Revolut grew from 500k users in 2017 to 2M in 2018, 4M in Feb 2019, and 8M in Sep 2019. The number of users a fintech like Revolut brings in one day is as large as some banks’ entire portfolio. Can banks be just as attractive? Can they ever aspire to attain a similar growth rate?
At the FinTech Edition of the Future Banking Conference in Bucharest, QUALITANCE and BCR ERSTE took the stage to share with the corporates, fintechs, and startups in the audience how banks can be just as exciting as fintechs.
In the company of fellow panelists from Ebury and Filip & Company, BCR CASA MEA Product Owner Irina Gheorghe and QUALITANCE Co-founder and Managing Partner Radu Constantinescu cleared up the Fintech Vs Banks competition myth and shared the experience of co-creating the Casa Mea digital platform for home mortgages – a pioneering solution developed by QUALITANCE for BCR customers. Judging from their experiences, here’s how banks can follow in the footsteps of fintechs:
1. Collaboration is paramount
Recent research shows that retail banks are thought to be struggling to compete in the digital era. 82% of decision-makers in major UK retail banks (like Virgin Money and Royal Bank of Scotland) believe that banks aren’t innovating fast enough to meet changing consumer demands for digital services. Also, 48% of respondents believe that these banks are at least 3 years behind fintech rivals.
The common belief is that, even when the ultimate purpose is innovation, most banks are not so eager to collaborate with technology partners or fintechs. Despite the statistics, a growing number of banks – with BCR Erste being one of them – are recognizing the importance of collaboration in meeting customers’ growing digital expectations.
“We learned from QUALITANCE the power of innovation, adaptability, collaboration, rapid prototyping, and continuous testing with customers – in fact, we learned to constantly keep the customer in mind whenever developing a new feature,” added Irina Gheorghe, BCR Casa Mea Product Owner.
Johan Gabriels, Ebury’s Country Manager in Romania & Bulgaria – also present at the conference, underlined that “collaborations between banks and fintechs are possible and can be successful as long as there is trust.”
The partnership between BCR ERSTE and QUALITANCE stands out as a living example of mutual trust. In a joint effort, the largest banking brand in Romania and technology & innovation company QUALITANCE brought to market one of the world’s most exciting digital platforms for home mortgages. It’s the first time that Romanians can secure a home mortgage via a digital platform, which reduces the length of the whole process by at least 50%, provides clarity through each stage, and relieves customers from the stress of countless visits to the bank.
The “Casa Mea” platform proves that a partnership between a bank and a tech company or a fintech is a huge advantage, which ultimately benefits the customers. It needs to be a win-win for everybody. Banks can learn the agile execution from fintechs, and fintechs can learn from banks the constraints of scalability. Each party has a lot to learn.
“BCR already fostered a pragmatic can-do culture and an excitement for innovation, and what equally accelerated this breakthrough was the bank’s willingness to adopt external technology and open its legacy IT systems in order to accommodate new digital platforms such as Casa Mea,” said Radu Constantinescu, QUALITANCE Co-founder and Managing Partner.
2. Learn from big techs – the CX heroes
Big technology companies like Amazon, Uber of Netflix may not yet compete with banks or fintechs in terms of products – mainly because they are not so willing to operate with so much regulation. However, because of their gold standard of customer experience, they have set the price of admission for all brands – banks, fintechs, and whatnots.
“Big techs are setting the pace for how easily we can do anything. They are referencing new behaviors and changing the way we do things. Banks too need to get close to that if they want to meet customers’ expectations,” added Radu Constantinescu.
Amazon, Netflix and the likes always paid close attention to the WHY behind customers’ decisions and behaviors. So, the superior customer experiences we see with these giants are not products of imagination; they are the result of a good understanding of customer data.
For instance – from such data, Netflix understood that people love to stay home, and Amazon realized that people want to save time. These realizations fueled all their products and services. Hence, Amazon customers save time in as many ways possible: buying stuff (free 2-day shipping), reading books (Kindle), completing tasks (Alexa), doing grocery shopping (Amazon Fresh).
In short, big techs are constantly looking at what customers want – not just because they want to keep existing customers happy and loyal, but also because they want to leverage every gap and opportunity in the market and bring in new customers by offering an increasingly valuable service.
3. Customer experience – the nucleus of disruption
When asked what they are planning to disrupt next, all panelists brought up customer experience, but from a different perspective:
- Irina Gheorghe, BCR Casa Mea Product Manager, focused on the emotional needs of customers for transparency and predictability as well as on the customer’s key role in the bank’s decision as to what products to create next.
- Johan Gabriels, Country Manager Romania & Bulgaria @Ebury, said Ebury is focused on listening more to their clients and improving customer service using the data that banks have been sitting on for ages without doing anything.
- Alexandra Manciulea, Partner @ Filip & Company, emphasized how important speed, safety, and simplicity are for their customers, while looking at AI & RPA as the means to provide such benefits.
However different in nuances, all interventions highlighted the central role of customers, pointing out that banks should focus on leveraging their feedback/data and create the experiences they expect by finding inspiration in the big tech’s CX and collaborating with fintechs or technology partners.
“Casa Mea offers a great proven CX in the market because it fulfills customers’ needs for convenience, transparency, and empathy. Throughout their experience with the platform, BCR customers felt that the bank understood them personally and treated them as individuals. People want to feel that way in their relationship with the bank,” concluded Radu Constantinescu.
To summarize, building superior customer experiences in the expectation economy requires leveraging customer feedback at a fast pace. Core human needs may not change, but people’s expectations do – and quite fast. Hence, both banks and fintechs need to leverage customer data through technologies and methodologies that are proven to yield relevant results fast enough to keep up the pace: Artificial Intelligence and Machine Learning, rapid prototyping, continuous testing with customers, Agile execution.
FUTURE BANKING FinTech Edition is the biggest event on digital banking in the local market, where fintechs, startups, and corporates are invited to tackle the latest industry developments, challenge prejudices, and collaborate. This year Wall-Street.ro, Fintech Camp, and Finqware emphasized their support for an ever-growing community by launching Romania’s first fintech map – a valuable resource that captures the state of our fintech environment.