MEETING POINT - CONNECTING DIGITAL EXPERIENCE WITH THE BRANCH NETWORK - Retail Banker International
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www.retai lbankeri nternati onal.com Issue 756 / December 2018
MEETING POINT
CONNECTING DIGITAL EXPERIENCE
WITH THE BRANCH NETWORK
FEATURE INSIGHT STRATEGY
Regions Bank: a How DLT can redefine Wema Bank aims to create
community-style approach the concepts of trust, an inclusive and agile
with the range of a national ownership and exchange environment in Nigeria
RBI 756 December 2018.indd 1 30/11/2018 09:50:07contents
this month
06-17
COVER STORY NEWS
05 / EDITOR’S LETTER
18 / DIGEST
• Banking fraud in India up by 20% in two
years
• Kuwait Finance House opens digital self-
banking branch
• Goldman Sachs’s online retail bank gains
traction
• Kotak Mahindra Bank launches open
banking platform
• Banco Original taps Fico to launch digital
platform
• UK online alternative finance market
grows by 35%
• UK launches investigation into bank IT
failures
• Société Générale to pay $1.3bn to settle
US AML probes
• Digital-only N26 goes live in UK
• Nearly 50% of Indian ATMs may close by
March 2019
BRANCHES AND DIGITAL
• Tandem looking to launch digital bank in
Hong Kong
Editor: Group Editorial Director: Head of Subscriptions:
19
Douglas Blakey Ana Gyorkos Alex Aubrey
+44 (0)20 7406 6523 +44 (0)20 7406 6707 +44 (0)20 3096 2603
douglas.blakey@verdict.co.uk ana.gyorkos@globaldata.com alex.aubrey@verdict.co.uk
Senior Reporter: Sub-editor: Director of Events:
Patrick Brusnahan Nick Midgley Ray Giddings
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patrick.brusnahan@verdict.co.uk nick.midgley@uk.timetric.com ray.giddings@compelo.com
Junior Reporter: Publishing Assistant:
Briony Richter Mishelle Thurai
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2 | December 2018 | Retail Banker International
RBI 756 December 2018.indd 2 30/11/2018 09:50:12contents
december 2018
09
FEATURES STRATEGY
06 / SCOTIABANK 12 / NATIONWIDE
Scotiabank sees its Canadian branches as a
key channel for customer advice and sales,
To fully embrace Open Banking, a clear
strategy is crucial. Rachael Sinclair, director of
06
and for brand reinforcement. Robin Arnfield strategy and planning at Nationwide, speaks
discusses channel strategy with James Popalis, to Briony Richter about how the UK building INDUSTRY INSIGHT
vice-president of omnichannel development society is rising to the challenge
22 / ITALIAN BANK
09 / REGIONS BANK 14 / WEMA BANK ASSOCIATION
Regions Bank combines a community bank- Wema Bank is accelerating change in Nigeria. Around two years ago it became clear that the
style approach to its customers, with the range Its digital outlook and launch of ALAT reveal infrastructure supporting Bitcoin – the most
of offerings of a national operator. Robin efforts to create a financially inclusive and established cryptocurrency – could redefine
Arnfield talks to Shawn Bradley, Regions’ head agile environment. MD and CEO Ademola the concepts of trust, ownership and exchange.
of customer strategies and analytics Adebise speaks to Briony Richter Giovanni Sabatini writes
16 / PKO BANK POLSKI
14 The Polish banking market is one of the 16
most modern in the world when it comes
to technology. Adam Marciniak, speaks to
Briony Richter about innovative solutions to
bring new life to payments
12
www.retailbankerinternational.com | 3
RBI 756 December 2018.indd 3 30/11/2018 09:50:16Retail Banking London 2019
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RBI 756 December 2018.indd 4 30/11/2018 09:50:17
1118Timetric_RBI_Ad.indd 1 26/11/2018 10:17editor’s letter
UK bank customer
complaints hit record high
Douglas Blakey, Editor
U
K bank branch closures this year total 682
outlets, with RBS accounting for more than one-
UK BANK BRANCHES, JANUARY 2017-END 2018
half of the axed branches. For the year to date, RBS jan 2017 Jan 2018 end 2018
NatWest has closed 409 branches. Barclays 1,309 1,208 1,058
In May, RBS finally confirmed the cancellation of its Williams Lloyds 1,140 967 893
& Glyn challenger unit, leading to the closure of all but 53 of Halifax 657 618 609
its almost 300 RBS-branded branches in England and Wales. In
Bank of Scotland 241 206 198
2017, RBS NatWest closed 331 branches, again the most UK
Lloyds Banking Group total 2,038 1,791 1,700
bank branch closures of any lender. The RBS NatWest branch
NatWest (England & Wales) 1,058 650 648
network is now down by almost 50% since the end of 2016.
