Embrace APIs – Digital Banking Toolkit

Digital is the latest buzzword in banking. Not only are the bank boardrooms echoing with digital keywords, its what seems to be driving the pitches at most IT and Management Consulting firms.

And rightly so !

When the data tells us that 9% of the population already uses Mobile Banking, we know that Digital Banking Revolution is already upon us.

India Internet Statistics
Source: We are Social

In the last article, I mentioned, how the Digital Banking Journey will be different for each bank and why it might be a good idea for the banks to play to their strengths.

Equally important is to acknowledge and understand, that partnerships will be essential in this journey.

And what enables partnerships to work (apart from a culture and mindset) is a technology architecture that is geared towards APIs.

APIs are like Legos – you own some, some you borrow – but put together you make something exciting.

While the consumer technology companies understand this, banks have traditionally been slow to embrace deep connects into their systems. The risk is too high ! After all banks have been trusted with the consumers money and data.

But to stay viable, banks will need to embrace partnerships, learn to publish and consume APIs, while still not compromising the customer promise.

 

Digital India – its already here

Today’s the launch of the Digital India initiative and quite a coincidence that I had an experience which makes me believe that Digital India is already here.

Digital India

Here’s what happened.

I was in Mumbai and called for an Uber. I started talking to the cabbie to understand the target market for a specific use case for mTuzo . We are pitching to banks that with mTuzo we can help move their debit card customer from an ATM only to ATM + POS relationship.

So I asked him which bank account he gets his Uber payments in – it was a SBI account and it was his choice. Uber gives him complete freedom to choose the banking partner.

Next I asked him if he had a debit card for that account . Turned out he did.

I asked him if he’s been using that card at ATM or for shopping also. As expected he had been using it only for cash withdrawals.

Probing further I asked him what if he got 15-20% discount if he shopped using his debit card, would he consider switching from cash to card. And his response just stumped me.

He said he’s already used his card for online purchases at SnapDeal. He did his first purchase using COD (cash on delivery) but once he was sure that they delivered just fine, his next transaction was through his debit card,

Let me repeat that – a 30 something male who has been driving a cab in Mumbai for last 10 years, is only schooled till class 10th, who uses his debit card only for cash withdrawal, has used it online at SnapDeal.

And what really really shocked me was his first purchase on SnapDeal. I can bet you will never be able to guess it.

 

 

Take a few guesses…..

 

 

 

…….

He bought a selfie stick for Rs 300 (after a 66% discount). A selfie stick !!!!

I rest my case, Digital India is here.

Maybe we need a Digital Bharat initiative.

 

Mood as the context for marketing

Something very interesting happened while I was using the Linkedin App on my mobile. I liked an article and pop came the message from Linkedin checking if I would want to share my love of the Linkedin App itself.

The timing of this “Rate us on PlayStore” screen intrigued me.

mood based marketingDo folks over at Linkedin believe that if I have read a lengthy article and liked it, I am in a good mood?

If you ask me, may be I am. Atleast for sometime.

And since that mood is caused by the content that was delivered on the Linkedin App, Now might be the best time for ask for a rating. I would rate them much higher.

Maybe they didn’t do this on purpose and this was just a coincidence.

But it still piqued my interest in “Mood as a potential context for marketing“.

Did a quick Google and found that both Apple & Microsoft have applied for patents long ago on Mood based ad targeting. If this is at play, its surely super exciting stuff.

Why?

For one, mood is a very strong context. I remember once being told that the reason behind gorgeous women in skimpy clothes selling electrical switches was to get the predominantly-male-customer distracted and lower the apprehension about the product itself. If that’s been working for ages, surely a more trackable and insight driven model will be more successful.

Also, this might help “push” marketing be more effective. Google driven pull marketing works predominantly on context – what is the customer looking for actively right now. Imagine products and services being thrown just at the right moment. Feeling all mushy thinking about your partner, and pop comes the mention of a romantic cruise. Imagine how hard would it be to not buy it then n there.

Play to your strengths – Digital Banking Toolkit

Nadal is the king of clay. Given a choice of surface, I guess he would choose clay 9 out of 10.

