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!

Why do we sometimes go quiet during roadtrips?

Found this in my notes from a road trip taken almost 10 years back in Dec 2005.

———

Road trips silent

In the last few months I have discovered a passion to travel, but what I havent learnt so far is why I love it? What gets me excited to just get out of “here” and be out “there”?

The more I think about it, the more it adds to my confusion.

I have been noticing my thoughts during these road-trips and its just amazing how the human mind is capable of such a diverse set of emotions and reactions, in seemingly similar situations.

I am yet to figure out any dominant patterns. Each trip, each journey seems to be a unique experience. How they add up? I  am not too sure. Not sure if they even add up.

What captivates me is the journey, more than the destination. The road trips are like the time spent in a planetarium, the whole universe seems to change every now and then. And the only thing you can do is shut up and watch.

Or maybe not !

I think while I am quiet outside, theres a lot that goes inside the head. But to be honest, I can’t remember what all came to my mind during my last road trip.

And looks like its not just me.

So why do we become all quiet when on a road trip?

Is it that we run out of things to talk?

Or is it that the steady pace of changing scenery somehow soothes the mind and forces all our senses to relax?

Or is it that most of the things that we intend to talk about somehow seem irrelevant and non-consequential once we are away from the hustle-bustle of our daily lives?

I feel that a change in the immediate landscape around us, forces our minds and hearts to shift gears. the vast expanse of nature all around us in its amazing beauty, forces us to think about more fundamental things.

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  partnerships.

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.

Big Data, medicine and Dr Gregory House

I am a big fan of House. BIG FAN !

I guess what I really like is the infectious curiosity of Dr Gregory House and the very extreme personalities of the characters at this clinic.

In my overly simplistic understanding of medicine, there are two parts to it – diagnosis and treatment.

And our Dr House excels at the former. He is able to connect the seemingly unrelated symptoms with behavioral patterns, genetic history and what not. And it is fascinating how the power of inference and hypotheses testing leads his team to find the true nature of what really inflicts the patients.

dr-gregory-house

What I wonder is that this might have been a super impressive set of scripts way back in 2004-2012 (yes the series is that old), but would it be as impressive in today’s age and time.

Experts say that Big Data or analytics is effective if the 3Vs are encouraging – volume, velocity and variety. In case of healthcare they talk about a 4th V – veracity or data accuracy.

Increasing number of our records are getting digitized – so the volume surely is exploding.

Wearables that track real time pulse, Blood pressure etc are already an expected norm. Patient specific information is definitely flowing at a very high velocity within the healthcare eco-systems.

Variety of data, might get addressed when data-sets from individual data-networks (like EMR co’s, hospitals, health insurers etc) are purged for confidential and individual data and insights shared on a common platform/network.

Given all these indicators, do you see a time when Big Data scientists will put a Dr Gregory House in every hospital that can afford such systems? The trick might be to find the best set of tests to conduct to confirm the existence of disease(s), and this is something that machine-taught algorithms can do nicely.

Would machine learning really help connect dots in the medical outliers?