The head of digital and user experience at TMB Bank, Robert Anghel, discusses how the bank is focusing on consumers’ growing appetite for digital services to lead in the market, the impact of COVID and its target technology model after the merger with TBank
Robert Anghel, head of digital and user experience at TMB Bank, joined in 2019 after spending eight years in ING Bank Romania to develop the Dutch bank’s digital platform ING Bazar. He then focused on mobile payments and the launch of the ING Pay service.
ING Group is the biggest shareholder in TMB Bank with a 30% stake and Anghel was promoted to lead the Thai bank’s digital strategy and consolidate its presence in the market.
He is responsible for the bank’s mobile banking service that has seen transaction volume growth of over 20% in the last couple of years. TMB Touch, its mobile banking app, has over 2.5 million users of which over 70% are active.
It is one of six domestic banks involved in the pilot use of biometric and blockchain technology through the National Digital Identification (NDID) platform under Bank of Thailand to digitally verify customer identity for the opening of savings accounts.
At the end of 2019, TMB Bank, then the seventh largest commercial bank in Thailand with the reputation of being a digital innovator, completed a THB 156 billion ($5.1 billion) merger with leading auto loan provider, Thanachart Bank (TBank).
The merger more than doubled the combined bank’s total assets to THB 1.9 trillion ($61.7 billion) and moved it up a notch to become the sixth largest in the country. It enlarged its customer base to 10 million, its branch network to about 920, and the total number of employees to about 19,000.
ING Group retains its majority shareholding at 21.3% with the other major shareholders such as parent company of TB Bank, Thanachart Capital, the Thai ministry of finance and Canada’s Scotiabank holding 20.4%, 18.4% and 5.6% of shares respectively, while minority shareholders account for 34.3%.
The following is the edited transcript of the interview
Foo Boon Ping (FBP): You were in ING Romania before you joined TMB Bank last year. Tell us what you did that and how did that experience affect you current role?
Robert Anghel (RA): I have always been passionate about delivering customer experience through digital services. I was responsible for the digital platforms with a very deep focus on mobile payments. Mobile payments in Europe is about tokenisation. Services like Samsung Pay, Apple Pay, ING Pay are focused on tokenisation of the card on the device. In Thailand and Asia, mobile payment is mainly about QR codes.
Leveraging increased appetite and usage of digital services
Asia and Thailand are ready for digital and mobile experiences. Most of Thailand is covered by 3G, 4G and is going to 5G technology. Thailand’s broadband speed is actually fourth in the world. The penetration of digital services is there. Customer appetite for digital and mobile banking services is very high. Research from Hootsuite shows 65% of Thais are using mobile banking or mobile wallet. This is the highest adoption of these services in the world. Thais are leaders in the world for mobile banking. The level of the market is supported by very heavy investment in mobile banking application. This is embraced by our customers. In the past months, more than 1.8 million customers had logged in to the mobile application with 55 million logins. Our customers use our app every day. This is very intensive engagement that we have via the mobile channel with customers, which puts us in a position to be proud of.
TMB Bank is on a mission to be a closer, more proactive partner of our customers and help them reach their financial well-being. To inculcate four financial behaviours; disciplined spending, regular saving, solid protection (insurance) and, responsible borrowing. We need to be more active in talking with our customers about these behaviors, via digital channels and support our customers to embrace them.
The foundation for developing disciplined spending behaviour is to move more transactions to mobile payments. The average user of TMB Touch app does 17 payments per month via mobile payments, especially now during COVID. Cash usage is down. It is a very accelerated trend of adoption of digital transactions. And it is at the core to teach discipline. If you can track spending with features like push notifications, you can see and monitor your financial behaviour.
For regular saving, we have features like saving goals. A customer can define a goal. There are at least 10,000 people with 10,000 dreams that have become reality. For responsible lending and solid protection, we have features where customers can see their products or they can buy new products and new services via the digital channels. We need to be more proactive to anticipate what they want and show them their next best actions.
FBP: What is the vision for the bank in this journey of reinvention and with the merger with TBank?
RA: The core value of TMB is “Everything starts with the customer”. There are two main expectations that customers have of us. One is a constant evolution in products and services, and their mobile app. They want to have trust, that they are engaged with a partner who looks into the future and brings what is best into their apps. And the other is everything that we build needs to be the best. There must be constant progress and UX (user experience).
