CARDS & PAYMENTS | Staff Reporter, Singapore

Banks eye ubiquity in a paperless future

Financial institutions scrambling to get more flexible.

Financial firms are adapting to chaning lifestyles and pioneer technological changes as they jostle for top brand status. Asian Banking and FInance got in touch with them to find out how they deal with this challenge.

1. Technology is becoming a bigger part of people’s everyday lives, including the way customers interact with their bank. What are some technological innovations that your bank is working on?

Noel Tagaza, SVP and Head of BPI Electronic Banking Group: With the electronic channels, mobility and availability will always remain on top of our innovation goals. In fact, our track record in the industry shows our readiness to embrace new technology as appropriate. Being a pioneer in the online banking space in the Philippines, we have seen it evolve into an essential banking need of a customer. As such, the bank is continuously improving our online banking platform in terms of the gamut of services offered and security protocols implemented in order to make onboarding more convenient and attractive. We would also like to see more transactions available on the mobile platform as appropriate to the changing lifestyles of our customers. This being said, what ultimately determines our product and service offerings is not the availability (or absence) of useful technology but the regulatory environment and the risk appetite of the organization.

Noppawan Jhermansa, First Senior Vice President of Retail Business Division: Digital experience is our key strategic innovation focus. We have a dedicated team and committed IT investment to ensure continuous innovations to meet various needs of different customer segments. We recently have launched Mobile Banking Plus Application embedded with technologically innovative features such as money transfer from mobile to mobile via recipient’s mobile phone number, personal financial management feature, and QR code generation technology.

Another example is “Speed Topup Mobile Banking” , designed for less sophisticated non-smart phone users to do simple financial transactions. In June 2014, we recently launch NFC Mobile Phone Sticker to enable e-wallet feature, the first mover in Thailand. Early 2014, we have partnered with 7-Eleven to offer money transfer from our ATMs to be disbursed at any of 7-Eleven’s 7,500 convenience stores, enabling money transfer coverage far and deep into any small towns. More and more cards and payment innovations are developed in the pipeline, with mobile banking as dominant channels.

Cynthia Liaw, Virtual Banking & Payments, Maybank Singapore: Advancement in technology has made smart mobile devices an integral part of every customer’s life and most customers can’t even leave home without it of even have multiple devices. Thus, the mobile channel is important to Maybank as both a distribution and delivery channel.

Advancement in technology has made possible instant gratifications in many areas – including banking and payments. Thus, Maybank has real time funds transfers for both domestic inter-bank and internal transfers, and real time cross-border funds transfers within the Maybank Group.

Last November, Maybank was the first bank in Singapore, and among the firsts in the world, to launch a mobile payment service that allows our customers to make money transfers to a mobile number, without the need for bank account details. Consumers can use the service to send or receive money and collection of the funds can be done via any bank’s account or credit card that is issued in Singapore

This service not only fits into the lifestyle of the consumer but also provides them with an added layer of security when receiving funds transfers as they do not need to disclose sensitive account information

OCBC: We are developing capabilities to develop real time analytic thus would be able to services that attune with moment of truth. We are working with our Telco partner to build a digital customers experience by combining mobile, vast amount of data, analytics, digital marketing, and moment of truth

Integrating all our channels to create seamless experience by upgrading design, content and positioning of branch networks, more convenient mobile and internet banking experience, upgrade call center system and more intercative ATM using CRM software

Yeoh Beng Hooi, Head of Group Retail Banking and Retail Distribution, RHB Bank Berhad: ‘RHB Now’ is RHB Bank’s mobile and internet banking infrastructure. We will be introducing ‘Mobile Lifestyle App’, which is a mobile application that is more appealing to customer’s lifestyle.

This mobile app will enable customers to be notified through push notification format via mobile on RHB Credit / Debit Cards special deals and promos and on-the- spot rewards redemption. Customers also able to purchase special deals coupons and share the great deals with friends instantly.

2. How does your bank ensure customers’ security especially for the mobile banking/payment scene?

Noel Tagaza, SVP and Head of BPI Electronic Banking Group: We only implement solutions that adhere to the highest available global security standards. The security of our customers’ information and transaction data is our main priority and we are committed to investing heavily in this area in order to ensure that these remain protected.

Siddharth Baidwan, Head of Retail Banking & Wealth Management HSBC Indonesia: Likewise in the cards business we continuously enhance our product and service features to meet the personal needs of our customers. For HSBC Premier customers, we understand that they require only the best, and our HSBC Premier Credit Card entitles them to a series of exclusive privileges specifically catering to their needs.

