Thin Mobile App or a Fat one – Digital banking toolkit

Mobile is the new frontier and banks know this well.

Amongst the various choices to make as part of the bank’s overall mobile initiative, is the decision around the structuring of mobile app(s).

Thin App Vs a Fat App.

These might sound strange terms especially in reference to mobile apps and no, we are not talking about the size of the app in MBs.

A Thin Mobile App is a niche solution available for select instances or customers, which allows a small subset of activities to be handled.

On the contrary, a Fat app is one where all the possible features and functionalities are available in the single app.

Banks have chosen to tread either of the paths. E.g. ICICI Bank has multiple apps in the playstore and HDFC Bank has just one main app.

Bank Mobile App - Fat or Thin

As one would expect, there are pros and cons of both, and I am listing a few here that come to my mind.

Attribute Thin App Fat App
 Clean UI  Easy to deliver  Needs design assistance
 User Engagement  Higher – as less distractions  Lower as many features irrelevant
 App Marketing  App adoption slows as marketing dollars split across multiple apps  Overall downloads look better as one single app
 App Development  Becomes complicated with multiple apps in market  Easier since tracking just one app
 Channel Migration  Depends on how the bank approaches it   Depends on how the bank approaches it

I personally feel, more than the final choice, it is the reasons that drive the choice which are important e.g.

  • It makes more sense to have a separate thin mobile app, if there is a unique customer segment that seems to have very different transaction or enquiry profile as compared to the others. E.g. Retail bank customers vs SME business owners
  • Building Traction. Many banks want to keep their mobile banking app for transactions only and do not see value in building any pre-login use-case. This makes the mobile adoption target so much tougher as there has to be a very precise value that the customer foresees in using the mobile platform for transacting. Plus its a two stage goal, get downloads and then get usage. It might be useful to break it down into easier goals, get downloads by providing a use-case even if its a pre-login e.g. offers on debit and credit cards. And then get the customer who already has your app to start using it for transactions.

What do you think?

SMS is reborn as an acqui channel in the Smartphone age

In the early days of Deal4Loans, we used to get a lot of traffic and leads through SMS campaigns. Especially for products like Personal Loans (Simple pitch and high-urgency in a need based product)

SMS reborn in smartphone ageDuring those days, NDNC (National DO NOT CALL) list was not introduced and there were very few players who were sending bulk SMS for lead generation. Response rates were high.

Market quickly figured out that this was a cost effective and easy channel to scale up. A tsunami of SMS campaigns started to happen and finally the National government had to intervene with its NDNC initiative.

And while SMS acquisition campaigns have largely died out, it seems to be back again.  And with even more potential.

In a recent campaign we closely observed, a bank reached out to a select base of consumers through SMS and emails. The resulting traffic on the portal was significantly higher in case of SMS.

Why?

Apart from all the other factors (higher delivery rates, targeting time of intervention), now most recipients have a 3G or Wifi enabled smartphone, where CTAs are simple. This campaign had a short URL taking to the Landing Page after a crisp text talking about the offer.

Lesson learnt:

If you can withhold the temptation to abuse your mobile registered users, SMS can deliver amazing results even in marketing campaigns.

3 tips for New To Bank Acquisitions – Digital Banking Toolkit

Why Online Acquisitions

Acquiring New To Bank (NTB) customers is a key agenda for most Digital Heads at Banks.

Its only logical that online acquisition budgets are getting bigger, given the following:

  • Consumers are spending more and more time online. Digital is the best channel to start a dialogue
  • Digital channels are tracked exhaustively. You can measure the return on each dollar spent.
  • Digital channels allow data to flow at higher speeds. This could translate into better context, targeted products, straight-through-processing, upfront checking of applications etc etc.
  • Tablets have provided the ideal form-factor to do an assisted digital sourcing, as has been proven by the success of ICICI Bank
  • Regulatory changes are also making it easier to acquire online – Aadhar database, eKYC, wet signatures to go away in some instances etc.

Here are 3 seemingly simple tips for anyone who is doing NTB acquisitions today at a banking set-up.

Choose the right on-boarding product

choose-productWhich product will you focus on to get more customers into the bank?

Many would say, we do not have a choice as each business line would be relying on the support of digital channels. Be as it may, it might be prudent to take a step back and understand the advantages of choosing a particular product for consumer on-boarding vs another.

