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Key Takeaways
mBank Wanted To Deliver A Next-Generation Digital Experience
A direct subsidiary of BRE Bank, mBank launched as the first online-only bank in
Poland -- and one of the first anywhere in the world -- in November 2000. But following
a flood of foreign bank entrants and better digital experiences in other industries, the
digital team at mBank feared it was falling behind customer expectations.
mBank Took Inspiration From Best-In-Class Online Retailers
mBank looked to best-in-class online retailers that do a better job of supporting sales
online. Consumers buy with their eyes through pictures and videos; access real-time
advice through chat-prompts, clickstream analysis, and Amazon-style algorithms; and
enjoy optimized checkout through stored payment and instant digital delivery of goods.
mBank Completely Overhauled Its Online Banking Experience
Based on a gap analysis with best-in-class online retailers, mBank prioritized
the following innovations: a new virtual store, video banking, integrated money
management features, real-time CRM-driven offers, merchant-funded rewards,
gamification, Facebook integration, a Google-like search tool, and a real-time creditscoring system.
Table Of Contents
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Competition has intensified. Competition in the Polish retail banking market is fierce as banks
compete for young customers and a growing middle class with Internet-only current-account
offers.2 The presence of so many foreign-owned banks including Bank Millennium, Bank
Pekao, BNP Paribas Fortis, Citibank Handlowy, ING Bank lski, and mBank itself means
that successful strategies and tactics from abroad are quickly imported and new strategies are
devised in Poland. Other direct banks, like established rival Inteligo and new entrant Alior Sync,
compete directly with mBank for consumer and media attention.
Customer expectations are rising. mBank customers now enjoy many digital experiences
outside banking that are far more graphical, interactive, and contextual; these made mBanks
once-leading platform look dated (see Figure 1). Likewise, as the fastest-growing eCommerce
market in Europe, Poland continues to attract many best-in-class retailers from abroad that do
a much better job of supporting online sales and showing what the modern Internet can and
should be.3
As a result of these two factors, mBanks digital team was beginning to feel like an early innovator
that had fallen behind customer expectations. Its ambition was to bring mBanks online banking
experience into the 21st century. For inspiration, it looked to a wide range of firms, including
Amazon.com for showing the world that everything can be sold online using real-time offers; Spotify
for its focus on customer delight through app and process design; Zappos.com for its virtual instore experience; Mint.com for its graphical and interactive approach to financial insight; Google
for its powerful search; Cardlytics for its transactional marketing and merchant-funded rewards;
Foursquare for driving early engagement with game mechanics; and American Expresss Link, Like,
Love campaign for plugging financial services into the heart of the social graph.4
Transactional services
Log out
and
messages
Products
Settings and
customer service
Traditional
online banking
New mBank
Navigation and
presentation
A virtual store
environment using a
modern Internet stack
with a quick search tool
Real-time CRM-driven
offers, integrated money
management, and video
banking, with full product
and transactional details
available on drill down
Checkout
Activity
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mBanks New Navigation/Presentation Make It Easier For Customers To Find And Buy
Within the presentation and navigation categories, best-in-class online retailers let customers
buy with their eyes, giving them lots of graphics, videos, and animation; they also make it easy to
find information. Yet online banking is traditionally text-heavy and table-based, with little search
functionality.5 mBank introduced two important changes as a result:
1. A virtual store using a modern user interface. mBank courageously stopped supporting older
browsers that constrained both how the bank developed code and the type of experiences
it could offer.6 Using HTML5 and CSS3 standards lets the bank craft more graphical and
interactive scenarios, while single page application (SPA) schemas help limit superfluous
clicks and page reloads.7 The result is a streamlined virtual store akin to Zappos.com, in which
pictures convey the meaning behind products and customers drill down to reveal additional
product details and benefits (see Figure 3).8
Figure 3 mBank Created A Virtual Store Environment For Financial Products
Product gallery
Personal loan
2. A Google-like quick search function. To make it easier for customers to find information,
mBank introduced a powerful, Google-like search tool (see Figure 4). Based on just three
letters, the search interface renders all possible keywords and results immediately within the
main screen. The flicks and iterations are absolutely Google-like.
Figure 4 mBank Built A Powerful, Google-Like Search Feature
Payments
Search in
transaction
history
mBank Built Research And Relevant Advice Tools That Require Little Customer Effort
Best-in-class online retailers typically offer better calibrated advice and guidance during the
research and sales process, whether this is through Amazon- or iTunes-style algorithms, clickstream
analytics, video support, or simple chat prompts. This guidance typically requires little customer
effort; customers dont have to set up savings goals or fill out forms they just get the insight.
