Innovations for Improving the Customer Experience

Innovation today means redefining traditional banking with products and services that improve the customer experience, whether it’s a mobile app that enables customers to better comprehend and manage their bills; a hands-free payment system utilizing Bluetooth; a personal finance manager that automatically tracks all transactions, spending and cash flow across customer accounts; or a voice biometrics system that enables faster and more secure access to a bank’s contact center.

That’s one key thread linking the product or service innovation nominations submitted by the 12 finalists in the 2014 BAI-Finacle Global Banking Innovation Awards. “Banks are increasingly trying to make it easier for their customers to do business with them – when they need it and how they need it, not the other way around,” says Aixa Manelli, chief information officer for Buenos Aires-based Banco Itau Argentina and a member of the judging panel for this year’s awards program.

“Social media, mobile banking, omnichannel initiatives and process automation – everything is converging in creating the ultimate customer experience of banking anywhere and anytime.”

The winners will be announced November 12 at BAI Retail Delivery 2014 in Chicago. In the “Product and Service Innovation” category, finalists are Moscow, Russia-based Alfa-Bank; BAC|Credomatic of San Jose, Costa Rica; CaixaBank of Barcelona, Spain; Istanbul, Turkey-based DenizBank A.S.; OCBC Bank of Singapore; and Toronto-based TD Canada Trust.

Alfa-Bank blended fitness and banking with Savings Account Activity, a high-interest-rate savings account that rewards customers for exercising. The technology connects fitness trackers to the accounts of Alfa-Bank customers who, depending upon how much they exercise, can transfer money from regular accounts to the Activity account. “Projects like this guarantee a new level of loyalty,” says Activity team leader Tamara Zuykova, while also noting how educating consumers and integrating the product into banking activities have proved challenging since Activity’s launch this year.

BAC Credomatic developed BAC Ticket, a mobile application to reduce wait times in branches. An electronic ticket replaces actually standing in line by notifying customers when their turn is near. As waiting times shrank, sales of credit cards climbed 52% in the first six months of the launch. “In essence, the high waiting times resulted in low sales,” says Alejandro Rubinstein, corporate manager of service channels. The biggest challenge, he says, was integrating the bank’s electronic queuing system into a central system and giving mobility access to it.

Timing Challenge

ReciBox: Online and Multi-device Service for Bill Payment was CaixaBank’s response to customers asking for improvements in paying bills through their bank accounts. The service warns customers about incoming bills in case they don’t have enough money in their accounts. CaixaBank sought customers’ input in every step, adding to the “timing challenge” of launching the project in less than a year, according to Benjami Puigdevall, electronic channels general director.

DenizBank’s fastPay Mobile Wallet enables users (including non-customers) to transfer money between mobile phones, withdraw cash from ATMs without a card and make purchases in stores. Merchants who set up the web platform can push out marketing messages to smartphones of fastPay users near their stores. “People need time to assimilate the product,” says Gurhan Cam, senior vice president for digital generation banking. “Therefore, our main focus is always on simplicity while developing the app.”

With Money In$ights: Personal Financial Manager, OCBC aggregates the personal finances of customers, showing spending across categories and helping manage upcoming bills. The service is aimed at cross-selling and boosting transactions.

TD Canada Trust is offering SecureKey Concierge, a service by software maker SecureKey Technologies, to enhance the security of customers conducting transactions with the government.  Customers use their online banking credentials (user ID and password) to log onto secure government sites, lessening risk because TD Canada says that its management and monitoring exceeds security measures taken by conventional providers of online credentials.

DenizBank A.S. and CaixaBank are also finalists in the “Channel Innovation” category. They’re joined by Tatra banka A.S. of Bratislava, Slovakia, and Lodz, Poland-based mBank. Tatra banka’s Voice Biometrics reduces authentication and verification of customers calling into the contact center from 90 to 30 second. The service uses voice samples to identify customers, replacing payment cards and other forms of verification. “The only challenge is change of mind set that always comes along when introducing a new product to the market,” says Lubos Kovac, director of the contact center division.

mBank, meanwhile, is offering video banking, personal finance management and money transfer via SMS and Facebook among more than 200 innovative features through Project New mBank: The Next Generation Digital Bank. About 700,000 customers signed up in the first 2 ½ months after the launch, according to the bank. 

DenizBank’s fastPay Mobile Wallet is competing in this category with its Social Customer Care Program that monitors 16 social media networks round the clock and responds to customers within an hour of them mentioning or posting a hashtag about the bank. Security walls had to be updated when configuring the systems of DenizBank and Lithium Technologies, the software maker on the project, according to Ebru Urunga, the bank’s customer satisfaction chief.

