Technology is accelerating the speed of change in banking as it is everywhere else in the global economy. But a recent project which built a new digital bank in just 10 weeks takes some beating in terms of rapid innovation.
Online and mobile banking apps are growing in popularity worldwide. Research by McKinsey found almost a third of all payments are now made using an app. But when a bank needs to upgrade its mobile services, where should it begin?
The answer, says Tata Consultancy Services (TCS), is to start with the end user in mind. “The focus should not be on a single technology, but on thinking of a user and what gives the user the best value,” says Chander Shekher Joshi, TCS Innovation Evangelist.
So, when TCS wanted to inspire a leading Nordic bank on how the new retail banking experience should be, the team quickly realized what was needed was not just another app, but the reimagination of retail banking for the digital age.
A whole new bank
The outcome was a complete new digital solution that allows users to access to everything traditional banks provide from their smartphone. And that includes opening an account.
In many countries, banking and anti-money laundering laws mean new customers must verify their identity in person with a passport or identity card. The only option is still a visit to their local branch to present their documents.
“Instead of doing a manual document verification, there are technologies which can read a document and extract the applicant’s photo,” says Joshi. “The technology can then compare the applicant’s face with the document, establishing their identity without them ever having to visit a bank.”
The power of Co-Innovation
The software which extracts the photo and matches it with the applicant’s image came from a firm within TCS’s Co-Innovation Network (COIN).
COIN matches tech start-ups to TCS innovation projects, giving clients access to the latest technology to solve their challenges. COIN’s development process is a dynamic one, with new companies invited to join all the time as projects evolve. In this case, says Joshi, the team reached out beyond the network to find the right start-ups to deliver the innovation they needed and bring them to COIN.
That innovation did not stop at onboarding. Something else that end users were calling for was the ability to monitor their spending in real time to stay on top of their finances. A Personal Finance Manager feature was introduced into the solution, which allowed users to analyse their spending by category just by tapping their phone’s screen
The solution also uses location-based technology to give customers access to special deals as they shop. As they walk along a street, they receive offers and information from the businesses they are passing, based on the insights drawn from their spending patterns – but only if they have given consent as per GDPR.
The solution evolved from being a simple app replacement to a full-on thought leadership project, incorporating the very latest technology. And it was built in just 10 weeks.
That’s thanks to the multi-location, multi-team working in parallel using agile methodology to develop the app.
“It wasn’t a race, the important thing was creating something users would value in a short time,” explains Joshi.”
The Power of Co-Innovation
The solution was launched to the client at a Co-Innovation Day. But rather than run a traditional presentation, the TCS team went one better and allowed 150 of the bank’s staff to explore and experience it for themselves.
“We produced a minimum viable product (MVP) and we gave it to the people in the bank so they could really experience all the features and understand how it works in a real scenario. A number of shops including cafeteria were set up where people could experience different bank features” says Joshi. These features included instant account opening with automatic Know Your Customer, payment to other users through their phone number, payment to merchants using QR codes, receiving offers based on content consent and analysing spending patterns. “It was so much more powerful than presenting in a conference room.”
The feedback was overwhelmingly positive and TCS has since evolved the digital bank concept further, using it, in part, to try out new ideas and technologies.
For example, it now allows users to make payments using biometric verification. The software scans the user’s face and checks their fingerprint to confirm they are authorized to use the account. Customers do not need to carry even a cell phone while shopping, their face is their identity and payment method.
So, can you go out and open an account with this digital bank tomorrow? Sadly not. “It was about demonstrating the art of the possible,” says Joshi. “Each bank has existing infrastructure which can be integrated with this solution. Now we have a platform on which we can develop innovative features related to banking and beyond banking, such as retail and insurance. This becomes a proof point and a quick way to gauge end user interest before investing heavily in features that users don’t actually want.”
And does the digital bank herald the end of face-to-face banking? Joshi says it doesn’t. He believes banks will use their physical branches as customer engagement centres for other services and in addition a place to showcase to take feedback for upcoming new products and services. “Bricks-and-mortar banks will still have a role to play, but one very different to their role today” he adds.