Here’s a fun trivia question for all you digital folks:

What digital channel gathers
25,000,000 transactions each month,
but doesn’t fit in your pocket?

Drumroll… the beloved Automated Teller Machine! By the way, that number is just for DBS in Singapore, who operate the world’s most active ATM network.

We recently nabbed a little trophy with DBS, for our work on their upgraded ATM User Experience. While most ATM’s you’ll see across Asia come with a retro two-color text-only experience, we wanted to get as close as possible to the mystical “omnichannel” experience. That means the ATM UI should look more like your website and apps, less like your pocket calculator from high-school.

If you think about it, as long as we need cash, which could be another 10 or 20 years by some estimates, why would you ignore the experience of getting cash? Cash is king, particularly in Asia. While some ATM’s can support up to 50 types of transactions, from credit card applications to buying government bonds, the core transaction is still cash.

By running the numbers on typical cash withdrawal amounts, we were able to provide intelligent and personalized Fast Cash options right on the home screen for a one-click transaction. The outcome is shorter cycle times and ultimately shorter queues, which is what you want to see. With bank branches on the decline globally, ATM’s will not disappear, but will actually see increased usage.

As Über and Amazon do with payments, the best experience is no experience at all

You can also personalize the experience like you might do on a real website, by changing the font size and language from a contextual menu. The first time you try it it’s almost tempting to play around with it, because it feels novel in such an old school context.

Something that really struck me was a senior banking executive telling me the story of how his elderly father never trusted the ATM’s when they came out in the 1960’s. He wanted a human to count his money, surely the machine would get it wrong at some point! You can only trust your money in human hands! In a lot of ways that’s what we’re seeing today with the onset of digital banking, with more and more transactions moving onto mobile devices. Older generations will always prefer the security and comfort of whatever channel they’re used to, be it physical or digital.

Whether it will keep rolling out cash, or serve other purposes like video chat or card issuance in the future, we should not forget this channel. Long live the ATM!

Thanks Alok, Rob & team, that was a fun journey!

Source: LinkedIn

In case you missed it, 2016 is quickly becoming a year to remember in digital disruption of financial services. The two momentous events you need to look at are DBS launching their mobile-only Digibank in India, and the upcoming launch of O2 Banking, the mobile lovechild of a startup and telco (Fidor & Telefonica).

What’s the story here? A sea change of digital banking.

These aren’t mobile banking apps.
These are mobile-only banks.

This is your Über moment

You might be wondering what separates a startup like Fidor from a bank? Both offer a banking app. Both have banking licenses. Walks like a duck, talks like a duck?

Cost. Massive, immovable cost. Human. Material. Immaterial. Everywhere. Glossy branches. Tellers. Automatic and human. Office towers with fountains. Commissioned sculptures. Armies of lawyers. Committees. Armies of middle managers. Committees about having more committees. Armies of auditors that audit the other armies.

Banks spend an average 65% on branches, yet only 12% of interactions happen there

Just like Über and taxi companies. Both have apps. Only one has massive fixed costs that prohibit scale. The other is mobile-only. Just a digital platform, that can scale almost infinitely. Ask yourself, are they on equal footing to compete in today’s marketplace? Tomorrow’s marketplace?

Learn from DBS, or lose your footing

Do what DBS did. It’s really that simple. They’re also a bank. They have branches, offices, fountains and tellers too. Yet they decided to try, well…  not being a bank.

Digibank is a real digital bank. Mobile-only. No branchesJust an app. See here’s the difference with mobile-only. When you sign up, you don’t go to a branch. You tap. And you’re done.

If a million customers decided to join DBS Digibank today, at the same exact time, it would take them a grand total of 90 seconds to become customers.

Let that sink in… it stings, doesn’t it? How long does it take your bank to onboard a million customers? More than 90 seconds? Try 90 months. You’re toast.

If their Digibank experiment works in India, do you think that’s the end of the story? Think again. In fact, it’s an extremely savvy insurance policy against disruption. If things go all Über, they’ll be right there, positioned to benefit. Positioned to remain relevant. Positioned to stay alive.

