Considered on the international stage

In the international Fintech bank at the awards ceremony Fortress it recently received an award as the best digital bank. How important is this award, and according to what criteria were the candidates assessed?

When evaluating the candidates for the award, criteria such as the ability of the bank’s digital solutions to improve the customer experience, the scope and capabilities of innovative activities, the security infrastructure to protect customer data, as well on the competitiveness of technologies that are integrated into the bank account. platforms were taken care of. It was great to be a finalist with a US-based bank with well-developed digital solutions and millions of active users – Wells Fargoas well as financial technology companies TransferMate. It was an important moment for us, because we were the only bank in the Baltic region that had the opportunity to compete with the main banks of the world. This strengthened the belief that the digital solutions created in the Baltics are globally competitive.

We created the first full-fledged mobile banking solution in 2018. We can be proud that our bank customers are among the most active users of digital solutions in Europe, that is, our customers ‘ perform more than 20 operations per month in the mobile app, without looking at the account balance. This includes movements, C Prizes management points, finding information and other activities. Among our customers alone, 4% are not active users of digital channels and mostly use services available at ATMs or branches. The remaining 96% actively use digital solutions directly. Such indicators are possible thanks to a convenient service infrastructure. We were one of the first to introduce remote customer account opening with a selfie photo, as well Face ID and TouchID to make a transfer. Our approach to digital infrastructure solutions earned us this award.

If we have to compare bank and customer relationships – how have digital solutions affected them?

10-15 years ago, there was a branch visit every day. People made appointments to visit a branch and ask interesting questions, make larger transfers or receive services. Gradually, the importance of online banking began to grow, and tools such as the code calculator appeared, but the biggest digital transformation came with the arrival of smartphones.

Have the residents’ daily routines changed and how?

Five years ago, the first signs of changing consumer habits and generational differences appeared. The older generation is used to visiting branches and does not want to use internet banking. The middle generation likes to receive daily services in the Internet bank, but only do important transactions in the branch. The millennial generation (born between 1981 and 1996) want to receive most services on a smartphone and are only ready to talk to someone remotely on important occasions. Recently, the “Gen Z” generation (born between 1997 and 2013) has entered this list, which in principle does not want to “step” outside the boundaries of a smartphone to access the information get what you need.

Creation Consolidate new mobile app, one of the goals was to create an environment that is functional enough so that the user does not have to visit an internet bank or a branch. Already today, we can see that there is a large enough number of customers who only used the application and did not visit the branches or the internet bank. At a time when you could be a bank customer with selfie identification, an audience appeared that performs all actions only in the mobile app. Then we realized that we had to make the best app to appeal to young people who are mainly users of digital services.

Is it possible to build a “relationship” with a bank without ever setting foot in a physical branch? What type of communication with the bank do customers prefer?

It is possible and it is already happening. Of course, a face-to-face visit to the branch is important when it comes to larger transactions, such as creating a mortgage loan, but it is also possible to receive such advice remotely. right now Consolidate the mobile app is used by around 260,000 customers, and the internet bank by 175,000 customers, so this share is already for using the mobile app. As the customer base becomes younger and younger, the importance of the app will not increase.

What behavioral change is expected in the market in the next 5-10 years?

Currently, there are approximately one million members of the “Gen Z” generation in the Baltics, which are already largely involved in the banking market. In a short time they make up 15% of the active population. This is already changing the financial sector, as the industry has to think about how to serve the first generation, born with a smartphone and who get all their daily information mostly through different apps . In the near future, more and more people will expect to get most of the services they need on their smartphone.

People’s expectations from services in the financial sector are now starting to approach what we expect from the most popular content platforms. Netflix, Spotify and users of other popular apps are used to personalizing content based on the user’s interests and profile. This trend is slowly entering the financial sector as well. For example, we were among the first in the Baltics to introduce a next-generation artificial intelligence chatbot into the service. It currently solves about 70% of user queries. Soon this chatbot will also be available in the app to make the user journey easier to find information.

The next financial transformation is likely to involve a shift from traditional money to various forms of digital currency. It is expected that the digital euro will enter the market soon, so the importance of cryptocurrencies and different digital wallets could increase. An increasing proportion of purchases will be based on the “buy now, pay later” principle. Klix (Consolidate created under the auspices of a universal online payment acceptance solution) data shows that people more often want to pay for purchases in installments, and that the range of different types of “subscription” services will increase in the future as well.

How have people’s attitudes towards money changed in general? Can it be said that a generation has grown up that has not even seen trivial money?

This cannot be said, as young people’s first contact is still with physical money, not digital money. At this moment when young people start to manage money digitally, the whole feeling changes – the feeling of reality disappears a little, because you can always ask your parents for money and transfer money with him your smartphone. The desire to use money among young people starts to decrease around the age of 16, when payment functions are available on smartphones, such as ApplePay and GooglePay.

Do people trust the bank and do they have peace of mind that their money is safe in the bank, even if it is digital and only numbers are visible?

The safety feature is more relevant to people of the older generation, who are less tech savvy. Young people have more trust in today’s technologies that are popular in their view, that is, if a friend or loved one shares good knowledge about a product, they trust it. The older generations used to get knowledge and information from more experienced people, while young people do it from peers, friends and acquaintances.

If we compare internet banking and banking apps in general – how much are functions duplicated and can you do the same thing in the app and in internet banking?

Since these are digital channels, there is of course a duplication of information. The question is about the user’s usage habits – who finds it more convenient every day. It is possible to make payments and receive credit services on both websites. Analyzing Citadele’s data, we see that customers are happy to use the mobile app directly to make transfers and use different products.

What is Consolidate the new app? What has changed compared to the previous one?

The app needed updating to improve its functionality and usability. Our goal was to understand the habits and expectations of the younger generation as they consume content every day through the latest entertainment and social networking apps. Consolidate The mobile app is built on the principle of an online e-shop, where everyday products and services are available in one place and can be accessed with the help of a few clicks, without visiting a third-party platform a party This is the new norm – to receive a service digitally, one does not want to move between several platforms, but to manage the process and receive the service in one place.

What was never offered Consolidate the new app?

For the first time, app personalization will be provided, allowing the customer to choose which toolbars and features are available on the front page. This will help systematize and manage the application to avoid situations where you have to find a function that you often need in your daily life with several clicks. The app also has a stories section, which, like social networks, provides information about new offers and reminds you of important notifications. In the future, personalized advertising offers based on customer habits and interests will play a more important role in financial services apps. This will be relevant to the new generation of customers, who do not want to spend time looking for information themselves, but expect companies to be able to deal with their relevant products on their own.