Publications
Partners
It was, perhaps, inevitable that we would find ourselves here. First our watches went digital. Then music and movies followed suit. Local storage shifted to the cloud. And now your friendly neighbourhood banks, too, are going digital (except that neighbourhood doesn’t really mean anything when you’re carrying your bank around in your pocket).
But it’s not just traditional bricks-and-mortar banks that are scaling up their digital offerings. All around the world, digital-only banks – or neobanks, or branchless banks – are taking off, attracting younger consumers accustomed to managing their lives through their smartphones, but SMMEs, freelancers, gig workers and other groups that historically might have struggled to access competitive financial services. According to Allied Market Research, the neo and challenger bank market generated R304.7-billion in 2019 and is expected to grow to at a compound aggregate growth rate of 48.1% to more than R7-trillion by 2027.
Added value
For clients who value – and increasingly expect – transparency, lower costs, convenience and personalisation, the appeal is understandable. But because all of your services reside in the palm of your hand, the digital experience has to be excellent, says Discovery Bank CIO Jérôme Frey. "We’re a full-service bank that offers our clients a set of integrated capabilities and services beyond just banking, like travel and share trading, for example. There is no safety net, so every feature and interaction has to work remotely."
If the bank gets it right, though, the user is afforded a seamless experience regardless of geography. “During the pandemic, despite many Discovery Bank clients moving houses, provinces and even countries, none have experienced any reduction in service levels,” says Frey. "They can bank where they live and work. Covid-19 forced many companies to change how they serviced clients; we spent the time improving what we were already doing. We have a 24-hour call centre that supports clients. Here we also deliver exceptional turnaround times in answering client queries and client calls are answered within 30 seconds."
Frey adds that the lack of a physical infrastructure means customers know their fees are going to services that are relevant to them. "No fees go to supporting a 20th-century branch network that you never visit. Our revenue supports only the channels you use daily. We have a ground-breaking virtual assistance tool called Live Assist. When clients initiate a call to our call centre, our agents can walk clients through their app, pointing out how to find and access key features in a simple and secure manner. Service agents only see the information they need to see to assist the client and all personal information is secure. As we continue to develop this service to work directly from the app and use it to its full ability, it will place Discovery Bank among leaders in digital servicing – while clients know they can always interact with or get the human touch when they need."
Working at scale
For the banks themselves, the lack of onerous physical infrastructure and clunky legacy systems to manage means they can focus on what matters, like building value-added services and features. In Discovery Bank’s case this includes a seamless AO journey, personalised and targeted offerings on interest rates and rewards, and also the ability to leveraging broader group integration.
A key benefit of digital features, says Frey, is that if built correctly they are inherently scalable. “If it works for one customer it’ll work for a million, to a large degree. If you solve one customer’s issue, all other customers benefit from that improvement. That’s how we moved our app store reviews from a couple of stars to an almost perfect 4.8 – through daily focus on improvements that every client receives instantly. Try teaching a new product or rule to all the tellers in one branch, never mind countrywide.”
Digital scalability may be an advantage, but digital visibility also needs to be borne in mind, adds Frey. “If you attract digital-native clients you need to service them where they are, and that’s often on social media. You can’t hide a problem in a branch manager’s office, so you need to turn that feedback cadence into a superpower rather than hide from it.”
Innovation enabling innovation
As technologies evolve, mature and become more accessible, so digital-only banks are able to create richer, more convenient banking experiences for their clients. These experiences begin at the onboarding process, which is being made faster than ever.
Frey says that with no branches, digital-only banks need to create a seamless single touch-secure and trusted digital experience to fully onboard clients in minutes. “The banking platform must be able to transact after the onboarding journey, providing full bank services within five minutes of downloading the Discovery Bank app – including branch services such as stamping statements with a digital verifiable bank stamp that can be printed if required.”
And while some customers may feel uncomfortable making high-value transactions digitally, Frey adds that technological advancements have rendered digital banking far more secure. “Using advanced facial recognition and APIs to positively identify clients and risk-rate every transaction provides a higher level of security and sophistication than traditional banking and legacy tech implementations.”
Digital platforms also enable a higher degree of personalisation than traditional banking models might. Frey says that personalisation on Discovery Bank’s digital platforms is immediately visible as no client profile is the same, starting with the onboarding journey and associated product offerings and recommendation, all the way through to personalised interest rates and reward discounts based on clients’ specific engagement levels and profiles.
“Traditional legacy banking differentiates clients based on the package only,” concludes Frey. “As a digital bank interested in our clients’ health and financial well-being, we’re in the client’s pocket and on their wrist, we have many more interactions per day, and we can adjust based on their context. We’ll change how we message them; we adapt their rewards; we nudge their behaviour – all so that they get more in the moment and over their lifetime.”
This article was sponsored by Discovery Bank and produced by BrandStudio24.