If you wait, Telefonica will teach you a hard lesson

The onslaught is already under way. In cubicles around the world, developers are hatching their evil plans to launch digital banks. They didn’t ask your permission. They don’t sit on your committees. They don’t work for you. They don’t work for your competitors. They work for startups, telcos, eCommerce giants, chat apps, you name it.

They’re going to make you look like a taxi company. What are you going to do about it?

Source: LinkedIn

The hits are coming in for 2016, which is shaping to be The Year of Fintech. Just recently DBS launched Digibank, their forward thinking mobile only offering, and now Fidor and Telefonica have done something very similar in Germany. Although, there’s something missing here.. hmm, I can’t quite put my finger on itOh wait, I got it!!

This is a real bank, yet
there’s no bank involved!

This is that watershed moment we’ve been waiting for. We will look back in a few years and think it normal to do banking without banks, but years of research, development, positioning, lobbying, legislation, failures and breakthroughs have taken place to get here. So let’s break it down. What the heck is so special here, isn’t this just another digital wallet…?

Banks are so 2015

I’ve already heard a few people compare this to previous tie-ups with banks and telcos. There are several examples around the world. In Singapore, the collaboration of Singtel and Standard Chartered springs to mind. There’s a natural synergy there, to provide simple mobile payment or wallet facilities through the telco channel. Co-branding and co-marketing. Throw in contactless for added innovation points. Yay. Yawn. It was solid marketing. Transformative? Disruptive? Not so much.

We’ll call you, don’t call us

This is different. Instead of opting to leverage an established financial services brand, like a bank, Telefonica is effectively doing their own thing. By partnering with a startup in Fidor, they call the shots. Make no mistake, Fidor is a provider to Telefonica, not the other way around.

For Telefonica, this move represents a new revenue stream, increased revenue per user, and opportunity to create stickiness with their customers. How many of their telco competitors also offer you banking services? Uhh. Yeah not many. Actually, ZERO! Globally! Not often you see that these days.

Cool, so what is it, some kind of app right?

Not a mobile wallet!

Fidor has been busy for years building a complete offering, including their own banking license, which is a feat in and of itself. Yes this initial service is for Germany, but Fidor’s license is valid across Europe! Imagine that! When’s the last time you saw a Fintech startup in Asia with a license across the region? The answer is never! A few hopefuls like BambuTryb and Marvelstone are paving the way…

What mobile wallets are to Fidor

That’s what makes this so different. It’s a real bank. Not a quasi financial wallet thingy that you have to top up at 7-Eleven, and can only buy things at compatible vendors with some special payment terminal. Pfft, I say! This is a real bank account, on your phone. Yes it’s an app, just an app. That means no branch, no queues, no crap. You get a virtual credit card by Mastercard, and they’re even doing small loans! Not your father’s mobile wallet, then!

Let’s talk about KYC baby

Know. Your. Customer. If banking is the least sexy field to work in, the compliance team is the least sexy division inside a bank. KYC is the thing they like to do the least. So, gives you an idea.

I want to do KYC when I grow up.
– said no one, ever

The burden of all financial institutions is regulation and compliance. Nobody wants it, but everyone needs it. Customers need it. Banks need it. Governments need it. It’s necessary so that firms don’t get greedy and accidentally fund hippies, terrorists and the like. The result is piles of paperwork, multiple layers of authentication, and bags of tokens for every occasion. So what is Fidor doing in this area?

Full online onboarding, supposedly in “a few minutes”. No paper. No meetings. As an interesting addition, they are using a video link inside the app to verify identity. Let’s see if that approach catches on. They could be onto something here… MAS, wink wink.

Telco customers

So what’s in it for Fidor? Why not go at it alone and challenge all the institutions? Because B2C is haaaaard. As a startup, you’re that guy on the street handing out discount leaflets that nobody wants. Nobody wants to be that guy. So don’t be that guy. Increasingly, startups are looking to leverage institutions for that very reason. Institutions already have customers. Why reinvent the wheel, when you can just use theirs?