For example, while travelling, we are exposed to many risks and being in a different country doesn't make it any easier. In HSBC, in we provide emergency cash advancement across more than 30 countries worldwide for lost wallets and identity. Our customers can simply visit a HSBC branch within the country and receive emergency cash.

We also provide travel insurance up to IDR 10 billion, overseas family medical insurance up to IDR 500 million and many other protection features. These are provided alongside other benefits such us airport lounge, Priority Pass and rewards points.

On credit cards, technology has enabled many conveniences such as e-Notification Services that allow HSBC customers to enjoy SMS notification services to help them manage their financials and fulfil their lifestyle needs, i.e : Banking Transaction alerts, Credit Card Billing and Rewards Points balance, etc. We also offer HSBC Mobile Banking application for iOS and android that can be down-loaded for free enabling customers to have access to their financials, transaction capability, and information on all the latest products, features, and programmes.

Another technology-related convenience is Instant Rewards Redemption, which allows HSBC credit cardholders to enjoy all year long discounts at HSBC merchant partners where customers can use their points to make a purchase at merchants.

Noppawan Jhermansa, First Senior Vice President of Retail Business Division: Security on mobile banking service is never our compromise. We are committed to providing our customers the utmost convenience and ensuring highest security on our mobile banking/payment platforms. Security system on our K-Mobile Banking platforms has met world-class security standards. Furthermore, the revolutionary “Triple lock security” system – that is referred to the User Protection, Transaction Protection and High Security Customer Data Protection – applied on our K-Mobile Banking PLUS makes it the most secure financial mobile banking application and the best solution for every lifestyle: fast, easy transactions with highest security technology.

Our world-class standard security system for encryption protects data throughout its journey, from the user to the Bank. Handset identification, mobile phone number verification and the user’s PIN ensure access authentication. For example, in the case of stolen PIN, transactions cannot be done on other handsets or other mobile phone numbers. Customers can feel safe and confident with their transactions on K-Mobile Banking platforms. The success of our innovative mobile banking/payment revolution is already reflected on a rapidly growing number of active K-Mobile Banking PLUS users to exceed 1.2 million users as March 2014, the largest base in Thailand.

Cynthia Liaw, Virtual Banking & Payments, Maybank Singapore: The online/mobile banking service is protected with encryption technology and security features such as 2-Factor Authentication as part of the login process.

Financial transactions such as online funds transfers are further protected with the need to do Transaction Signing when adding new up payee accounts.

For added security, customers can also set their own daily funds transfer limits and will also receive SMS notifications whenever they add a new payee or perform a transaction above the default threshold or the threshold as determined by themselves. We also proactively update our customers on new online scams such as phishing websites and educate them on how to protect themselves and not to be a victim of online fraud

OCBC: Our mobile banking especially is designed with the objective of simplicity and convenience, which would translate as ease of use in the hands of our customers.
However, security is no less compromised and we have put practically all essential security measures as the following would suggest:

  • During registration, customers will be provided with a set of User ID and Password that are generated by a Hardware Security Module (HSM). Then, when customers log in for the first time, they are required to change their password. Passwords are also securely encrypted every time transmitted to the back-end system
  • Our Mobile Banking application is secured by 128-bit SSL (Security Socket Layer) encryption, certified by Verisign
  • On the customers’ end, every financial transaction must be authorized by Token or OTP (One-Time Password)
  • Further on customers’ end, we have put daily transaction limits for financial transactions

Yeoh Beng Hooi, Head of Group Retail Banking and Retail Distribution, RHB Bank Berhad:  At RHB Bank, we deploy the same measure as per online banking through 2-way Authentication / Mutual Authentication. We have adopted the multi-factor authentication (MFA) to verify transaction. With the MFA implementation, consumer authentication mechanism upon signing-on and performing high risk transaction was enhanced through the introduction of stronger authentication methods. This is to cater for both the current threats such as phishing attacks and emerging security threats for example Man-in-the-Middle and Man-in-the-Browser attacks. We adopted MFA based on a combination of:

a. Customer-owned mobile number that has been verified by the Bank - customer has to register the mobile number with the Bank to receive the one time password via SMS, which can be done via the call centre or branches
b. Out of band dynamic one time password – the out of band dynamic one time password which consists of alphanumeric will be sent via SMS to the registered mobile number
c. Out of band transaction verification code – the transaction verification code (called Security Code), which is made of hash total for the particular transaction, is displayed online and send together with the dynamic one time password. Customers are advised to validate the Security Code on the SMS against the displayed code online.

3. A typical Asian consumer simultaneously uses multiple cards. How can a bank differentiate its cards offerings with value propositions? 