Translating this into a banking context, Panowiczs team:
3. Integrated money management features into day-to-day banking. When customers log
in, they are automatically shown their current balance; their safe-to-spend limit; as well as
a consolidated financial statement across all mBank accounts that automatically categorizes
spending to an accuracy of more than 85%, with a one-click link to how they are performing
against their budget (see Figure 5).9 In doing so, mBank exposes all customers to the most
important money management features and delivers all their value upfront.
Figure 5 mBank Automatically Categorizes Spending And Displays Performance Against Set Budgets
Spending in the
category eating out
Budgeted amount
Remaining budget
Amount spent
Budget
4. Refined the CRM engine to offer real-time, event-driven advice. Rather than use generic
banners, mBank associates predefined customer events with specific bank responses. For
example, if a customers current account is running low and his money management forecast
suggests that he will soon hit zero, mBank can display a preapproved cash loan with a prefilled
application and deliver the cash straight to that customers account.10 As the offer is real time
and relevant, it doesnt render as a sales message but as advice received just at the moment
the customer needs it.
5. Developed video banking for more complex interactions. To give customers the confidence
to complete more high-value banking activities through digital touchpoints, mBank enables
customers to transact, buy products, access advice, and share documents through video
banking (see Figure 6).11 Importantly, customers dont need to install a software client, access
a separate app, or use a separate phone.12 It offers the ease of Google chat or Facebook chat but
with full authentication and the quality and efficiency management of call center integration,
even on the modest bandwidth of a 3G mobile connection.
Figure 6 mBank Offers Video Banking For More Complex Interactions
Disconnect
Source: mBank website
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mBank Optimized Its Transaction Processes So That They Are Quick And Easy
Panowiczs team found the biggest experience gaps within checkout. Best-in-class online retailers
do a better job of supporting the modern Internet users desire for instant gratification. Sites like
Amazon and iTunes make payment quick and easy, with stored payment facilities instantly retrieved
for express checkout and instant digital delivery of goods. Translating these principles into banking,
Panowiczs team focused on two imperatives:
6. A channel-agnostic payments hub. Rather than being forced to remember bank sort codes
and account numbers, mBank customers simply need to enter the first three letters of a
name and mBank searches for all context about that person through Facebook, previous
payments, and the customers account history to prefill the payment. Regardless of the
underlying rails and they support transfers, payments, Facebook, email, and mobile the
login scenario and flow is identical, and customers can make multiple payments in one go.13
7. Expedited approval times for credit products. Instead of assessing credit risk through credit
bureaus or paper financial statements which can take days, if not weeks mBank now
makes all credit decisions for existing customers within minutes, using internal aggregation
to analyze all of a customers transactional activity.14 Using external aggregation, the bank can
even do this for prospective customers.
mBank Offers New Services That Make Banking Easier, More Fun, And More Rewarding
With this difficult groundwork done, Panowiczs team realized that without much additional work, it
could experiment with three further services, not traditionally associated with retail banks:
8. Merchant-funded offers. mBank uses its real-time CRM engine to identify patterns in
customers transactions and to match those patterns to relevant product offers. Customers
access offers by clicking on a given merchant within their bank statements or by clicking
through to a dedicated tab. mBank also offers a Facebook application for this service
mDeals in which customers can manage their offers, share great deals with friends, and
receive rewards refined by likes within their profile (see Figure 7).
9. Gamification integrated into the transactional site. Inspired by Foursquare, mBank did
some light software development of game mechanics to test the capacity of games to drive
early engagement. mGame consists of two parts: a series of tutorials, which acts as a type
of game-driven user manual, in which players earn badges for completing quests organized
around new service features; and a selection of engagement games in which players get points
for logging into online banking, making loan repayments or deposits, and using contactless
payments, for example. Throughout, mBank uses cultural humor, historical references, and
word play to make it fun (see Figure 8).15
10
10. Facebook integration. Lastly, mBank has taken advantage of social platform application
programming interfaces (APIs) and the social graph. Panowiczs team uses Facebook APIs to
pull in customers pictures to personalize service, enhance the address book of transfer recipients,
enable fast person-to-person payments to Facebook friends, populate leadership boards for
mGame, and offer sharing and gifting scenarios for mDeals.16 With mDeals, Panowiczs team
made a conscious choice to seek social influence by encouraging customers to share information
on the banks behalf, rather than attempting to share that information itself.17
Figure 7 mBank Offers Merchant-Funded Rewards On Facebook Through mDeals
My mOffers
Your gains
Choose an mOffer
11
Figure 8 mBank Uses Cultural Humor And Historical References To Make mGame Fun
Mr. Tagger
(tag spending)
Transfer King
Socialman
Speedy Deal
Personalizator
12
How mBank Did It: Colocation Drove Co-Operation Among Business, IT, And Design
Perhaps more impressive than the number of new features that mBank implemented is the time it
took the bank to deliver them. In just 14 months, the new mBank went from a blank sheet of paper
to a full product range and full backward compatibility.18 Of course, this wouldnt have been possible
without funding and Panowiczs team secured approximately $35 million to cover the entire
project but the real story of how mBank did it stems from innovations in its approach.19 These
included:
The colocation of business, IT, and design teams. mBank changed how employees co-
operate, the frame of reference for how it made decisions, and how people do everyday tasks
by colocating business, IT, and design teams in one room. Right from the beginning, design
professionals, psychologists, and human-computer interaction specialists worked side by side
with career bankers to design new customer experiences from the ground up.
