5 key learnings from the Asian mobile banking landscape

The interconnected ecosystem
In Asia, a new breed of “ecosystem players” are focusing on the best way to digitally serve the daily needs of customers across a range of services, including meals, grocery shopping, travel, entertainment, and even medical services. Service providers who embed themselves in customers’ daily routine through an ecosystem stand to significantly increase usage of their services while offering customer convenience: a win–win proposition.

Meanwhile, in the EU or Americas, when we think about the “ecosystem”, we normally think about bringing a bunch of companies into the same platform and making some connections. For example, the ability to book a flight through your bank rewards app seems to be a massive leap. What’s currently happening in Asian markets can really be described as “next level” and what we should aspire to deliver.

An example of the two different approaches can be seen by quickly analyzing the M&A/investing strategy of Alibaba vs. Amazon.com. When Amazon buys a company such as Whole Foods, it simply applies its model of faster delivery and enrolls them into their e-commerce platform. On the other side, Alibaba will provide acquisitions with a platform to build on top allowing the creation of new services and connecting them to their main platform as the hub. In turn, enriching Alibaba’s data ecosystem.

The power of data insights
It’s incredible to see how much data banks in Asia can digest and use for meaningful interactions, from simple marketing campaigns to using it to build better products. Most surprisingly was the high level of openness of sharing data. For example, 60% of customers in emerging Asian markets are willing to share data in exchange for better services.

Zhong An, one of the largest insurers in China, which uses data from Alibaba and other insights to offer customers predictive usage-based insurance and perosnalized offers. With this deep knowledge of their customers and 3rd party data, users can submit a claim for a delayed flight and be compensated while at the airport. In addition, Zhong An has become famous for providing tailored insurance and mastering the art of cross-selling.

Cloud core
On the more technical side, I’m particularly amused by their agile infrastructure, speaking with a person from a well-regarded digital Chinese bank, I discovered how much has been critical to their cloud core infrastructure. This bank is able to launch new products in matters of days, their current record from ideation to live customer pilot is 9 days. A classic bank in the Americas or Europe would take months to achieve the same result. Further stipulating the importance of having a flexible architecture, as it is a true enabler of building unique customer experiences. They are also able to keep costs low as they do not need to invest in building API layers, or “frankenstacking” integrations to connect the different silos of their bank. The data is simply there for them to use.

Cross-fertilization
Something very interesting was the ability of non-classic FS players to get into the banking space. In the EU or NA, we think only about Amazon, Apple, and Google as threats to banking. However, in Asia you can see Razer, a gaming company, building one of the largest payment capabilities in the ASEAN countries. These companies bring tech know-how and access to customers and data to the table, along with advanced analytics capabilities. Moreover, when they move into the financial services space, they’re able to do a technological play by building white-label platforms that can be re-used by competitors or can help spin off other businesses.

Mobile focus
In the Asian market the mobile penetration is growing at incredible rates, a result of the large population, the addressable mobile market is huge. In China, smartphones have a 50% mobile penetration and 66% in southeast Asia. Hence, most of the banks have a mobile-first approach. However, the way they are leveraging those services is for meaningful interaction. Thanks to data and infrastructure flexibility they engage with consumers via chatbot to provide the bank teller experience, which is totally different from the EU or NA. For example, Zhong An Insurance is able to settle 70% of claims via its AI engine and chatbot providing them major operational efficiencies, at the same time giving to the customers an incredibly quick response in a difficult moment. In Asia, the major digital banks deal with customers mostly via chatbot with an estimated 80% adoption rate for day-to-day activities, saving them costly branch network and personnel. On top of a great self-service customer experience, those banks are able to disburse SMEs loans in minutes only with few clicks.