“First is accessibility, micro everything. Second is about convenience. What we believe is microtransactions embedded into the daily flow of consumers or sellers would result in more convenience for customers and greatest satisfaction, said Reuben Lai, senior managing director at Grab Financial Group, at the event.
“The final point is around transparency, to be very clear how much we are charging our customers so that they don't get caught unaware.”
Grab started out as a ride hailing app but has expanded into financial services, offering products like insurance, loans and credit lines. In December, it received a banking license from the Monetary Authority of Singapore.
“When financial services are just embedded into the everyday flow of a customer, the conversion rates are tremendous,” said Lai.
Other panelists echoed similar sentiments.
“Transparency is very important for customers to know exactly how much they are paying when transferring money internationally,” said Diana Avila, global head of banking and expansion at Transferwise.
As there is no set standard for how financial firms charge for cross border payments, it makes it difficult to determine which services are most cost-effective, said Avila, who gave examples of some cross border payment providers where nominally their transfer fee is zero but are charged via FX margins.
“It's very important to boost and to have the requirement for service providers to openly and transparently disclose the fees that they are charging.”
Banks vs non-banks
While many fintechs (non-banking financial institutions) have addressed underserved segments of the financial services market, Piyush Gupta, CEO and director of DBS Group, believes that banks have a role to play as well, but argues they must adopt a more innovative mindset too.
“In terms of getting the right customer experience and innovating, this is not the domain or the purview of any one player.
“What you need to do is make sure you have the right customer obsession and you have the right culture to be innovative and nimble,” he says. “Those are often things that incumbent banks suffer from. They have legacy systems that don't have the capacity to use a modern technology stack or just don't have the culture to be able to adapt.”
The success of Grab in financial services is partly attributed to the strength of its existing ecosystem, cultivated by its ridesharing/food delivery services. Banks likewise have a customer base they can leverage.
“Banks are advantaged to the extent that people build full fledged financial relationships with banks,” says Gupta. “We have your financial health and have an entire suite of products. Banks are also further protected by a regulatory framework of deposit protections and there is a element of inertia in trust.”
“Fundamentally, the opportunity to improve the customer experience and do the right thing for the customer is equally available to incumbent banks as it is to technology companies.”