in many countries around the world, using the Germany Telekom
mobile virtual network operator business model.
Netherlands KPN
Lebara Mobile provides pay-as-you-go mobile SIM cards, Sri Lanka Dialog
targeted toward the needs of international communities
and migrant workers. Lebara was founded in 2001; it is Saudi Arabia Mobily
one of Europe's fastest growing mobile companies
Spain Vodafone
employing over 62 nationalities worldwide in six
countries. Lebara makes it much easier for migrant Sri Lanka Dialog
communities to stay connected to family and friends back
Switzerland Sunrise
home. Lebara serves 5.3M customers and has a revenue
of over 500M Euro annually. UK Vodafone

Switzerland Sunrise

BD innovations | Banking MVNO | page 7

THE CASE OF EQUITEL- FOUNDED even a simple feature phone will work similarly to a
sophisticated smartphone. Equitel is a mass market
BY EQUITY BANK GROUPS offering and so brings internet banking to the masses. It
enables all customers to access their bank accounts 24/7
The Equity Bank Groups is a rapidly growing Pan-African conveniently.
banking group. A social and economic brand, it has
scaled up by providing financial services to the masses
through a diversified distribution of its products and
services.

The Group’s strategic initiatives are geared towards

enhanced access, convenience and affordability of
financial services achieving an impressive growth
momentum.

Timeline

1984 Equity bank founded

2004 Converted into a fully-fledged commercial

bank

2006 Listed in Nairobi Securities Exchange,

became the largest bank by market Cap.
2007 Received investment of 185M USD from
Helios (strategic investor)
2015 Acquired Pro-Credit Bank in DRC (Congo)
Launched Equitel – Mobile Money
Platform
2016 Reached 10.1 Million active customers
Became a Hub for financial services in
Kenya
It is also a unique and universal platform that is
interoperable with other systems. Customers can securely
send and receive money on the Equitel network, as well
as other banks and mobile money platforms such as Airtel
Money, Orange Money and MPESA. Equitel money
transfer from one mobile phone or bank account to
another within the Equity ecosystem is free of charge.
Equitel was the first platform in Kenya and Africa to offer a
full banking suite without building a new mobile
infrastructure. It is a Mobile Virtual Network Operator
(MVNO). The service combines mobile, banking and
telecommunications.

Equitel offers a broad range of banking products including

EQUITEL IS THE MNVO THAT
EQUITY BANK FOUNDED
Equitel provides Equity bank with another opportunity
to offer inclusive, innovative, customer-focused financial
services. The platform makes banking services more
accessible, flexible, convenient and more affordable.
loans, cross-border transfers, insurance and investment
services. Equitel customers can also receive diaspora
remittance onto their accounts and access it directly
through their mobile phone.
Equitel is available to all Equity Bank account holders.
Equitel provides tools and features to perform all financial
transactions as well as make calls, send SMS and browse
the internet.

Equitel enables the Equity Bank to boost financial

inclusion and overcome the limitations of set banking
opening times and static branch locations.

Equitel’s mobile money platform eliminates the need for

mobile applications to access internet banking because

BD innovations | Banking MVNO | page 8

SUMMARY
BANK MVNO CRITICAL SUCCESS
The Launch of an MVNO with Mobile Money Services
FACTORS
will:

⊲ Compete more effectively with telecoms in the banking Create a business with increasing
sector revenues

⊲ Determine and control the price of your services Select the appropriate MVNO
network model
⊲ Manage the quality of service / the customer
experience (e.g., availability, customer support, security)
Develop a robust business plan
⊲ Enable you to focus on value adds for your target and financial model
audience, increasing your market share and revenues
Select the right network partner

Negotiate the optimum wholesale

agreement

Select the right equipment vendor

and negotiate good terms

Put in place world-class program

management

Improve performance on a
continuous basis

BD innovations | Banking MVNO | page 9

About BD Innovations
BD Innovations develops and markets
end-to-end Business Management Software
(BMS) for Service Providers in the Digital
Lifestyle Era.  Serving satisfied customers for
over 7 years, our solutions are built on
up-to-date software technology that is being
used by Facebook/Google and Amazon.

Our outstanding expertise is in signaling and

that is an important asset for Telcos who need
Control Points, Intelligent Networks,
Real-Time Billing, Complex Integrations, and
Professional Services.  Our solutions are
modular, so service providers can mix and
match and scale up following their growth.
Our solutions are affordable and easy to
deploy with state of the art technology at
cloud economy costs.

Tel. +972-542-265-158
info@bd-innovations.com
www.bd-innovations.com