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How UOB leverages tech partners for its digital bank

It’s not enough to assemble a new proposition around clever fintechs, says Dennis Khoo.



Dennis Khoo, UOB

Big banks are busy building up digital channels. Where does this leave smaller banks that don’t have the same kind of budget? Singapore’s United Overseas Bank (UOB) is relying on partnerships. It has recently launched a digital bank in Thailand, in what may be an emerging pattern.

Classic measurements of a bank’s success may not apply to digital-only firms – or, at any rate, are not being applied today.

Dennis Khoo, head of group retail digital at UOB, cites a number of factors he believes represent momentum for TMRW, as the Thai-based business is named, in its first two weeks of operation

  • 11 million music video views
  • 2 million likes on social media
  • 500 visits to the website

These are not the usual milestones for a financial institution. No figures on deposits, or fee income, or net interest margin.

This app is just for you

Khoo declined to say how many customers TMRW has. DigFin checked Google Play, as this represents one gateway, and found the bank had attracted about 100,000 downloads.

TMRW is a mobile-only bank aimed at millennials in Southeast Asia. Its value proposition is in its customer experience, a data-driven engagement that Khoo likens to Netflix. Unlike a traditional bank’s website, which is usually a static page with every product offering on tap, TMRW’s app offers a personalized menu that skips products that its algorithms deem irrelevant.

The learning curve becomes our advantage against copycats

Dennis Khoo, UOB

Over time, machine-learning tools will adapt to each person’s behavior in order to prioritize the kind of information or offers it puts at the top of the page.

For example, the app can learn which account a user would prefer to make certain kinds of payments, based on transaction records. The app will display the most likely account up top.

The service will alert customers if they’re in danger of running short of cash and risking an overdraft. Similarly, it can alert users for expiring subscriptions and services – which users can then cancel or renew.

Tracking fintechs

Khoo said: “Engagement is using data to learn who you are, predict your needs, and help you to make the right financial decision.” And in what the bank believes is a simple manner.

This is all straight out of the fintech playbook. Some fintechs are creating their own businesses this way (e.g. Revolut, Gini). So are big banks.

For mid-tier players like UOB, it has to rely even more on creating a network of partners – and try to grab market share fast.

“We are not the size of J.P. Morgan,” Khoo said. “We don’t have tens of thousands of software engineers. Our strategy is to create an open system that we can plug a lot of fintechs into.”

Indeed, UOB is leaving all of TMRW’s customer-facing services to third parties, rather than build these on top of its platform.

“When tech companies create a software product, they would need to have a roadmap and to talk with customers all the time,” Khoo said. “Banks, when building a product internally, is usually a project focusing on a specific customer need.”

A tech company focused on creating a product rather than just doing a project can do better than banks, Khoo concluded.

For the past year, UOB has been tracking thousands of fintech companies with customer-facing solutions. It distilled that down to five, and is currently running pilots with some of them.

Those that make the grade will be deployed regionally into TMRW, which will launch in a second market by the end of this year. It aims to build a customer base of 3-5 million in the next five years.

Combining solutions

The first version of TMRW that has debuted in February is powered by two fintechs. Meniga is an Iceland-based company that consolidates and categorises customer data; Personnetics is an Israeli company that uses artificial intelligence to personalize recommendations based on user transaction data.

The power of building a multi-fintech offer is in combining these services. TMRW is using Meniga to track data, and Personnetics to make sense of it.

“We are the first bank that takes Meniga’s categorizing power, and then feed the data to Personnetics,”said Khoo.

Khoo’s team found Personnetics in a trade show in HK in 2017. In July 2018, the bank became a minor stake-holder of the fintech.

“We were fortunate to be able to discover them early. By making a small investment, we would have access to top managements and express our needs, they could then take into their product road map,”said Khoo.

Khoo declined to name use cases for PoCs other than the need for chatbots, to communicate better with customers. But last year, UOB set up a joint venture with China’s Pintec. The J.V., called, creates credit profiles based on users’ social-media activities.

The risk of building a bank built around multiple fintechs is that rivals can assemble a similar offering. There’s no proprietary UOB ingredient, other than how it packages these fintechs. In some cases, TMRW will be competing with fintechs head-on.

Khoo acknowledges this but says the important thing is to experiment with what engages customers, by segment, by offer, and by advice or research tips. But this has to be done in volume, and quickly. “The learning curve becomes our advantage against copycats,” he said. “It creates a barrier.”

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