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Building a digital bank
- 1. BUILDING A DIGITAL BANK THE MOST BASIC MINIMUMVIABLE PRODUCT
- 2. WHAT IS A DIGITAL BANK Neo Banks • No banking license • Partner with existing banks • Offer user friendly interfaces • Example – Niyo (First IDFC),Yolt (ING) New Banks • Obtained banking license • Direct competition with traditional banks • Same services as Traditional banks • Example – Monzo, Starling Beta Banks • Subsidiary of existing traditional bank • Supports the traditional bank • Helps enter new markets • Increases customer base Digital banks are banks which transfer of transactions from traditional modes to online through use of advanced technologies for an enhanced customer experience and cost reduction
- 3. WHY A DIGITAL BANK? For Banks For Customers Reduced dependency on branches Ease of accessibility Reduced costs of transactions Lesser fee-based transactions Staff Reduction Automated processes reduce TATs Increase in customer reach Anywhere banking Financial Inclusion benefits Rural population gets easy access to banking Additional opportunities for cross sell Better product mix available Omni-channel benefits for marketing Ease of access to banking products and services Streamlined customer acquisition Better customer servicing 24X7
- 4. KEY ADVANTAGES OF DIGITAL BANKS Top UK Digital Banks have – Added 13 Million customers in Europe 5 Million accounts opened in H1 2019 Increased reach outside of major cities Digital banks have – Lower cost-to-serve than incumbents of £20-£50 per account vs £170* No branches and branch networks No Legacy IT systems support costs Sources: * - https://www.finextra.com/newsarticle/34335/digital-banks-on-track-to-treble-customers-in-next-year-but-profits-remain-elusive
- 5. VISION OF A DIGITAL BANK (BETA BANKS) Rethinking from end Customers perspective Transparent product pricing Use of Open API for interoperability Intelligent use of Data (Paperless Banking) AI based customer service SingleVersion of Truth Integration with Fin- techs Omni- Channel
- 6. PRODUCT DELIVERY – SIMPLIFYING THE FRONT END WITHOUT IMPACTING CORE PROCESSING MostViable Product Feature C Feature B Feature A Product Backlog Client Onboarding KYC/CDD Account Opening (CASA Offerings) Transactions PaymentsWorkflows Loan Offerings Accounting and Reconciliation Regulatory Reporting Risk Management Treasury Omni-Channel Platform Core Banking Platform By increasing order of impact
- 7. TYPICAL CUSTOMER ONBOARDING JOURNEY – MVP1 Customer enters Portal Derive customer data Data Analytics Customer Due Diligence KYC Partners Credit Scoring Rating Agency Account Opening Core Banking Platform Payment Gateways Payment Partners SingleVersion ofTruth (Cloud Based Enterprise Layer) Front end
- 8. THANKYOU!