NatWest (Scotland) 5 5 5
Branch closures across the sector this year are down sharply
RBS (England & Wales) 281 272 53
on 2017, when 1,160 branches were closed. In total, across the
RBS (Scotland) 193 99 91
major retail banking and building society brands, the UK ends
2018 with fewer than 7,500 branches. Over 1,800 branches RBS Group total 1,537 1,206 797
have closed – one in five of all outlets – since January last year. Santander 841 798 766
Barclays the largest network by brand HSBC 748 625 626
Branch closures are accelerating at Barclays: in 2017 its branch TSB 588 559 551
estate reduced by 101 outlets, although it remains the largest Clydesdale Bank 111 71 67
branch network by brand with 1,058 outlets, following the B n/a 2 2
announced closure this year of 150 branches. Yorkshire Bank 137 99 90
Branch closures across Lloyds Banking Group (LBG)’s three
CYBG Total 248 172 159
brands remain relatively modest. LBG will close a further 12
Virgin Money 81* 81* 81*
branches in early 2019, with eight Bank of Scotland outlets to
close, reducing its network to 198 units. Bank of Scotland’s Handelsbanken 207 207 208
network north of the border remains larger than those of Cooperative Bank 105 95 68
traditional rivals Clydesdale and RBS combined. Metro Bank 45 55 62
Three Lloyds branch closures reduce its network to 893,
Nationwide Building Society 691 680 680
down 74 on the year. Meantime, one closure at Halifax reduces
its estate to 609, down by 48 for the year. Similarly, Santander Other Building Societies 860 839 700
has made few changes to its branch numbers, down by only 32 Total 9,298 8,138 7,456
this year to 766. *73 branches and 8 lounges
It is a similar story this year at the newly merged Clydesdale/ Source: RBI
Yorkshire/Virgin Money group. Clydesdale and Yorkshire
Banks have done much of the heavy lifting in terms of branch- year increases HSBC’s network to 626 outlets. Metro Bank’s
number rightsizing. In 2017, Clydesdale closed more than ambitious store-expansion programme remains on track: its
one in three branches, reducing its network to 71 units. This current estate comprises 62 stores, up by 14 for the year to
year, Clydesdale’s branch network has inched down by only date. Handeslbanken is also up by one net branch, to 208
four units to 67. Sister brand Yorkshire Bank is down by nine outlets. With little fuss or fanfare, Handeslbanken’s network
units this year to 90, having closed 38 branches in 2017. has grown from only 56 as recently as 2008.
Clydesdale’s Virgin Money brand remains unchanged at 81 By international comparison, the UK’s branch density is the
outlets, comprising 73 branches and eight lounges. third-lowest in Europe. The UK’s 66.5 million population is
Cooperative Bank has closed no branches in the second half served by 7,456 branches, giving a density of 11.2 branches
of 2018, following 27 closures in the first half. It ends the year per 100,000; only in Holland and Estonia, with 9.4 and 7.6
with 68 branches, compared with 291 as recently as late 2013. branches per 100,000 respectively, are the rates lower.
HSBC, Metro bucking the trend At the other end of the scale, Spain (60), France (50+) and
HSBC has closed no branches during 2018. Indeed, the Italy (45+) remain over-branched. The European average is
opening of a branch within its new Birmingham HQ this around 35 branches per 100,000. <
Get in touch with the editor at: douglas.blakey@verdict.co.uk
www.retailbankerinternational.com | 5
RBI 756 December 2018.indd 5 30/11/2018 09:50:18
18 10:17feature | scotiabank
scotiabank:
a long-term
future for the
branch and atm
Scotiabank sees its Canadian branches as a key
channel for customer advice and sales, and for
brand reinforcement. Robin Arnfield discusses
channel strategy with James Popalis, Toronto-
based vice-president of omnichannel development
A DIGITAL TRANSFORMATION
s part of its plan to drive in-branch channels and contact centres. We don’t say
transactions to under 10% of total to clients that we don’t want them to use
transactions, Scotiabank uses Scotiabank has set five key priorities for branches. But we explain that digital is more
its branch channel to encourage digital its Canadian and international banking convenient, which means our branch staff can
banking adoption. businesses: customer focus, structural costs focus on deep conversations with clients when
“My role is to look at our physical footprint transformation, business mix alignment, they come in with a problem or need advice.”
in terms of where we open, close and relocate leadership and digital transformation. Popalis says Scotiabank focuses on being
branches,” James Popalis, vice-president of In 2017, Scotiabank said its objective was emotionally engaged with clients in order to
omnichannel development, tells RBI. “I to improve its all-bank productivity ratio to help them with their needs. “Our branch staff
consider what makes a good market for us and under 50%, to achieve at least 70% digital decide as to whether the client can be assisted
where we should allocate capital. Another area adoption by its customers by 2021, at least in the branch or needs to be referred to a
is the modelling of branch staffing for specific 50% of products being sold digitally, and in- specialist,” he says. “We align all our resources
locations.” branch financial transactions accounting for and bring the bank to our customers. We’re
Popalis is responsible for overall under 10% of total transactions by 2021. agnostic by channel and by department, and
management and future strategy for In its 2018 Investor Day presentation, aim to have seamless interactions with clients.”
Scotiabank’s Canadian ATM fleet. “Another Scotiabank said it is making good progress Another strategy is community engagement.
area I look after is digital adoption and towards these goals. Across its Canadian and Scotiabank has a national brand image and
migration and strategy for our mobile app,” Latin American businesses, in-branch financial brand story, but wants to ensure that its
he says. “I also oversee our contact centres transactions are down to 20% in fiscal 2018 branches have a connection with the local
to figure out the reasons for call volumes ending 31 October, from 22% in fiscal 2017. community and a local component.
and spikes, and what the customer irritants Digital adoption has risen to 35% in fiscal “This is a huge focus for us,” Popalis
are. A priority is creating more self-service 2018 from 29% in fiscal 2017, and digital explains. “We want to resonate with the
opportunities for clients, and to empower retail sales to 20% from 15% in fiscal 2017. communities we serve, for example via hockey,
them to use mobile or desktop banking for marathons, other sporting events and arts
enquiries.” SCOTIABANK BRANCHES programmes.”
Canada generates 52% of all Scotiabank’s Scotiabank has deployed digital screens
revenues in geographic terms. In a recent Popalis says Scotiabank’s strategy is not a in its Canadian branches. “We leverage
investor presentation, Scotiabank said its forced migration to digital. “The branch is in-branch digital screens to advertise what
Canadian retail banking revenues had grown important, as it’s a pillar of the community is happening in a branch or a community
by 3% year on year to C$1.95bn in the third and will remain a cornerstone,” he says. “But event,” says Popalis. “We also use digital
quarter of 2018. simple transactions will migrate to digital screens for national branding purposes if we
6 | December 2018 | Retail Banker International
RBI 756 December 2018.indd 6 30/11/2018 09:50:19feature | scotiabank
have something going on nationally.” “We have a thin network in Western Popalis notes that Scotiabank is currently
In contrast to major retail banks in the Canada compared to some of our rolling out its new ATMs across Canada.
