Banking Summit in Asia
I had the pleasure of attending the Asian Bankers Summit at the brilliant new Convention Centre at Resorts World on Singapore picturesque Sentosa Island over the past few days. The summit saw the pulling together of various banking streams. Me being the technologist, I joined the Technology Stream. There were key themes that oriented around Innovation and Social Networks which attracted some bright minds to the panel to lead discussions. But despite these brilliant minds it appears that Banks haven't woken up to the innovation craze of the past few years.
Everyone acknowledge the merit of things such as Mobile Banking, Bank 2.0, SOA, Social Networking, etc. but like traditionally risk adverse banks, there were dozens of excuses as to why things can't be done: compliance, security concerns, brand risk, change management and the list goes on. Even to the point where during the summit, ANZ announced that they will be turning off their Mobile Banking service. This from the bank that brought us WING Money in Cambodia, a primary mobile bank for the under and unbanked markets of South East Asia. Have they completely missed the data on the uptake of mobile devices as a means to communicate, including internet services?
Interesting regional statistics tell us that on average, between 27-36% of NEW Internet Users in Indonesia, Malaysia, India, Thailand and the Philippines use mobile devices when "popping" their internet cherry. And this figure continues to grow year on year. More and more users across the region are plugged into Facebook, LinkedIn, and Twitter and recently we’ve seen the launch and growth of foursquare. While there is no immediate revenue opportunity for Financial Intuitions, there comes a rich learning experience on a customer segment that thinks very differently to the traditional banker: Gen Y. Data shown at the conference by Don Bognar of Oracle Financial Services shows that by 2017, Gen Y will be the largest consumer segment in the market. This is a market is constantly connected to networks, always on the move, adopts innovation at twice the rate of past generations and takes product/service recommendations from the Internet and Social Networks. Basically, if they network recommends HSBC for a Credit Card, they’ll go to HSBC without shopping around and without concern for price, brand or benefits. No amount of direct marketing will ever overcome this.
It not all bad news, as many Financial Institutions have made attempts at engaging this segment, NAB(previously National Australia Bank) launched their UBank Direct Banking operations that boasts the ability to open a new account within five minutes without ever having to visit a branch. They use networks such as Facebook and Twitter to attract Gen Y and even carry out customer service on Twitter (@UBank). Whether this experiment works or not is irrelevant, why?
1. They are doing something and learning from it. Organisations ALWAYS learn more by doing rather than planning and researching. This will be key for NAB when it comes to understanding Gen Y and they move closer to the Banking Market sweet spot of 35-44 years of age.
2. It’s a separate Brand. Banks have love known about the advantage to experiment with new services under a new brand. ANZ did this with WING in Cambodia. It creates an opportunity for the Bank to also experiment with new branding concepts for new customer segments. Does Gen Y relate to the big red star of NAB? Or the lime and dark green branding of UBank, who has a website that looks straight out of the Apple design team.
Another interesting session was led by Brett King (@brettKing) as he told his vision for BANK 2.0, the Service Oriented Architectural approach to Customer Centric engineering for Innovative Markets. As a fellow Banking Innovator I can see his wisdom, but it is the time for radical visions in banking after their just spent the past ten years delivering compliance projects only to be hit with the Global Financial Crisis and massive investment cuts. Brett’s theory points towards building platforms that encourage rapid change and innovative products, but are the products all that different? The basic principles of bank accounts haven’t changed in decades; the only part that has ‘evolved’ is the service creation and delivery. Admittedly we have seen the rise of new cross-subsided accounts and offset products, but the big changes have been the launch of ATMs, Point-Of-Sales devices, Internet Banking and more recently Mobile Banking including the adoption of self-service business processes, all of which had their challenges as full automation is a challenge when you can’t let go of your architectural mentality that see you desperately holding onto your Hogan, Systematics or Midanz platforms.
So what did I take out of the summit?
1. Asian Bankers are waiting to be told what to do next
2. There are some really smart thought leaders out there, that are struggling with traction for their visions
3. Completely surprised Mobile as a business isn’t a main discussion point.
I’ll leave you with a prediction. As Gen Y becomes the main market segment, banks will struggle to keep up, six to nine month product lead times won’t cut it. A new industry will evolve on the customer facing side of the Financial Intuitions to create innovative and rapidly changing Service Creation Products to manage financial product choice, application, transactions and ongoing support. Something similar to what the Telcos are doing in Mobile Banking, they understand the market, but lack the financial regulatory & risk experience, so they partner with bank/s and stick with their core understanding of Sales, Marketing & Distribution. Have a look at the MTN / Standard Bank or Telenor / Tameer Bank partnerships.
Happy Banking Gen Y