I've spent the last few days talking with relatively young banks on their digital strategies in several countries, and it's intriguing to debate and dialogue with them how they want to work. By young bank, I mean banks in markets that typically did not have banks operating in the 1980s or, if they did, they were state-run banks rather than consumer-focused banks.
These banks illustrate well my main mantra that digital is not a function but a culture.
For example, take ICICI Bank in India, a young bank. ICICI was invented with digital in mind, and I have always been impressed by their focus to keep costs to the minimum and service to the maximum through digital enablement.
This is why ICICI Bank can operate transaction process at a tenth of the cost of a traditional bank and, like banks in Turkey, Poland, Ukraine and elsewhere, are starting to demonstrate innovations you just don't see in traditional banks.
Here's an example/idea and it's one that I think is developing in these young banks much to the chagrin of the old banks.
Let's develop the idea of a fully digital bank concept for today's world. In other words, I’m not being futuristic or visionary, just realistic and pragmatic for today.
So we want a millennial bank for millennials. Our bank in under 35 years old, it is cool, it is relatively unconstrained by legacy systems and it is small enough to be able to move fast and be agile. My bank is led by a technology visionary who sees the future of banking through millennial eyes and realises it has to be digital as culture through and through.
So yes, this bank has branches, but they are there to leverage digital enablement and support.
There is a call centre, ATMs, online and mobile banking, but they are all the same: there to provide leverage to the customers' digital lifestyle and support them in their financial needs.
The bank has integrated payments as an API such that most of the cool apps have their payment service embedded. Forget setting up cards on Uber and Starbucks; you just TouchID Bankpay and it's done.
The coolest thing the millennial bank has done however, is fast moved to become embedded in Facebook and Skype. The bank took many of the best customer contact agents from call centre and branch, and retrained them in responding rapidly to customer needs in Facebook and Skype.
The bank placed their full service banking into a Facebook app, and made it available to any customer to use. Full Service Facebook Banking gives you all the functionality of payments, billing, balance checks, money transfers and more, but all in a Facebook gateway to the bank.
Looks like Facebook, feels like Facebook, but it's not Facebook. It's a gateway to Full Service Facebook Banking (FSFB).
Similarly, the bank determined to make their Facebook page their service channel. Forget calling the bank to ask questions, just leave a comment or question on Facebook and the bank will reply within seconds. A dedicated FSFB Team has been created, from their contact and branch agents, who create conversations and relationships through Facebook.
You can connect with these agents as individuals on Facebook or via the bank's Facebook Page, and you can just talk about money. The bank even holds a monthly Town Hall Meeting on Facebook to explain complex financial matters. How does APR work? How do banks make money? Why do banks need a licence from the government? What caused the banking crisis? These are all themes the bank develops in conversations during the pre- and post- Town Hall meeting, and the aim is to ensure that agents are having conversations.
This is because the bank sees the new world as one where they gain relationships through conversations on the network, rather than by pushing products through channels via traditional media.
It's a critical difference in thinking.
For example, these banks measure staff effectiveness by the number and quality and depth of conversations they engage in social and digital spaces, rather than by their product sales. The aim is to encourage the conversation knowing that the sales will come. Therefore, the annual bonus is based upon shared rewards for success whilst the individual incentives are to engage in quality dialogue socially to build relationships and trust.
So the bank deploys FSFB and then backs it up with the ability to contact any of your bank friends via video. Just Skype me and we'll talk more.
Amazingly, the bank finds that these friendly social financial networking structures encourage people to actually visit their branches to meet their Facebook bank friend in person. It becomes a community around the bank. A relationship that is social and trusted.
This is the future of banking: creating conversations of relevance through the network I trust.
And if you want to see it in action just visit Turkey (Akbank, Deniz Bank), Poland (PKO Bank, mBank, Alior Bank), Ukraine (PrivatBank), and other young bank markets to see this in action.
Because these banks began in the 1990s, they are millennials and they think like them. Oh yes, and for the crème de la crème, don't forget ICICI Bank in India.
This is their Chairman, K. V. Kamath, talking about their approach at SIBOS. Apologies for the quality of the video, but this was SIBOS 2006!