Fintech Finance "Phigital" Supplement 2017

PHIGITAL SPECIAL SUPPLEMENT

Analysis of the latest trends and innovatians in the physical and digital worlds of banking

INSIGHTS FROM

Holding all the aces reveals its hand at TRUSTECH

Glory Global Solutions Welcome Real Time Millennium BCP Parabit â—? FIME MetroBank

PHIGITAL SPECIAL

A fine romance

(and the dog comes free) Stricter regulations are conspiring to make online account opening a headache for many banks. By contrast, high street heartthrob Metro Bank appears to have perfected the seductive art of onboarding, as Fintech Finance’s Lewis Averillo-Singh discovered We all want to make a great impression on a first date… and when that first date is between a customer and a bank – quite possibly an encounter that will turn into a lifelong relationship – it’s worth the bank observing the rules of financial courtship.

Don’t keep your intended waiting while you shuffle through endless verification forms – they might just decide to go off with someone else. Be genuinely interested in who they are – this isn’t a Tinder try-out and for know-your-customer to be meaningful it requires more than an identity check. And among all the clearly articulated advantages of this match, schmooze them with a generous gesture – it helps build trust and repartee.

Simple, eh? Well, it’s surprising how many financial institutions appear to get it wrong.

According to one research firm, ‘effective onboarding and activation that emphasises customer engagement can help financial institutions boost profitability by $212 per customer’. And yet, in another global study, one third of banks considered their onboarding programme to be less successful than desired.

As rivalry among challenger banks for consumer affection grows, overcoming that potentially awkward getting-to-know-you moment is clearly key. A clunky onboarding experience is a fast turnoff for consumers and damaging for future brand perception, with the attendant lost opportunities for cross-selling and up-selling.

According to the Digital Banking Report, based on both cost and results, of all the onboarding channels banks could use, initial branch engagement with the customer drives the best returns. Which is a bummer for online-only banks, but good news for the only one to have entered the UK high street in the past 150 years.

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So just how wow is Metro Bank at wooing? Our globe-trotting Lewis AverilloSingh found it pretty irresistible when he went shopping on London’s Cheapside for a Metro Bank current account.

Already a client of HSBC and Monzo, and with a commonwealth account in Australia, he was primarily interested in a bank that wouldn’t penalise him with charges when travelling abroad.

A real bow WOW! Within seconds of stepping across the threshold, he’d been greeted, his professional and personal life gently explored and the Ts & Cs explained in plain English, while a single passport ID was verified and AML background checks run.

A new picture was taken for biometric identification, which allows account holders to transact in branch – or in store,

as Metro Bank prefers to describe it – without a card, and a mobile account set up and ready to go. He left with an activated debit card, still warm from the desk-top instant issuance machine, in his wallet.

In less than the time it takes to queue for a Starbucks, Lewis was on board. The walk-in process had taken all of 15 minutes and, by the time he left, he’d been shown the seven-day vaults for customer use, the meeting rooms available for SME clients to hire, and ‘introduced’ to the CEO Craig Donaldson and founder Vernon Hill, who set out to build a retail bank with personality, believing that customers were willing to pay more for superior service because they enjoy the experience.

And then there was the picture of Duffy – Hill’s Yorkshire Terrier, which is emblematic of the bank’s corporate social responsibility (CSR) policy. A supporter of Battersea Dogs and Cats Home from its outset in 2010, the bank reimburses customers with rehoming fees if they agree to take a mutt out of care. It even hosts free chipping events for any customer’s hound in its dog-friendly stores.

When he re-entered Cheapside, Lewis not only had an account he could use Europe-wide with no extra charges, but was also half way to adopting a stray for his mum. And that’s the kind of warm glow no digital bank with an onboarding chatbot can achieve.

As he’d sat down, Lewis noted an old picture of Cheapside covering one wall. Taken in 1915, it captured the City in its heyday. “It was a lot busier then,” Lewis’ real-life onboarding assistant observed.

“A lot of the other bankers who work here have been in banking for 45 years or so and when they come into Cheapside, they see this and remember how it used to be… almost.” www.fintech.finance |

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What do we want?

Cards! When do we want them? Now!

Matica Technologies will use TrusTech 2017 to officially present its new instant card issuance concept – a must-have if branches are to keep delighting customers, says CEO Sandro Camilleri Matica Technologies couldn’t have chosen a better year to officially unveil a new line in desktop instant issuance card machines.

The 50th anniversary of the ATM has focussed attention like never before on our flexible friends – including the overwhelming majority linked to debit accounts.

