“We want our customers to achieve more of what they want, and we want them to achieve it faster. That means going beyond banking. That’s why we are a lifestyle-digital bank,” said Jayash Patel, the head of Liv., the first digital-only bank in the UAE that is stealing the spotlight at a time when even the more traditional industries such as banking are welcoming innovation and digital transformation.
Jayash, or “Jay” as we heard people call him, spoke exclusively to AMEinfo about the thought process behind a digital-only bank; what helps it stand out; how it has transformed the banking business model; and the challenges it is turning into opportunities.
There’s nothing really new to the insight that consumer behaviors are changing, quickly moving towards digital in a variety of patterns. What is new, however, is the way some industries – and most importantly some industry players – adapt to this shifting reality. Banking is no exception, with the emergence of new digital retail banking concepts such as Liv., operated and managed by the Emirates NBD Group.
The time that consumers, millennials in particular, are increasingly spending on their mobiles was at the root of Liv.’s creation. “We thought we needed to build a proposition that takes advantage of the fact that consumers are spending time on this channel, and of all the technological innovation that’s happening, to present a better proposition to our customers. That was the genesis of Liv. – to build a proposition for millennials: one they relate to, one they love, and one they use,” says Jayash Patel, Head of Liv.
Beyond financial transactions
Launched in 2017, Liv. is aligned with the UAE Vision 2021’s strategic objectives of going paperless and building an innovation-based economy. However, it was not only conceived as a mobile-only, paper-free bank, but also as a first-of-its-kind banking-meets-lifestyle experience.
First off, Liv. created a path for consumers to open an account at any time, 24/7, without having to sign any documents, merely requiring them to download the bank’s mobile application and fill in their details digitally. The application scans a valid ID and opens the account once all the details are digitally verified. This process can be completed anywhere, without interaction with another human, within a couple of minutes.
Secondly, a high level of personalization and extreme attention paid to digitally enhancing customers’ lifestyles, are key to creating the unique experience that millennials crave in all aspects of their lives.
“Customers have more preferences, so this cookie-cutter approach of me building and making the masses happy is going away. I need to make each customer happy; and when you start that, you realize that there are some customers that are happier with this, and there are some customers who are happier with something else,” Patel says. He goes on to explain that “we started looking at more lifestyle-oriented behavior. I went around a few countries and met about 1,000 potential customers. Interestingly, when we asked simple questions – How much do you spend on food a month? How much do you save a month? – many were not able to answer. When you have goals for which you need money, how often do you achieve them in the timeline you want? Many people struggle with some of these elements. At Liv., we’re actually addressing all these problems.”
Indeed, the bank devised innovative solutions to improve the way customers handle their money – and consequently, their whole way of life. “We want our customers to achieve more of what they want, and we want them to achieve it faster. That means going beyond banking. We want to know what our customers do; what they like; what their ambitions are; and we want to help them get there. That could mean simple things like helping you save for the next trip you want; getting you into more events you love; helping you enjoy more of the culinary experiences you want,” Patel says.
From debit card transactions sorted by category (food, travel, motoring) and showing how much has been spent in each for the past few months, to digital savings models based on changing consumer behaviors, Liv. keeps exploring new avenues. For example, “one of the big challenges [our customers] had is splitting a bill when going out for dinner. So, we developed a solution for that. How many people do you have? Five? Split it evenly. The other person only has to accept an invite and the money is sent. We started developing digital solutions that work with their lifestyle rather than developing solutions that are traditionally banking-centric,” Patel explains.
In 2018, celebrating its first year in business, Liv. introduced its much-touted Goal accounts. This new type of feature runs on a set of algorithms that helps people save money without having to change their spending habits. It first lets people identify what they hope to save money for, the “goal” – anything from saving for the future; plans to travel or buy something; saving to pay off a debt; or something more personal like gifting a loved one. The consumers can then choose the way they want their money to be saved; for instance, a certain amount of money can be put aside every time they swipe their card, or they can save money if they spend less than a certain amount per day or week. Once these parameters are set up, the bots run automatically to save money through the year. “It’s incredible how much you save without actually switching your spending habits. And I’ll give you a testament to that: people who open a goal account. Within the first three months, a majority opens a second and a third goal account. Because now they can say ‘My lifestyle hasn’t changed much, but I’m also saving’,” Patel says.
No innovation goes without its share of obstacles. While cutting-edge digital retail banks have overcome a majority of technological, cultural, and hierarchical challenges in their organizations and workflows, they still share some of the difficulties that their traditional peers face.
“All players face the same challenge, whether you are traditional or digital. A customer can open an account, but they still have to use it. And as we go more digital, it becomes very much like e-commerce. You signed up for one of the e-commerce players; they want you to come back. And they have figured out tons of ways to engage you,” Patel says.
Digital banks have taken various proactive measures to attempt dealing with this challenge. Liv., for example, allows customers to top up their account using a debit card from any of the UAE banks. The idea is that once the money is transferred to an account, consumers will start engaging with that account. Solutions such as this, combined with an increased digital marketing push, tend to draw customers in.
“We spend a significant time working with partners to create value for our customers. We have amazing offers on Careem rides; we bring you food content. We’re constantly doing things to keep you engaged. If I look at the metrics, the percentage of customers active on Liv. is probably one of the highest globally. It’s not easy, but there’s a lot of ways to get around it to keep customers active and engaged,” Jayash Patel concludes.