Transforming device finance for a major UK mobile airtime provider

Steve Stone

Steve Stone | Commercial Director

Steve brings over 30 years experience in the financial services industry gained through working with top-tier banks and lenders, investors, fund managers, and brokers. He has extensive skills and experience in supporting new lenders coming to market, Business Process Outsourcing (BPO), and software provision to companies operating within the financial services industry.

A mobile revolution

In December 2021, new regulations were introduced. This meant mobile providers had to separate device finance from the airtime contract. Ofcom also set out rules around greater transparency and fairness for the customer. These included the right to be informed before contracts ended and the ability to switch providers with just a text message.

The mobile device finance market is growing rapidly. Devices that could require finance include mobile phones, tablets, Air Pods, smartwatches, and wearable technologies such as AI glasses​. New and emerging technology, like the latest iPhone, is highly desirable to early adopters. The premium price for being the first in line means the device cost is often too expensive as a one-off purchase​. Amid this rapid growth, providers have had to adapt to ensure their solutions and platforms meet the new regulatory requirements. That’s where device finance comes in.

The challenge for providers

Mobile providers require Loan Management Software (LMS), to support the change and ensure device finance is separated from airtime or SIM-only plan, completely transforming the customer experience. In many cases, the cost to develop, deploy or maintain a new or existing LMS system in-house is either too costly, too time-consuming or in-house development teams just didn’t have the required time, experience, or skillset.​ Additionally, some providers have realised that legacy systems are not easy to flex or scale to meet changing requirements.

A rapid response

Our client, a top-three UK mobile airtime provider, was ahead of the curve and keen to rapidly adapt to this regulatory change before it became mandatory. It was the right thing to do for the business and their customers. Target, working in partnership with our parent, Tech Mahindra, have strong experience in device financing and the broader financial services market. This meant we could deliver a strong joint proposition to help our client adapt to the change quickly and confidently.

Target was able to stand up an Agile delivery team to scope out and deliver the project for our client. As part of our Business Process Outsourcing offering (BPO), Target provided our hosted, managed administration service to the end customer. We also deployed our loan administration system to manage customer device financing payments.

The complete Target Tech M solution:

  • Managed hosted LMS underpinned by Targets’ deep expertise in consumer lending​
  • Scalability to support increased account volumes and significant peaks in demand (e.g. new device releases) ​
  • Highly flexible and adaptable to meet regional requirements and to help navigate the FCA and associated regulations in this market​
  • BPO operations expertise, supporting overflow or providing a second line specialist loan servicing operation​
  • Capability to take over loan servicing administration​
  • LMS is highly configurable and flexible to meet regional regulatory demands​

Partnering for the future

The service for our client went operationally live in November 2020, with a full product launch in October 2021. We’re delighted with the partnership and look forward to supporting their future needs.  Keep an eye out for a case study where we reveal more about the client in the coming months.

We’re exploring new initiatives with the client, such as interest beating products and innovative solutions to help support and grow their customer base. The mobile device market is growing at pace, and our client is primed to deliver their superior customer solutions to this expanding market.

We’re here to help

Please get in touch today to explore how Target and Tech Mahindra can help transform your business to meet evolving customer and regulatory needs. Contact Us – Target Group