According to RBR’s Global Payment Cards Data And Forecasts To 2021 study, they now represent 70 per cent of payment cards globally and, despite

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competition from the digital wallet, blockchain and cryptocurrency, there’s no sign of their popularity slowing. In fact, these muscle men of the financial system – responsible for lifting and shifting £41billion of spending a month in the UK alone – are likely to single-handedly drive up the total amount of payment cards worldwide, says RBR. And why? It’s simple, according to Matica Technologies’ chief executive Sandro Camilleri.

“Cards work well. They’re easy to carry

around and people understand them.

International standardisation makes this form of payment very easy and universal, aided by the ongoing move from magnetic stripe to chip and PIN (Europay, Mastercard and Visa standard). The speed at which card payments can now be made, some instantaneous, is brilliant and the card is seen as reliable and convenient by consumers who may be resistant to changing to other payment methods.

“The card is now part of our global payments infrastructure.”

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Which is the reason so many customers want to get their hands on them – and fast.

The heart of ‘phigital’ As a leading card issuance specialist, Matica is at the core of ‘phigital’ banking, supplying both central issuance machines geared to large volume production in a variety of online and offline industries, and now a new mini modular system of desktop hardware and software that allows bank branches to respond instantly to the customer standing in front of them.

The Matica Desktop Modules Architecture concept will be presented for the first time officially at TrusTech 2017.

“Taking new products to market when the market is changing so rapidly has presented our engineers and designers with some considerable challenges,” admits Camilleri, “which is why we’ve

made adaptability and modularity a central theme of our new launches.”

It’s been wise to do so, especially in an era of rapid branch transformation where everyone is on a journey and no one truly knows the destination.

“As more competitor banks disrupted the market, the high street banks realised they needed to invest in strategies that would radically shake up their customer service,” says Camilleri.

“One of those strategies was about the speed and convenience of banking.

By bringing card issuance – a previously industrial-scale process – into the bank branch itself, the banks can save significant money and court and retain current customers while recruiting new ones.”

It helped that Matica had a mature network of global partners in the financial industry to shape its response to these changes – among them Mellon Technologies (the Athens-based IT integrator with a large banking client base) with whom it had worked for more than 20 years and collaborated on a number of significant projects.

“Our relationship started with some big instant issuance projects in Eastern Europe and most recently we were involved with Mellon in delivering a wearables project for the Bank of Cyprus,” says Camilleri.

“Consultation with our partners and the financial sector more widely helped us to shape and design the instant issuance technology so that it answered the industry’s wish-list; it drove the design and engineering of new technology. So we were one of the first to offer the financial market the sort of technology that one would ordinarily see in a central issuance system in a desktop card issuance printer, such as the S3500 and the S3800 machines.

“The technology for financial instant issuance has been refined over the years so although volume will never equal that of central issuance, it’s more than enough

for one branch. It’s easy to use and highly secure – it includes high-level security features – and it maximises space.”

A changing industry As a global supplier to the financial services industry, not only must Matica be alert to a revolving door of start-up banks and third-party relationships between existing players and incumbents, but it’s also squarely in the frame when it comes to challenges and opportunities created by the Revised Payment Services Directive (PSD2).

“It will eventually have a significant impact on the way data is communicated, stored and deployed – and as part of the industry, Matica can’t not be a significant part of that change,” recognises Camilleri.

That is especially true as the cards themselves become increasingly personalised and sophisticated, even capable of carrying biodata.

Camilleri has previously referred to payment cards becoming ‘little PCs’ with their use extended into other areas of our lives – acting in effect as our personal identity cards. Built-in anti fraud measures are driving innovation in this area, particularly around two-factor identification before a transaction is authorised by the bank.

“We see two clear trends in terms of two-factor authentication – the one-time password (OTP) and biometrics,” says Camilleri. “OTPs are normally sent to a mobile phone via SMS in order to finish the card transaction but in some of the newest cards the code is displayed in the card itself.”

With instant issuance allowing for cards to be personalised to the individual – even carrying images of pets and family members – while embedded technology links them to our most personal information, payment cards are increasingly looking less like a flexible friend and more like a partner for life.

Which has to be good news for the card industry and its suppliers.

By bringing a previously industrial-scale process into the bank branch itself the banks can save significant money and court and retain current customers while recruiting new ones Winter 2017

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Points mean prizes Banks will be the ultimate winners if they invest in rewarding customers for their loyalty, argues Pierre Boces, Head of Product Marketing and Consulting at Welcome Real Time Like every business orbiting bank transformation, customer loyalty specialists are feeling the winds of change, not least since a number of big names cut back on this well-established spend.

RBS, Capital One, M&S, NatWest, Tesco Bank and Santander have all announced unexpectedly dramatic changes to their loyalty programmes over the last three years. In 2016, M&S Bank reduced its customers’ entitlements from one point for every £2 earned to one point for every £5 spent outside of M&S while Santander capped the cashback on its 123 credit card to £9 a month. Tesco had already halved its credit card holders’ earnings overnight, Capital One and RBS having closed their YourPoints card schemes

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altogether. This summer, NatWest slashed the cashback for 1.7 million existing Reward current account holders from three per cent to two per cent, while limiting new customers’ benefits.

