A 100% Digital Bank: Using Real-time Data to Enable a New Digital Banking Experience
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This document discusses Alex Bank, a 100% digital bank that uses real-time data to enable a new digital banking experience. It outlines how Alex Bank has achieved rapid growth through its niche focus and proprietary technology that enables straight-through processing. The benefits of Alex Bank's real-time digital banking model include fast and simple customer experiences with applications approved in hours. However, the reality is increased expectations around data security, fraud prevention and maintaining regulatory compliance when dealing with high volumes of real-time customer data across multiple channels.
A 100% Digital Bank: Using Real-time Data to Enable a New Digital Banking Experience
- 1. A 100% Digital Bank: Using Real-time Data to Enable a New Digital Banking Experience June 2023 John Heaton – Chief Technology Officer
- 3. 3 Data Driven Who is Alex.Bank? Putting a human name and face to banking, we’re on a mission to humanise banking, give Australians a fair go, and show them a bit of flexibility when they need it most. Alex Bank is a 100% digital bank, purpose- built from the ground up by fusing deep banking experience with leading-edge technology design and investment, to enable straight-through processing. 100% Digital Bank Enduring competitive advantages in Alex Bank’s current product offering are enabling rapid penetration into target markets with massive TAM. Alex Bank also has a well developed product and segment pipeline. Clear Growth Path Using Alex Intelligence™️ – proprietary technology that enables straight through processing – delivering best-in-class customer experience, leading CTI ratio and ability to scale. Straight Through Processing A strategic, revenue-led market entry in segments not targeted by traditional banks, alongside a technology platform and low- cost business model enabling highly- competitively product pricing, has delivered strong loan and revenue growth from the outset. Niche Focus
- 4. 4 Data Driven 2018 2019 2020 2021 2022 In just 5 years, we’ve achieved many milestones… 2023 Received an Australian Credit Licence, December 2018 Applied for Restricted ADI (R- ADI) with APRA, August 2019 Launched first iteration of the Personal Loan, supported by Alex Intelligence ™ Alex Bank received its Restricted banking authority (R-ADI). Personal lending portfolio grown to $8m, July 2021 Introduction of the Broker channel with a pilot group Expanded Broker channel strategy to the major Broker Aggregator groups Launch of Term Deposit product, and Secured Personal Loan pilot Founded by Simon Beitz and Craig Fenwick, June 2018 Named one of Australia’s Fastest growing companies Settled $50m in Personal Loans Receipt of full Authorised Deposit Taking Institution licence. Core banking system in place and in direct market with an Unsecured Personal Loan, August 2020
- 5. 5 Data Driven Simplexity Quicker, faster, better. The Alex Factor The hacks you’re looking for. A Fairer Go! We want what’s right for you and your customers. FAST SIMPLE FAIR A Genuine Interest Your needs are our business. HUMAN Our brand values underpin everything we do at Alex.Bank, leading to both industry and peer recognition
- 7. 7 Data Driven Digitally Enabled Banking – Process centric design Gather documents Complete Application Response in 60s Submit / Upload Documents Assess Application Approval & Contracts Disbursement Customer Outcome
- 8. 8 Data Driven Real Time Data Driven Banking Hi, my name is Billy and I would like to borrow some money to go on holiday. I agree to let you collect some information to see if how much money I can borrow. Sure Alex, here is a selfie, cute hey? Okay Thanks, sunshine here I come !! Thanks, Billy we have verified your identity. You have a great credit score, well done. The product seems a good fit for you. Can we ensure you are who you say you are? Can we check you that you will not extend yourself too far by borrowing some money for your holiday? All good, go enjoy your holiday and were here to help if needed.
- 9. 03 The benefits of real-time banking
- 10. 10 Data Driven When things go well 1. Customer 2. Staff 3. Partner 4. Regulator 5. Shareholder FAST SIMPLE FAIR HUMAN Banking is complex and boring - but at Alex Bank we make it simple with easy-to-understand products, uncomplicated forms, and a 100% paperless process for our personal loans. Our banking platform and processes leverage cutting-edge technologies. That means snappy applications, fast approvals, and a seamless digital experience. We're about easy to understand terms and fair market leading rates with no upfront or ongoing fees on our lending or deposit products. Don't be fooled by our fast technology and digital processes, we've got a whole team of real humans based in Brisbane and Sydney, working to provide you faster, fairer and more flexible banking solutions.
