Two years ago, Australia Post entered into a joint venture with a company to offer local businesses a single platform to access e-commerce products and other services. Post office branches in the UK offer customers access to the majority of all UK current accounts, while in other parts of the world remittances are now being sent to remote rural communities.
These are only a few examples of how technology in the postal sector is transforming the delivery of financial services – known collectively as fintech. Once considered part of the back office, fintech has stepped into the spotlight and is now an essential feature of front office processes using computer-based and mobile software.
As fintech possibilities grow, postal operators have seized on its ready potential. They recognize that a highly connected physical postal network forms a natural bridge linking the financial and electronic networks and capable of delivering value to customers and governments alike.
Can postal operators take advantage? The UPU’s Postal Financial Services Coordinator Sergey Dukelskiy believes so. He says that, instead of developing their own fintech solutions, Posts are actively looking for partners and already existing marketing solutions that are cheaper and faster to integrate.
His view chimes with that of the UPU’s Digital Inclusion and Policy Issues Expert Daniel Nieto who said in a recent interview, “Building from scratch is also sometimes unnecessary as there are companies that can help you build successful new services. If you want to avoid the investment of considerable time and resources, partnerships offer the best solution.”
The UPU’s Postal Technology Centre’s Account Relations and Product Management Coordinator David Avsec expects fintech to evolve further in 2019. “I think we will see evidence of the fintech sector’s ability to change the financial services landscape and drive down costs,” says Avsec.
He contends that the focus on mobile banking and micro-lending and the absence of big infrastructure costs make fintech ideal for the less developed world. “Fintech is facilitating the expansion of networks. It can enable access to payment networks for millions of people previously denied this opportunity,” Avsec maintains.
Regulation also plays a strong role. “Although huge progress has been made, problems remain. E-wallets on mobile phones, for example, are still not accepted in some countries and legislation needs to keep up with technological change,” says Avsec.
The fintech discussion, according to Avsec, also has to account for blockchain’s influence. He stresses that, in the struggle to integrate secure transactions and ally operations to finance and technology, blockchain could be the missing link.
“There is a large range of market solutions, but they do not always speak to each other. In 2019, I think you will begin to see more evidence of blockchain becoming fintech’s unifying force,” he says.
Dukelskiy agrees that blockchain will influence fintech. “Blockchain can help reduce transaction costs, savings that can be potentially passed on to customers.”
In early April of this year, UPU will bring experts to Berne, Switzerland for a conference titled, “Shaping postal financial services in a digital economy”. The conference aims to promote promising and exciting out-of-the-box solutions for postal operators, including blockchain and blockchain-driven cryptocurrencies.