We all get it – one should play to one’s own strength. Its obvious in sports, but most of us fail to apply the same rule(s) in business.

keep-calm-and-play-to-your-strengths

As most banks embrace digital, this is one rule we should not forget.

Look at the bigger PSU banks in India – it’s fair to assume that they have a big list of areas to focus on when it comes to going digital:

  • Channel migration of customers onto internet banking and mobile banking
  • Higher activation and spends on their credit cards
  • Straight Through X-sell campaigns
  • Improving the customer on-boarding experience
  • Reducing TAT for customer transactions and queries
  • …..and so on

It sure can be overwhelming to look at such a big list. One might also be tempted to look at the success stories of the likes of ICICI, Citi or HDFC Bank and try to replicate their strategies.

Will that work? Chances are it won’t !

Why? Because those banks are different. Different in terms of their customer profiles, their capabilities and their partner eco-systems.

When I look at the RBI’s data on ATMs, POS, Credit and Debit cards for Nov 2014 – its clear to me that for PSU banks, ATM presents a unique opportunity.

Digital experience starts from a conversation, an interaction or a transaction – and for PSU banks these are happening in plenty on their debit card portfolio at the ATMs.

SBI has 23.6K onsite and 22K offsite ATMs.And they had 2.4 crore ATM transactions !

Their digital strategy should have a clear ATM story:

  • What opportunity does the ATM transaction present ? E.g. the bank knows where the customer is at that point of time. Using solutions like mTuzo they can share Offers-near the ATM and migrate customers from ATM to ATM+POS.
  • Citibank has just launched Funds Transfer functionality through ATMs. Or one could do mobile recharges.
  • PSU banks do not have an aggressive sales culture. This could be used to their advantage at the ATM, where its not a warm body pushing a product but maybe the thank-you screen which is “suggesting” a product basis past behavior of the customer.

Hence, for any bank embarking on a digital journey, its imperative to ask – What is our strength?

And align the roadmap to play to these strengths!

Why is Financial Inclusion important?

Financial Inclusion is a common theme across multiple initiatives both by governments and private sectors across economies. Especially in the developing world, it would be safe to say that Financial Inclusion must be in the top 5 priorities of the respective governments.

But why exactly is Financial Inclusion important ?

 

Financial Inclusion takes an economy towards more equal opportunities

Financial access is a key component towards providing equal opportunities and equal access for growth for various segments of the society. Just like education, nutrition and healthcare access are critical in driving growth of a population, so is access to finance and payment instruments. The Better Than Cash Alliance (Bill & Mellinda Gates Foundation) says in its 2014 report for the Australian Presidency

Studies show that broader access to and participation in the financial system can reduce income inequality, boost job creation, accelerate consumption, increase investments in human capital, and directly help poor people manage risk and absorb financial shocks

And why exactly do we need to work on removing inequality?  As Christine Lagarde (MD, IMF) said in her  June 26, 2014 speech at Mexico, the need for removing inequality goes beyond moral principles. It is a key ingredient for sustainable growth.

Inequality is not just a moral issue—it is a macroeconomic issue. Our research tells us that countries with higher inequality tend to have lower and less durable growth. Inequality chokes the prospects for individuals to realize their full potential and contribute to society. Whether it is through personal experience or empirical evidence, one thing is clear—growth has to be more inclusive, and for this finance has to be more inclusive

Financial Access can increase investments

Whether it is individuals or small/medium firms, access to finance, builds the environment and comfort for savings and investments. This could be because of multiple factors:

  • Access to credit
  • Access to easy, safe, reliable means of savings and investments
  • Triggers and reinforcements (social, system-driven) that induce a culture of saving and/or risk-taking, investing etc

Financial Access provides security/insurance

The impact of negative scenarios is significantly high for those who have no financial security or insurance. The ability of an individual or a community to bounce-back from a calamity is directly related to the access of funds made available during such times of need. Insurance has the other advantage of providing mental peace and a mindset where the poor are not constantly worried about basic sustenance.

Digital success needs a matured partnership mindset

I believe that smart matured digital players will need to develop deep integration with their partners.

Let me explain why.

With the growing consumption of digital media, there is considerable noise that a consumer is now exposed to. This would mean that the brands have a fast shrinking window of opportunity where they have their prospects attention.