But out of adversity comes great innovation and opportunity in a competitive marketplace.

Business loyalty solutions provider Welcome Real Time is one such innovator and an award-winning one – it garnered four prestigious awards this year alone, having stayed ahead of the curve in creating payment-based loyalty programmes. Its primary focus is on providing robust omnichannel systems (increasingly that means via social and mobile payment platforms) that identify a customer and then instantly reward them

for every interaction with their bank in ‘real time.’ That also means customers have the chance to redeem that reward there and then. Welcome Real Time has delivered this across five continents for more than 23 clients, demonstrating to more than 36 million bank customers and more than one million merchants that loyalty pays.

Time for a fight back Launched in 1996 to develop marketing solutions for payment cards and now a market leader in machine learning and big data analysis, Welcome Real Time has come a long way. In 2014, global marketing specialists, Collinson Group, acquired the company and injected its own area of expertise into Welcome Real Time as leaders in influencing customer Winter 2017

behaviour to drive revenue and add client value. As such, Welcome Real Time is now one of a handful of expert companies in the CG family, benefitting from a hive mind and powerful network.

Given its credentials in relation to the customer loyalty piece, its views on bank loyalty programmes are worth hearing.

And Pierre Boces, head of product marketing and consulting, is blunt.

“The customer relationship is the next battlefield, with customers facing more attractive, more agile and useful solutions from players competing with banks.

Banks must rethink their strategies and give their customers new reasons to engage with them directly.”

There are external forces coming into play that make that more urgent still.

“Delivering a robust and successful loyalty programme to re-engage banking customers is one of the solutions to the challenges posed by the revised Payment Services Directive (PSD2). Regulatory initiatives like PSD2 or open banking are aimed at breaking the monopoly of the banks in terms of the customer relationship and should lead to an explosion of new services. Yet research from Collinson Group shows that banks could be doing far more to deliver loyalty initiatives that their customers truly value and use.

“The market for the payments industry is becoming more and more fragmented in terms of new solutions, for example with instant payments, while new players constantly challenge the incumbents,” says Boces. “That said, we’re also starting to see consolidation as some fintechs are being absorbed by large banks.”

"Then, of course, there is China. The western world has started to realise the power of the Chinese digital giants, Alibaba and Alipay.”

It’s against this background that the Collinson Group’s research among mass affluent bank customers revealed that 68 per cent of millennials demand digital experiences in exchange for their loyalty; 66 per cent still want to be able to collect points; and 82 per cent of consumers who are active with their bank loyalty programme, spend more as a result.

Given customers’ clear preferences and behaviours, and growing competition for their spend, it seems counter intuitive that bank investment in such reward schemes has been slowing.

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Rethinking loyalty Welcome Real Time has come to understand that banks need to better personalise their customer loyalty programmes; provide choice – put the customer in the driving seat; get to know their customer’s customer; provide alternative earning redemption methods in-store and online; make sure there is more than just merchandise on offer (such as charitable donations or experience-based rewards); and that there needs to be omnichannel communication and delivery, which now has to cover social as well as mobile payments. And this isn’t even getting into the extra value that big data and machine learning are increasingly expected to deliver.

“Since the 2008 crisis, it’s been a rocky decade for the financial services industry,” says Boces. “Customers have come to expect more from financial services brands as they continue to rebuild

Banks must rethink their strategies and give their customers new reasons to engage with them directly.

The customer relationship is the next battlefield consumer trust and confidence and compete with the dynamic fintech sector. Loyalty programmes help them to differentiate. Customers expect personalised experiences in real time, which generate opportunities to create more engagement with them. In the Collinson Group study, it showed 80 per cent of mass affluent consumers spend more as loyalty programme members. Yet, it also showed there’s been a 20 per cent decrease in membership since 2014.”

In fact, this 2016 study also revealed that, among all the main customer loyalty programmes, banks fared worst, seeing a

drop from 47 per cent to 30 per cent uptake. In the credit card space, it fell from 65 per cent to 48 per cent.

Memorable experiences But Welcome Real Time is embracing the challenges – and opportunities – that the industry with all its reconstructive surgery can throw at them.

“The new regulations enable us to constantly rethink, develop, and enhance loyalty marketing strategies,” says Boces.

“They’ll affect our products at front-end and back-end. PSD2, for example, will be about providing frictionless and intuitive apps allowing users to access a range of incredible new services, like aggregating banking and loyalty accounts; calculating the financial needs of households based on banking and social data; and selecting the best payment method based on the financial situation of individuals.

