imaginBank: Simpler banking for the digital age

"I don’t need an elaborate banking service with branches, passbooks, letters in the post, an annual financial review and a bank manager that knows my name. Interest? I don’t save enough to accrue any, or I put my money somewhere else. All I really want is an account that will accept my deposits, hold my money and release it when I want to make a payment or transfer. I don’t want to wait for transactions to appear on my balance or for transfers to clear. An automatic payment function would be useful, so I can settle my bills easily. But most important of all, I want to do everything, repeat everything, on my phone. Some exclusive offers and deals would be good too. That’s it."

Welcome to the mindset of a growing demographic of today’s banking customers. All are committed device users - not power users or early adopters - just people that manage their lives using phones and tablets. Many are young – Millennials - but not all. Most have modest incomes and are determined to live debt-free and unconstrained by financial commitments.

As a customer segment, this group holds little traditional revenue potential for a bank. Instead of writing it off, however, Spain’s CaixaBank has embraced it wholeheartedly, launching an entirely new mobile-only proposition: imaginBank. I caught up with Jordi Guaus, CaixaBank’s Head of Digital Marketing and Chairman of Mobey Forum, to understand the thinking behind imaginBank, which launched earlier this year.

“Customer behaviour is changing,” says Guaus. “We knew this segment was growing and that if we didn’t offer a banking service that would address these changes, then another bank would. We also know that once a customer switches banks, it is very difficult to win them back. Many of the customers in this group are young and in the early stages of their careers, so instead of focusing on immediate revenues, we are taking a longer term view. At least some of today’s imaginBank customers are going to need more sophisticated services in the future, at which point CaixaBank will be there to help.”

When asked about the development of imaginBank, Guaus is quick to praise CaixaBank’s forward thinking culture. “It is not easy to gain internal support when you’re developing a completely new proposal focused on simple services, even at CaixaBank, which is known for innovation and its willingness to buck the trend.

“The biggest hurdle we faced was to accept that the digitalisation of financial services is going to change everything, and that we need to change as a result. There are customers that feel they don’t need branches, for example; so for them a digital banking platform is more than capable of delivering day-to-day banking services. On the plus side, however, this also means that we can take out many traditional costs of delivering services. As it is mobile-only, imaginBank is a far leaner proposition; we don’t need to make the same margins for it to be commercially viable. In many ways imaginBank is one big experiment – we’re using it as a way of testing different services and models which we might someday adopt at CaixaBank. For us it’s a win-win; it brings new customers with us and enables us to trial new ways of operating.”

Guaus understands that mobile adoption hasn’t been the only factor driving change in the way customers approach their finances. “The past decade, with the housing crash, poor economic conditions and high levels of unemployment in Spain have definitely had an impact,” he says. “Many customers, especially those that are younger, are looking for a different way of doing banking. imaginBank is designed to deliver a banking experience that this customer set wants: a no cost, mobile bank that delivers simple services in an immediate and totally transparent manner. Even now when the Spanish economic situation is improving, imaginBank’s value proposition fits perfectly with those that are focused on day-to-day financial services and a great user experience.”

Guaus is enthusiastic about the additional value added services that the bank can also offer using the mobile-only model. “We are offering great discounts for other digital services that are also targeting this segment, like Ticketmaster and wauki.tv,” he says. “We’re also able to give customers more control over their finances with tools delivered via the imaginBank app. They can view their account securely from within Facebook, for example, draw money from an ATM without a card and send money to friends using only an email address or mobile number. We are very satisfied with the results: we have attracted 70,000 active customers during the first six months of imaginBank.”

There is little doubt that today’s disruptive digital market is challenging banks to think differently, but Guaus is confident that banks are in a strong position to protect themselves from disintermediation. “Sure, there are more new market entrants offering digital services, but it is the banks that still have the trust of their customers. We continue to work in a closely regulated environment and have a long history of defending customer confidentiality. People won’t put money into an institution they don’t trust, so as long as banks can adjust to the changing requirements of their customers, I think their place in the future of financial services is secure.”

Sirpa Nordlund

Executive Director

Mobey Forum