UK and across much of Europe, Scotiabank’s competitors,” says Popalis. “So we partnered “We’ll have envelope-free deposits across
branch network has only inched down in with Cardtronics to get our ATMs and our our ATM network,” he says. “Each branch
recent years. It ended the third quarter of brand into 7-Eleven stores. The importance will have multi-denomination ATMs where
2018 with 960 branches in Canada, down of ATMs for us is cash accessibility and you can select your choice of bank note
from 1,010 three years ago. branding. They give the perceived notion that denominations: fives, tens, twenties, fifties and
a bank is a lot bigger than it actually is, if hundreds. Next Spring, we’ll change our ATM
ATMS people see its ATMs.” transaction screen flow so the mobile app and
In Western Canada, Coast Capital Savings ATM screen will be identical.”
“There’s a lot of debate on the future of Federal Credit Union and Vancity are
ATMs,” says Popalis. “We think people will significant players in the Vancouver area, while MARKET STRATEGY
always need quick access to cash, so ATMs ATB is a key banking provider in Alberta.
will remain ubiquitous. Scotiabank will “We’re not going to open up a ton of Scotiabank has migrated to a market-based
continue to have ATMs in our branches, and branches in Western Canada, but we use approach to branch network planning.
use Scotiabank-branded ATMs supplied by relationships with third-party ATM deployers “Depending on our footprint coverage
third parties.” to get our brand out there,” says Popalis. “For coupled with certain market characteristics,
Outsourced ATMs are surcharge-free for us, cash accessibility and brand awareness are we determine how we orient our branches and
Scotiabank customers. Scotiabank has a important. deploy different types of format,” says Popalis.
partnership with Stanley Security, a subsidiary “When we optimise our footprint, we may Globally, Scotiabank has used design agency
of Black & Decker, to provide ATMs in close a number of branches if there isn’t a Ideo for its new branch formats. “We have
Couche Tard supermarkets in Quebec and return on investment there, as customers are different branch formats depending on the
in the community hockey areas the bank banking more online so don’t need advisory transactions or services that are needed in a
sponsors in Canada. It also has a contract with capabilities in those branches. But we leave an specific area,” says Popalis.
Cardtronics for ATMs in Canadian 7-Eleven ATM behind, so local people can continue to Popalis says Scotiabank examines what
stores. do banking and have access to cash.” individual markets need. “We ask: ‘Does this
www.retailbankerinternational.com | 7
RBI 756 December 2018.indd 7 30/11/2018 09:50:22feature | scotiabank
market need tellers?’” he says. “If we have an Scotiabank has a huge focus on newcomers is a core competency for anyone joining
existing full-service branch in close proximity, to Canada. “There are five big banks Scotiabank,” Popalis says.
it doesn’t make sense to have tellers in the new dominating Canada, so we have to get Scotiabank has created fintech factories
branch, as clients can have access to an ATM.” new customers from the new-to-Canada in Toronto and four Latin America cities,
Scotiabank’s strategy in large urban markets market,” Popalis says. “We have a new arrival which feed into the bank’s data analytics.
such as Montreal, Vancouver or Toronto is programme and engage with new immigrants “Our fintech factories focus on how to digitise
to infill. “In these markets, we have a lot of to win new customers. We want to make the the banking experience,” explains Popalis.
branches in the downtown area, as it’s very bank account-application process seamless for “We’re big on customer journey-mapping, on
important for our branding to have a strong them, as they have major challenges to worry understanding how customers onboard and
presence there,” Popalis says. about when moving to Canada. They just how they engage with us.”
Scotiabank has “solution centres”, which want an easy experience with banking. Popalis says Scotiabank learns a lot from
are branches with no tellers. “If you have “Once immigrants are our customers, we Tangerine, its Canadian standalone digital
a problem, you can go to the solutions want to stay continuously engaged with them, bank. “We learn from it how a virtual bank
centre for help,” he says. “The staff are also so they don’t go to another bank. We don’t operates and how to leverage Tangerine to get
focused on providing advice, for example for just want to sign them up with Scotiabank better market penetration,” he says.
mortgages or investments.” accounts and say: ‘Goodbye, we won’t be in While declining to comment on Quebec-
In Canada’s major cities, Scotiabank touch.’ Digital banking makes it much easier based Desjardins’ decision to close its
operates what it terms “showcase” branches. to have frequent contacts with new customers, virtual-only subsidiary, Zag Bank, Popalis
It also deploys full-service branches where it rather than traditional methods such as says banks need a physical brand presence for
houses experts in different services such as phoning them or sending letters.” customers to feel comfortable banking with it.
wealth management, commercial and small “Tangerine is backed by Scotiabank’s brand,”
business banking, and retail banking. DATA OPTIMISATION he notes. “With a thin branch network, it’s
In addition, Scotiabank is piloting very hard to win a customer base. While
express branches across Canada targeted at “Scotiabank’s CEO, Brian Porter, has a big digital-only banks can offer higher rates than
millennials. “Our express branches let you focus on making sure we have sound data traditional banks, this is only a short-term
open accounts and get access to cash,” explains when we make business decisions, such play to attract customers.