Dedicated build the bank headcount. Rather than make building the new mBank part of
someones existing job, Panowiczs team had 200 dedicated full-time employees in the core new
mBank team and more than 300 during the peak period of development. Many of these people
were employees that mBank reassigned from other roles at the bank to help build the new mBank.
Several strategic partners. mBank worked with a number of strategic partners to build and
launch the new mBank: Polish systems integrator Efigence for design and human-computer
interaction; Icelandic white-label money management vendor Meniga for the back end,
digital money management, and search; Accenture for engineering excellence and support in
development process management; and Polish software and services vendor Software Mind for
back-end video banking service support.
Rapid design iteration. In total, mBanks development team delivered 400 final user interface
(UI) and user experience (UX) designs with 1,700 interim blueprints. The bank ran 1,050 hours
of wireframe and prototype testing with customers (excluding customer acceptance tests), held
250 beta tests, and had 1,100 pre-rollout testers; it had 1.6 million lines of final code and 45,000
test conditions for final user acceptance tests (UATs).
13
Voluntary migration to the new platform. Rather than risk alienating customers with a big
bang launch and forced migration to the new online banking platform, mBank has invited
customers to try the new platform and has given all customers a 12-month period in which both
platforms are running concurrently. Within the first four days of launch in June, mBank received
200,000 volunteer sign-ups; by mid-July, the new interface had reached 500,000 customers. These
numbers far exceeded the banks expectations. While objective comparisons are difficult, the
digital team at mBank is delighted that these numbers greatly exceed the scale of many other
digital-only banks.20 Already, 35% of total logins for mBank are made through the new platform.21
New account opening. Some 45% of mBanks new account openings in the post-launch period
were linked to interactions with marketing content for the new mBank, suggesting that the new
platform is driving net new customer acquisition.
Installations of the mDeals Facebook app. mDeals, mBanks Facebook app for merchant-
funded rewards, received 50,000 installations in its first three weeks. In June 2013, Facebook
reported that mDeals was its third-fastest-growing app in Poland and has been for the past three
months (July, August, and September 2013).
mGame use. In the first few weeks after launch, mBank was getting 45 views of the mGame
page for every 100 views of the new online banking home screen; this suggests that these games
are enticing customers to find out more about the new platform.
Media coverage. Although its a softer metric, the new mBank has received 714 press mentions
since launching. By mBanks count, thats 3.3 times the 217 mentions that its Polish rival Alior
Sync received over that same period.22
Planning second-generation mobile and tablet applications. mBank will translate its new
online services to smartphones. The digital team is still at the ideation stage, but it plans to use
the unique interaction mechanisms and form factor of touchscreen devices and phones to create
distinctive digital experiences.
14
Extending the new mBank platform to other entities. mBank will roll out the new platform
to customers of MultiBank, which is BRE Banks brand for the affluent and small and midsize
enterprise (SME) segments. The bank will also roll out the new platform to the 600,000
customers of mBanks Czech and Slovak operations.
Developing scenarios for more complex products. mBank wants to extend account
aggregation and the new user interface to investments, loans, and insurance products. From
here, the bank will be able to blow out all of a customers transactional behaviors to provide
even better insight, offers, and guidance to customers about managing their finances.
R E C O M M E N D AT I O N S
modern Internet stack was mBank able to craft graphical and interactive scenarios akin to
those that best-in-class online retailers offer.
Customers shouldnt have to work for insight. By taking the most important money
management features and embedding them into customers day-to-day scenarios, rather
than burying them on a separate tab, mBank has delivered all the insight of money
management upfront.