We are going through an organisational transformation on two dimensions. First, we are putting agile as a methodology within the organisation and all the implementations that we are doing in digital channels are based on the most rigorous agile methodology. Second, we are applying design thinking principles, to test with customers all the features that we are developing so that we know that everything that we put in the app is valuable and usable. And these are the key transformational changes that are coming through the organisation.
We are a full digital bank. All of our products are exposed to digital. Most of our customers use digital and the transactional behaviour is a very obvious proof that the bank is digital. We hope with the merger to enlarge the services and value to our customers.
FBP: Talk to us about the digital architecture of the combined bank.
RA: What we are targeting in terms of technology is open APIs, microservices, domain design driven applications, which enable us to connect with external parties, but also to automate seamlessly internal processes, in a scalable and reliable way. Scalable means that whenever we see a peak in traffic for a component of the application, eg. mutual funds, we can increase the size of infrastructure that is dedicated to that model, without impacting all the other components. Reliable means the same thing but on the opposite side. Whenever we have downtime for whatever services, that service can be isolated, and does not affect the reliability of the entire system.
Microservices and API technologies are at the core of the design. We are connecting to external parties to get information about products and to push transactions from our customers to these connected partners. More than 30% of the transactions are already done through the mobile banking app. We have in our ecosystem this concept of product-as-a-service developed together with our partners.
A customer can choose whatever best fits his needs and can do this remotely using his mobile app without any intervention from human operations in the process of inspecting, exploring and buying.
Targeting a single system for the combined bank
The target model is that we merge everything into a single system for each of the products. We have already gone through the exercise of understanding what is our target product shelf. We know the target systems we want. With dual systems that will complicate our lives both technically and with the relationship with customers. The end goal is to take away the complexity and not be impacted by the complexity of the design.
So indeed, it is a complex digital ecosystem that we are looking at. We need to imagine TMB Bank as a gateway to our digital experience. Most of the focus will be oriented towards TMB Touch at this point.
I would congratulate the regulator, BOT, that they have standardised the NDID, where the customer can be identified based on credentials stored in hosted banks, a framework developed on blockchain. It is interesting because it is one of the first real-life applications of blockchain in banking that has the potential of making a difference. I'm excited to participate in this exercise together with the other banks. We are in a technical sandbox and expect it to be live this year.
FBP: Has COVID accelerated any plan that you have in terms of rationalising your branch footprint?
RA: The movement of customers behavior during COVID towards digital was accelerated. People didn't need too much cash overall, and spent more on electronic channels with mobile apps and cards. Rationalising the branch footprint is something that is happening on a normal basis. We are in a happy spot. Most of our customers already embrace digital, most of our payments are done via digital. More than 98% are done digitally.
COVID: A test of agility and customer validation
FBP: Talk about increasing digitalisation and operational resilience to unforeseen event like COVID.
RA: These are the two components that have helped us to achieve this. Adaptability to the current state. One was solid business continuity plan, everything worked by the book. Whenever we needed any decision we knew who to call, when to call, what kind of decisions to be made in what kind of context. The continuity plan was well designed and useful. The organsation is flexible and people understand that this is a special situation.
For example, we received a request for loan installment delay by the authority. In two days we managed to digitalise the process. And there are more examples that our colleagues managed to understand and deliver what the customers needed even though the workforce is working remotely. You might not be together but you're able to implement changes because you are agile.
It is very important because the agile methodology is based on the autonomy of the squads that are building the app. This was one of the components that helped us succeed. The fact that we can mobilise. Digitalising the request for installment delay was done by three people over two days.
FBP: Digital reinvention projects are fraught with risk, how do you manage the risk, failures and what experience can you share?
RA: There are two types of risks that we need to cater for. The IT and technical risks, eg. coding mistakes, that banks in general know how to manage. We have good policies put in place to cater for these risks. And there is a lot of tools and technology that cover these risks.
The other type of risks that we need to start paying more attention to is the risk of developing something that is not relevant. We need to make sure that whatever we invest in in terms of features that they are really valuable and useful to the customers. And that's why we validate with customers through design thinking principles. I'm happy whenever an idea is validated, because it means that we have saved time, and money.
FBP: What advice do you have for people who want to follow in your footsteps to drive the digital reinvention of their organisations? What are some of the lessons that that you can pass on to them?
RA: If I were to give advice to anyone from the learnings that I've had in my professional background is to stay focused and not have patience. Whenever you are focused on something, you can't wait to see it in real-life. Then it will happen. This is maybe the most important thing that I've learned during these last few years. It is okay to be focused and to be impatient at the same time.
FBP: Thank you for speaking with us.