How you build the bank of tomorrow

UOB’s new digital bank is very different in style and concept to what has gone before in South East Asia. Dennis Khoo, chief architect of TMRW, sets out the vision

According to Dennis Khoo, ‘banks do projects; they don’t build software’. Which is why the chief architect of United Overseas Bank’s (UOB’s) latest digital consumer platform reached out to fintechs when trying to imagine what a financial service look like in the social media age. He literally built tomorrow.

Inspired by trendy textspeak, TMRW is the latest addition to the digital banking landscape in Thailand. A purely mobile service, it’s aimed at millennials and follows thelaunch of UOB’s sassily named Razorpay, an ewallet for the same demographic. UOB hopes TMRW will land it three to five million more customers, if not in the next 24 hours, then over the next five years.

“The mission was to better serve a new generation of banking customers,” says Khoo.“

They are specifically young professionals; technologically literate and with high expectations. It’s a market that large banks in the UK are struggling to keep from migrating to the likes of Monzo and Starling, as Khoo discovered in early research.

“We visited banks all around the world, and realised that the service wasn’t good enough. What was crucial to the TMRW project was to deliver a very different kind of banking experience.”

So what exactly does ‘different’ look like? Khoo and his team started with customer engagement, working on the premise that ‘if you don’t harness data to digitally engage, then you’re going to be too similar to existing banks’.

Next, Khoo and his team needed to find the right partners to help them deliver it.

“By chance, we saw Personetics present at a conference in Hong Kong, and we thought ‘hey, this solution meets our needs’,” says Khoo.

Personetics uses artificial intelligence (AI) and machine learning to generate highly personalised transactional data for banks, so that they can, in turn, provide a highly individualised service. In fact, UOB was so impressed by Personetics’ proposition that it now owns a stake in the company.

“Using Personetics, one of the breakthroughs we hope to make is being able to personalise the bank to the specific individual by collecting information about each person so we can better understand them better and the things that are important to them. We can tailor our communication to a segment of one,” says Khoo.

It might be using the latest technology, but UOB didn’t set out to build an artificially intelligent bank in TMRW. Rather, the technology was an organic part of the process.

Khoo explains: “Whatever you do today will touch on artificial intelligence, on machine learning, but we never said ‘we want to use AI’ or ‘we want to use machine learning’. We started by asking ‘what experience can we create so that customers will say every bank should be like this?’”

Along with Personetics, UOB also enlisted the services of fintech startups Meniga, the Icelandic-based data enrichment specialist, to deconstruct transaction statements and help customers track their expenses in real time.

“Advanced expense tracking sorts and categorises these large volumes of complex transaction data. This means our customers can match their purchases without having to scratch their heads, trying to figure out the retail or brand name associated with the merchant,” says Khoo.

TMRW also leveraged the joint venture partnership between its parent bank and another China fintech, Avatec.ai, whose dynamic credit assessment model uses non-traditional data points such as utility bills, call history and spending patterns. UOB announced in April 2018 that it planned to invest $12million in Avatec.ai to extend services to underbanked populations across South East Asia.

It’s clear that choosing the right partners was important for Khoo and his team.

“Startups are always very hungry for business, so they are always very willing. The issue is, how do we know which are the right startups to work?” says Khoo. “We have a team of people looking at the digital engagement space and its leading fintechs, then we narrow down and produce a shortlist of the ones that make us say ‘these guys have got a pretty interesting solution that we think could be used to increase our engagement capability even further’.”

Once he had his fintechs all in a row, Khoo selected Thailand as the launch target because ‘we wanted to start at a place where standards were already high’.

Khoo knew that Thailand’s digitally savvy consumers were well-accustomed to customer-centric banking. As far back as 2007, the Thai finance ministry launched PromptPay, which drastically reduced transaction fees for customers, as part of an initiative to create a cashless economy. By 2019, the Annual Global Digital Report showed that 74 per cent of Thai internet users accessed banking services via mobile devices.

Khoo explains: “We want to build a brand that connects emotionally with millennials and reflects how they think, how they feel and how they treat money differently.”

That approach is reflected in TMRW’s branding, which is refreshingly at odds with traditional banks’. Its lively Instagram feed, free Starbucks vouchers on its Facebook page, bright colour palette and cartoon character website graphics make TMRW look more like an advertising agency than a bank – which, of course, is exactly the point.

Meanwhile, TMRW’s focus on improved customer engagement made implementing chatbots as part of the platform a logical move.

“In the chat world, everything is recorded,” says Khoo. “So chatbots are going to be very significant in servicing customer experience and I think this area is very important, because, consistently, when you ask customers what their experience of a call centre has been, they will say it’s poor.”

Transcripts are also, of course, a data source that can provide insights into TMRW’s customers. Data is fundamental to the TMRW project.

“That data can help to improve customer experience, whether it’s in better user interface design, better insights and advice, or in the credit and risk management systems,” says Khoo.

While TMRW is mainly aimed at millennials, they are not the only demographic TMRW hopes to serve. Khoo believes the new banking solution could help foster wider financial inclusion, too.

“In the Association of Southeast Asian Nations (ASEAN) one of every two working adults is still unbanked. Because of the cost involved in the past of setting up a branch and problems staffing it meant you might not be able to serve certain segments of the population,” explains Khoo. “But with mobile banking, everybody has a branch in their hand and, because you build it once, you can spread the cost over millions of customers.”

And it’s helping UOB realise the bank of TMRW, today.

 This article was published in The Fintech Finance Magazine: Issue #12, Page 30.