Bouyed by growing insurance sales, Telkom is enduring the depressed economic environment, as it positions to be a serious player in the provision of financial services.
This is according to Sibusiso Ngwenya, managing executive: Telkom Financial Services, who says the business unit performed well, especially in the second half of the company’s financial year, bolstered by a rise in policy sales.
Outlining Telkom’s stimulated push in financial services during an interview with ITWeb, Ngwenya says the growth in insurance sales had firmed up the company, triggering it to aggressively advance other new products.
This comes on the back of a growing trend by mobile operators in SA of venturing into financial services, as they evolve into ICT-based service providers beyond telecommunications.
MTN recently unveiled its ambitious plan to create a standalone fintech company by the end of the first quarter of next year and onboard 100 million subscribers in five years.
Similarly, Vodacom is scaling up its financial services offering and plans to launch its VodaPay services in partnership with Alipay imminently.
Now, Telkom says it is joining the race with its own plans to capture a significant share of the increasingly competitive market.
Ngwenya says: “Insurance policy numbers grew at over 20% year-on-year, mostly driven by device insurance sales. The funeral cover is competitively priced and caters generously for one’s extended family, which is the primary reason people take out funeral cover.
“Our Telkom Pay digital wallet has over 10 000 registered and fully KYCed users, a number we are happy with given the product has been in pilot phase which started in December.”
Digital wallet surge
Telkom’s digital wallet operated on WhatsApp – Telkom Pay – debuted in December 2020, allowing customers to make transactions without the use of cash and the need for face-to-face interaction.
Ngwenya says the company is satisfied with the progress Telkom is making with the digital wallet.
“In December, we launched the Telkom Pay digital wallet – the wallet uses WhatsApp so there is no need to download and learn the working of a new app. The functionality works on the messaging platform and you access the numerous features, such as buying data, airtime, paying or receiving payment via QR codes, sending money to a recipient through a menu via WhatsApp so it is easy to use,” he says.
“We added to the features of the digital wallet earlier this month. Users can now create a Mastercard Virtual Card which they can use to make online payments. We believe the virtual card on WhatsApp is a first for the continent and demonstrates Telkom’s commitment to bring to market simple solutions aimed at meeting the needs of consumers.”
Further, Ngwenya says, digital wallet users can make EFT payments to any bank account and also enjoy other services.
“In demonstration of our commitment to inclusivity, we have also made the features of the wallet available via USSD. Our ever-popular Mo Nice is available on the wallet. On the insurance side, consumers can now take up funeral cover and maintain their policy online.”
Future prospects
According to Ngwenya, there are plans to build the Telkom Financial Services brand as a serious contender in the provision of financial services.
“We are putting into motion a campaign to promote the Telkom Pay digital wallet as well as educate consumers on its capabilities. We think the next 12 months will prove to be very exciting for Telkom Financial Services; we will continue to build the Telkom Pay ecosystem – bill presentment and payment and an innovative payments acceptance facility for small and medium businesses is on the cards.
“We recently concluded a heads of agreement with Easy Equities, in terms of which Telkom and Easy Equities will launch investing services within the Telkom Pay digital wallet.”
However, Ngwenya lamented the impact of remote working on Telkom Financial Services, saying: “We do a lot of device insurance sales in our stores, and during the hard lockdown, our stores were closed for a period and that caused insurance sales to almost dry up. We are therefore very impressed as to how well we bounced back in the second half of the year.
“This was only possible through the adoption of an effective remote working model, which is still in force as we speak. I can confess that getting a new line of business off the ground working remotely can be challenging. We had to re-engineer some processes and ensure alignment across our value chain. We have adapted so well, we believe aspects of our remote working model are here to stay.”
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