The question that gets asked at almost every gathering of financial services executives is, “What institution is the best innovator in banking?” or “Where is most innovation in banking taking place?” Luckily there are trade organizations such as Efma (an association of 3,300 financial institutions in 130 countries) and the Bank Administration Institute (BAI) that have annual competitions to recognize the best in the financial services industry. While the specific innovations recognized may differ between these competitions, a relatively small number of organizations and geographic regions take home top awards year after year.
The Efma–Accenture Banking Innovation awards program is an initiative which aims to identify and award the most innovative projects in the retail banking sector at a global level. This program is in it’s fifth year, with the aim of sharing worldwide best practices in the retail banking distribution and marketing arena.
Innovations in ten categories are recognized, including two overarching awards for Global Innovator of the Year. The categories are:
- Best New Product or Service
- Phygital Distribution
- Digital Marketing
- Big Data, Analytics and AI
- Customer Experience & Engagement
- New Business Ecosystem
- Workforce Empowerment & Behavior
- Wallets & Payments
- Global Innovator of the Year (both Challenger and Established players)
A total of 183 financial institutions from 59 countries submitted 467 innovations for the 10 award categories in 2017. I was fortunate enough to be co-master of ceremonies for this year’s event, where bronze, silver and gold awards were presented. The winners were selected through a combination of votes by a panel of senior retail banking judges and by Efma members and non-members online. The three criteria used for evaluation included: originality; strategic capacity to generate long-term competitive edge and return on investment; and adaptability for use in other markets and countries.
Best New Product or Service
DenizBank (Turkey) won the Best New Product or Service award for their Augmented Agricultural Banking App. This award was the only one voted on at the awards ceremony, after six finalists pitched their innovations live to gain votes from attendees onsite and online.
The agricultural banking app from DenizBank shows the potential for banking to be at the center of a lifestyle ecosystem, going far beyond a traditional banking application. The app provides insight on crop rotations, planting, watering and fertilizing, and even integrates the ability to review and purchase farm machinery. These non-banking capabilities are brought to the app through strategic partnerships with regional experts who are available on call to provide assistance to farmers in need.
The benefit of this type of application is the ability to distribute expertise digitally, saving time for both the bank and the farmer. Instead of physical interactions, the mobile app leverages digital interaction on demand, personalized for each unique farm’s needs.
Idea Bank (Poland) which focuses on entrepreneurs’ segment, won the Phygital Distribution category with “Idea Hub Express,” the first bank branch on tracks. It is a co-working space that allows train passengers, often traveling on business trips, to make better use of their time while in transit, while also benefitting from Idea Bank services.
Idea Hub Express train cars, adopted for office work, feature tables, comfortable chairs and a screen for presentations. Travelers can also use the available office equipment (printers and scanners), phone chargers, Wifi connections, as well as coffee makers, and read a selection of newspapers delivered every day. Cars are open to all passengers holding a valid ticket, but Idea Bank customers have priority in taking the available seats.
Idea Hub Express in aligned with Idea Bank’s corporate strategy of supporting SME owners in their daily chores, and it is a continuation of banking co-working project – Idea Hub. Idea Bank started its Idea Hub project in early 2015, with almost 30,000 visitors having stepped into these unique business banking centers.
The primary impact of this innovation has been on the overall Idea Bank brand, resulting in significant increases in visitors to the physical Idea Hubs. It has also served to position Idea Bank as the best banking solution for small businesses and entrepreneurs who need help starting their businesses.
DBS Bank (Singapore) won the Digital Marketing award for its very unique DBS Sparks mini-series, which was inspired by real client stories. DBS Sparks leverages digital content marketing instead of traditional advertisements to build trust and goodwill in the marketplace. The goal is to stand out from the competition in a highly commoditized industry and to challenge consumer’s perception of the value of DBS Bank.
By using real customer stories and DBS employees, there was authenticity that was not possible in a traditional ad. In addition, the longer format (YouTube platform) also helped convey the stories with more depth versus a 30 or 60 second television spot while still keeping audiences entertained.
The Sparks Episodes 1-7 and their trailers have amassed over 100 million views and over 11 million digital engagements across DBS markets (Singapore, Hong Kong, Taiwan, Indonesia and China). In breaking views and engagements down per country, the bank realized that using the mini-series as a vehicle to introduce DBS worked well in the bank’s developing markets (Indonesia, China, Taiwan), as evidenced by number of views and engagements in those countries. This may be an excellent vehicle for other banks fwith operations in higher unbanked and underbanked markets, where trust in banking is suspect.
Big Data, Analytics and AI
Sberbank (Russian Federation) took home the Big Data, Analytics & AI award for “Tips” in Sberbank Online, an artificial-intelligence-based tool that helps users change their financial habits for the better, saving them money, time and effort. Instead of looking at the past, the goal was to look forward and provide recommendations around what is expected to occur in the future.
Tips was created to leverage digital assistants such as Siri as well as financial services like Mint, providing the advantages of each: proactivity, analysis of financial behavior, machine learning, provision of recommendations for everyday tasks, etc. In comparison with similar services of financial recommendations, Tips in Sberbank Online also has features like collection of feedback, links that allow taking advantage of advice, and other tools.
The digital assistant accumulates feedback from clients and uses it for self-training. If a client says several times that he/she is not interested in the advice on a specific topic, the system decides if it is bad advice, or if the client is not interested in such advice. On the basis of this feedback, the digital assistant will continuously improve its advice targeting skills with respect to the broader audience. The objective is to make the digital assistant, at a certain abstract level, generate and provide clients with advice, without interference from content managers.
Customer Experience and Engagement
KBC Bank (Belgium) won the Customer Experience & Engagement award with “My car”, which uses blockchain technology to create a seamless experience in car loans, from the instant the customer signs the order to the moment they drive their car off the dealer’s lot. This includes the car loan, insurance, the acquisition of a license plate and even breakdown assistance.
The My Car program makes the actual payment of a car hassle-free while reducing fraud. Blockchain technology is used to ensure a shared source of truth and central place of workflow. Every participant in the ecosystem profits from a faster and more secure flow: the customer, the car dealer, the distributor, the government, the insurer, and the bank.
The initial assumptions about the poor customer experience around buying a car, fraud and rationale for the project were confirmed:
- One car dealer mentioned that up to 50% of his customers can’t pay their car on their first appointment.
- A very low interest rate is often approved when a loan is for a (new) car. The order serves as proof that there actually is a car to sell when the payback of the loan stalls.
- All involved parties are waiting for the customer to move the process forward. By centralizing and automating the process, all parties to the transaction benefit.