Most brands do understand this and hence have started investing heavily in better designs and more meaningful content.

But when it comes to acquisitions, it seems that this underlying assumption is usually forgotten. Maybe the acquisition teams are overwhelmed by the amount of digital data they are expected to digest and optimize for. In order to increase the leads volumes, most brands usually explore new partners who have possibly captive audiences.

In many cases these captive audiences are merely email id lists/bases that the partner has sourced not even built. And this might be the root-cause of my recent bad experience with a MNC Bank in India.

I have been using a premium variant of this bank’s Credit Card very regularly for the last 8-10 years. I have my email registered with the bank’s card team where I regularly receive official communication from the bank.

Interestingly I received am email for a gold card from the same bank on the same email id. This wasn’t a proposal to downgrade the plastic, but an email to take up a new card from the bank. I was confused. So I checked the email headers and discovered that this was sent by some partner of the bank who had my email id on its base.

The bank didn’t scrub the partner’s base for emails already registered by existing customers. I can understand why the bank would not want to scrub and give back a base to the partner. Because then the partner could do a delta check and figure out which email ids are registered with the bank.

Nevertheless the bottom line is that the customer experience was significantly compromised.

So what could the bank do? What should other brands do?

Partnerships in Digital WorldI feel they need to pick & choose partners carefully and then deeply integrate with them. They should in fact look at sending emailers from their own servers so that scrubbing is done real time and the partner just gets a report of how many emails were shortlisted for the blast rather than a list of which ones were shortlisted or rejected.

Even if the partner is just worth the customer base it holds, banks would need to step up and control the subsequent stages of the lead generation process. On personalized platforms like emails, its customers can not be treated like New To Bank (NTB) applicants.

In today’s world, we talk about data quality and data velocity. Maturity in both these aspects is possible only through an eco-system mindset and not in the current vendor-client approach.

It would definitely add to the cost of acquisitions. And there might be other better, cleaner solutions but the current process just does not cut it.

Why mobile payments must arrive soon

I try to go walking on most weekdays. And I prefer to do so light – carry just the minimal stuff.

On my way out for a walk yesterday, I stopped by to take some cash along with me – just in case.

And this got me thinking, with my smartphone (& earphones) I do not need so many other things.

I know the time(so that I am in time for that movie), can listen to music while I walk, I can track my work emails (allows me to stay away from my laptop) , I know I can be reached anytime if the need arises(through calls, SMS, messengers etc).

I can track my workout (and its just amazing what all some of the fitness apps can do), click high resolution photos while I am on the move and share it with my friends & family.

But I still need to carry my wallet when I go for my walk. I do so, because I might want to buy fruits on my way back. Or I might get a call from home to pick up some other groceries. Its usually not a planned spend but I want to have the confidence that I have money available to spend when I am out for a walk.

 

I don’t like the feel of the wallet while walking. I would love my phone – which is the digital swiss army life in most our lives – to be able to do that. I would want my phone to give me a sense of financial security too.

Swiss army phone

I know business strategists would say this an isolated and small use case. And I agree. But my point is, its a matter of time. While mobile has brought all these solutions into one gadget, payments cannot stay away for too long.

But then again, its not just me. When my mother goes out for a walk, she carries her phone and a small purse. Does she spend money every day – No. Would she go out without money/purse – No. Would she go out without her phone – No.

Crowdsourcing from a captive audience – New approach to complimentary breakfasts

Crowdsourcing is all the rage. And restaurants seem to have caught the fancy.

There is this guy who is spending a good time just getting real feedback before he decides what and where of his restaurant. A few restaurants have decided to skip the printed menu completely. Who wants to pay professional photographers when the customers can click the dishes with their smartphones and create a more powerful visual menu?

Crowdsourced restaurant

So let’s take the example of the first guy – are restaurants keen to know which dishes to keep in their menu? In most of the cases – Yes !

Does crowdsourcing help? Yes !

The data becomes more reliable with increasing volume.

But the challenge remains that if the customers are not repeat (as Groupon showed us) and if they are just looking for the next cullinary adventure, then crowdsourcing might not be too helpful at all. 

