We’re in the midst of a convergence of communication and financial services, with telcos and banks leading the way. Telcos and banks across the world are diving (and wading) into new service areas alone or in partnership. While bank and telco product innovation isn’t new, the urgency and scope of cross-industry experimentation have increased recently. Read my recent post on the bank/telco convergence for an overview of the trend.
Many banks and telcos rightly worry that they could be left behind as communication and financial services converge. Yet, risk and cost are holding them back from exploring converged options. That makes collaboration and partnerships the surest path to winning the trend. With partnering, each player contributes its services and expertise, lowering risk and costs.
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Just as appealingly, partnering delivers immediate rewards. Banks capitalise on telcos’ sticky service experience and large customer bases. Telcos see partnerships as a way to boost revenue by cross-selling and upselling partner products and services. As importantly, telcos view embedded financial services as a potential competitive differentiator likely to help them attract and retain customers.
Forming a partnership appears straightforward – from the outside. Start by co-creating a customer proposition that furthers bank and telco business goals while delivering must-have value to customers. Then, rapidly design, build, and scale your joint vision. That’s a proven formula for success, but it’s far from straightforward. At Amdocs, we’ve found that many banks and telcos stumble at the integration stage.
Trend takes shape
A recent partnership between Verizon and Santander in the United States exemplifies the benefits of working with an ally. The partnership revolves around a co-branded savings account that rewards Verizon customers. In Brazil, NuBank partners with telco Claro to offer wireless service through its digital banking app. German digital bank N26 partners with Vodafone Germany to empower customers to activate mobile phone service for a new or existing number within its banking experience. These are just a few examples of how telcos and banks collaborate to deliver fresh financial and communication options.
An obvious “why” with virtually unlimited “hows”
Banks partner with telcos to reach more customers and offer an integrated experience. Telcos partner with banks to grow revenue and delight customers with expanded services. How do these partnerships work? Partnerships take many forms, including:
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By GlobalData- Co-branded products: One of the simplest forms of partnering involves a joint offer of a traditional banking or communication service to existing customers. For example, a bank and telco could join to offer savings accounts or small business loans.
- Buy now pay later (BNPL): Telcos partner with banks to offer customers BNPL services for communication products and other purchases.
- Superapps: Telcos and banks partner to build apps that deliver a wide range of communication and financial services.
- Loyalty ecosystems: This option rewards customers with discounts or other incentives for taking advantage of cross-sell and upsell opportunities.
- Bundles: Here, a bank and telco combine financial and communication services into a single, high-value product offer. They can even add more partners to expand bundles to include entertainment and other options.
“How” is also the challenge
When banks and telcos settle on an answer to the question “How can we partner?” the heavy lifting begins. Partnerships between telcos and banks can get stuck on the many “hows” of integration. Banks and telcos rely on complex systems that often blend modern approaches, like cloud and AI, with legacy systems. The right approach accounts for – and overcomes – that complexity from the outset. The variables of how to integrate can be overwhelming. A modular approach can help you meet the exact requirements of your partnership faster.
You gain speed from a modular approach, but you must avoid allowing customers to feel the “seams.” Predictive AI can anticipate customer needs and personalise experiences, while GenAI enhances the frontend by providing conversational support and answering questions about joint products. For more advanced, seamless experiences, Agentic AI comes into play—capable of autonomously acting on behalf of customers to resolve issues, complete tasks, and optimise outcomes across banking and telco services. Agentic AI can also empower customer service staff with a holistic, cross-industry view, enabling them to address complex, multi-domain challenges. With proper compliance and customer consent guardrails, these AI technologies together deliver the data-driven insights that financial and telco leaders need to manage and grow partnerships. Most importantly, Agentic AI serves as an innovation engine, unlocking possibilities such as proactive financial coaching and automated loan decisioning, all while maintaining transparency and user control.
How to accelerate partnering with modular integration
With a modular approach, you focus on the key integration layers relevant to specific propositions. Modular project teams foster expertise and focus that help them advance projects fast while spotting and resolving issues sooner. The goal is to use modular teams and project execution to accelerate co-innovation, de-risk launches, and rapidly validate customer propositions. Include telco, banking, and multidisciplinary specialists on each team to ensure cross-industry fit and to guide coordination across modules.
Organise modules around the following critical integration layers:
- Digital experience: Supercharge engagement with digital experiences that seamlessly blend financial and communication services. Apply research-based design methods to ensure usability even for customers with limited exposure to banking.
- Data and GenAI: Establish a modern, stable, compliant framework for data related to the partnership. Clean data and optimized AI models help create a unified experience for customers and your people.
- Platform: Maximize the use of modern approaches like cloud, APIs, and open source technology. Basing partnership programmes around modern systems supports scalability, performance, and compliance.
- Quality: Use AI, machine learning, and automation to accelerate testing and time to market for customer propositions.
Fast-track partnerships with experts
A modular approach to project execution is proving to be a powerful engine for innovation across banking and telecommunications. For example, one recent initiative saw a bank launch an embedded finance BNPL service that telcos extended to their customers. APIs accelerated the onboarding of new telco partners, who then focused on boosting customer engagement through enticing offers and seamless integration of the BNPL experience.
Whatever your vision for telco/bank collaboration is, whether it’s BNPL, digital wallets, or next-gen loyalty innovation, now is the time to explore fintech partnerships that align with your goals. Talk to experts about how a modular approach can help you move faster, reduce complexity, and unlock new value across industries.
Pablo Cella is Division President and General Manager for the Business Division Studio at Amdocs