  • Do we reject a lot of applicants for this product. Typically in case of credit cards and most loan products, the rejection rates are high and hence we need to sieve upfront to reduce the cost per lead or cost per account. Are there other products in the portfolio which have lower rejection rates e.g. most liability products may fall in this category
  • Does the product start giving me more data and insights about the customer? Can I build strong contexts to pitch the next product. Any payment product would be a good bet as it starts building a lot of relevant data points about the customer.
  • Is this being sold or the customer has a well articulated need? Loans should see a higher conversion as against credit cards because the customer has a need. But the scenario may change if the card is free and loaded with offers.
  • Is the process straight-through? If not, how many steps are there? The higher the number of steps, lower would be the conversion rates.
  • Competition – given that you are not the only bank trying to talk to the customer, the kind of marketing money it takes to interrupt a customer would increase for the segment with higher competition. Back in 2007 the bid rates for Personal Loan keywords moved almost 100% in less than 6 months. Every bank in India was focusing on acquiring Personal Loan customers.

Manage the Drop-out funnel

With all the tools available for tracking, doing A/B testing it is so much easier than before to manage the drop-outs in the acquisition channel. Over the years, industry has also learnt and created a best-practices library. Use it. E.g.

  • Acquiring through partners who have data on customers is more efficient and reliable. This is why most banks are exploring SME financing through ecommerce platforms.
  • Allow applicants to save applications and continue later. Across channels.
  • Build for a true OmniChannel experience. As the customer journey will definitely toggle devices
  • Provide for assisted filling of forms. What might sound simple & easy to you may be confusing to others
  • Authenticate the communication fields upfront (email, mobile). This allows you to follow-up on leads more proactively.
  • There are no permanent rejections – a customer who is not eligible today may be eligible tomm. Except may be those who are already over age :-).

Build data-led acquisition platforms

Data - Led AcqisitionsWhat has changed significantly in the last decade is the amount of data prospects and customers are generating across various channels and touch-points. The future (if its not already upon us) of digital acquisitions is data-led.

E.g. acquiring SMEs for working capital financing can happen in multiple ways:

  • Bidding on search engines for loan keywords
  • Putting up banners on B2B portals
  • Showing banners to specific SMEs on a B2B portal basis some cuts
  • Deep integration with portals to get fresh data about SME’s transaction, reputation, growth trajectory etc.
  • And so on.

Its easy to see that as the richness of data improves and also its freshness, the credit decisioning becomes better.

But this is not easy to do. It requires bringing together credit , product and digital teams into a room and understanding clearly the opportunities ahead of us.

Some banks are already working hard to evaluate the new data-points available and calculate their influence on the traditional credit models. Its a matter of time before this becomes the new normal.

 

Uber and Free Market Economics

Uber has changed the way we travel within cities. On a recent trip to Jaipur, the first thing I did on reaching the city, was to top-up my PayTm wallet to get going on Uber. (yeah no card-on-file yet 🙂 )

Uber Free Market Economics

And over the next 3 days I took more than 12 rides across the Pink city. Here are some of the interesting observations I had:

  • Jaipur is really a small city – Only one ride was over Rs 100/-. All others barely crossed the Rs 75/- mark. Given the distances are not too much, the per ride fare is expected to be low. This is a critical point because the supply-demand balance can be easily titlted in a small-population. Also the per ride metrics are sensitive to even the slightest changes.
  • Free market economies tend to be cyclical – Almost all the drivers I spoke to talked about the good old times they have had, driving around as Uber cabs upto almost 6 months back. It seems back then Uber was super aggressive in signing up cabbies and were paying as high as Rs 1800/- per day. Guaranteed. This came down to 1600, 1400 and now is at 1200/-. And its all because of the immensely huge supply. Most cabbies now complained of getting too few rides on a daily basis. Add to that the low average per ride fare and it is clear that this city needs volume of rides to be high. Or to quickly reach an optimal sweet-spot of supply and demand match. As the word of tough times (for the cabbies) is spreading,  fewer are joining and many who had joined Uber are reportedly quitting it. Some can’t even pay their loan EMIs.
  • There is no consistency of vehicle experience – I got from a Nano to an Innova under UberGo. Firstly, UberGo is where most customers go, hence even cabbies are registering themselves as UberGo. So you are better off choosing an UberGo. The Innova guy said that he wasnt getting any rides so he switched from UberX to Uber Go. Also it seems you make the same per ride across both categories. Hence UberGo seemed a logical preference. The Nano guy was proud of his decision, he claimed that he would recover his investment much faster. And thats true. I think this is a classic example of how the market evolves when its close to a free market.
  • Drivers understand and give importance to rider feedback – I have never seen so much sensitivity from an Uber Driver towards the feedback/rating. To have been able to crack this is really commendable on Uber’s part. The drivers have strong appreciation for this feedback being utilized for giving them ride bookings. Again, there might not be a completely transparent system but the fact that information and feedback is flowing across the supply and demand side, is strong enough motivator to influence decisions.
  • Locals are avoiding taking own vehicles – Lot of areas constantly face bad traffic due to construction activities. Parking is a challenge. Most of my local friends have either started using an Ola or Uber over self-drive or are seriously considering to do so. Atleast till the fares are this low !