Why? Because we may be using the knowledge of segment A to cook and serve a dish for segment B ! There is no positive reinforcement for the individuals who gave feedback. Do they go back and see their feedback implemented?

But take the case where a restaurant has a captive audience.

Let’s say you checked into a hotel. Chances are the breakfast is complimentary and most of the guests would end up eating at the in-house restaurant. And on most days, in a typical hotel, there would only be a small majority of non-guest walk-ins for breakfast.

So shouldn’t the hotel/restaurant try to understand what the guests would like for breakfast? Well I guess if I recommend this to a 5 star hotel, they would say “Sir, our breakfast spread has been carefully crafted after years of research on what our guests typically like. Thats also the reason you will see so many dishes and cuisines. We really care about what you want… Blah Blah Blah”

But consider this. There might be a Bollywood festival in town and suddenly there are more Indians who want Aloo Parathas.Or a Tamilian wedding with guests staying in the hotel, who would all love a dosa.

Well it need not be so drastic, but wouldn’t it be great if the restaurant could ask me what I would like to have. And then maybe come up with the dish over the next few days of my stay. If there are others who like it. Would it not make me thrilled, would it not make me feel special. My guess is it would.

It would also make the chef’s job so much more challenging and exciting.

And also allow the hotel to stay connected with the guests – guests are not just a room number or ID in their CRM systems.

What do you think?

—————————————————

Image Credit : http://mashable.com/2014/03/19/dinner-lab-crowdsourced-restaurant

TripAdvisor feature – add professional profile and ratings

What makes TripAdvisor a preferred choice in the process of identifying a hotel to stay at is the rich guest-feedback and reviews for most of the listed properties. The stuff about getting addresses, details, baking in a booking engine has been done by very many, but where TripAdvisor leads the pack is this recommendation layer built on top of this aggregated data.

This recommendation layer is what helps us in not only discovering but also deciding on the hotel/restaurant we want to go to. It also gives you a place to comeback and share your own views – which hopefully can influence future decisions. Which gives us a sense of being in control, of being an influencer of sorts

TripAdvisor’s recommendations product is indeed a very mature offering. They have baked in reviewer’s authority, social graph ( it shows reviews from your network clearly marked) etc.

But there is one huge opportunity which is clearly missing – Individual Professional profiles for the hospitality sector.

Let me explain this in detail.

We all know from our past experiences that the key to a great experience is much more than the architecture, luxury, ambiance etc- it is the staff which finally brings all of these together to give us a great stay. Right?

There have been times when I stayed in a great property but the staff just failed to step up to the expectations. On the other hand, some of the best times I had was when I was backpacking and staying at guest-houses and probably half star rooms in Rajasthan. The human connect is absolutely critical.

If this assumption is valid, shouldn’t we help build reputation for the hospitality sector professionals by sharing our feedback? Maybe we should avoid writing it when its an overall negative experience, but why wouldn’t I do it for a great manager/waiter?

A recent experience confirmed the need for this.

We were out on a road trip to Agra/Mathura/Vrindavan and my brother found this incredible property in Vrindavan (and not through Trip Advisor). We checked out the next day and in the whole confusion of getting all 11 people and their stuff together, my brother forgot his wallet at the reception.

We were on our way and almost back on the highway when the manager called to tell us about the wallet. On his own he checked where we were and sent out his guy on a bike to deliver the wallet. Kept calling us to check if we got it or not. When my brother called him up to say ThankYou, he just asked if we would write a positive review on TripAdvisor.

We did, but guess who gets the 5 star rating? This manager got mentioned, but he would get drowned in the list of fresh or helpful reviews that would float over my brothers review of the property.

trip-advisor-ratings

Look at the image above from Dusit Devarana’s page. These are the top 2 reviews showing and one can see Varun Kutty being mentioned – unfortunately one guest got the name wrong. Many other reviews don’t mention Varun. Wouldn’t Varun love to have a small place on TripAdvisor which shows a summary of only those reviews which mention Varun. That would be a personal trophy for him – one that keeps getting bigger day-by-day !

Also given the churn in the hospitality sector, this manager would probably move to a new location and while he might dig out the review and show it during interviews, it might not be a compelling argument in his favor.

