FinTech Innovation

Two qualities that Australian banks need to compete with Digital Banks

Traditional banking is being challenged by Digital Only Banks and FinTech companies.

Australia isn’t any different market for the global trend of customer-centric banking. Yes the size of the Australian consumer market would be smaller than UK, USA or India but the consumer expectations are the same!

So here are the two qualities that Australian banks need to compete with Digital Banks:

1. Speed

Customers have seen traditional banking practices for decades. They apply for a new product, the bank takes their own sweet time to tick all the boxes, maybe a card (not a thank-you or Xmas card!) takes a week or so to get delivered and so forth and so on…

But fast forward to current expectations, customers expect much faster banking experience. It’s not just an application for a new product but equally applies to service requests too. If I call you to cancel a credit card then don’t tell me to call between Monday to Friday from 8am to 4.45pm excluding public holidays!

The path to least friction in customer experience in sales and services space and also the efficiencies derived by smarter decisions and interconnected systems drives the customer loyalty and benefits to Banks.

Banks need to deliver services and product innovation at the pace which today’s customer demands. If Banks can’t be faster at this game then it’s definitely a competitive advantage for much nimble and agile digital banks (also known as neo banks).

2. Convenience

 

“As a customer, I want to interact with The Bank through my choice of platform.” 

If you haven’t got above story title in your backlog then its a gift from me. Just copy paste and add it to the backlog today! I am happy to write that story for free if you email me!

There was a world where mobile was added as a new channel to the ways bank would interact with customers. Then came Mobile First and Mobile Only….

In today’s Mobile-Only world we are seeing following interaction models which add huge convenience and brand affinity to increase customer connection.

  1. Messenger based banking (e.g. Facebook launches P2P payments in UK, KakaoBank-300,000 accounts in 24 hours!)
  2. Chatbot based communication (e.g. Paypal receipts on FB messenger, DoNotPay, TransferWise)
  3. Data analytics based banking features/products (e.g. Personalised marketing & customer retention scenarios)

I came across Korean digital bank case study recently and it is a great example of how new entrants to banking market will play to their strengths.

KakaoBank – A digital-only bank started by messaging platform KakaoTalk.

This digital-only bank played to their strength with its huge customer base on the messaging platform but they also attracted new customer segment by delivering what they need.

A messaging platform as banking app and 5-7 minutes onboarding time serve the need for a younger and low credit risk customer segment.

Thoughts for the day:

  1. Where can you add Speed and Convenience to your bank’s product offering or services?
  2. What are the data assets in a bank that are unBanked? ( if this is too hard, I’m happy to help!)

 

Till next time… Namaste & Live Out the Dream!

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