“Because the General Data Protection Regulation (GDPR) is about handling data in ways that comply with the new rights of the customers, it will impact processes and solutions already put in place.”

Boces believes that digital giants will move further into the financial services industry in Europe, as they compete with fintechs and traditional incumbents.

“They’ll use PSD2 as a strategic opportunity and it will also enable a wide range of new applications, fighting for a winner-takes-all position,” he says.

“Social payment will grow stronger, posing similar challenges to banks on the verge of losing the customer relationship to social media.”

For Welcome Real Time, 2017 has been a year of consolidation in its product portfolio where it has iterated some modules and components to newer, features-rich versions, particularly around its mobile application for mobile point-of-sale (mPOS) devices.

“Our newer version provides more opportunities for merchants to create promotions and monitor their payment and promotional activities, and we’ve focussed on building more modern REST APIs into our back-end, too,” says Boces.

“2018 will see our product roadmap focus on mobile, social and communication.

“Being at the crossroads of payment and loyalty, we plan to support banks in winning the customer relationship battle with memorable, practical experiences.” www.fintech.finance |

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Thecomfortzone

Traditional banks are using automation not to distance themselves from customers, but to create a more personal and relaxing experience. Javed Anjum, EMEA Branch Transformation Sales Leader at Glory, gets settled in…

Once upon a time, bank branches were places where everyone went to handle their financial affairs and make plans for the future.

Now, we have online banking, mobile money and a growing range of non-bank payment services, all of which are eroding their familiar high street role.

But all is not what it seems. Although Bill Gates predicted the end of banks some 20 years ago, and the rise of digital money is irresistible, we won’t be saying goodbye to bricks and mortar banks or notes and coins any time soon. Indeed, cash is still the most popular means of payment worldwide and, rather than closing their shutters, branches are evolving into something else.

It is a trend that Javed Anjum is well-placed to comment on. As a branch transformation expert at Glory, a leading supplier of cash technology solutions, Anjum is keenly involved in redefining the role of branches in today’s online and mobile-first world.

“We want branches to be cosy, comfortable places to discuss your financial needs,” says Anjum, “and it’s automation that makes this possible. Old-school branches, dominated by manual processing, must give way to smart branches – technologically sophisticated with automation creating the environment for a more satisfying and engaging customer experience.”

Automation, of course, is nothing

new: it has been changing the banking world for decades. ATMs, for example, were introduced 50 years ago and since then we’ve seen technology revolutionise payments and the way money is handled.

Technology has certainly undermined the personal relationship between customers and banks, so we must draw a distinction between automation that removes the human element and automation that enhances it.

“When you enter a branch today,” says Anjum, “or manage your finances externally, you quickly see how technology has simplified the movement of money and day-to-day financial transactions. Often, however, something has been lost as well as gained – and that loss is the human factor.

“For instance, take the Middle East. Every time a new technology is developed, the first thought is ‘let’s take people out of the equation, let’s have an unmanned branch and automate everything.’ When this happens, it seldom lasts long. Although it’s an approach seen elsewhere, such as across the Benelux countries, one thing is becoming increasingly clear: automation may be a boon for all standard or basic transactions, but when it comes to more complex banking and financial needs, there’s no substitute for talking to a person.”

If automation is here to help

customers, it’s also here to help banking staff. But, more to the point, it’s not here to replace bank staff in their advisory roles; instead, it can release them to concentrate on customer-facing activities where they can add value to every branch visit.

“In-branch staff shouldn’t be using their time for simple things, like processing transactions,” says Anjum. “Managing bank notes, coins and cheques is labour-intensive and repetitive. It’s an unnecessary burden that can be removed with the right sort of automation.”

This is where Glory’s technology comes in. A key element is cash recycling, where tasks such as accepting and dispensing cash, storing it securely and keeping accurate cash inventories are all done automatically.

Investing in quality time Glory is the leading provider globally of teller cash recycling units in 18 countries and manufactures a range of recyclers and dispensers. Banks are now using this technology as a key part of their strategies for increased customer focus and operational efficiency. In moving away from traditional teller windows, the banks can improve straight-through processing, as well as security and accuracy, and redeploy staff in advisory roles.

“Without automation,” says Anjum, “you’re left with staff sitting in the back office, counting and recounting cash, preoccupied with time-consuming

Cash and comfort: Branches should make you feel relaxed and secure

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activities. If you didn’t have this distraction, if you were to streamline and automate the cash-handling and management process, you could deliver more value and a better service to customers in the front office.

Then you could focus on face-to-face time instead of worrying about the books not balancing because £10 has gone astray.”

Glory takes a holistic view of banking.

