Telecoms - Open banking - Nordigen

How telecoms uses open banking

| Article by: Laura AasheimProfile Image Laura Aasheim 3 min

Telecommunications (telecoms) have been forced to invest in order to keep up with rapidly developing technology. With the pandemic the push has been even greater. The industry has become central to modern society with almost every person needing to be able to either work or study from home (Nattermann & Sauer-Sidor, 2020).


Telecoms are changing

The introduction of cloud computing has helped telecoms develop new services, reduce costs and better adjust to changes in market demand (Marr, 2019). Cloud computing enhances the customer experience by strengthening security, predicting customer preferences and providing automated customer support (N-iX, 2021).

Artificial intelligence is being used through virtual assistants and chatbots. These AI tools enable telecom companies to improve their level of services and customer satisfaction. AI optimises and maintains telecom networks and is able to prevent and detect fraud (Marr, 2019). From mobile devices to apps and wearables, telecom devices are creating and collecting large amounts of data, known as big data, which enables  AI to provide better business insights (Marr, 2019).


What is open banking?

Open banking is a banking practice that securely shares financial information, such as consumer banking transactions and other financial data, to third-party financial service providers (Estevez, 2020). Sharing data is done through the use of application programming interfaces (APIs) and only with the consent of customers (The Balance, 2020). Open banking is the driver behind both innovation and competition in the financial industry (Cahill, n.d.).


Why do telecoms use open banking?

Financing of consumer electronics drive purchases. Traditionally, customers needed to “build credit” before accessing the latest technology. Today open banking allows telecoms to expand their customer base and offer financing to more customers.

Open banking helps to reduce credit risk by accessing more information that is then used to evaluate a customer's financial health. Furthermore, open banking enables telecoms to fill in information gaps where credit bureau data is not available by using alternative data.


Some telecom companies you should know about

Swisscom is a major telecommunications provider in Switzerland. Swisscom is standardising the CA Technologies API management portfolio. The two companies have partnered to create the Swisscom Open Banking Hub (CA Technologies, 2018).

Giffgaff is an innovative UK mobile telephone network running as a Mobile Virtual Network Operator (MVNO). In 2018 it announced plans to use open banking rules to provide its users with a personal finance management app.


What’s to come?

5G is the next big thing for telecom networks and devices. The technology offers a much higher speed than previous broadband networks and has a much lower latency. 5G networks provide machine-type communications that enable a wide array of applications, making it one of the most important upcoming technology trends for the telecom industry (StartUs Insights, n.d.). Telecoms will no longer include just tech distributors, but also service providers (Marr, 2019).



The Balance. (2020, October 11). What Open Banking Is and How It Will Affect You.

Cahill, H. (n.d.). InvoiceFair. The Evolution of Open Banking: Connectivity breeds digital competition.

CA Technologies. (2018, September 19). CA Technologies and Swisscom team on open banking hub. Finextra.

Estevez, E. (2020, August 27). Open Banking. Investopedia.

Marr, B. (2019, October 14). The 7 Biggest Technology Trends That Will Transform Telecoms In 2020. Forbes.

Nattermann, P., & Sauer-Sidor, K. (2020, October 30). The telecom sector in 2020 and beyond. McKinsey & Company.

N-iX. (2021, May 6). Cloud computing in telecom: stats, benefits, best practices. N-iX.

StartUs Insights. (n.d.). Top 10 Telecom Industry Trends & Innovations in 2021. StartUs Insights.    

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