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The Dialog you know is now a bank as well

Last September, Dialog made a fin-tech acquisition. It acquired an 80.34% stake in Colombo Trust Finance PLC for Rs. 1.072 billion. At the time, Dialog had stated that it was planning on offering financial services in Sri Lanka. Now one year later, we’re seeing that take form with Dialog Finance.

What is Dialog Finance?

Colombo Trust Finance is now Dialog Finance PLC, which is a subsidiary of Dialog Axiata PLC. Thus, it operates in the same manner as wow.lk, Doc990, and Guru.lk. It’s registered by the Monetary Board of the Central Bank of Sri Lanka under the Finance Companies Act 78 of 1988.

Dialog Finance is a subsidiary that offers financial services (Image credits: Dialog Axiata)

Dialog Finance is a subsidiary that offers financial services (Image credits: Dialog Axiata)

Accordingly, they offer savings, loans, fixed deposits, leasing facilities, and other services you’d expect from a bank. As per the images on the official website, these are meant to be accessible through a few taps on your phone.

Of course, that’s to be expected. However, that’s all we know at the moment. The section on the Dialog Finance website regarding digital financial services only lists as coming soon. Meanwhile, for other products, it lists a number to call rather than having the information on the website.

So why’s Dialog entering the finance sector?

Simply put, there’s big money to be made. Mobile money is one of the biggest opportunities for telecom operators right now. According to a report by the GSMA, the mobile money industry processed $1bn per day globally on average in 2017. Furthermore, it generated $2.4bn globally in direct revenues for telecom operators.

The mobile money landscape has changed with a big opportunity for telecom operators in Asia (Image credits: GSMA)

The mobile money landscape has changed with a big opportunity for telecom operators in Asia (Image credits: GSMA)

But most importantly, it’s expected that one of the biggest growth opportunities for mobile money will be in South Asia. In 2012, only 5.6% of mobile money customers were from South Asia. In 2017, that number jumped to 34%. Furthermore, the value of the transactions by these customers rose from $5.7bn in 2016 to $8.4bn in 2017. That’s an increase of 48.9% in one year.

Of course, most customers of mobile money services are still in Sub-Saharan Africa. Yet, the growth in the Asian region is not one telecom operators can ignore. Thus, it makes sense that Dialog would eventually enter the fintech industry sooner or later.

Going up against the traditional banks

In the recent months, we’ve seen Dialog heavily promote Genie, which is its own digital wallet app. Interestingly, in that space, it has also found a competitor in FriMi. The same FriMi by Nations Trust Bank. Similarly, Commercial Bank has also released their own competitor with Flash. Thus, we can see that the banks are entering the digital world.

Dialog Finance

With apps like FriMi, the traditional banks are also entering the digital world (Image credits: Gavin Mathew)

Of course, there’s no denying that they’re horribly late. But better late than never at all. Yet, the banks are still a trusted entity by many for storing money safely. Whereas Dialog has some messy incidents when it comes to safeguarding the money of its eZ Cash users. Thus, we can see that the company will face some competition in this arena.

Nonetheless, Dialog has the potential to make financial services easily accessible to the masses. It can be through USSD or an app. For some, that ease of access can make all the difference in helping our society moves towards a digital economy. Whether Dialog Finance and the other digital payments services achieve this is something only time will tell. But at the moment, the industry is growing.

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