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The German business division of mobile operator Telefonica is using technology from a challenger bank to launch a mobile-based bank account. O2 Banking will use Fidor Bank technology as a rebranded white label service.
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Fidor, set up in Germany in 2007, gained a UK banking licence in 2015. It uses social media to overcome the cost and complexity of traditional banking, while increasing customer trust through an online community.
Matthias Kroner, CEO at Fidor Bank, said the partnership between Telefonica and Fidor was a “disruptive alliance in Germany”.
He added that the “collaboration gives customers the best of two digital worlds, namely a quick and easy banking services via a mobile app, combined with innovative additional services from their O2 mobile contract”.
The bank has an open-technology platform it developed itself, which can be plugged into through application programming interfaces (API).
For example, as a result of open APIs, its current account customers can access 25 different services.
Fidor Bank also offers its technology to other companies as a white-labelled service. With more and more companies entering the financial services sector and traditional banks trying to replace legacy IT systems, API-based financial services are in demand.
Recent research from Gartner revealed traditional financial services IT suppliers have not responded quickly enough to the demands from banks, and claimed 25% of banks will go to startup IT suppliers for their online and mobile requirements by the end of 2019.
Meanwhile, technology companies, such as Telefonica, are entering the market and are looking for banking expertise.