World's Best Digital Banks 2019: From Lifestyles To Treasury Services

When Ant Financial refers to Alipay, its digital wallet and payments solution, as a lifestyle platform, it’s neither an oversight or an overestimation. Users can hail taxis, book hotels, buy movie tickets, pay utility bills, make appointments with doctors and purchase wealth management products directly from the app. Alipay’s evolution from a digital wallet to a lifestyle enabler has attracted 700 million active users in China, helping it become the most used app in the world, excluding social media. 

Alipay also provided banks a glimpse of the dangers posed by Amazon, Google and Facebook, should they expand into financial services with a similar array of offerings that match lifestyles rather than dispensing generic, off-the-shelf banking products.

Data is the key to providing personalized lifestyle services, says Christian Ball, head of retail, GFT UK, which designs IT solutions for financial services companies; whether through aggregation or enhanced information, banks must be able to provide a competitive customer experience. “In the next 12 months or so, that’s going to end up being a me-too,” he says, so while it’s critically important, it’s not going to move the needle on bank performance: because they are all going to have to have it.”

Rather than simply helping customers buy a house by selling them a mortgage, going forward, banks could also offer the same customer other services related to a home move such as solicitor valuations, decorating, building and furniture, Ball suggests.

As well as tapping into the financial demands underlining major life moments, banks can help customers live their daily lives, wherever it impacts their finances. Russia’s Tinkoff Bank, for example, which notched eight wins in this year’s Best Digital Bank Awards, including Best Corporate/Institutional Information Security and Fraud Management, recently acquired a stake in Kassir.ru, a Russian ticketing service, so it can offer customers a choice of movie, theater and concert bookings. A new Entertainment section to the Tinkoff.ru platform also allows customers make restaurant reservations.

Compatriot Sberbank, which took five awards, leverages customer data, algorithms and machine learning to power its Sberbank Online app. For example, the main screen now displays action cards. Algorithms use AI to analyse the preferences of clients under 1,000 parameters and offer the variants that are most relevant to each user.

A new app from Thailand’s United Overseas Bank, TMRW, helped the bank earn Most Innovative Digital Bank for Consumers. TMRW crosses into the world of games by letting customers grow their own virtual city though saving, encouraging active use of the app. TMRW also reminds customers of important payments coming up and displays their spending patterns, encouraging them to make smarter spending and saving decisions.

To hammer home the active role that banks can play in customer lifestyles, Emirates NBD Bank, which won three awards  in the UAE, launched its Liv app, which offers services designed around the customer’s lifestyle, education, finances, mental and physical well-being. When customers exceeded their spending limit, Liv recommends free activities. 

Chatbot Armies 

Earlier this year, Liv added Olivia, an artificial intelligence (AI)-powered chatbot. Olivia joins an ever-growing regiment of virtual assistants, including Standard Chartered’s Stacy; Tinkoff’s Oleg, Aida, from Sweden’s SEB; and TD’s Clari. Bank of America’s chatbot, Erica is a veritable virtual assistant veteran, having surpassed 6 million users and completed more than 35 million client requests as of last March.

These chatbots use available customer data to provide an instant self-service channel for customers, which banks hope will change the way they interact with their financial services providers over time. Standard Chartered’s Stacy, for example, has been trained to answer over 400 banking-related questions and learns through each interaction how to further fine-tune its capabilities.

“TD’s investment in conversational AI is part of our strategy to empower customers with deeper insights into their financial decisions as they make everyday purchases or prepare for big life moments,” Rizwan Khalfan, TD’s chief digital and payments officer, said on launching Clari early this year. TD took home four Consumer awards in the North American region this year.

Pairing data collected from customers with predictive analytics opens the way for other innovative services; TD, for example, offers a digital program that identifies customers who could save money by shifting to a different type of account. Predictive analytics can also help banks in customer service, marketing and security. Advanced data analytics help determine whether transactions flowing through the bank’s systems match a client-specific behavior profile and issue alerts when fraud is suspected.

Application programming interfaces (APIs) help banks move away from legacy integration limitations, allowing them to add services, products and capabilities for corporates as well as customers. Citi Treasury Trade Services (TTS), for example, provides real-time data to business clients via API with its CitiConnect API Developer Portal and file testing portals. Corporate clients receive real-time information and payment capabilities delivered via APIs directly to their back offices.Citi, which invests heavily in digital, earned numerous Digital Bank Awards.

Information portals, debuted by DBS with the launch of Treasury Prism in 2017, are opening up another new dimension of service for corporate clients. DBS has likewise invested heavily in digital banking and won multiple awards, including Most Innovative Digital Bank on the Corporate/Institutional side.

AI is also helping banks tailor new information services for clients in specific industries. Dubai-based Mashreq Bank, which won two awards this year, partnered with publisher MEED (formerly Middle East Economic Digest) last year to launch an industry-specific portal providing unique and specialized content for the construction sector while Citi recently launched an information portal that informs clients about industry-specific trends and issues that could impact their business. Citi’s Knowledge Exchange Center enables clients to access the latest TTS market intelligence across geographies, products and sectors.

Documentation And The Cloud

Banks are venturing even farther afield in the quest to differentiate their digital services from the competition. With robotic process automation, for example, banks can help stem the tide of paper into corporate treasury departments by simplifying, streamlining, automating and digitalizing more processes. Automation and cognitive technologies accelerate business growth by enhancing digital customer experiences, improving operational efficiencies and increasing staff productivity.

In December 2018, Tinkoff Business began offering Document Builder, whose 1,400 templates help entrepreneurs to rapidly create legally accurate documents within a short time, from an application to register as a sole proprietor to a power of attorney. Tinkoff Accounts, a mobile app for sole proprietors, allows easy filling in and filing of tax returns, including an electronic signature. Tinkoff Business even offers a website builder that enables companies and entrepreneurs to create new websites in minutes.

Poland’s mBank, Best Digital Bank in Poland, is developing a “branch in the cloud” to support clients’ operational needs, including video face-to-face interaction and an “ebanking desktop,” that provides video connection to mBank’s relationship managers, foreign exchange, trade finance and cash management specialists.

The need to keep delivering new digital solutions is driving banks to foster innovation. In 2014, Wells Fargo launched its Startup Accelerator, a hands-on program that create solutions for financial institutions and enterprise customers. Citi Ventures is Citi’s vehicle to hook up with fintech talent while BBVA’s  API_Market provides fintechs and other third parties a sandbox to test products in synergy with the bank.

Innovation tends to focus on improving the cost, speed, security and convenience of solutions for banks and their clients. Biometric authentication via fingertips, facial and voice recognition not only provide greater security but save customers time and effort. Digitalization helps banks sell products at a lower cost. While competition will continue to be fierce, continuing development of digital innovations will be critical for banks.