As chief information officer at Canadian direct bank Tangerine, Charaka Kithulegoda is at the forefront of the drive to take financial services mobile. He talks to Finextra about how technology is changing the banking landscape.
Tangerine was founded in 1997 as ING Direct, the first direct banking outpost established by its Dutch parent. Renamed in 2012 following an acquisition by Scotiabank, by the end of 2013 the firm claimed over 1.8 million customers and held close to $40 billion in total assets.
Initially serving clients over the phone, Tangerine quickly became a primarily Internet-based provider, and is now in the midst of a second delivery revolution as customers increasingly manage their finances through their mobile phones.
Overseeing the transition is CIO Kithulegoda, a 16 year Tangerine veteran who says that adoption of mobile is happening far faster than the earlier online migration. With this in mind, the bank has taken an iterative approach to its mobile app, regularly updating it since its first appearance in 2010.
Five years ago customers may have been happy to bank on a mobile website but, says Kithulegoda, today people expect far more from the handsets and the providers - in all industries - that deliver services through them. "So to do that, the only way to do that, is to watch how our clients behave, to listen to what our clients want, and to iterate."
One area where client expectations are in flux is security. Last autumn Tangerine was an early adopter of Apple's Touch ID fingerprint technology, using it to let customers access the Orange Snapshot balance checking feature. Touch ID will soon be coming to the full Tangerine app but Kithulegoda is clear that this will be in addition to, not instead of, a passcode.
This is a more cautious approach than that taken by UK giant RBS, which has just announced that customers can login with only their fingerprint. Kithulegoda says that the reticence to ditch the passcode is more to do with customer expectations than security, with Tangerine reluctant to push users too far too fast. However, he adds: "I think that in some point in time we should give our customers the option of saying ‘use only biometrics’."
Another area in which Tangerine is experimenting is voice control. For Kithulegoda voice control's real advantage over touch is in the field of wearables such as smartwatches, where there is little space for touch-based commands.
But, the bank is discovering through its pilot, voice throws up a host of challenges. "I’ll give you an example of something we saw, its funny but its true," says Kithulegoda. "So we said that...if you want to confirm a transaction or cancel a transaction, the way that people would do it is that we’d ask a question: 'Do you want to proceed with the transfer?' and you’d say ‘yes’ or ‘no’ right?"
Unfortunately, living up to the Canadian stereotype for politeness, Tangerine found that "a large number of our clients in the pilot are saying thankyou."
Tangerine is also looking into the potential of video conferencing as a way to bring the human touch to digital banking, although Kithulegoda is unconvinced by the attempts of many banks, such as BofA, to integrate the technology into ATMs.
"Why are we trying to build this technology into something that’s from the 70s when all of us carry at least one single device or multiple devices that can deliver that same interaction experience very seamlessly from within our pocket from wherever we want?" he asks. Not only is the ATM not the best delivery mechanism for video conferencing for the customer using it, it also inconveniences other users, suggests Kithulegoda: "I personally would be fairly annoyed if I got to stand in line waiting for someone to have a short conversation."
Nevertheless, Tangerine is actually piloting video conferencing at its own physical locations. The bank has recently been taking a pop-up site (it refuses to call it a branch) around Toronto, using it as a way to attract new customers, with staff helping people to sign up to accounts on mobile devices and then handing over to specialists in areas such as mortgages over video links.
Despite defining itself as a direct bank, Tangerine has several 'cafes' in major Canadian cities. However, like the pop-up, these are about customer acquisition and getting the brand out there, rather than normal branch-style services, says Kithulegoda.
"So you can walk into any of our cafes and say 'What is this Tangerine thing, what is it?' They find out what we are about, we’ve got some great people working, enthusiastic. They’ll tell you what Tangerine is all about. The person is excited, says 'OK I want to become a client'. The next step is very very different to a conventional branch. We walk you up to an iPad and say please scan your drivers license and take five minutes, answer a couple of questions and you will be able to become a client.
"We actually facilitate the transaction, we don’t do the transaction. So again we introduce people, even new customers, to the use of technology and how easy it is to deal with us using technology from step one. So seamlessly you can walk into one of our cafes and within five to 10 minutes walk out having your debit card and being a client, all using technology."