It looks at the entire cash chain and removes manual processing at every stage and for all types of activity that would otherwise require human intervention. And then it looks at how that time could be better used elsewhere.

“We handle both cash and coins,” says Anjum, “and although coins are sometimes neglected, they are pretty high on the agenda of most branch managers. If you see a lot of coins, you need a solution to manage them quickly and cost effectively.

Often, the cost of handling coins is higher than the value of the coins themselves!”

Recent figures from the strategic research firm RBR underline the growing market for teller technology. In its latest Teller Automation And Branch Transformation report, RBR reviewed teller installations up to the end of 2016 and made forecasts for 2021. RBR says that there are more than 185,000 installations worldwide, of which 69 per cent are recyclers and 31 per cent dispensers. It predicts that the number of automated tellers installed worldwide will exceed 196,000 by the end of 2021, with the USA being the largest market.

The challenge for transformation is to automate the back office while reinventing the front office with the right mix of technology and personal interaction.

When Anjum talks about the need to be ‘cosy and comfortable’, he’s referring to the human face of banking. Banks

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must provide all the digital channels that customers expect today, while also ensuring that they are still personally approachable and responsive, and that staff are ready to help with anything that requires a personal touch.

“We design customer journeys to maximise the benefit of human contact,” says Anjum. “When you walk into a branch you should have the reassurance that personal advisors will step in and help you with a wide range of financial topics, while your everyday cash management needs are being sorted in the background by automated tellers. Nothing should

In an industry that is all about trust you need people to reinforce a sense of wellbeing and security get in the way of meaningful contact with the customer. Tellers shouldn’t be seen with their heads down, counting, reconciling and securing cash; they should be out front, free to help you and to cross-sell services.”

Role of assisted service Technology enables banks to build their role as advice centres. It provides the connections and the context for a better understanding of customers and their individual needs.

This is the so-called single view where big data, structured data, is enriching the client-customer relationship.

One aspect of this is assisted service, something that is an important part of Glory’s offering.

“We bring everything together to create a seamless service area,” says Anjum.

“Customers can perform practically any transaction independently, with bank layouts and technology designed for comfort and ease of use. Tellers will intervene at those times when you need help or advice, enhancing the overall in-branch experience with the right combination of speed, convenience, and expert attention from personal advisers. The result is a more collaborative, welcoming environment.”

Today, as in the past, the fundamental charter of a bank is to handle deposits and withdrawals, to make transfers and obtain credit and, above all, to provide security.

However, the digital economy is changing customer expectations and banks need to adapt and be flexible.

But one thing should not change: despite the growth of online banking and mobile services, banks must continue to be physical spaces where customers can go for advice and support. Branches represent something real, something human and reassuring.

“In an industry that’s all about trust,” says Anjum, “you need people to reinforce a sense of well-being and security. The best way to do that is to use automation to give bank staff a more engaging and interactive role in the front office. Positive customer experiences are essential for incumbent banks now that they are increasingly under pressure from alternative digital financial service providers.”

Fortunately, banks can harness the same digital technologies that have been threatening to erode their familiar roles.

The old high street branch with tellers sequestered behind screens may be a thing of the past, but traditional banking values persist – invigorated by the right blend of high tech and high touch.

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Branching out After a decade in the doldrums and an EU bail-out totalling billions of euros, Portugal’s economy is at last on the rise again.

Natural, then, that its biggest privately owned bank, Millennium BCP, should see this as a basis for taking stock.

Having undergone its own financial revival, MBCP is now asking itself, in a healthier, freshly-growing economy, what products and services its customers want, delivered in which kind of environment.

Its answer centres on an impressive Closer to the Customer business transformation, featuring measures from clearer client segmentation, to a root-and-branch review of products and strategy. And it’s working.

Like the country in which it is based, MBCP’s interim results for the first half of 2017 show it is experiencing a marked turnaround of fortunes – with net profit of €89.9million compared to a €197million loss in the same period of 2016. A growing band of customers, enticed by its fresh approach to meeting their needs, has directly contributed to this, boosting the bank’s net interest income. This has coincided with a reduction in its non-performing loans and a successful capital-raising exercise that enabled it to pay back the expensive contingent convertible bonds (CoCos) it had taken from the Portuguese government, ready for an even rosier future.

So, for this retail-focussed organisation with 596 branches across Portugal, serving more than 5.6 million people, what does getting closer to customers actually mean?

According to Sérgio Magalhães, head of its Branch of the Future project, it starts with understanding who they are and what they want, then delivering on it.

“Why? Because we truly believe that the customer experience leaders are going to outperform the market, as understanding the customer is the way to be more effective, in terms of sales and results,” he says.