Popalis. “They are intended to help millennials as investing capital to fund projects,” says “We don’t want to get into a pricing war
to get started with us. We answer their Popalis. – we’re about offering sound advice to our
questions or co-pilot them using a universal “We need to make sure we understand customers and understanding them, instead of
banker on how to onboard quickly digitally or the problem we’re trying to solve, based on being like a car dealer who gives you the deal
to use digital banking.” accurate data. Instead of saying: ‘I have a of the day. We want to be there for the client
Popalis says Scotiabank has found that feeling that clients want this product,’ we use when their short-term deposit matures a year
express branches are a format that works. data to get the right answer on what products later, and advise them on what to do with the
“Our express branches in Quebec are very to offer. We’re trying to analyse the copious funds.”
successful,” he explains. “But, rather than amounts of data we collect into order to Popalis says Scotiabank spends a lot of time
focus on specific formats, we prefer to think understand how customers bank, and how educating branch staff so they know how to
about what are the needs of a local community they save and invest money for the future.” respond to customers’ needs. “Branch staff
such as tellers or ATMs.” Scotiabank’s management team attend data can’t be expert on every one of our products,”
analytics courses that include AI and machine he says. “So staff need to be able to refer
UNIVERSAL BANKERS learning and modelling. “Data analytics clients to the right channel or right expert.” <
Popalis notes that Scotiabank has more
universal bankers than its competition. Canada’s largest banks by branch network
“Around 80% of our Canadian branches have Branch numbers as of Q3 2018
universal bankers,” he says. “The universal
bankers have tablets where they can do 1,500
digital demonstrations and onboard simple
1,200
products with clients. Our branch advisors are
encouraged to show their screens to clients, so 900
they can see how to download apps and bank
online.” 600
When Scotiabank opens a new branch,
300
the clients are a mix of all age groups, from
students, recent graduates, new immigrants
0 o n k
to retired or established people. “People have k
an a nt io BC an
k of al an BC an an
ro in nk tre nti di n
l B ad To om CI ab l Ba HS re naster
a need to have a branch in close proximity,” a
y a n oti Ba on a
n d au
a
C e
Ro f C D Sc M tio ana L W
o Naf C
Popalis says. “Even if they never enter the o
branch, they feel more confident engaging
with their bank if it has ATMs and branches.” Source: RBI
8 | December 2018 | Retail Banker International
RBI 756 December 2018.indd 8 30/11/2018 09:50:22feature | regions bank
regions:
retaining a
community
approach
Regions Bank combines a community bank-style approach to its customers,
with the range of offerings of a national operator. Robin Arnfield talks to
Shawn Bradley, Regions’ head of customer strategies and analytics
H
eadquartered in Birmingham, do not justify branches. “Due to changing format along with branch closures, resulted
Alabama, Regions operated 1,476 customer behaviours, we no longer need in $5m in severance and $4m in branch
branches and around 2,000 ATMs to run branches in close proximity,” notes consolidation expenses in the third quarter of
across the South, Midwest and Texas as of Bradley. “In the past, we’d have two branches 2018. This followed severance costs of $34m
30 June 2018. Its parent, Regions Financial close by, because there were too many in the second quarter of 2018, and $30m in
Corp., had assets of $125bn as of 30 transactions for one branch to handle on its the third quarter of 2017 relating to Simplify
September 2018. own.” and Grow.
Regions has a “right-sizing” programme RBI’s in-house research shows that Regions Regions has built new branches in markets
for its branches. “We firmly believe in had 1,492 branches in June 2017, down from with economic or population growth. “In
branches, as they are a critical channel for 1,599 in June 2016, 1,709 in June 2013 and some markets where we are sub-optimally
our customers,” says head of customer 1,774 in June 2010. represented, we need to add branches to be
strategies and analytics Shawn Bradley. “But relevant and competitive in those locations,”
it’s an important moment for the branch, as SIMPLIFY AND GROW Bradley says.
customers adopt digital banking.” Tampa, Florida, Houston, Texas and
Regions has consolidated and pared down Regions’ Simplify and Grow branch Atlanta, Georgia are examples of markets
branches in markets where it has more programme, which includes deploying experiencing significant economic and
branches than needed, or where growth rates “reimagined branches” and a new design population growth, where Regions is
www.retailbankerinternational.com | 9
RBI 756 December 2018.indd 9 30/11/2018 09:50:22feature | regions bank
expanding its presence, Bradley says. accessible and available, and the commitment
“Small business banking is a driver for of its associates to deliver these programmes in
us,” he says. “Our retail banking channel their communities,” Everfi said.
handles our smallest business segment, firms Working with Everfi, Regions has provided
with revenues of under $1m. That segment financial education to over 214,000 people –
comprises the vast majority of our business from high-school pupils to college students
clients in terms of numbers. One of the and adults – since 2011. In the 2017-2018
benefits of looking at markets with strong school year, Regions sponsored digital
economic growth is that there are strong financial education resources in 154 high
opportunities in the small business banking schools, and provided 13,400 college students
segment.” with information to help them understand
finances. It also helped 22,000 adult learners
UNIVERSAL BANKERS with digital tools and online resources.
“Our staff are critical for our customer
In early 2018, Regions moved to a universal education and the adoption of all our
banker model involving a single job family, channels,” says Bradley. “Our central mission
instead of its previous model of separate tellers is to improve the financial lives of our
and customer service/sales advisors. customers through education. We leverage
“We see three primary benefits in going our associates inside and outside the branch –
to one job family,” says Bradley. “Firstly, for example, at various gatherings – to teach
hugely improved customer experience and people about financial education and to help
convenience, as they now have one branch customers be better prepared for their future.”
associate handling all their needs. The
associate can have deeper conversations with
Shawn Bradley, Regions Bank TECHNOLOGY
clients and work to improve their financial
future during every interaction. quality studies from third parties,” says “We’re constantly looking at new technologies
“For our associates, there’s now a very Bradley. “With our universal banker model, like iPads in our branches, pre-staged mobile
tangible, achievable career path through the customers don’t get passed from one associate ATM transactions, and biometrics for
branch network – each step upwards is related to another. One associate can handle all the authentication,” says Bradley. “But we don’t
to the step before, but it adds responsibility responsibilities that occur in the branch, and have any of these deployed at the moment.
and sophistication. Previously, if you were a this provides a good experience for all our We have deployed image-based deposit-taking
teller, you just handled transactions and you customers. Our mindset is to be a community ATMs right across our ATM network, and our
had to switch to a totally different role if you bank with a personalised local touch plus a ATM network usage has grown dramatically
became a customer advisor.” national bank’s product set and skills.” with that technology.”
