A Glimpse Into the Future of Banking: India’s First Bank in an App

May 2, 2016     By : Amit

What if I told you that today, it is possible to open an account in 90 seconds and convert it into a savings account immediately? What if I told you that you can do that in India? You probably know by now (if you follow LTP) what I am talking about: a mobile-only bank product. The 21st century’s innovations are peaking in the areas of banking and commerce. As technology continues to play an increasingly important role in the rise of digitization, banks are reimagining and reinventing customer experiences in financial services. Of course, FinTech startups had a big role to play in this and banks are catching up fast. DBS—one of the largest banks of Singapore and a leading bank in Asia—recently unveiled digibank, India’s first mobile-only bank. I like to call such solutions (Simple, Moven, Atom Bank, etc.) a “bank in an app.” Through digibank, DBS will be offering an entire suite of ground-breaking technologies to allow customers enjoy a whole new way of banking. Needless to say, digibank has no branches and comes with a virtual assistant (think AI, machine learning) and has a personal finance management feature as well. Artificial Intelligence tech for the virtual assistant comes from the U.S. startup Kasisto (startup that comes from the same lab where iPhone Siri has its roots)

Before we go into further details, I would like to mention a few things in this context. We have been tracking such mobile-only bank players all across the world for a while now and as an individual, I wished to have something like this in India. I know a few groups who have been working on such a proposition in India, but nothing has been launched yet. So, I was pleasantly surprised to see DBS seeing it as a great opportunity to strike first—digibank is a refreshing new take on banking. If you decide to give it try, you will see how the transitions are smooth and very well thought-out. A bunch of small things—like the SMS notifications—show up within the app, even on the iPhone. No OTP required while making payment transactions. Get a virtual Visa debit card as well. 

digibank

In India, for many decades, paper was the KYC norm. Even thinking about eKYC was out of the question a year ago. RBI had been looking into eKYC to help the digitization of money flow further and has approved some use cases recently. Digibank is one of them. So now, eKYC based on Aadhaar and PAN ID is considered valid to open something like digibank’s e-wallet—add biometric verification to that and you have a savings bank account (that also pays 7%). Isn’t that cool?

I am in discussions with some of the key people involved in building the digibank product. I will have more to tell you later this week, I guess. Watch out for an update to this article.

Here are some of the exciting features offered by digibank:

1. Paperless and signatureless banking in 90 seconds

The service is India’s first paperless, signatureless & branchless bank. You can open a digibank e-wallet in just 90 seconds and can convert it into a digiSavings account easily and effortlessly, with just your biometric authentication (fingerprint) & Aadhaar card at any of the DBS 500 Cafe Coffee Day outlets. With digibank’s e-wallet, users can pay phone bills, electricity bills and make recharges and can also shop at over 1,00,000 online merchants. Once converted to a digiSavings account, customers can avail following services:

  • Account holders can earn a 7% interest from the first rupee, one of the highest in the market.
  • Customers can enjoy unlimited free cash withdrawals at over 200,000 ATMs nationwide.
  • There are no minimum balance requirements.
  • A physical debit card, which comes with the account, can be used across all Visa-enabled online and point-of-sale transactions as well as overseas.

 

2. Virtual assistance powered by artificial intelligence

For any query or for banking transactions performed in real time, consumers can converse with digibank’s artificial intelligence-powered virtual assistant.

To provide its consumers with this artificial intelligence service, digibank has partnered with US-based FinTech Kasisto. In Asia, DBS is the only bank harnessing experimental conversational technology from Kasisto, a spin-off from the Stanford Research Institute that created Siri.

digibank3. Budget optimizer

digibank also provides budget optimization service that can help consumers with their budgeting, tracking of expenses and in analyzing their purchasing patterns. Digibank synthesizes customer data, understand behavior and preferences, and provides actionable recommendations.

digibank

For example, the budget optimizer can read your spending habits and reward you with relevant marketing offers, such as a restaurant discount for a foodie or a coffee voucher for a caffeine-lover.

digibank

4. Inbuilt security

Instead of implementing security through one-time passwords (OTPs) via SMS, digibank has an embedded soft token security, avoiding the need to wait for SMSs to arrive and providing even stronger security for transaction authorization.

“India’s banking system is at the cusp of a massive change, and as a bank committed to shaping the future of banking, we are excited to roll out a revolutionary, mobile-only bank. With digital, we are able to create a completely different customer experience. What’s more, digibank’s efficiencies and lower costs enable us to pass on significant benefits to customers in the form of greater customer value.” Said DBS CEO Piyush Gupta,

“Among the Singapore banks, DBS has the largest presence in India. This reflects our long-standing commitment and confidence in the market. Over the years, the bank has grown its corporate banking and SME franchise meaningfully. Going forward, we would like to extend our reach in the consumer segment as well. With a billion Aadhaar cards and over 200 million smartphone users in India, the opportunity for growth with digibank is huge,” Said Surojit Shome, DBS India CEO.

DBS’ efforts to be at the forefront of banking innovation have been widely recognized. The bank was recently named the “Best Retail Bank in Asia-Pacific” by The Asian Banker.

The new digital service by DBS was also applauded by Nandan Nilekani, the Co-Founder of Infosys and Former Chairman of Unique Identification Authority of India, “I am very happy to hear that DBS is launching digibank. I have been a great believer that we are now at the ‘WhatsApp moment of banking,’ where paperless, presenceless and cashless transactions are going to completely transform the banking industry. I believe digibank using Aadhaar is a great example of what’s to come.”

Three important phases of digital-only or mobile-only banks that you will see in this part of the world:

Phase 1: Single use case and quick sign up. Ex: digibank allows customers to open their digibank e-wallet in just 90 seconds without any hassle of paperwork and signatures. The primary use case is payments.

Phase 2: Once identification and authentication is done, it can allow things such as savings accounts (with interest in India), personal finance management, P2P transfers, bill payments and so on. Multiple banking and financial services can be availed. The whole process gets completed in two days after the request is made by the customer for converting e-wallet into savings account. digibank uses biometric authentication with regard to Aadhaar card for verification to convert the digibank e-wallet into a savings account. The authentication can be done in either one of the Cafe Coffee Day outlets or the customer can even request the service at home. The customer’s fingerprints are matched with the fingerprint image present on the Aadhaar card for identification.

Phase 3: Reduce that 90-second + 2-day time period to minutes. There is work going on in this area. I am still not sure which model will win, but look at the picture below. If Aadhaar’s biometric verification is built into a specialized device like the one shown below, then a customer can open a fully functional bank account within two minutes. It would be even better if Apple Touch ID and Android biometric authentication is accepted/integrated with Aadhaar’s biometric ID—there would be no need of a specialized device (or the bank person or BC carrying it) as well. The customer can do everything at his/her end.

digibank

Source: Rajan Anandan’s tweet

So what are you waiting for? Go ahead and try the bank-on-an-app from the Google Play Store or Apple’s App Store. Check it out for yourself.

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Amit

Amit is the Co-Founder & Chief Curator of Let's Talk Payments. He has a strong background in strategy and market analysis and has advised dozens of clients (ranging from startups to Fortune 500) in payments, commerce and technology. His vision with LTP is to provide the same level of analytical rigor that analysts put into their work and combine it with Content 2.0 technology to offer unparalleled satisfaction for readers in this space.

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