“If we get to know our customers better, we can digitalise our processes and products better. The first step is to understand which personas we are working for, how many digital clients we have and how many traditional customers. Then,

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Millennium BCP’s Sérgio Magalhães describes how the bank’s ambitious physical and digital transformation process is bearing fruit which channels do each of these prefer?

Starting from that, we can create better processes and products for them and consequently better results for Millennium.”

For MBCP, which also has a footprint in Macau, Poland, Angola and Mozambique, it’s not a question of branch or digital; it’s both, because it believes digital customers may also be branch customers, and vice versa, depending on what they need at any particular time.

Therefore, one priority of its change process is to offer comfortable, welcoming and functional environments that cater for every need. Helpful by-products of this process, it hopes, will be future-proofing and reduced operating costs.

We’re basically reducing the customer effort index by creating the best journey possible in every channel Banking without boundaries MBCP has built its reputation on a commitment to innovation, speed and personal service for customers ranging from everyday consumers to prestige and business clients, as well as younger ones looking for innovations such as mobile-based service provision.

Magalhães adds: “We believe in a very integrated system, between the physical and digital capabilities we are building.

While we need to move with the digital times, branches will continue to have an important role. That’s why we started to renovate ours, to create a new customer

journey involving several environments within one setting.“ And there is a harder edge to the innovations MBCP is trying to implement.

Digital pricing displays are designed to be informative, convenient and transparent for its customers, while also fulfilling Banco de Portugal regulatory requirements to clearly display current charges to its customers. MBCP has introduced 700 of the displays into all its branches, allowing for automatic and real-time product updates. This is also contributing to the bank’s improved bottom line by eliminating wasted admin time and print costs, projected to save €230,000 every five years.

And this is just one example of the seamless physical/digital crossover MBCP is trying to achieve with the help of technology from cash management specialist Glory Global Solutions, according to Magalhães.

“We are trying to make our branches a new, digital step in the process, through self-assisted ways of doing things,” he says.

“We offer a range of features through self-service, even creating unique offerings for customers, like instant cheque issuance, statement provision and even obtaining travel insurance.

“The motivation behind introducing self-service technology was our commitment to providing service excellence to our customers. The strategy promises not only a simple and convenient solution, but enables us to free up teller time to focus on other customer service requirements.” And it doesn’t end there.

“We’re also looking at other areas, such as a 100 per cent digital account opening process,” he adds. “We are redesigning all the steps in the process, to become as integrated as possible and have our branches, our call centre, the internet and mobile all working together.

“For example, if someone does a mortgage illustration on our website, our branch will know, and will call them to ask if they need any help. Meanwhile, the call centre is ready, 24/7, to answer questions they have about the mortgage illustration Winter 2017

and application they’ve submitted via our app. We’re basically reducing the customer effort index by creating the best journey possible in every channel.”

The challenge of change As well as the emphatic vote of confidence from the customers themselves, MBCP’s efforts have been recognised with industry awards, including, in 2017, a ‘bank customer experience best brand experience’ award for its transformation of 33 of its Portuguese branches, incorporating innovations like paperless transactions via tablets; cardless ATMs operated using multi-channel codes; free wifi and digital zones allowing access to its apps – all against the backdrop of comfortable, welcoming environments.

Magalhães doesn’t underestimate the challenge change represents.

“The big challenges are everywhere, because customers want everything. They go to a branch and expect to be served immediately, free of charge.

They even want to be served with things they haven’t thought of, because they expect us to guess what they want. They expect us to have cash available 24-hours-a-day and to allow them to withdraw a cheque or make a deposit up until midnight.”

To cater for this, Millennium is also offering a diverse range of branches.

“We will have several with different formats. Some will be self-assisted, allowing clients to do everything by machine in self-service areas.

Others will offer all our services, including direct deposits for companies.

Others might cater for more affluent customers and some might be in alternative locations, like shopping centres, to reach people where they are.”

Tech will play a large role in the delivery of this vision, says Magalhães .

“We have what we call the Millennium Teller Machine, different types of teller-assisted units that enable customers to make withdrawals and deposits 24-hours-a-day, seven-days-a-week. While our branches are open, they can transact via these machines with assistance from branch staff. Out of hours, our contact centre can make authorisations or video teller with them, to personalise the interaction with the machine.

“All of this is something we’re very proud of. The branch of the future is really a very important project for us because one of the things we know is that cash is still the king here in Portugal and we have to cater for that.”

MBCP puts the same attention to detail into the process of getting to know its customers and what they want in the first place.

“We are now much more aware of the moments when we collect data,” he says.

“In every process we redesign, we pay a lot of attention to how we collect everything, from a customer’s birth date to their ID, in a seamless and non-invasive way. Then we can reach them via email direct marketing, SMS, or phone. Everything is collected via our onboarding systems within our CRM, from when someone opens an account, to taking out a mortgage or buying insurance.