Noppawan Jhermansa, First Senior Vice President of Retail Business Division: Along with notable privileges, promotional activities have contributed to distinguish our credit cards from others. A combination of two distinct drivers lies behind our successful differentiation. First driver is to understand-your-customers. With over 3 million card base, we have a dedicated team to analyse customer data, preference and triggers. It may not surprise any card business players that more than half of customers’ spending fall into dining, shopping, travel and healthcare categories. It may not give any big surprises to say that the promotions induce spending.

It is the second driver that are more critical to success and we believe that differentiate KASIKORNBANK’s credit cards from the rest of the industry. It is to always surprise, exceed-expectation promotions – a WOW factor, or the first of its kind offer. Thus, we have new big campaign every year to surprise our customers. 

“Shop 1000 Baht, Cash-back 1000 Baht” campaign in Y2012 : created a talk of town buzz words about the campaign. The promotion tag line has been registered in the market with strong association with KASIKORNBANK credit cards.

“A Million Surprises” campaign in Y2013;just show KASIKORNBANK CREDIT card to enjoy free items at over 1,000 various retail outlets nationwide i.e. free cup of coffee at Amazon Cafe', free box of chicken nuggets at McDonald. It created a million occasions to touch and deepen relationship with our card customers nationwide and all year round. 

In 2014, we have introduced an exclusive domestic flight campaign which allows our customers to fly to various destinations in Thailand with only 1,000 points + 1,000 Baht.

In sum, participated customers earned domestic flight tickets at or cost less than half of normal flight ticket value This is the first of its kind promotion, reinforcing our WOW message in the market.

The results of our consistent WOW and surprises have led KASIKORNBANK to the highest market share of 21.7% (March 2014) on credit card spending, while continuously increases market share in term of card numbers.

Karen Low, Head, Cards & Unsecured Lending, Maybank Singapore: It is essential to create an identity that is easy for customers to relate to. For example, we have the Horizon card that is designed to appeal to frequent travellers and the Family and Friends Card that is created with the family-oriented customer in mind.

The value propositions should also be straightforward and easy to remember such as 5X points on travel packages and overseas spend and five per cent cash rebate on groceries, and family-focused retail outlets such as Popular, Toys R Us and Mothercare.

In addition, it is also important to reward customer loyalty. Loyalty and redemption programmes are good ways to thank customers for their support. Some of the ways in which Maybank does so is by providing customers with the option to make instant redemptions at selected merchants such as TANGS, Robinsons and Courts to make it an easy and hassle-free process for them.

OCBC: By focusing on a distinct customers’ need, bank would be able to present more effective its value proposition and predict better the behavior of card holders. It would allow bank to deliver clear and consice massaging that empahsising on the strong value propositions. For example OCBCNISP Platinum card emphasises on airmiles exchange rate, no annual fee. It quickly communicate the card is for frequent travelers

Yeoh Beng Hooi, Head of Group Retail Banking and Retail Distribution, RHB Bank Berhad:  At RHB Bank, we offer a holistic product proposition to cater to customers’ needs and segment. For example, we have a credit card product that is skewed towards to the daily needs that gives attractive cash back for groceries and petrol.

Besides that, we also have credit card that rewards the youths when they spend at selected merchants. We also offer a credit card to cater the business segment in managing their expenses which provides cash-back of up to 1%. We strive to provide the best payment solution with benefits to cardmembers that best fit their various life stages. This way, the Bank is able to customise our card offerings to target audiences.

4. Recent data revealed that Asia is experiencing the biggest high-net-worth population growth rates. How can banks grow further in the premium cards market?

Noppawan Jhermansa, First Senior Vice President of Retail Business Division: KASIKORNBANK has more-than strategic motto of customer centricity. We do execute customer centricity in tangible manners. Our business organization structure supports multiple business fulfilment metrics whereas there are dedicated teams to focus on understand and meet needs of specific customer segments and different teams to focus on product perspectives.

High-net-worth is one of our strategically defined segments. Both high-net-worth segment manager and credit card business manager work together to ensure that not only super-premium credit card program is in place but also all customer experience and touch point for high-net-worth customers are articulately designed to correspond with customers’ wealth, social status, recognition and lifestyle. In addition, non-card spending privileges and wealth related are profoundly packaged to add up to total customer experience and value proposition.

Karen Low, Head, Cards & Unsecured Lending, Maybank Singapore: One of the fundamentals is to offer these customers unique and memorable experiences that they enjoy which will hopefully help create a strong and lasting bond between the customer and the bank.