Bradley says a single job family makes Regions has trained all its associates to help Bradley says that Regions is one of the
staffing Regions’ branches more efficient and
easier.
“We just have one job family to fill instead
of two,” he says. “It’s easier to hire, train and
Our mindset is to be a community bank
schedule people, and we can staff at optimal
levels at any point in time to drive efficiency
with a personalised local touch plus a
and customer service.” national bank’s product set and skills
AWARDS
clients with digital devices. “One of their largest deployers of VTMs in the US. “Our
Regions has garnered accolades from various additional jobs is to be digital ambassadors VTMs are connected to a remote banker,”
consultancies. In June 2018, Javelin Strategy and to familiarise all of our customers in the he says. “That increases the features and
& Research designated Regions as a Trust in various ways they can interact with the bank,” functionality at our ATMs, as you can talk to
Banking Leader for the second consecutive Bradley says. the agent to order new chequebooks, open
year, in a ranking of 17 top US banks. Javelin “We get them to sign up new customers for new accounts, update your mailing address or
evaluated the level of trust account-holders mobile and digital services, get them a bank get a replacement card.”
reported for each bank or credit union that card and demonstrate our ATMs and video Another benefit of VTMs is easier staffing.
they identified as their primary financial teller machines [VTMs].” “We can extend the hours of our remote
institution. In October 2018, Regions won the 2018 banking centre via VTMs without leaving the
In March 2018, for the fifth consecutive Financial Capability Innovation Award from entire branch open,” Bradley says. “So we can
year, Regions was listed among the top 10% of US education technology specialist Everfi. serve our clients for a longer window during
the 318 companies across 20 industries listed “The award recognises Regions’ focus on the day.”
in the annual Temkin Experience Ratings. financial education, the scope and impact of Each VTM is separated from neighbouring
“We do quite well on customer service the bank’s efforts to make financial education VTMs with a divider to ensure privacy, and
10 | December 2018 | Retail Banker International
RBI 756 December 2018.indd 10 30/11/2018 09:50:23feature | regions bank
customers can use the keypad to convey does not just suggest products or services buying fintechs, if they have appropriate
sensitive personal data to the remote agent. to discuss with a client. “In the 350 pieces offerings to benefit us,” says Bradley.
“With the VTMs, a new customer can of information, there is life stage data and A key focus for Regions is partnerships with
show their driver’s licence to authenticate demographic information,” says Bradley. fintechs specialising in various areas of the
themselves, if they don’t have a Regions debit “This helps our associates to anticipate what lending market. “We have done other things
card,” Bradley says. information a customer will need, such as with fintechs, but lending is the biggest focus
Regions offers a chat functionality in both financial education on savings, if we can see for us in the fintech space,” says Bradley.
automated and human mode. It’s also looking that they aren’t saving money. So the associate Lending technology specialists Regions has
at robo-advisor functionalities, although it has might say: ‘Have you thought about long- partnered with include Avant, which uses AI
yet to deploy a robo-advisor platform. Regions term savings?’ or ‘happy birthday,’ or ‘thanks to underwrite consumer loans, mortgage and
is also keeping a close watch on the roll-out of for being a loyal customer for 10 years.’” consumer digital lending technology platform
digital standalone banks by traditional banks. The AI tool also offers help with mortgages provider Lender Price, and small business
“There are a wide variety of different and wealth management, for example lending firm Fundation. Regions has also
approaches to digital-only standalone banks,” providing a referral to a wealth manage advisor taken an equity stake in Lender Price. <
says Bradley. “Some of the incumbents or a business services advisor.
use their standalone digital banks to test LARGEST 20 BANKS BY BRANCHES
technology, and others just offer savings BRANCH REFURBISHMENT US banks by branch numbers, June 2018
accounts or asset growth. Some are connected
Wells Fargo 5,875
to the parent bank, and others are completely Regions has a new design format for
Chase 5,146
separate, while several – PNC and MUFG the branches it is currently building, to
Union Bank, for example – are building demonstrate to customers its brand attributes Bank of America 4,473
branches for their digital banks.” of being welcoming and innovative. US Bank 3,131
Regions’ short-term objective is to continue At the high end, Regions branches have a PNC 2,481
to serve its customers through its existing resemblance to Apple stores because of their BB&T 1,971
digital and physical channels. “But we’ll use of open space and of glass, as well as their
Regions 1,476
continue to evaluate the standalone bank reliance on technology. However, unlike Apple
Toronto Dominion 1,259
concept,” says Bradley. stores, Regions branches do not use white as
their colour, and retain the Regions livery. SunTrust 1,243
ARTIFICIAL INTELLIGENCE “We use stone and wood in our branch Keycorp 1,199
design to make you feel welcome,” says Fifth Third 1,173
Regions has developed an AI platform that Bradley. “The glass is designed to make the Citizens 1,145
is currently being deployed across all its branch feel non-threatening and very open.
Huntington 1,011
channels. We want to have a welcoming feel to avoid
“When a customer walks into the branch alienating our customers. So many banks’ M&T 852
and they are identified, the AI system branches are built like fortresses, and many Citizens 717
crunches over 350 items of data relating to customers talk about getting into a branch but Santander 662
that customer,” says Bradley. “Then, within a feeling they can never get out!” BBVA 645
few milliseconds, the system gives the associate
BNP Paribas 619
the most relevant topic to talk to the customer FINTECH PARTNERSHIPS Capital One 605
about.”
