Digital banking involves transforming banks internally to focus on data, user experience, and personalization. New technologies and business models are disrupting traditional banking by empowering new market players, changing customer behavior and expectations. Customers now demand ubiquitous, relevant, and contextual interactions on mobile. To succeed, banks must redefine their roles around data management and open APIs, and stop thinking of channels as separate from the core bank. The future of banking lies in analyzing big data to generate personalized offers for each unique customer.

1. DIGITAL BANK
VISION
Created for TBC BANK
by
Malkhaz Pertaia

2. What forces lead the change?
What is Digital Bank?
How to create Digital Bank?
Content

3. WHAT IS EXACTLY
TECHNOLOGY
CHANGING?

4. BUSINESSMODELS
CLIENTS
MARKETPLAYERS
DIGITAL
TECHNOLOGY is re-defining
many industries by empowering
- Business Models
- Market Players
- Customers
Digital stands in the core of the
transformation process
New Business Reality

5. NEW BUSINESS MODEL
Sharing
Economy
people utilize their
redundant assets
by
P2P direct interaction
users capitalize on their liquid assets:
houses and cars
UBER
enables to share cars
AIRBNB
enables to share houses
market value: $24 bln
market value: $62 bln

6. NEW BUSINESS MODEL
Platform is
new normal
Companies do not produce, manufacture
or even own the product any more
Customers produce product
Business provides platform

7. They have experience in disrupting
big industries.
e.g. Telecommunications
Banking services is not delivered
exclusively by Banks any more
What about
Financial
industry?
Tech players enter Market
taking share from traditional
banking revenue generators

8. NEW PLAYERS
Disruptors take share from traditional banking revenue
introducing new way of banking
* source: ING Bank

9. NEW WAY OF FUNDING
As we have seen P2P was in the center of Sharing Economy.
Now it disrupts one of the fundamental business of Banking: FUNDING
Croudfunding: new way of
financing business is
surpassing Venture
Capital model
Collaboratve
Economy
people unify their resources to fund
desired products, companies, changes
v
in 2015 $32 bln was raised
more than 5x than it was in 2014

10. LESSONS TO LEARN FROM TELCO INDUSTRY
Telco’s
core products
are surpassed
They try to wrap their offers
around Internet Traffic services
and gadjets
competition on local market and commoditization
of services push the service prices to 0
Magti/Geocell/Beeline offering unlimited services for
fair price and eveen that is not enough to win the market
Traditional Revenue
Generating Services
Disrupted by
tech companies
Iternational calls
Roaming
SMS
Voice Calls

11. NEW TYPE OF CLIENTS
WITH CHANGEDCLIENTS,
DO THEY
ALSO
CHANGE?
Customer Behavior
Expectations
Demographics

12. CUSTOMER BEHAVIOR
MOBILE
OUTPERFORMS
WEB

13. CUSTOMER EXPECTATION
MOBILE
is not
enough
clients demand
personalized
conversation not just
a channel
Ubiquitous - be available
whenever/wherever client needs 24/7
Relevant (what you say?)
interaction must be
relevant to clients, their intereses, needs,
goals and feelings
Contextual (WHEN you say?)
interaction must be in context of
time/space with client
Personalized conversation - what is it ?

14. CUSTOMER EXPECTATION
clients will have loyalty
with the conpany that
serves as a
‘marketing advisor’
which gives only
RELEVANT offers
in
Context
Personalization
will end irritating
marketing

15. DEMOGRAPHY DRIVES CHANGE
Digital Natives
Digital Aliens
LESS DIGITAL
Non DIGITAL
*source: geostat.ge
Digital natives Digital Aliens
UX oriented Transaction/goal Oriented
VS

16. CHANGE IS OBVIOUS
NOW
WHAT TO DO?

17. RE-THINKING BANKING
IT IS ALL
ABOUT DATA Who can collect, analyze and capitalize
on Data, holds a key for winning
Under this terms banks start to
define how to think of customers needs
and methods of delivering value
Technology has brought data rich and
time poor world

18. CURRENT STRUCTURE IS STOPPER
Existing structure is not a product of design but a result of response
to the market calls
Here each channel is
additional layer to
the un-changed bank
model
1970s 1980s 1990s 2000s 2010s
ATMBranch Network Call Center Internet Mobile

19. STOP THINKING OF CHANNELS
Digital Bank is not only
digital channels
Change not
channels but
Bank itself
Omni-channel strategy tries to unify the UX
across platforms, but what will happen
if other devices emerge?

20. DEMOGRAPHY DRIVES CHANGE
Digital Natives
Digital Aliens
LESS DIGITAL
Non DIGITAL
*source: geostat.ge

21. RE-DEFINING BANKING
WHAT ROLES
DOES BANK
TAKE
Manufacturer
decomposite every product to its
lowest parts And enable to build
and offer modified to clients as widgets
Processor:
open source the services
like PayPal does throu API.
Enabling to integrate paypal
into their systems
(City opening API for SWIFT)

22. RE-DEFINING BANKING
WHAT ROLES
DOES BANK
TAKE
BIG DATA is key!
Manage relationships remotely
Mass personalization
As for every retailer

23. DIGITAL BANK
WHAT DOES IT EXACTLY MEAN?

24. DIGITAL BANK
Functional
Products are apps
Processes are APIs
Acts as a retailer
UX
Interaction is highly
personalized for each
client but NOT face-to-face
Big Data
Bank analyses users’
activities to generate
tailor-made offers for each client

25. DIGITAL BANK STRUCTURE
Big Data is core
UX is the frontline
Channels are means
of Distribution
UXBig Data Channels
Client1
Client2
Client3
Client4
Client5

26. KEY
TAKEWAYS
-Technology driven changes are unstoppable
-Banking industry is easily disrupted
by new players
-New type of business and customer
behavior push banks for change
-Clients have power not companies
-Banking is not something you go,
but something you do
-Digital Bank means transforming
banks internally
-Data is Core of digital banks
-UX will be key differentiator
-Channels are only means of distribution
-Future is in Data

27. Used Resources

28. Thank you
2016
Malkhaz Pertaia
maxpimba@gmail.com