Additionally, product bundling should be offered to entrench the customer’s total banking relationship with the bank instead of being only one dimensional

OCBC: Leveraging analytics capabilities to engage customers emotionally to capture the attention. It can be achieved by optimising and creating seamless experience in all customer contact channel. Thus enable banks to create unique and value add customer experience for example knowing that a card holder recently looking for mortgage on bank’s website can be an important information. It would allow call center rep to discuss or create an offer when the customer make the next call.

Furthermore, communication should also be consistent accross different channels.

Finally delivering all those services on the customer’s terms, attune with moment of truth. These activities would improve customer experience and expanding wallet share

Yeoh Beng Hooi, Head of Group Retail Banking and Retail Distribution, RHB Bank Berhad: Identifying the needs of these segments is crucial in offering the relevant card which appeals to them. Our RHB Premium cards business offers exclusive privileges for mid to high net worth customer segments.

These cards are aimed at a broader base of customers who seeks more premium and value added offerings in cards and payment services such as unlimited cash back for overseas spend, travel, leisure and dining experience. Having a comprehensive product offering range which includes Premium Cards via Premier/Preferred Banking is key in extending the reach to the High Net Worth base.

5. What other comments do you have?

Jonathan Larsen, Head of Consumer Banking Asia Pacific and Head of Retail Banking Citi globally: New Citi branches around the world are taking on the Smart Banking model, with interactive touch panels, video-conferencing capabilities and full-service banking from iPhones and iPads. First launched in Japan in 2009, they have since been rolled out across the world. These branches bring in two to three times more new clients than traditional branches. They are also going paperless and wireless.

We have also located "transit branches" in Singapore, Hong Kong, Shanghai and Tokyo that are located on commuter routes and serve customers on the go.

We're taking a hard look at what ATMs can do and we launched Citibank Express - the next generation ATM earlier this year. It basically does all that you do in a branch.

We have launched mobile banking in all markets in which we operate; on all 3G formats whether it’s Apple, Google, Samsung or Nokia. You can do everything you do online on your mobile phone and it's incredibly fast.

We are also leveraging our technology and infrastructure to shape the development of mobile payment systems. In Mexico, we were the first to launch a mobile banking platform, where we are partnering America Movil, one of the largest mobile companies in the world, to pioneer the m-wallet concept in Latin America. Citi’s also the lead bank in Google Wallet, offering the latest smartphone tap-and-pay technology. We are imminently about to launch a similar platform in Asia.

Nearly 98% of all our transactions in Asia are now via non-branch channels. We do though understand that many clients still want to bank in a branch, but the main role of branches today is to acquire customers, drive brand awareness and manage affluent relationships.

Technology and digitization are defining global trends and transforming the very way we serve our clients. Technology also enables us to improve our efficiency.

Across the world, nearly 5 billion people are using mobile phones. That’s two and a half times more than the number of bank accounts. The difference is especially pronounced in emerging markets. This has important implications for our Consumer Banking business as we are the developer of highly digital consumer banking in markets that are already predisposed to using mobile technology rather than bricks-and-mortar branches.

We have been investing in technology to support the expansion of our business. We have invested several billion dollars in Rainbow, designed to bring all our businesses onto one technology platform. This provides huge economies of scale along with the ability to standardize and integrate our products and services globally. It also enables us to get new products to market quicker and in the extreme case launch a retail business in a country quicker than ever before.

Speed, simplicity and ubiquity are guiding our use of technology across the world.

Banking works well through devices like Apple Inc.'s iPad for example, it is a good fit for us. We have had good success with the i-Phone too. As a bank there is a priority on using innovation and technology to serve our clients and we are getting better and better at utilizing operating systems on mobile devices. We're taking a hard look at what ATMs do, too.

The whole field of authentication will get more sophisticated. Our challenge is how to make it easy to authenticate across multiple platforms. Most of the industry still relies on the paper format, all of that is unnecessary now—our new branches are paperless and wireless. We're in the process of getting rid of all the forms and putting them all online.

You can now apply for a credit card online without any paper forms—this was unthinkable 10 years ago.

Adoption is a challenge. We have the technology, but in order to be a mainstream player in all of the markets we compete, we have to have a minimal physical presence in terms of branches. If people don't see physical locations, there's a credibility gap. We have gone from under 100 branches to over 700 in under a decade and that gap has been largely bridged in many markets. We are focusing now on broadening this footprint further and innovation is core to our plans.

There are risks of course but security is something we think about every day and it's a priority for us to ensure all our offerings are as secure as they can be. There's a new technology called out-of-band authentication which has been launched in several Asian markets. It allows you to receive a phone call with a PIN number and you can key that number back into your phone so it never goes through the PC channel. Authentication will be something that will also evolve further. We're already testing voice biometrics where we can identify a customer based on voice patterns.


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