PH digital bank CEOs tout marketing, mindset, partnerships to disrupt banking
They made use of their old payments model and partnerships to scale operations.
For the Philippines’ newest digital banks, it was a leap into the unknown to launch in the country– especially as they have to help create the concept itself.
“There was a huge amount of unknowns when we were starting because the digital bank license category didn't exist yet. We actually co created with the BSP in the sandbox mode, we co-created the digital license concept,” Tonik Bank CEO Greg Krasnov told attendees of the Asian Banking & Finance Forum held at Shangri-La The Fort, Manila.
Krasnov was joined by Maya Bank President Angelo Madrid and GoTyme Bank CEO and President Nate Clarke at the panel discussion, which revolved around the disruptions and innovations brought about by digital banks in the country. Alvin Dave Pusing, Director, Financial Services and Risk Consulting at PwC served as the panel’s moderator.
Right Mindset, Right Model
Madrid recalled how he was tapped into his role in Maya Bank in order to instill the necessary tech mindset which he said was needed in order to build a successful digital bank in the Philippines.
Apart from mindset, adopting the right model was also needed to scale. In Maya’s case, they built up from its predecessor, PayMaya, a payments app.
“We created an embedded finance model where we're kind of layered in or sandwiched in between the payments ecosystem. So the customer will not be removed from the current relationship that they have or payment behavior,” Madrid said.
Madrid particularly highlighted the layers involved in digital banking and customer loyalty: first, the trust that Filipinos now hold for accounts that are phone-based; second, the ability to use the layer of data you obtain to understand consumer accounts and behaviors.
From these, Maya built up their embedded finance model, harkening back to their roots as a payments app. This helped not alienate their former customers as well as tapped into pre-existing digital payments behaviors that Filipinos held.
“That was really the key, to embed experience in that ecosystem. The vision is really to keep on building on the embedded experience,” Madrid said.
GoTyme Bank, meanwhile, adapts a hybrid model: it has teamed up with physical retail channels in order to reach the human customers.
“Two thirds of our customers actually come through in the sign and sign up for us through a physical retail channel or an office building,” Clarke said, sharing that they have sign-up spots and kiosks in 400 locations across the country. These locations have an ambassador that will help the customer download their app and set-up a new bank account.
Partnerships are at the heart of GoTyme’s operations, with Clarke sharing that they have specific people in the bank focused on partnerships and creating commercial models that offer the right-aligned incentives for their customers.
“So it's kind of very much in our DNA to be partner led,” Clarke said.
As an example, Clarke noted the retail loyalty program Go Rewards, which they are affiliated with. When a customer signs up for a GoTyme account, GoTyme will automatically open a Go Rewards account for that customer; if they already have a rewards account, it is merged.
New Marketing Tactics
Krasnov touted Tonik Bank’s unique approach to marketing.
“We're also taking a radically different approach on promotional branding. I don't think any bank in the Philippines has ever taken such an FMCG, kind of funny, humorous approach to their branding,” Krasnov shared. “I'm very happy to see that most of these things have worked out well.”
Currently, Tonik Bank is looking to scale its lending portfolio, which is a mark of the profitability journey that the bank will undertake. So far, they’ve worked for a year and a half on this, Kransov said.
“In the consumer finance space, where you're reaching into the people that haven't been banked before, you need to take time to really build your credit models, customer acquisition, profitability,” he said.