Update:

And back in Delhi.

  • There was a surge charge of 1.9X due to high demand and unmatched supply I guess. This allowed UberX  guys to also pick up UberGo customers without formally registering into the UberGo. Complete reverse of what’s happening in Jaipur. I guess Delhi customers prefer the more spacious UberX and there is sufficient demand therein.
  • The first cabbie who picked my request, called me and asked me where I need to go (instead of asking me where to pick me up from), and hearing my destination – declined. Just put the phone down and on my Uber screen I was back at fresh request. No way to even go and give feedback on this bloke ! So I guess Delhi cabbies have a hack to the feedback-driving-behaviour loop also. Land of Jugaad !!

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.

Can someone ever be truly selfish

selfish

(of a person, action, or motive) lacking consideration for other people; concerned chiefly with one’s own personal profit or pleasure.

This definition is inherently flawed.

Can someone be truly selfish

Why?

I can explain it in two steps:

  1. Very simple – I have come to believe that the only way any of us can get true happiness and peace is by helping others.By being compassionate
  2. Now, if we are truly truly selfish we should try to maximize our happiness at every opportunity possible. Right?

So going back to point1, how can we get that happiness & peace?  ….. its by helping others.

Hence if you really are selfish, you will do what the world sees as acts of random kindness and unselfishness.

Agree?

The Marketing Funnel at Baapu Market Jaipur

On a recent roadtrip, we went shopping at the famous Baapu Market in Jaipur. Its a bazaar with lots of small shops selling similar stuff mostly fabric, bangles, jewellery and the likes. One is also told to bargain hard when shopping here.

While my wife was excited about the amazing collection of fabric, jewellery etc , I was intrigued by the interesting model that these shopkeepers had adopted.

Baapu Bazaar Jaipur
Baapu Bazaar Jaipur – photo credit Eric Parker/Flickr/MakemyTrip.com

In most shops there were three different types of roles that the owner and staff were playing:

  • The Marketers – One or two people who were stationed outside the shop, about 15-20 steps away. They would shout out loudly about their speciality bangles or suit-pieces or sarees. I felt the idea was to get the attention of the people who were walking around to move towards their shop(s). They essentially brought more attention/traffic to the specific shop. Like many marketing campaigns, there focus was on increasing reach, hence they would spread in a wider catchment area.
  • The Call-to-Action – Then there was this one guy who was right at the entrance of the shop. Now, most shops here have some of their wares displayed right on the footpath. This guy would observe what me or wife were showing interest in, and would try to nudge us in saying there’s an amazing collection inside that we should check out. This is a critical step in their sales cycle. My assumption is that they have figured out that if you step inside the shop once, chances of your buying something increase multifold.
  • The Convertors – Now comes the most interesting part. In most shops (especially those dealing in fabric) one would be expected to remove shoes and sit down for the guy inside the shop to show the collection. I feel that the removing of the shoes and sitting down is like crossing a certain conversion hurdle. The prospect is now almost committed. This person(inside the shop) would be a very calm and relaxed one, who would have the utmost patience of showing us all that we asked. Its easy for one to feel bad for not buying from him since he had spent so much of his time on us. But the fact is, that its we who invest our time and end up feeling its better to buy from here, given that we have spent so much time checking out so many options. Interestingly, these guys came across as very easy to trust and in the absence of brands, its their personality and conduct that drives that trust.

Maybe I was seeing patterns where none exist.

Let me know if you visit this market and see (or fail to see) what I have just described. Will be interesting to hear from you.

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!