CaixaBank developed two wearable technologies: an app for Google Glass that locates branch offices and converts currencies and Boisa Abierta, a native application for Sony’s Smartwatch that monitors the performance of stocks. “We were acutely aware of our tech-savvy customers,” Puigdevall says, noting that Caixa “ran a number of internal test pilots to ensure both acceptance and ease of use.”

For “innovation in internal process improvement,” the finalists are CaixaBank, Denizbank and Mumbai, India-based ICICI Bank Ltd. An artificial intelligence project by CaixaBank created personalized messages to online customers, boosting clicks and conversions. It required taming what Puigdevall called “a real-time machine” that processes more than 1,000 variables, such as customers’ browsing histories and financial backgrounds.

DenizBank reduced inflow of monthly non-performing loans with inter-Collect, scenario-based collection software that prioritizes debt collection. Calculating the collection scorecard requires blending of historic data such as steps already taken and customers’ demographics, helping determine how aggressively to pursue repayment, according to Executive Vice President Elif Zihlii. “If you take harsh actions against valuable customers who probably will pay, you may cause customer churn and potential value loss,” he says.

Data Mining Dashboard

DenizBank also created Smart Cross Platforms “inter-Dashboard,” a platform using data mining to predict why customers are calling or visiting branches, helping to inform employees whether to prepare for routine transactions or sales pitches. It required broad commitment “starting from the head office, making sure that the big picture is seen and managed at all levels so everyone can focus on the same targets,” Zihlii says.

ICICI Bank developed a software program called Project MARC (Mobile-based Automation of Receipts on CAPS), that allows delinquent customers to pay on mobile devices. Bankers can monitor collection activities and follow up with customers. Payments are automatically updated in the bank’s central system for debt servicing, called CAPS.

Three banks are competing in the “Innovation in Societal and Community Impact” category: BAC Credomatic, CaixaBank and Cincinnati-based Fifth Third Bancorp. BAC Credomatic is helping the visually impaired avoid mistakes and fraud with a staggered card device that distinguishes different denominations of bills through the We are Inclusiveness – Inclusive Finance program. The Costa Rican bank also trained branch executives to provide better service to the disabled while implementing a telework program allowing individuals with motor disabilities to work from home. “The most important challenge was acquiring the technical knowledge on how to include part of the population with disabilities as part of our team and also how to serve them better as customers,” Rubinstein says.

CaixaBank is a finalist with two innovations. Microdonations: Charitable Giving through Electronic Channels enables CaixaBank customers to make charitable gifts while conducting frequent bank-card transactions such as purchases and ATM withdraws. Second, the bank improved access to ATMs through APSIS4all machines that cater to people with disabilities. Customers present their cards as they approach the ATMs, activating interfaces to help complete transactions. The project required employees “to internalize the barriers that people with disabilities face every day,” Puigdevall says.

FifthThird Bancorp teamed up with NextJob for the Homeowner Reemployment program to help homeowners with delinquent loans find work. The bank paid for borrowers who were two or more months behind in payments to attend the NextJob program. Four in 10 participants found jobs. The bank pitched success stories to the media, helping overcome skepticism by customers “who wondered what the catch was” when the bank to which they owed money was paying for their job search, says Chief Marketing Officer Maria Veltre.

CaixaBank, Idea Bank S.A. of Warsaw, Poland, and Berne, Switzerland-based PostFinance Ltd. are contending for the “Disruptive Innovation” Award. CaixaBank developed the Alta Cliente Mobile Application enabling individuals to provide documents for new accounts without visiting branch offices. The service required collaboration between the IT and business units to avoid “a situation where we drive our prospects to take the wrong actions,” Puigdevall says.

Idea Bank created an Idea Cloud – Secure Banking Cloud platform combining banking, accounting, operations and cash flow monitoring for small entrepreneurs. “The most challenging part was to find a core common to every Polish entrepreneur and transform it into a fully working center of command,” says board member Malgorzata Szturmowicz. The entrepreneurial background of the bank’s employees “helped us a lot when building the platform,” she says.

PostFinance is shifting the paradigm as a retailer for digital goods by adding digitized gift cards to its mobile application, leading to higher sales as it partnered with iTunes, Nintendo and other companies. “It was challenging to develop the understanding of PostFinance’s new role in the market,” says Amir Tabakovic, head of market development. “We had to communicate very clearly that we do not intend to sell either dog food or socks.”

Mr. Burritt is a contributing writer to BAI Banking Strategies based in Greensboro, N.C.