We can then see the best opportunities for us, as a bank, to be present in their lives, and fulfil their financial needs.”

He’s aware that internal change is not the only kind MBCP will need to contend with.

“We have to keep an open mind, understanding that the banking system is going to work on partnerships, particularly with fintechs. Our traditional business model is going. It has to expand, to give us other avenues of profitability in the future, and partnership is part of that equation – especially in Portugal because we have been in a recession for so many years and we now need to create a stable base for our stakeholders as a whole, based on a better business model.

There are so many areas where we as a bank can be more useful to our customers.”

The money tree: Branches are an essential part of Millennium BCP’s new growth

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PHIGITAL SPECIAL

Pressing all the right buttons The self-service branch is the embodiment of ‘phigital’ banking, as Rob Leiponis, President & CEO of Parabit, explains Fintech Finance: What have been some of the biggest changes to branch and ATM security and how well have banks dealt with these challenges?

Rob Leiponis: Until recently there was a big disparity between security supporting the customer walking into a traditional branch to withdraw cash, versus walking into an ATM lobby or tellerless branch.

Technology was previously geared more towards a staffed retail environment and not the 24-hour self-service model.

Since 2010 and the rapid change of customer behaviour towards mobile banking, we’ve seen a shift in philosophy, where banks are investing more resources into self-service, leveraging surveillance, near-field communication (NFC), Bluetooth, beacons and biometrics for access, authentication and remote facilities supervision. This shift has generated a huge synergy between security and self service. One supports the other to the extent that the line between customer experience and security is becoming blurred. Mobile devices that provide contactless payment, capturing customer data, are now also providing access control, thereby improving the customer experience and reducing the risk of fraud.

Utilising Bluetooth low energy (BLE) beacon technology to communicate with various digital touch points throughout the branch, banks can now execute and capture a myriad of data points – from cueing access control to customer counting and tracking where and how long customers are spending time.

They can then use this information to generate a targeted marketing campaign around relevant customer interests.

FF: How much automation is being introduced into the branch, both for customers and for staff?

RL: We see a dramatic increase in the amount banks are spending on technology Winter 2017

in 24-hour, self-service environments as well as added security to support, protect and supervise these facilities. In the US, there is a huge increase in 24-hour self-service – tellerless branches with access control that works with contactless tech as well HD cameras that provide a facial recognition plug-in for identification.

In terms of the staff, automation allows a bank to be much more efficient with its tellers, so they can be utilised in more challenging positions. It allows them to focus on providing a better customer experience. There are economies, of course, but also opportunities to cross-train staff on more platforms.

identify, adapt and modify locations and digital touch points to maximise customer accessibility within their desired markets.

The line between customer experience and security is becoming blurred

FF: As the volume of physical cash continues to increase, how can banks be more efficient in its delivery?

RL: I doubt cash will level off or decline within the next five to 10 years. Plus, in my opinion for cryptocurrencies to become stable enough to use in replacement of cash, they must be backed by vault currency or gold, silver, etc.

Technology enhancements will continue to expand the capabilities of ATMs and self-service tech as well as the ways customers interact with them. In the US, the pursuit of safety, security and the customer experience has driven ATMs and other self-service technology into vestibules and spiked the enhancement and growth of 24-hour banking. Defining best practices for the efficient protection and servicing of these environments will be another layer for banks to manage.

FF: We hear a lot about the ‘branch of the future’. What does this mean to you?

RL: With ever-increasing innovation in cryptocurrency, mobile and online banking, there will be a reduced footprint of bricks-and-mortar retail branches.

That said, many institutions are moving to a hub-and-spoke topology for their retail locations, which are more than ever providing new interactive digital and remote access technology. Successful models are being tested and deployed that showcase customer-centric experiences with interactive user touch points that are easy to navigate.

Digital access channels are continually evolving to meet the lifestyle demands of different customer segments. In turn, institutions must maintain a mechanism or service provider that supports real-time evaluation of customer behaviour data to

FF: How will the branch and its position in the banking model evolve?

RL: A significant number of branches are closing, but equal numbers are opening as self-service technology filled tellerless branches with centralised and distributed video conferencing.

Parabit’s role in this branch of the future will be to continue to innovate in contactless access control, integrated with a mobile app that provides NFC and Bluetooth access control/customer count and dwell time stats as well as customer rewards/advertising functions, integrated with multi-layer credentialing.

Our MMR Cloud service will improve customer authentication and collect statistics on location behaviours that drive targeted mobile promotions and rewards/ couponing via a software development kit, integrated into a bank’s mobile app. www.fintech.finance |

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PHIGITAL SPECIAL

Next stop: The future With a new CEO at the helm and an accelerated R&D programme, FIME is setting the pace for innovation in payments – notably in public transport FIME, the end-to-end testing services provider within payments, appointed Lionel Grosclaude as its new CEO in September 2017.

