Balancing human and digital: Discovery Bank
Akash Dowra, Head of Client Insight at Discovery Bank in South Africa, provides valuable insights into the dynamic landscape of digital banking and the unique challenges faced by a digital-only bank in a market dominated by traditional brick-and-mortar incumbents.
Akash Dowra, Head of Client Insight at Discovery Bank South Africa, shares valuable insights into the challenges and strategies of operating a digital-only bank in a competitive market dominated by traditional brick-and-mortar incumbents, in an interview for the Qorus-Avanade report titled Balancing human and digital: Are banks losing touch with customers?
What are your roles and responsibilities in the bank?
As Head of Client Insight at Discovery Bank, I am responsible for customer acquisition, marketing, PR, and client insights.
What is your top customer challenge right now?
We’ve launched a digital-only bank in an already established, mature and highly competitive market, dominated by traditional brick-and-mortar incumbents. A customer-first approach and a differentiated product offering that clients believe in is key to any future success.
As a new bank we want to grow. Once clients join, it is critical for those clients to begin to use their banking product and to evolve into a primary banking relationship.
How do you decide the balance between human contact and digital interaction for your retail banking customer segments? Can you give an example where your approach has created a distinctive service? Do customers ever get lost in the process or experience lower levels of service?
Consumers are ready for digital banking, and in many ways the Covid-19 pandemic has accelerated this trend. Our research shows that most South African consumers (86%) are ready for digital banking as long as the banks provide easy-to-use, secure channels but also make human assistance available.
Mobile apps have completely removed the need to visit a bank branch. You can now download stamped bank statements, open an additional account, instantly create and transact with virtual bank cards, increase credit limits, invest in forex or shares, and fulfill many other processes typically requiring a branch visit – 24/7/365 on the Discovery Bank app.
When a client needs assistance, they expect to have the option of dealing with a human. Someone that understands their needs and can help them achieve their objectives. Discovery Bank launched Live Assist in 2021 – a remote support solution that offers clients branch-like support from the comfort of their home. Clients can call into our call center at any time, and break out into a live version of their banking app, where a trained bank expert remotely helps them navigate the app. Using the app’s built-in screen sharing technology, the agent uses a laser pointer to guide the client through the desired journey to fulfill the task required whilst all sensitive information is masked. Unlike with many other digital support solutions, with Live Assist we don’t just tell clients how to use our digital banking platform, but also train and empower them with hands-on practical help when they need it. This bionic approach is crucial for both customer satisfaction and cost management.
Do you think there are limits to what banks can do by focusing on digital only, or are the benefits much greater than the disadvantages?
Digital service offering has the benefit of not only offering a higher level of service and convenience to our clients, but at a much lower cost to the bank. We think the migration to digital is inevitable. Our banking app for example empowers clients to take control of their day-to-day banking needs in a way that could previously only be facilitated by a branch employee or private banking – for example in the generation of bank stamped statements, administration of cards, and adjustments of transaction and credit limits.
Discovery Bank’s Real Time Forex product was a dream just a few years back, yet now our clients can save, spend, and invest in alternate currencies in real time on their bank app with lower fees than offered by conventional forex providers. Clients get a superior product at lower cost compared to traditional cash or travelers cheques.
In the future, how will banks make the most of human engagement? Will such engagement come at an additional cost for the customer or even a premium price?
By offering a bionic model, banks can give clients the best of both worlds.
A centralized service center allows Discovery Bank to have servicing agents right next to the teams that developed the products. This ensures that agents are true experts in their field and provide real-time feedback to product development for future enhancements. This helps Discovery Bank manage the client experience far better than if there were 200 branches nationwide. Customers are also quick to catch on – our research shows that 60% of South African consumers don’t think there will be a need for bank branches in the next five years.
We are cost-efficient, having a dedicated team that helps our clients, allows us to create smaller, more effective teams, and manage workforce planning to deal with seasonality.
As we enter a recessionary period, banks will be keen to demonstrate greater understanding of and support for their customers. What initiatives are you taking to appear more human and empathetic? Or are you relying on more automated, contextual responses, based on algorithms and avatars?
