The second largest mobile telecommunications company in Russia, Megafon, is in the process of starting up a bank to capitalize its customer base's interest in managing their own finances. This would allow for on-the-go and cross selling of services by and between the existing customers of the telecommunications firm.

Many of the Russian mobile operators are trying to increase profits in a maturing market, thus the search for avenues to increase revenues from their subscriber base. Megafon's move comes after MTS had purchased a stake from a bank its parent company Sistema owns.

According to Megafon CEO Ivan Tavrin during the Reuters Russia Invesmtment Summit, "We are discussing - we don't have a decision - creating a Megafon bank. We are very (focused) on value-added services. There are many (new) things we can do inside our industry."

Tavrin added that Megafon would be inclined to purchase a small bank instead of acquire a banking license, as the latter would take more time. The firm is already in discussion with a number of small lending institutions. Also, the bank should not have large operations or a branch network.