Versatility in financial services through technology
The case of Octopus by Heritage bank
Players in the financial services sector have increasingly seen the need to converge the customer’s needs into one place. As such, there has been a proliferation of products with the capability of offering several services at the same time. A typical example is the ATM and the smart card, which started with the capability to make simple transactions such as balance checks and withdrawals, and this was what they could mostly do in the beginning.
Today, with the continuous evolution of technology and increasing understanding of the customer’s needs, ATMs have been upgraded with the capacity to handle inter-bank transfers, air time purchase, deposits, merchant transactions, bills payment and so on.
So it is with most technologies that have been introduced in the financial services sphere. Artificial Intelligence-based products like chatbots started with solving customer issues but were quickly upgraded to handle simple banking transactions, open bank accounts and resolve customer issues among other things. The same can be observed for digital banks that have been increasing in their capability to handle more tasks. Now it is common to do banking transactions, buy airtime, pay bills, buy movie tickets, update toll gate accounts, pay for TV subscriptions, make group collections and many more. All of these give versatility to the customer, converging the customer’s needs in one place.
The latest of this brings artificial intelligence technology, digital banking, and social platform into one place. That is the innovative thinking behind Octopus, the digital bank introduced by Heritage Bank. It provides a strong opportunity for the consumer to build their own digital world and perform digital transactions the way they want it. So in a nutshell, the consumer’s daily activities like banking, cinemas, stock markets, social interactions, churches, universities, meetings, restaurants, utility – DSTV, PHCN – fans clubs, associations and any other communities have been digitized and consolidated; embedded in the same social media platforms where they are such as Facebook and Telegram, with access via apps and multiple devices according to the consumer’s choice.
Beyond converging the customer’s needs in one place, Octopus also allows the customer to start and complete transactions or activities across several devices. So it is now possible to see a single transaction commence on a platform like a chatbot, continue on another platform like an app and conclude on the web seamlessly and fluidly. This is a unique feature on Octopus, which the promoters call omnichannel. The multiplicity of the platform just makes its name apt, alluding to the many tentacles of the octopus and the metaphorical attribution of the organism to handle several tasks at the same time because of its tentacles.
The attendant benefits of Octopus to its users is therefore numerous, including keying into electronic payment systems, creating efficient collection systems, social integration, customer retention strategies, bills payment, virtual mobile top-up, funds transfer, balance inquiry, movie show time and news, engaging customers, sending messages, advertisements, auto reminders for due payments, sell products and services, automatic product recommendation, create any kind of community and engage freely.
Another angle of the digital bank’s versatility is the freedom of the customer to make any transaction using any bank of choice. So while most other digital bank models try to retain or direct the consumer to the mother bank, Octopus gives liberty to the consumer, allowing the user to utilize the platform regardless of the bank. It doesn’t have to be Heritage Bank. It thus has the capability to consolidate and connect all the customer’s bank accounts in one place, delivering ease of access to the customer. This is a smart move. History has shown that constrictive strategies often fail where liberty is given, so it will be interesting to see how the banks evolve into this mode in this very competitive environment.
Driven by the need to improve performance and gain market share in the face of intense competition, most banks have restructured their organisation, made their operations simplified through automation and tailored their products and services to attract customers. The need to continue innovating with new technologies or upgrade existing ones is apparent and the financial institutions understand this because beyond the rapidly advancing technology, there are also other considerations regarding globalization, consolidation, deregulation, the spate of fintech startups and customer adaptation.
Financial service operations have been upgraded internally using technology in areas like price optimization, loss forecasting, fraud detection and compliance monitoring among others. The main area of interest for the consumer, however, relates to services and products that help them have better experiences with their financial institutions and every innovative technology in the finance sector for the customer’s use aims to achieve this.
Technological innovation is built on identifying people’s problems and creating a solution that people can easily adapt to. This is a common trend that was noticed with most technology solutions consumers had to directly interact within the financial sector in Nigeria. The uptake is often a bit slow at the start, but at some point, it gains acceptance and usage quickly. Largely because it follows a simple buying principle: consumers see the product enough to become likable; friends have it and talk about it; then they feel they need it as well. The pathway may differ at times, but from the introduction of the Electronic Fund Transfer (ETF) to internet banking at home and in the office to the Automated Teller Machines (ATM) to Smart Cards to Point of Sales system (PoS) to mobile phone banking and computerized credit rating, this principle has played out to a large extent.
Today the uptake of innovative financial products tend to be taken up faster, as consumers get more used to digital technology and trust them better, even as the banks improve the performances of their technological solutions by solving the attendant glitches or hitches and upgrading their features as they continue to gain more insight on their customers. As banks continue to move towards the complete automation of their operations and services, more convergence of consumer needs and versatility of platforms is expected.