The AI system is a customer relationship- ‘We’ve been very open to our own fintech Bank of Montreal 595
building tool as well as a sales tool, as it development and to partnering with or even Source: FDIC
www.retailbankerinternational.com | 11
RBI 756 December 2018.indd 11 30/11/2018 09:50:24strategy | nationwide
nationwide:
a strategy
for an open
Banking world
Easier access to data has become a hot topic across the financial sector. To fully embrace Open
Banking, a clear strategy is crucial. Rachael Sinclair, director of strategy and planning at
Nationwide, speaks to Briony Richter about how the building society is rising to the challenge
T
he potential benefits of Open “Open Banking is a set of cases, and there machine needs to be replaced or you have
Banking are substantial: enhanced is an ambition to open up the banking world. forgotten about car insurance.
customer experience, new revenue What we came out with in March was a real, “They manage their money day to day,
streams, potential new partnerships and clear statement that Open Banking is a real but they are really active digitally, so what
a sustainable platform for underserved transformative moment in financial services. we thought was how we bring these sectors
markets. “We are leading [joint initiative] Open together to find solutions and scale solutions
Speaking to RBI, Nationwide’s Rachael Banking for Good. The reason for doing that to help those people.”
Sinclair describes her responsibilities as is that we want to bring together partnerships The challenge is live now. As part of the
director of strategy and planning. “My role with commercial organisations, with charities, £3m ($3.8m) fund, Nationwide is making
is very much about setting the strategy with fresh agencies, to find solutions that are strategic investments in and partnering
development and the formation of our supporting the financially squeezed.” with early-stage fintechs. It also hopes that
strategy,” she says. “Owning the execution Research from Open Banking for Good exploring innovative products and services will
plan and, through that, providing and finding suggests that as many as 12.7 million people provide real benefits for the building society’s
the right insights with the leadership team in the UK could be financially “squeezed” – members in the future.
across the organisation to make sure we are having significant financial responsibilities The project is focusing primarily on three
focusing on the right things, keeping our but little capacity to cope with sudden main areas:
minds fresh. I came to the role in July and I’ve financial changes. Open Banking for Good 1. Income smoothing: Helping with regular
been at Nationwide about 10 years now, in aims to bring together different organisations bills, payments and fraud planning. Many
various different roles.” with people to create solutions based on consumers can experience fluctuating
Regulatory and technological developments Open Banking that will inevitably improve incomes. Nationwide data revealed over
are forcing banks across the UK and Europe to consumers’ financial capabilities. 60,000 members receive substantial
up their games by opening up their systems to Open Banking not only enables banks to income from the gig economy. Open
APIs. If banks embrace this, they will be able connect data, but also to connect that data Banking can support balancing this;
to become a bank that not only maintains a to the device that the vast majority of UK 2. Income and expenditure: Using Open
customer base, but significantly grows it. consumers use today: the mobile phone. Banking, with its transparency of data, to
Continuing, Sinclair notes: “With Open help people have a more dynamic view of
OPEN BANKING FOR GOOD Banking for Good, what we are trying to do is their income and expenditure. Nationwide
demonstrate the benefits of Open Banking to receives over 5,000 calls a month from
Detailing what Nationwide has been up society, and working with charities like Money members who are approaching financial
to since Open Banking launched, Sinclair Advice Services and Money Advice Trust. difficulty. Automating an income and
highlights: “We, like other organisations, are We have committed to run a fintech expenditure profile through Open Banking
following the regulatory path in terms of our challenge that demonstrates the challenges could make it faster and more accurate for
development there. That’s all about enabling that are felt by the financially squeezed. customers, and
consent. We have given customers the ability Those people find it really tough dealing with 3. Money management: How organisations
to use our mobile app and internet bank to financial shock – that moment where you have can connect with people to embed
view account and transaction information. an unexpected payment such as your washing healthier financial habits.
12 | December 2018 | Retail Banker International
RBI 756 December 2018.indd 12 30/11/2018 09:50:24strategy | nationwide
Nationwide remains committed to its branch network
Open Banking presents a huge opportunity financial data. So how does Nationwide tackle are seeing, but it’s about having those other
to support every consumer with managing this issue? conversations that people want to have in
their money. The Open Banking for “After we launched into Open Banking branch. Actually, members do come in to have
Good challenge is a great example of how we absolutely focused on the education with conversations about Open Banking. There
collaboration in this new environment can our members. We took a lot of time to create are still services, like getting a mortgage, that
foster a fairer financial landscape. It is a way of information to explain exactly what this customers feel more secure in coming and
getting ordinary people to try this new way of meant for customers. having a conversation with an actual person.
banking and sharing their data, but seeing in “Nationwide does involve its members “There are digital solutions within the
it real value to them. in the testing of our programme. We’ve branches, but it is about evolving them and
got members involved to ensure that we creating what’s really meaningful to our
INVESTMENT AND ADOPTION are focusing on what they really value. The members today. We have a completely new
aggregation side is an important thing; branch design and I really stand behind them.
Nationwide has certainly been investing in customers do think it’s great that they can see I think we have nailed the branch format,
new ways to embrace Open Banking. In all of their accounts, but it still needs to be that is really warm and welcoming. It would
September, it announced that it would spend brought to life. We are looking to launch fully absolutely not be in our interest to remove
an additional £1.3bn on technology. At a next year,” Sinclair says, adding: “That will branches from our members.”
time when customer expectations of service be a way of opening up and using those APIs Sinclair highlights that while there are
are rapidly changing in a digital world, more and more.” definitely significant growths in mobile
Nationwide is investing to ensure that it adoption and digital payments, many
provides the best services. BRANCH NETWORK customers still prefer both the physical and
“In total there is a £4.1bn commitment to digital channels.
our network. We’ve just come out with the As much as consumers across the UK are For bigger financial decisions, Nationwide
additional £1.3bn, which is very much about shifting towards digital banking, Nationwide wants to be able to provide support in
focusing on the service transformation. It will fully believes in the value of its physical whatever manner the customer wants. Sinclair
go towards creating the seamless experience branch network. adds that members want a combination of
across our services because you need to make Transparency, connectivity and support are human service on the high street, as well as
your digital investment work in your branch at the heart of the new Nationwide branch digital convenience.
network and in your contact centres. We are designs. Rather than transactions, Nationwide Open Banking has raised the bar for banks.
introducing automation and machine learning branch employees increasingly focus on With fintechs flooding in with innovative
to the simple parts to enhance them.” advice. The new designs aim to bring staff to digital offerings, everyone needs to rethink
Another challenge that all banks have faced the forefront by removing the old physical their customer-engagement strategies.
with Open Banking is getting customers on barriers of closed counters and providing more Sinclair concludes that 2019 will be the year
board. A recent YouGov report found that open spaces. of delivering what Nationwide has committed
close to three-quarters (72%) of UK adults Speaking about consumer behaviour and to, and always providing services that are
have not heard of Open Banking. Nationwide’s branch transformation strategy, meaningful and value-adding to its customers.
