Sirpa Nordlund, Executive Director, Mobey Forum catches up with Jordi Guaus, Head of Digital Marketing, CaixaBank, to get the inside track on imaginBank, its new mobile-only proposition.
I don’t need an elaborate banking service with branches, passbooks, letters in the post, an annual financial review and a bank manager that knows my name. Interest? I don’t save enough to accrue any, or I put my money somewhere else. All I really want is an account that will accept my deposits, hold my money and release it when I want to make a payment or transfer. I don’t want to wait for transactions to appear on my balance or for transfers to clear. An automatic payment function would be useful, so I can settle my bills easily. But most important of all, I want to do everything, repeat everything, on my phone. Some exclusive offers and deals would be good too. That’s it.
Welcome to the mindset of a growing demographic of today’s banking customers. All are committed device users – not power users or early adopters – just people that manage their lives using phones and tablets. Many are young – Millennials – but not all. Most have modest incomes and are determined to live debt-free and unconstrained by financial commitments.
As a customer segment, this group holds little traditional revenue potential for a bank. Instead of writing it off, however, Spain’s CaixaBank has embraced it wholeheartedly, launching an entirely new mobile-only proposition: imaginBank.
I caught up with Jordi Guaus, CaixaBank’s Head of Digital Marketing and Chairman of Mobey Forum, to understand the thinking behind imaginBank, which launched earlier this year.
“Customer behaviour is changing,” says Guaus. “We knew this segment was growing and that if we didn’t offer a banking service that would address these changes, then another bank would. We also know that once a customer switches banks, it is very difficult to win them back. Many of the customers in this group are young and in the early stages of their careers, so instead of focusing on immediate revenues, we are taking a longer term view. At least some of today’s imaginBank customers are going to need more sophisticated services in the future, at which point CaixaBank will be there to help.”
When asked about the development of imaginBank, Guaus is quick to praise CaixaBank’s forward thinking culture. “It is not easy to gain internal support when you’re developing a completely new proposal focused on simple services, even at CaixaBank, which is known for innovation and its willingness to buck the trend.
“The biggest hurdle we faced was to accept that the digitalisation of financial services is going to change everything, and that we need to change as a result. There are customers that feel they don’t need branches, for example; so for them a digital banking platform is more than capable of delivering day-to-day banking services. On the plus side, however, this also means that we can take out many traditional costs of delivering services. As it is mobile-only, imaginBank is a far leaner proposition; we don’t need to make the same margins for it to be commercially viable. In many ways imaginBank is one big experiment – we’re using it as a way of testing different services and models which we might someday adopt at CaixaBank. For us it’s a win-win; it brings new customers with us and enables us to trial new ways of operating.”
Guaus understands that mobile adoption hasn’t been the only factor driving change in the way customers approach their finances. “The past decade, with the housing crash, poor economic conditions and high levels of unemployment in Spain have definitely had an impact,” he says. “Many customers, especially those that are younger, are looking for a different way of doing banking. imaginBank is designed to deliver a banking experience that this customer set wants: a no cost, mobile bank that delivers simple services in an immediate and totally transparent manner. Even now when the Spanish economic situation is improving, imaginBank’s value proposition fits perfectly with those that are focused on day-to-day financial services and a great user experience.”
Guaus is enthusiastic about the additional value added services that the bank can also offer using the mobile-only model. “We are offering great discounts for other digital services that are also targeting this segment, like Ticketmaster and wauki.tv,” he says. “We’re also able to give customers more control over their finances with tools delivered via the imaginBank app. They can view their account securely from within Facebook, for example, draw money from an ATM without a card and send money to friends using only an email address or mobile number. We are very satisfied with the results: we have attracted 70,000 active customers during the first six months of imaginBank.”
There is little doubt that today’s disruptive digital market is challenging banks to think differently, but Guaus is confident that banks are in a strong position to protect themselves from disintermediation. “Sure, there are more new market entrants offering digital services, but it is the banks that still have the trust of their customers. We continue to work in a closely regulated environment and have a long history of defending customer confidentiality. People won’t put money into an institution they don’t trust, so as long as banks can adjust to the changing requirements of their customers, I think their place in the future of financial services is secure.”
imaginBank is the kind host of Mobey Day, Mobey Forum’s flagship fintech conference taking place at Barcelona’s CosmoCaixa on 5-6th October. For more information, please consult www.mobeyday.com
Commerzbank to lose 1.7 million clients by 2024 – Welt am Sonntag
FRANKFURT (Reuters) – Commerzbank expects to lose 1.7 million customers by 2024 as part of its current restructuring, resulting in a 300 million euro ($364 million) hit to revenue, weekly Welt am Sonntag reported, citing sources close to the bank.
