Expanding the Boundaries of Retail Banking

For the 12 institutions named as finalists in the 2013 BAI-Finacle Global Banking Innovation Awards, innovation means expanding the boundaries of traditional products and services in retail banking to improve the customer experience. Below are short profiles of the finalists; the winners, as determined by a distinguished panel of judges, will be announced November 5 at BAI Retail Delivery 2013 in Denver.

In the “product and service innovation” category, finalists were CaixaBank of Barcelona, Spain; Hana Bank of Seoul, Korea; and Sydney, Australia-based St. George Bank. Hana Bank is being considered for two innovations: Hana N Wallet, a smartphone-based e-wallet, and One Click Mortgage, an online mortgage product.

Hana N Wallet provides various real-time services such as person-to-person payments, ATM cash withdrawals (without use of a card) and on- or off-line payments at 30,000 participating stores and public transportation entities. The application “boldly removes conventional concepts about account numbers and customer definition to create a new user experience,” says Senior Manager Woo Kyung Chang. The bank had to develop a three-stage authentication process to ensure a secure one-step money transfer process, Chang adds.

The One Click Mortgage was introduced in 2011 to generate “cost efficiency throughout the mortgage origination process as well as save the customer financial cost and physical effort,” says Hyun Jeong Lee, assistant manager, Retail Business Department, R&D Center. The product overcame initial reluctance from customers due to its unfamiliarity to generate over $3.2 billion from 36,000 clients since January 2011. “One challenge of the product was to educate staff and persuade customers to apply for the mortgages directly online,” Lee says.

CaixaBank’s SegurCaixa Auto is a mobile application that provides convenient access to travel assistance services such as accident declaration loss, policy information, traffic news, gasoline station locations and even reminders of where the customer’s car is parked. “With this app, we expect greater customer satisfaction by offering added value to their insurance contract,” says Benjami Puigdevall, head of electronic channels.

With its MoneyMeter, St. George Bank became the first in Australia to enable customers to view their account balances on a smartphone. “Customers not only love the simplicity of the feature, but it also saves them time – by not logging on to mobile banking – and helps them stay in control of their finances,” says Travis Tyler, head of mobile.

Alior Bank S.A., Istanbul-based DenizBank and Hana Bank were the finalists in the “channel innovation” category. Alior, which is based in Warsaw, Poland, introduced a new online credit process that expedites purchases at online vendors via online income verification, enabling the customer to receive a decision and funding within 90 seconds. The bank reports receiving over 185,000 loan applications within the first six months.

“Working out the process was like a puzzle, where we had to combine bits and pieces of technology from selecting a product in the online store to delivering it to the customers, and all the while keeping the process as simple as possible,” says Katarzyna Rybicka, head of the strategic projects department at Alior. “Moreover, we had to create algorithms for the evaluation of a client’s trustworthiness over the Internet, establish cooperation with partners and refine security issues.” Success required cooperation between several departments in the bank as well as online shops and online payments companies, she adds.

DenizBank’s proactive contact center is fully integrated across all the bank’s channels to improve the customer experience via predictive analytics and customer feedback. “It predicts the reason for the customer’s call and offers to route the customer according to the predicted reason,” says Dilek Duman, information technologies and support operations executive vice president. “The most challenging issue was to make a decision about which services or products would be offered to customers and which should be prioritized. At that point, CRM business intelligence tools for journey mapping and demand analysis, customer surveys and customer feedback all became part of the project.”

Hana Bank’s entry is Hana N, a mobile application that enables customers to manage their financial lives on a multi-channel basis via their smartphone.

For the innovation in “internal process improvement,” the finalists were Istanbul-based Akbank; Turkish Economy Bank (TEB), also of Istanbul; and Vienna-based ZUNO. Akbank introduced a business service monitoring system (BMS) powered by multi-channel architecture that serves as a service tracking system for information technology (IT) systems to identify application and infrastructure bottlenecks, enabling the bank to identify customer transaction issues as they emerge.

“The BMS system was an important innovation because of the disparity and pervasiveness of Akbank’s distribution channels,” says Boluc Papuccuoglu, availability manager, citing branches, ATMs, point-of-sale devices and customer PCs and mobile devices. “In order to maintain an accurate picture of the state of service we are providing to our customers, we had to devise a system that combined those streams to a common model that enabled us to correlate events. Our monitoring staff now only needs to be familiar with one system, which manages both business and technical data.”

TEB’s cardless money withdrawal with QR code provides more convenience for mobile customers by enabling them to withdraw funds more quickly from ATMs. “With this innovation, we removed the customer’s obligation to carry a debit card, shortened the time they spent in front of ATMs and provided cash money to new customers even before they received their debit cards,” says Business Developer Batuhan Ulutuncel. While the creation of this product did not involve great technical challenges, it did require “successful teamwork among different people who had never worked together before,” Ulutuncel says, citing the participation of TEB’s online banking IT and ATM IT teams along with a third-party developer.

ZUNO was recognized as a finalist for its multi-country direct banking standardization, which provided the company with a centralized operations framework in several central and eastern European countries. “Online banks without a branch network are quite unique in our region, so we had to basically start from scratch,” says Slavomir Mizak, head of IT. “Based on our goals – and the business strategy – we defined all products and processes in such a way that they could be done by clients online and were available 24 hours a day, seven days a week. Then, we had to select and integrate a set of IT systems that would enable us to support such a multi-country setup and deliver the required online availability.”

Three banks are contenders in the “innovation in societal and community impact” categories: Equity Bank, Nairobi, Kenya; Standard Bank, Johannesburg, South Africa; and Manila-based UnionBank of the Philippines. Equity Bank is a contender for its agency banking system, which enables customers who do not live near the bank’s branches to conduct their banking business through trained and credentialed agents. Once at the agent’s location, customers can utilize their mobile phone or debit card to open accounts, withdraw funds, transmit funds or even purchase airtime on their phone’s network.

Standard Bank’s AccessBanking is a similar service designed to make banking more accessible and convenient for customers who might otherwise have difficulty utilizing banking services. Under this system, a full suite of banking and savings products are offered via a network of agents, retailers and cellphone banking capabilities. “At the heart of it all was ensuring financial inclusion in a simple, transparent, affordable and convenient manner while ensuring a dignified customer experience,” says Audrey Mothupi, director/head inclusive banking.

Union Bank’s UShare is a cash management solution targeted at the fund-raising needs of non-profit organizations (NGOs), enabling these organizations to reach donors across the globe. Since its launch in the third quarter of 2011, the project has generated about 5,000 donations worth 8.7 million pesos for 120 NGOs. “The critical challenge was the market’s limited understanding of the Internet as a platform for an online presence and donations,” says Tim Diosana, product manager, business development group. “The key success factor was in simplifying the UShare implementation to make it easy for clients to use it.”

Mr. Cline is managing editor of BAI Banking Strategies. He can be reached at [email protected].