It\u2019s 2015, everyone I know makes use of online banking. In fact in Malaysia you\u2019re getting online banking mobile apps that also take advantage Apple\u2019s fingerprint sensor to give you a quick balance. Yet, you can\u2019t take a photo of a cheque and get yourself credited, like you can do in the USA.<\/p>\n
But that\u2019s not the online banking I\u2019m referring to. Online banking as a service or conduit for your physical bank is pretty boring. I\u2019m thinking of the online savings accounts<\/a> like ING Direct does provide you in Australia \u2013 high interest rates due to not having physical bank branches to maintain. Withdrawals or payments are made easy by having access to a cheque book.\u00a0<\/p>\n So the online banking I\u2019m excited about is the idea of a direct bank<\/a>.<\/p>\n No bank branches, minimal advertising (have you seen the HSBC ads on the rugby or the many airports one may visit?), mobile first, desktop second, and great telephone support in the local language of choice. ATM withdrawal fees at any network will be reimbursed if less than 5-8 transactions a month (Standard Chartered in Malaysia already manages this). ATMs in critical areas (malls? coffee shops?), with cash deposit as well as coin deposit (Singapore\u2019s DBS has good examples of this). Cheque deposits via snapping a photo on your mobile phone.\u00a0<\/p>\n What about loans? Let\u2019s do it over the telephone. Since we\u2019ve got the online first mentality, wouldn\u2019t it be cool to provide an interest rate discount if you provided us access to your social media streams? After all the more data we can get about you, the better it is we can provide you with a loan! This can also work for unsecured lines of credit (credit cards, personal loans, etc.) \u2013 your creditworthiness can be deemed on how much you\u2019ve demonstrated you can pay (ala Amex), but at the same time once we have more information about you, we can be a lot more efficient (eg. you\u2019ve posted a photo of you in Athens on Instagram; the bank doesn\u2019t have to call you about a potential fraudulent transaction since it knows you\u2019re there). Identity (and encryption) is important, so tying in a service like Keybase.io<\/a> might make sense to ensure that now I can email my bank about my travel plans. After all banks are already used to using \u201cSecure Mail\u201d to send their private banking<\/em>\u00a0customers notes via email\u2026<\/p>\n Hong Kong and Singapore understand electronic payments at point of sale via Octopus cards as well as the NETS system. Australia was way ahead of this trend with EFTPOS (with the ability to cash out at some locations like supermarkets even, thus eliminating the need for you to visit a bank ATM). Malaysia has this ability with MEPS but it has never really taken off. I once had dreams of paying my nasi lemak seller using plastic; that was the promise of SoftSpace (Malaysia\u2019s answer to Square). Execution of buying a unit from CIMB (they white label for them) is nowhere near as easy as Square, which explains why uptake has been extremely slow.<\/p>\n But the time is now. There are more mobile phones in use than there are Malaysians. Many have access to the Internet, either via mobile data or WiFi. Pretty much every establishment today has access to an Internet connection. There is no longer an excuse to not have electronic payments. Its also a lot more efficient for the tax man (from a retailer\u2019s standpoint).<\/p>\n One thing that I\u2019ve not focused on much is regulation; however regulation is something that will eventually change with time (or if you do something first\u2026). South Korea is moving towards this as the FT reports \u2013 South Korea moves towards first online-only bank<\/a>. They plan to only issue one or two licenses, and it seems that DaumKakao is looking towards getting their hands on a license, and offer banking via their popular messaging app, KakaoTalk. \u201cSeoul is introducing web-only banks as part of efforts to deregulate and advance the under-developed financial sector, as it seeks new economic growth drivers.<\/em>\u201d – something Malaysia can learn a lot from. It\u2019s interesting that China already has some of this in the form of Mybank (backed by Alibaba) and WeBank (backed by Tencent).<\/p>\n There\u2019s also reading material that I found rather interesting, a 2014 McKinsey report \u2013 Digital Banking in Asia<\/a>. The US has something cool via Simple<\/a>\u00a0(can draw some great inspiration from their execution).<\/p>\n If you\u2019re interested in solving a hard problem, with a great focus on customer satisfaction, with the ability to be really<\/em>\u00a0disruptive, please feel free to drop me an email \u2013 byte@bytebot.net<\/a>.<\/p>\nShare this:<\/h3>