The lender hopes to offset the drop by growing its loan business as well as by expanding its business with corporate and very wealthy clients, the report said, without giving any further detail of why customer numbers were expected to decline.
It also didn’t say if any specific category of client was most likely to be lost.
Commerzbank declined to comment.
According to the bank’s website it serves around 11.6 million private and small-business customers in Germany and more than 70,000 corporate and other institutional clients worldwide, so the reported loss of customers would suggest a drop of around 15%.
The bank earlier this month reported a $3.3 billion fourth-quarter loss, sinking further into the red as it continued a major restructuring and dealt with the fallout of the COVID-19 pandemic.
The bank’s restructuring plan involves cutting 10,000 jobs and closing hundreds of branches in the hope it can remain independent.
($1 = 0.8253 euros)
(Reporting by Christoph Steitz and Tom Sims; Editing by David Holmes)
Citigroup considering divestiture of some foreign consumer units – Bloomberg Law
(Reuters) – Citigroup Inc is considering divesting some international consumer units, Bloomberg Law reported on Friday, citing people familiar with the matter.
The discussions are around divesting units across retail banking in the Asia-Pacific region, the report https://bit.ly/3pD57WP said.
“As our incoming CEO Jane Fraser said in January, we are undertaking a dispassionate and thorough review of our strategy,” a Citigroup spokesperson told Reuters.
“Many different options are being considered and we will take the right amount of time before making any decisions.”
The move, part of Fraser’s attempt to simplify the bank, can see units in South Korea, Thailand, the Philippines and Australia being divested, the Bloomberg report said.
However, no decision has been made, according to the report.
Revenue from Citi’s consumer banking business in Asia declined 15% to $1.55 billion in the fourth quarter of 2020.
The divestitures could be spaced out over time or the bank could end up keeping all of its existing units, the Bloomberg report said.
The firm is also reviewing consumer operations in Mexico, though a sale there is less likely, the report said, citing one of the people.
Last month, New York-based Citigroup beat profit estimates but issued a gloomy forecast for expenses. Finance head Mark Mason said the lender’s expenses could rise in 2021 in the range of 2% to 3%, weighing on its operating margins. (https://reut.rs/2ZwXRB1)
(Reporting by Niket Nishant in Bengaluru; Editing by Maju Samuel)
European shares end higher on strong earnings, positive data
By Sagarika Jaisinghani and Ambar Warrick
(Reuters) – Euro zone shares rose on Friday, marking a third week of gains, as data showed factory activity in February jumped to a three-year high, while upbeat quarterly earnings boosted confidence in a broader economic recovery.
The euro zone index was up 0.9%, with strong earnings from companies such as Acciona and Hermes brewing some optimism over an eventual economic recovery.
The pan-European STOXX 600 index rose 0.5%, as regional factory activity was seen reaching a three-year high on strong demand for manufactured goods at home and overseas.
Another reading showed the euro zone’s current account surplus widened in December on a rise in trade surplus and a narrower deficit in secondary income.
Still, the STOXX 600 marked small gains for the week, having dropped for the past three sessions as investor concern grew over rising inflation and a rocky COVID-19 vaccine rollout.
But basic resources stocks outpaced their peers this week with a 7% jump, as improving industrial activity across the globe drove up commodity prices.
“This week’s slightly adverse price action has all the hallmarks of a loss of momentum temporarily and not a structural turn,” said Jeffrey Halley, senior market analyst at OANDA.
“There is not a major central bank in the world thinking about taking their foot off the monetary spigot, except perhaps China. (Markets) will remain awash in zero percent central bank money through all of 2021 (and) a lot of that will head to the equity market.”
Minutes of the European Central Bank’s January meeting, released on Thursday, showed policymakers expressed fresh concerns over the euro’s strength but appeared relaxed over the recent rise in government bond yields.
The bank’s relaxed stance was justified by the euro zone economy requiring continued monetary and fiscal support, as evidenced by a contraction in the bloc’s dominant services industry in February.
The STOXX 600 has rebounded more than 50% since crashing to multi-year lows in March 2020, with hopes of a global economic rebound this year sparking demand for sectors such as energy, mining, banks and industrial goods.
London’s FTSE 100 lagged regional bourses on Friday due to a slump in January retail sales and as the pound jumped to its highest against the dollar in nearly three years. [.L] [GBP/]
French carmaker Renault tumbled more than 4% after posting a record annual loss of 8 billion euros ($9.68 billion), while food group Danone and German insurer Allianz rose following upbeat trading forecasts.
(Reporting by Sagarika Jaisinghani in Bengaluru; Editing by Sriraj Kalluvila and Shailesh Kuber)
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