Just a couple of months into the job, here he gives an insight into what attracted him to the company, his thoughts on FIME’s position in the market and his vision for its future.

You have worked in IT and banking for more than 20 years, fulfilling roles across Europe and the US. What was it about FIME that appealed to you?

FIME is at the forefront of its field. It has an impressive reach globally and it is known for its agility, innovation and creativity. It is primed and ready for the next phase of its evolution.

I’m honoured and excited to be the person to lead the company into this next chapter of its history by driving an expansion strategy to bring us even closer to our customers with new offices and laboratories.

In what ways is FIME ready for growth?

The company is renowned in the payments world because of its sophisticated functional testing solutions, global network of industry-accredited laboratories and comprehensive training and consultancy services.

This wealth of payments expertise is transferable to new markets. Transport ticketing is one example; a sector that is committed to delivering seamless travel options by embracing new technologies.

FIME already has credentials in this area through its existing relationships with the Smart Ticketing Alliance and Île-de-France Mobilités (formerly STIF) – the Paris regional public transport authority. These are relationships that we can build upon.

FIME can also benefit from the convergence of payments into new use cases and the increasing requirement to secure transactions and authenticate individuals, such as the adoption of the EMV (Europay, Mastercard and Visa) standard in transport and the continuing

interest around smart cities to deliver ultimate convenience to the end user.

It is the combination of FIME’s established credentials, global footprint and expansive knowledge that will enable us to enhance our offering to better support existing customers as well as attract and support new customers in new markets.

What expertise do you bring to the company to help support its growth?

The most important question! Firstly, I have experience in significantly growing a company of similar size to FIME. This was achieved by industrialising product and service offerings across legacy and new markets as well as focussing and simplifying operational policies. I hope to replicate this while retaining the personality, innovation and R&D at the heart of FIME’s operation.

Additionally, I am educated as an engineer and have always worked in highly technical environments. This

Fast pace of change: FIME has an ambitious R&D programme in 2018

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| www.fintech.finance

Winter 2017

background enables me to understand the technical challenges our customers face and balance them with business and operational requirements.

What are your immediate priorities?

FIME is already known as a thought leader in its field. Our experts participate in a number of industry associations, including EMVCo, GlobalPlatform and NFC Forum, to define the future of payments and other secure component use cases.

It is vital that we continue to contribute and innovate, while accelerating our R&D programmes to bring new products and services to market. One example of this is to continue our drive towards Cloud-based testing models. This allows us to be more agile to software updates in response to industry needs. Plus, our customers get immediate and convenient 24/7 access to the tools they need, wherever they are in the world.

We are also working to optimise our security evaluation offering. We are known for our functional services and we want to build a clear security product and

service portfolio that enables customers to access both elements of the testing landscape efficiently and effectively.

You have only been in the role for a few weeks, but do you have a vision for the future of FIME? As I learn more about the company, speak to the team and meet customers, I realise its potential is endless. At this stage, however, I can see that FIME is a trusted brand in the payments sector and, at a fundamental level, this solid platform allows us to do a number of key things.

Firstly, it allows us to meet the ongoing needs of the traditional payments community, while using this knowledge to build new tools and offerings to support disruptive fintech and regtech requirements.

It also enables us to expand our relationships with existing partners in new markets and also establish new partnerships to maximise our potential in key vertical sectors.

And it helps us to identify strategic acquisitions to enhance and complement FIME’s expertise and knowledge.

This will all be supported by ongoing expansions at FIME’s offices and laboratories worldwide, including new office openings across the Middle East and Asia, the first of which has just been announced for Dubai.

So, how have your first few weeks gone?

I have thoroughly enjoyed them! It’s exciting to join a company with so much promise. As I have spoken to the team, I have been amazed by the energy, creativity, ability and friendliness. On top of this, our customers’ commitment to innovation is staggering and I look forward to supporting them in achieving their goals.

Importantly, everyone I have spoken to shares my vision for a bigger, better FIME, while emphasising that this needs to be achieved by retaining the company’s core values of customer service and agility.

I will continue to connect with all of FIME’s stakeholders as we work to round off the year and set ourselves up for a strong and exciting 2018.

FIME can benefit from the convergence of payments into new use cases and the increasing requirement to secure transactions and authenticate individuals, such as in public transport

Winter 2017

www.fintech.finance |

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Automation enables transformation Our solutions help to optimise the cash processes across your entire branch.

Free up time, free up space and free up your staff to focus on your customers.

To find out how we can enable your branch transformation strategies, visit www.glory-global.com or contact your Glory sales representative