EXCLUSIVE: “Lighting up the Radar” – Peter-Jan van de Venn, Mobiquity in ‘The Fintech Magazine’
Peter-Jan van de Venn from Mobiquity, offers advice on how to differentiate your banking app in a sea of sameness
Innovation is everything in fintech, so it may come as a surprise to learn that nearly 80 per cent of daily functionalities offered by neo and legacy banks are actually very similar, leaving just 20 per cent of services where providers can truly set their brand apart. The figure comes from digital transformation consultancy Mobiquity’s second Interactive Digital Banking Features Radar report, which examines the most commonly used features on more than 80 banking and fintech apps worldwide
By accepting the fact that the majority of those features have some commonality, the idea of the Radar is that banks can direct their budget towards new product development that can truly make an impact – tools and services that can ‘delight’ customers and ‘differentiate’ the business, says Peter-de Venn, VP of Global Digital Banking at Mobiquity.
“It’s not a matter of how big your budget is; it’s about spending it wisely,” he explains. Instead of wasting time and effort reinventing the wheel, he says it’s less risky and certainly less costly to use out-of-the box products from digital banking vendors who’ve already road tested the ubiquitous ‘must-haves’, like account opening and onboarding, to make sure they deliver 100 per cent of the time with 100 per cent security. Mobiquity itself works closely with composable banking specialist Mambu and engagement banking platform Backbase when it comes to designing functionalities for their joint clients.
“They have built many banks across the globe and a lot of those commonalities are embedded in the software they provide,” says van de Venn.
“In every retail bank, the customer needs to log in, have their dashboard and overviews, carry out transactions. Those are the essentials. But, for many banks, it’s already hard enough to provide these essentials, with the experience that is expected these days. So, don’t try to customise everything in your IT landscape.
“If you have a very efficient foundation, it leaves budget to be allocated for real differentiation. Then you can go into the typical ideation process, conduct customer research, fully understand who you are, what your brand promise is, and find your space,” he advises. What’s apparent from the second iteration of the Radar is how fast and how high the bar on in-app experiences has been raised in the last couple of years. Activity alerts, for instance, are now table stakes, as is the ability to freeze and unfreeze payment cards. Recent years have seen an explosion in digital touchpoints and while this has had an impact on all sorts of brands, it has ramifications for banks. Indeed, van de Venn points to other research that says about 40 per cent of clients will walk away if they don’t get the digital experience they expect from their banking provider.
“It’s a world of competition, but that doesn’t necessarily mean that you need to copy what the others have. It is important to deliver in line with who you are, what your brand promise is”
And that’s not a churn rate any business wants to contemplate. People rarely visit a bank branch these days, making it hard for banks to control the consistency of the brand experience the way they once did. But they can effectively differentiate themselves from competitors if they have a good understanding of what that customer really wants and can build on their brand values to deliver it, says van de Venn: “It’s a world of competition, but that doesn’t necessarily mean that you need to copy what the others have. It is important to deliver in line with who you are, what your brand promise is.”
A bank that has pledged to improve access to financial services for those with a thin credit file, for example, will offer something completely different to one focussing on high net worth Millennials.“If it’s aligned with who you are, and what you stand for, it makes a difference,” he adds. A good case study of brand differentiation is South Korea’s Kakaobank. In a culture where 71 per cent of people are gamers, the bank incentivises customers to save regularly by turning the savings experience into a gamified challenge for which they are rewarded with a massive hike in interest on their deposits if they reach their 26-week goal.
It’s worth noting, though, that cultural context can be everything. A similar interactive savings game by UOB’s digital bank TMRW was a big hit in Thailand, but was considerably less successful in the Singaporean market where customers resented what they saw as a patronising approach to good financial management. Australian digital bank Up has taken a very different approach to encourage good savings discipline, which is the antithesis of what its rivals are doing but very much in line with its defining principles. Its aim is to educate young people about their finances and help them spend their money wisely, so it is keen to help them avoid getting into a buy now, pay later credit cycle – a brave strategy in the birthplace of BNPL.
“If a customer wants to buy something, they can share what that is with the app, which will come up with a savings plan for it and then buy it – which is really in line with what Up stands for,” says van de Venn.
He stresses that the key to coming up with a strong differentiator is knowing your customers and doing extensive research to find out what frictions they come across in their daily financial lives, then help them to overcome them. Van de Venn cites Mobiquity’s experience of building a ‘product’ for ila Bank, the first neobank bank in Bahrain.
“There is a traditional way of community saving, where everybody puts money in a clay pot, and every month somebody gets everything that’s in the pot,” he explains. “We talked to a lot of potential customers and that insight gave us the basis to design the digital version of it that focussed on removing frictions from the end user journey.”
The ‘jamiyah’ account is a mutualised digital savings pot to which friends and family can be added, with each participant paying a monthly contribution. When their turn comes, the contents of the account are transferred to them. It’s a simple and transparent alternative that answers some of the problematic issues that customers identified with the traditional process.
Not all differentiators are as useful. European neobank N26 chose to reinforce its new-age brand credentials by using augmented reality technology to help users visualise what their new bank card would look like on their desk. Van de Venn is sceptical that such aesthetics in tech will have added any more bucks to the bottom line, but he doesn’t dismiss it.
“While interesting to see, I don’t think it serves a real business case. However, it might make clients more loyal and prouder to be part of that bank,” he says. You get the feeling he would prefer founders spent time and budget (which for fintechs is much less freely available than it was two years ago) on thoroughly researched and tested tools that are relevant to the customer segment they’re chasing. Revolut, for example, which was originally set up as a borderless account with low FX fees, partnered with Expedia in 2021 to launch Stays, an in-app tool that allows its account holders to book hotel rooms straight from the banking app. Revolut’s ambition is to become a super-app – and you only need to look at WeChat and its ecosystem of 1.2 billion users to see why.
Amid ongoing economic turmoil, perhaps most banks would be wiser to focus on speciality over scale, though, in order to avoid years of unprofitable growth, which is making investors nervous. “I completely understand why Revolut and others are trying to move into that [super-app] space. It creates loyalty and long-term retention, which are very important,” says van de Venn. “But you must find the balance between what your clients want, what is technically feasible, and what has a business case. Is it viable? Because, ultimately, you need to make money, and only five per cent of neobanks are profitable. So, a neobank has to combine those three perspectives when building a roadmap.
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