Don’t be that guy in the popcorn suit

One of the more innovative things Telefonica have done is to incentivize their existing users to adopt their banking app. For example, you might get additional free data on your 4G plan as a reward. Synergy, convergence and gamification. Hmm.. I wonder where could this go..?

Where to from here?

If you haven’t heard, two banking licenses were handed out in Korea in 2015. One was a telco. The other a chat app. Tencent and Alibaba already have banking licenses in China. Expect big things. Dinosaur big.

Source: LinkedIn

Sit down, it’s time for a lesson in digital banking. This week, DBS launched their much anticipated mobile-only bank in India. For my money, this is bigger news than Apple Pay launching in Singapore. Here are five key lessons for all other banks, in Asia and beyond. Now take a seat, school’s in session!

#1: Politics and Regulation are just hurdles

When Indian policymakers countered Singapore’s decision to limit expansion of Indian banks into Singapore, that was a big setback for DBS own plans in India. They could have done what all other banks would do, which is get back in line and grumble about it.

Instead, they turned the tables and looked at it as a challenge. After all, a hurled is meant to be jumped over! If you can’t set up more branches, what can you do? What if you just had an app?

#2: Onboarding in 90 seconds

Yeah that’s not a misprint. This isn’t 90 days like some other Asian banks. Heck, even 90 minutes would be impressive.

Forget banking apps, 90 seconds is Über fast

The smarts here are that in digital you need to get customers in, quickly. If they’ve decided to download the app, don’t turn them away by introducing massive amounts of headache with signup. DBS have removed that almost completely. Even the credit-card is virtual, so no physical handover is needed. Slick!

For customers that want to move from the entry-level E-Wallet to a real savings account, they will still need to perform KYC and AML checks. Again, point for DBS. As they only have a tiny branch network, they couldn’t ask customers to swing by the nearest DBS branch. Instead, they partnered with a local F&B chain that can be found at any corner! Another example of turning a disadvantage into an opportunity. Two thumbs up.

#3: No tokens, no OTP, no B.S.

Let’s face it. Everybody hates tokens. There’s not many things in life I hate more. The worst is three-factor authentication, which DBS still uses in Singapore. You need your phone, their app, an OTP and their token. That’s a lot of moving parts that can stop working together, and a lot of annoyance for customers.

With Digibank in India, they’ve done away with the whole lot. Applause!! 

#4: Leveraging startup technology

While not absolutely necessary, DBS has gone the extra mile to show where things are going. Instead of hiring an army of customer service staff to answer the same question 1,000 times a day, they have chosen to trust Artificial Intelligence technology from U.S. startup Kasisto. Interestingly, they were spun off from the same lab that gave us Apple’s Siri. No joke.

This is an interesting experiment in the banking context, and banks should follow consumer feedback closely. DBS have taken a risk in integrating A.I. into the customer experience, making the app almost conversational in nature. If proven successful, the use cases for A.I. are a golden opportunity for costs savings.

For me the most important fact here is that they found an interesting startup, and brought them in. There’s a lot of talk about how banks should work with startups, so here’s an example. DBS have taken a minority stake in the company, so motivation should be high on both sides to make it work.

#5: From spenders to savers

In addition to the daily banking needs, DBS have combined one of my favorite digital banking features into the app: spend tracking and budgeting. It’s a subtle but intelligent way to get consumers to think about their financial health. No extra effort required, just use spending data, analytics and recommendations.

Once you get people to stop unhealthy behaviors such as spending on credit, the next evolution is savings. Again, DBS is a step ahead by incorporating an attractive savings product offering 7% returns. In this choppy global market and negative interest rates, that’s about as good as it gets.

In conclusion, DBS has put together a package that surpasses anything other banks provide, and even gives some of the European challenger banks a run for their money! So other banks, while you were busy talking about all this, DBS just went ahead and did it. What’s your next move?

Source: LinkedIn