Nervousness around sharing data is also a Sinclair says: “We are committed to our The potential for Open Banking to bring
worry, with 77% of participants stating that branch network; that’s not because we are about positive social change is significant and
they would be concerned about sharing their not seeing what other financial institutions should be fully embraced. <
www.retailbankerinternational.com | 13
RBI 756 December 2018.indd 13 30/11/2018 09:50:26strategy | wema bank
wema bank:
the journey to
a digital future
Wema Bank is accelerating change throughout the
banking sector in Nigeria. Its digital outlook and launch
of ALAT reveal its efforts to create a financially inclusive
and agile environment. MD and CEO Ademola Adebise
speaks to Briony Richter about the bank’s digital strategy
I
n 2009, Wema Bank brought new key role in the bank’s strategic turnaround. Wema believes in combining the best of both
management on board to begin a 2018 has been a transformative year for channels to create a seamless and unified
transformational journey that would the banking sector. The growing dynamism experience.
see it become a regional bank in 2013, and of financial services combined with the vast Adebise notes: “We believe in a healthy
back to being a national bank in 2015. number of fintechs entering the market balance. Digital is the future, and in the
Since then it has moved quickly and have forced banks and other financial to do competitive and dynamic environment we
strategically. Aiming to hold its ground things differently. Although these factors have today, employing innovative digital
and compete against younger financial pose a challenge for banks, the changing solutions – like we’ve done with ALAT, *945#
organisations, Wema embarked on a digital environment, powered by digital technology, [Unstructured Supplementary Service Data
journey. A desire to make banking easy for is also an opportunity for banks to set their banking, which enables telephone banking by
its customers, Wema is streamlining all its course for a digital future. dialling a series of codes], card control and the
banking services, enabling a frictionless virtual dollar card – is the most effective way
banking process for customers while cutting BRANCHES AND TECHNOLOGY to scale up and expand your reach. However,
operating costs. it is also important that we’re aware of the
Speaking about what Wema offers, MD It is often assumed that the rise of digital-only market in which we operate, and the readiness
and CEO Ademola Adebise says: “As a banks will be the death of branches. While of the market to completely embrace these
financial institution that prioritises customer it is true that consumers on a mass scale are solutions.”
experience, we deploy a range of services accessing accounts digitally every day, many Wema is certainly accelerating its digital
across different touchpoints to ensure we meet still want the option to check in to a branch capabilities, as that is where it sees the future.
our customers at every point of interaction. and interact with staff for certain services; However, digital technology also holds the key
“We have a dedicated call centre, called to creating the branch of the future, and that
the Purple Connect, that attends to all DEBIT CARDS lead in nigeria is also where Wema is focuses its efforts.
phone inquiries from potential and existing Cards held per 100 individuals in Nigeria The bank branch as we know it, with tellers
customers. We also arm our contact centre and small cubicles, will change – it has to in
with listening tools to respond in real time to 40 Credit cards order to survive. Wema Bank does not see
complaints and inquires made across social Debit cards it as strategically viable to simply add more
35
media platforms.” branches in as many locations as possible.
Adebise continues: “While these digital 30 The building and maintenance costs would
deployments have enhanced customer 25 be extortionate, and in more urban areas
service and interactions, we do not relegate branches would become obsolete as more
20
the importance of physical and traditional people turn to mobile.
interactions with our customers. Our 15 Digital banking is becoming more attractive
relationship managers regularly visit or call 10 to customers, particularly to those that desire
customers to ensure the bank remains top of speed, efficiency and convenience. Wema
5
mind and that their needs are actively met.” has around 2 million registered customers
0
Adebise has held his current role since f f f
13 014 015 016 17e 18 19 20 21
f that access their accounts every day, and the
January 2017. Part of Wema’s executive 20 2 2 2 20 20 20 20 20 bank services those customers through several
management team since 2009, he has played a Source: GlobalData different channels.
14 | December 2018 | Retail Banker International
RBI 756 December 2018.indd 14 30/11/2018 09:50:26strategy | wema bank
unawares. In May 2017, we offered a fresh and
exciting perspective on the Nigerian banking
experience with the launch of ALAT, the first
fully digital bank – not just in Nigeria, but the
first in Africa as well.
“Built from the ground up to be a
branchless, paperless bank, ALAT completely
removes the need for initiating or completing
transactions at a physical location. Signing
up begins with downloading the bank’s app,
available on both Android and iOS, or visiting
its web application. Registration is completed
by uploading a selfie and a photo of one’s
signature, as well as other identification
documents.