What if,

  • TripAdvisor allows hospitality sector professionals to build Linkedin kind of profiles
  • A guest who is reviewing a property can also mention the specific staff members who influenced their experience
  • Maybe we would want to keep the personnel mentions for positive reviews only- hence trigger the prompt or tagging option only when the rating is 4 or 5.  I would want to do this to keep the negative reviews out, which are rarely written objectively.
  • Aggregate the reviews/ratings mapped against the professional and show it as a summary. Also show this in combination with the property or brand they were associated with at that point of time.
  • This profile could also be used as a proxy for background/reference checking. Hospitality sector suffers from a very high level of CV fraud and most of those pertain to prior experience.
  • This would also get the hospitality staff fully integrated to the TripAdvisor platform. They might not feel the threat of competition right now, but this would help build a very strong hurdle against any future threat.

In my opinion, this would also motivate the staff to invest in each interaction they have with guests. The gap is that this would end up catering to the front-end staff only and miss out on the back-end folks. Very few people ask for the chef’s name at a restaurant if they have had a great meal.

Recommended feature for Google Maps Application

Gratitude First – I am really thankful for Google for the traffic layer on its Maps application. Like most others in Delhi, I have become a regular Google Maps user now, checking the traffic updates and choosing the route that I should take to reach my destination. So much so, that my driver also insists on it.

I started tracking my typical usage behavior and interesting things surfaced. I would open the application if:

  • I am going to a new/unusual place or
  • To the usual place at a not-the-usual time,
  • I don’t know the route or the traffic conditions or both
  • Faced with a traffic build-up on my usual route to work(or back) to see how long the jam was and what was the situation on alternate routes

And amongst the situations listed above, almost 90% of my usage was due to the last one – traffic buildup ahead of me on my usual route to work or back home.

Also, since my daily commute is almost 40kms one side, many a times there are multiple congestion points that I encounter. And some of those develop while I am on my way. Hence even if I check the traffic at point A and see that everything is clear downstream, chances are that the situation would change when I reach the downstream point B.It can be very frustrating, trust me.

There’s another scenario that kicks in – given the resolution at which maps open up basis my current location, I need to scroll a lot to check out the whole path. Many a times I miss out checking the traffic congestion at far-off points.

google-maps-traffic-layerAnd this set me thinking – wouldn’t it be a great feature for Google maps to

    • allow me to set my usual route for work/home
    • jump directly to my route showing the areas with traffic build-up or

better still, alert me even without my opening the Google Maps app that there are places where there is slow traffic. This would have been true delight.If this is possible, can we build a web-app to send traffic updates to people who do not have a smartphone. Can such users register their routes and get SMS updates? Why not?

As I toyed with the idea, I started wondering, why hasn’t Google done it already.

This is a very simple and intuitive need, surely someone at Google would have articulated such a need long time back.

So I started understanding how Google Maps work and what I discovered in a quick 2-3 hours of research was the following:

  • Google has a similar feature (time to destination – work or home) in its Google Now set of widgets. But its not really the kind of delight that I was referring to.
  • Google might not want to do it – Google collects and calculates traffic data from users who are using Google Maps and sending their locations to the Google servers. This means, Google would always need higher number of users to stay-on with their Maps/location services for them to get more data-points to have a better traffic estimate.
  • And maybe independent developers also cannot do it – The Traffic heat-maps are a “layer” on the Google maps and they are provided in a similar way in the API – a visual layer that sits on top of the geographical UI. This means that any developer would not get a feed of locations/latlons along with the traffic feed. To develop the kind of app/feature I referred above, the Google traffic API would not be helpful.

 Update:

With today’s experience I think Google should still go ahead and build this feature. I now feel that this feature would kick-in more signins into Google Maps. Why?

If I get an alert that there is traffic in my usual path and the alert doesnt mention the specific points, I would be tempted to login into Maps and see where the blockage is. What are the alternate routes and what is the situation there.

One challenge here is that not every one might have their GPS on and it might be tough for Google to know if the person is already on the move or not. It could choose to send these alerts only to those with GPS on. This would serve two purposes – more people would keep GPS always on, hence provide the feed to Google’s server to better calculate traffic pattern. Also with the GPS on, Google would know when the user is on the move on the pre-defined specific route.