A combination of human and digital initiatives can help support clients in tough economic conditions:
Human – When clients call us, they deal with highly trained individuals that are experts. This is especially important when clients are in distress. We have highly trained collections teams, that work closely with our clients to define payment terms and plans.
Digital – All Discovery Bank products have Vitality Money. A revolutionary shared-value program founded on established behavioral science principles that helps clients improve their financial wellness by:
• Automatically assessing their financial health and making it easy to understand;
• Providing access to market-leading financial education courses that are delivered digitally;
• Using advanced analytics and smart notifications that automatically create budgets for clients, provide proactive monitoring and automatic spend categorization, and then notify them when they are at risk of overspending in real-time;
• Incentivizing good financial habits with a wide range of retail, lifestyle, and travel rewards.
Are you developing any partner ecosystems and how are they integrated into the end-to-end customer process? What issues do you typically face? Can you demonstrate the benefits of adopting this approach?
To streamline the customer onboarding process, we integrate with a range of partners including the South African Department of Home Affairs, credit bureaus, other banks, and know-your-customer third-party providers to automate customer identification, address and income verification. This reduces the administrative burden for new clients, increases conversion rates, and reduces compliance risk.
As a digital bank, we collaborate with a wide range of local and international retail partners to deliver world-class products and services to our clients that satisfy their evolving needs. During the pandemic, we focused on promoting our integration with our healthy lifestyle discount partners to make the cost of groceries, essential personal care items, and fitness devices more affordable.
In 2022 as global borders reopened, Discovery Bank launched its own travel platform, giving clients unparalleled discounts on local and international flights, accommodation, and car hire. The platform gives clients access to both discounted and non-discounted partners, allowing them to book their full itinerary with the Bank. The offering has been hugely successful, with close to 90,000 flights booked over the December festive season.
Discovery Bank also partnered with a digital share trading platform to give clients access to low-cost share trading through the Discovery Bank app, unlocking access to markets in South Africa, Australia, Europe, and the United States.
The client experience is critical with any integration. We insist that Discovery Bank owns the front end that faces the client. Whether on the web or on our app, our clients interact with simple and intuitive interfaces that they are comfortable with. This is critical to ensure a smooth customer experience. Responsive web breakouts, for instance, while quick to implement, often result in a sub-optimal client experience.
Discovery Bank is the highest-rated bank app in South Africa and won the 2023 Best Digital Bank award from MyBroadband (a leading consumer news website in South Africa).
How do you collect and use customer data to improve the customer experience? Can you give an example?
Understanding client behaviors is critical. We use client data to help our clients get the best out of their banking. Helping them understand their finances in an easy and intuitive manner. With our client’s permission, we automatically retrieve and collate their financial information from various sources such as credit bureaus, online property valuations, and industry aggregators. We analyze this information across five key behaviors: having enough emergency savings, managing unsecured debt, having the right types of insurance, planning for retirement and paying off property. A simple score out of 80 000, helps clients understand how well they are doing, and access tips on how to improve.
We perform tedious tasks on their behalf. Creating a budget is difficult and administrative, and it is even more difficult to keep to it. Our sophisticated algorithms transform this into a one-tap process, and smart notifications help keep clients on track. We use the latest machine learning algorithms to help clients with their ‘next best action’. Personalized nudges and communications are provided during various stages of the customer lifecycle, helping them get more out of their banking experience.
What collaboration tools do you provide for your employees so they can work more effectively on improving customer service?
All servicing information is logged on databases that are analyzed regularly to identify trends that are then used as inputs into the product development cycle, or to update training. Product information is stored in centralized databases, including recommended answers for common questions. These systems are regularly updated, and available to all employees with Discovery Bank.
What issues do you face in adopting technology to manage customer interaction? How have you managed the need for legacy modernization, for example?
As a new digital bank, Discovery Bank is built on the latest state-of-the-art banking infrastructure. This is a significant benefit, as there are no legacy systems. New architecture combined with a highly skilled development team allows the Bank to conceptualize and roll out new features and products in a short space of time.
How are you applying AI and analytics to generate better customer engagement?
AI and analytics are critical in driving engagement. Discovery Bank has built a central data lake that collates all our client information. For example: customer behavior is an integral input into the smart notifications systems that defines a client’s next best action and is also used for fraud prevention and detection.
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