“With an average sign-up time of only five
minutes, ALAT has revolutionised the process
of opening a bank account in Nigeria. The
hour-long, paperwork-filled account-opening
Ademola Adebise, Wema Bank Wema Bank’s Lagos headquarters
process at traditional banks is now a thing of
The rise in mobile banking explains the the past.” sector. To thrive, banks must be willing to
huge investment Wema is making in the ALAT simplifies and innovates previously pick up the pace more than they have ever had
digital banking space. The star of the show cumbersome banking tasks to deliver a to previously.
that brought the bank into the digital age is its seamless customer experience. For example, “The retail banking space is becoming
fully digital platform, ALAT. the bank’s developments extend to offering a increasingly competitive, particularly in
debit card which, as Adebise highlights, was Nigeria where access to the main source of
AFRICA’S DIGITAL FIRST unprecedented in Nigeria. ALAT also enables deposits – government funds and public
in-app card requests and activation, meaning sector business – has thinned out. In addition,
Adebise noted that Wema faced a significant customers can order a card from the comfort the rise of fintechs, payment solutions and
problem for a few years trying to figure out of their home. Furthermore, after completing tech-driven fund managers will continue to
an innovative way to gain customers while the onboarding process, the bank offers free threaten traditional banking business.
making a profit. It did not have the capital delivery in as little as three working days to “Banks must, therefore, be ready to
to rapidly expand its branch network, so it any address in Nigeria. compete aggressively for a profitable share of
looked to the future and how Wema could “Like other Nigerian banks, ALAT offers the market, particularly in terms of deposits
find its place. a standard savings account, but that is where and low-cost funds. Banks will also continue
The bank decided to move swiftly and the similarities end,” Adebise states. “The bank to roll out innovative solutions to enhance
strategically into the digital space, and provides multiple personal savings options, the customer experience and differentiate
launched ALAT, Nigeria’s first digital bank, including savings goals and group savings themselves as superior, given the diversity and
in May 2017. Wema took it upon itself to options. Nearly all of these account formats value-add of their offerings,” Adebise says.
build the digital platform to be completely come with up to 10% interest – three times Consumers are eager for innovation in the
branchless. Acknowledging that the future is the regular bank rate in Nigeria.” banking sector and Wema has delivered. By
digital, ALAT completely removes the need He adds: “To keep its millennial audience creating an environment that facilitates both
for a customer to walk into a branch. within the ALAT ecosystem, the bank also digital and physical channels, the bank can
“As a bank, we faced a conundrum for offers loans, deals and discounts on food, service its customers with various channels
many years: while we desperately needed entertainment and travel. It also offers a to suit all. It will, however, be a challenge to
to achieve profitability by acquiring more virtual dollar card for online shopping. These spread digital capabilities across the country,
customers, we could not afford the massive are use cases of innovative digital systems with more than 60 million of Nigeria’s
expense that would be required to expand our in financial services, and are proving to be roughly 200 million population not currently
network of branches. extremely successful.” having a bank account.
“Over the years the Wema brand had been ALAT was an instant hit with the millennial While bricks-and-mortar branches remain
overtaken by more youthful financial brands, generation, which was to be expected; an important channel in Nigeria, digital banks
and considered unattractive by a majority of however, Adebise notes that general adoption such as ALAT have introduced news way of
Nigeria’s millennial population. With these rates have significantly exceeded the bank’s banking – ones that are continually gaining
people representing the future of the bank, expectations. During its first year, Wema popularity.
a change was necessary to ensure the bank’s acquired more than 250,000 customers, The rise of and sophistication of digital
survival,” Adebise says. responsible for well over NGN1.6bn technology continues to completely transform
“Pressed for time and struggling to stay ($4.48m) in deposits. the way banking works. It also offers
afloat, Wema Bank took a bold step that Looking to the industry’s future, Adebise institutions like Wema the opportunity to
caught the rest of Nigeria’s banking industry sees an innovative but extremely competitive forge a thriving digital future. <
www.retailbankerinternational.com | 15
RBI 756 December 2018.indd 15 30/11/2018 09:50:28strategy | pko bank polski
pko bank polski:
award-winning
mobile app embraces
digital challenges
The Polish banking market is one of the most modern in the world when it
comes to technology. Adam Marciniak, vice-president of the management
board supervising the IT area, speaks to Briony Richter about the
implementation of innovative solutions to bring new life to payments
B
anks in Poland are accelerating was PKO Bank Polski and five other major and value-added services such as currency
their efforts in payments. As more Polish banks that decided to co-operate as exchange and travel insurance.
consumers turn to digital channels, a joint venture. Due to BLIK’s success, the Customers using the mobile banking app
banks are focusing on transforming service is available in 11 Polish banks right can assign a PIN to BLIK vouchers and use
their infrastructure to facilitate digital now.” them for payments at retail outlets that accept
technology. A phenomenon that is spreading not only BLIK, bringing both applications together to
Just over 11 years ago, the first contactless across the Polish market but the global stage is offer a personalised and convenient service.
cards took to the stage on the Polish market. the BLIK mobile payment system, which was The mobile banking app continues to gain
This kicked off a trend that had a huge created on the basis of the IKO application. new customers on a daily basis. Its quick
impact on the payments industry. For PKO IKO is gaining significant popularity for responsiveness and modern platform is
Bank Polski, its IKO mobile app has been an both Android and iOS users. It also facilitates enjoyed by over 3 million customers, and has
integral part of its digital transformation. real-time peer-to-peer payments, while revolutionised the image of mobile banking
Speaking to RBI, PKO’s Adam Marciniak other popular features include transactional in Poland.
says: “We are proud and happy that our app “We have just reached 3 million active
turned out to bring such satisfaction to our applications, which is the best result in the
customers. Polish market. We have grown rapidly since
“We came up with the concept of IKO as 2013, and have promoted the app both
early as 2013. When you look back at the online and in our branches. Today we can
Polish market, advanced financial apps were boast that our customers make an online
practically non-existent, while IKO provided mobile payment every second, and that for
our clients with the mobile banking services the last five years they have made overall over
and very comfortable payments. At the same 130 million mobile transfers and payments,”
time, we never let user experience out of our Marciniak notes.
sight and our clients appreciated it. That’s why BLIK has quickly become the most popular
IKO was a breakthrough. mobile payment system in the country,
“Then we could take IKO to the next level – enabling millions of customers to make secure
our app served as a basis for BLIK, the Polish and convenient online payments, withdrawals
mobile payment standard that gave Poles the cash deposits, and instant transfers to a mobile
possibility to pay, withdraw and transfer their phone number without needing to know the
money via smartphone. At the beginning it recipient’s bank account number.
16 | December 2018 | Retail Banker International
RBI 756 December 2018.indd 16 30/11/2018 09:50:29You can also read