- 11. 11 Data Driven Reality of real time data & digital 1. Customer 2. Staff 3. Partner 4. Regulator 5. Shareholder Perception and reality misalignment Digital expectations
- 12. 12 Data Driven Reality of real time data & digital 1. Customer 2. Staff 3. Partner 4. Regulator 5. Shareholder • 3 to 5-minute application process • Customer Experience fully digital from application through to self service • + – 100 customer entered data points collected real time • > 1000 data points automatically collected / derived in real time • Instantaneous decision if the product is not a suitable fit or appropriate for the customer • Few hours to funds in bank account upon customer acceptance
- 13. 13 Data Driven Reality of real time data & digital 1. Customer 2. Staff 3. Partner 4. Regulator 5. Shareholder Australian Bureau of Statistics - Personal Fraud 20/21 ACSC Annual Cyber Threat Report, July 2021 to June 2022 • Cyber Security Incidents, Fraud and Data Breaches pose a significant threat to customers and organisations. • Data needs to include both event, security and fraud information to be able to consistently validate and verify information as it is progresses through the lifecycle. • Log information needs to be integrated into security operations center to protect • Unauthorised access / change to information • Unauthorised change • Immutable data provides security and opportunity to compare and contrast
- 14. 14 Data Driven Multi product, multi-channel single status 1. Customer 2. Staff 3. Partner 4. Regulator 5. Shareholder Brokers Direct APIs Affiliates
- 15. 15 Data Driven Channel Partners 1. Customer 2. Staff 3. Partner 4. Regulator 5. Shareholder Partners • Real-time updates to keep customers informed • Embedded finance • Optimal customer experience and journey • Embedded finance • Transparent Lending policies • Deep integration into partner systems through APIs Banking is boring and customers prefer not to have to switch to separate processes to apply for financial products to meet needs.
- 16. 16 Data Driven Governance and Risk 1. Customer 2. Staff 3. Partner 4. Regulator 5. Shareholder • Real time security events • Security visibility across • Business process • Customer • Channel Partners • Service Providers • Executives • Mapping of events to business transactions • Immutable and auditable providing transparency of business transactions and decisions • Codification of policies and standards into the data quality, schema and rules.
- 17. 17 Data Driven Metrics, metrics, metrics 1. Customer 2. Staff 3. Partner 4. Regulator 5. Shareholder High Customer Satisfaction Score 4.7/5 TrustScore Increased Margin Lower operating costs Return on equity Response to competition
Editor's Notes
- #8: Applicant has a need Banks and organisations consist of many different complex processes. Processes are designed around the bank requirements to determine the suitability and ability of the customer to repay the loan. Processes require a significant amount of information to be able to pass through the different statuses (controls) which have been put in place to determine the suitability of customer (risk profile) for the product. Customers and staff provide the connectivity / integration between processes and systems. A paper process which has been digitised, operated, assessed and progressed by staff.
- #9: Real time data streaming allows the customer journey to be transformed into more of a conversation with real time feedback. Information is collected and consolidated real time from multiple sources. The customer involvement is changed from having to supply all information to only having to supply critical information and then providing consent to collect additional information which is required. Uploads of documents and categorisation of information is automated and standardised across products.
- #12: Access to data and insights provides transparency and pricing for risk and the individual circumstances. The product can be tailored and personalised to the individual. Perception and reality are often not aligned 100%. Digital empathy and transparency needs to be incorporated into design to educate and inform when presenting outcomes which do not meet expectation. Expectations of customers and individuals: being digital and with real time data that immediately there is the depth and breadth in products. Iterative rollout of capabilities and features which real time data driven cloud based technologies enable often fall short of expectations in the short term until the depth and breadth is delivered.
- #13: Real time data with a digital experience is a new paradigm. Customers have been trained to think banking is complex and time consuming. When it is not then customers start to suspect that there is another issues, i.e. not a valid process, we have not done a thorough validation. Customers want the speed but are weary of quick outcomes which do not align with expectations.
- #14: Real time data with a digital experience is a new paradigm. Customers have been trained to think banking is complex and time consuming. When it is not then customers start to suspect that there is another issues, i.e. not a valid process, we have not done a thorough validation. Customers want the speed but are
- #15: Multiple channels are integrated real time for staff to gain a complete overview of applications across all products all channels. Staff focussed on assessment and customer support and not integrating and context switching between systems. Processes are operated and executed by the use of real time data and technology. Staff provide an oversight and value add role. Journeys started on any channel are visible to staff to assist customers. Real time updates to information ensures continuity when switching between team members. Extended teams have access to the same information for example risk and treasury. Real time data can be extended to real time reporting providing ability to react and manage channels and business. Responding to changes in the environment within hrs not days, weeks or months. With real time information the ability to detect and respond to