Video can fulfill the psychological purpose of the branch. Digital channels have steadily
replicated all the things that the branch can do. Synchronous, one-to-one video is the final
frontier in the digitization of distribution giving customers the confidence to complete
high-value tasks but with the convenience of not visiting the branch.24
15
If an offer is real-time and relevant, it is advice not sales. Refining its real-time CRM
engine catapulted mBank into a post-sales paradigm. The bank now offers only advice and
at precisely the time that customers need it when there is excess liquidity in an account,
an anticipated shortfall, or some other financial need.
Merchant-funded rewards are an obvious new revenue stream. Retail banks with a strong
transactional marketing capability are in a unique position to be the face of these rewards.
The merchant funds them, but they give the bank a real halo effect, as evidenced by the
number of customers sharing mDeals.25
You can best influence social conversations by staying out of them. The early traction of
mDeals suggests that if you want to exert influence through social media, you must give your
customers something positive to talk about such as great merchant-funded rewards
rather than attempt to infiltrate the conversation yourself.
The colocation of business, IT, and design drives collaboration. Business, IT, and design
teams often exist in deep trenches with barbed wire between them: different professions,
trained differently, evaluated differently, and motivated by different things.26 Colocating teams
in one room helped mBank overcome the perennial challenge of effective collaboration.
Endnotes
While there are a few online-only direct banks that have more customers than mBank, notably ING Direct
in several countries, the direct banks that have more customers than mBank almost all either operate in
more countries than mBank does or operate in larger countries than Poland.
Strong growth and competition characterize the Polish retail banking market. Only 68% of the population
owns a current account, and a large number of banks are competing for customer attention. Online banking
has grown rapidly in the past few years and is overtaking the branch as the preferred banking channel.
Changing customer behavior means that Polish channel strategy executives need to put digital channels
at the heart of their strategy. See the December 1, 2011, How Polish Banking Customers Use Different
Channels, 2011 report.
Because of the rapid growth of eCommerce in Poland, companies like French supermarket chain Carrefour
and UK-owned Tesco have recently introduced services that allow Polish consumers to buy products online
and pick them up at drive-in locations. And Polish online grocery stores such as Frisco.pl have enjoyed
popularity for some time. Amazon made waves in Poland in January 2013 with its purchase of Polish IT
company Ivona Software, a maker of text-to-speech software. For years, there have been reports in the
Polish media that Amazon is considering opening a Polish version of its service. Source: Online Retailing:
Britain and Europe 2012, Centre for Retail Research (http://www.retailresearch.org/onlineretailing.php).
16
Within financial services, mBank looked to GarantiBank and Akbank in Turkey for inspiration; both
have shown the world that a modern retail banking transformation is possible, even from a large-scale
institution.
Google has revolutionized and reset expectations around search. Our Technographics data suggests that
consumers rank secure site search as important, but 23 out of the top 30 banks in the US do not offer this
functionality within their secure sites.
The site is not compatible with Internet Explorer 8 and doesnt use Silverlight (except for video banking) or
Flash technology. The digital team focuses only on modern HTML and CSS standards, with heavy use of
JavaScript. Silverlight was accepted as a tradeoff to get video banking launched sooner, which is difficult to
provide in a business-to-consumer scenario. The bank plans to replace it with an HTML5 solution once that
standard solidifies.
Single page application (SPA) schemas are pages that dynamically render as a full page, rather than users
having to scroll down to see all the content. For more insight into HTML5, see the August 3, 2012, The
Coming Of HTML5 report.
All in, Panowiczs team believes that it has nearly 2,000 different pictures and nearly 60 different videos
within its public and secure site.
Complexity on demand was an important design principle for Panowiczs team throughout the overhaul
of mBanks online platform. It wanted the overall experience to be simple but able to support those
customers who wanted to go deeper.
This CRM system also prompts reps in mBanks call centers and the branches of BRE Banks subsidiary
MultiBank. mBank refrained from offering sales messaging within its transactional system in the past, both
because a lack of targeting made it look like spam and because the table view made it difficult to render that
offer unobtrusively. With its new graphical interface, a small pop-up window discreetly presents the offer
and does so at precisely the time the customer needs that guidance.
10
Panowiczs team was guided by the landmark research from Albert Mehrabian: This suggests that 55% of
human communication is seeing another person, while only 38% is tone of voice and 7% actual spoken
words the so-called 55:38:7 rule. Without the visual cues seeing another person customers wont
have the comfort and confidence to undertake more high-value, high-risk financial transactions. Source:
Albert Mehrabian, Nonverbal Communication, Aldine Transaction, 2007.
11
The bank uses Silverlight for video banking. The bank plans to replace it with an HTML5 solution once that
standard solidifies.
12
Customers can concurrently execute five different payments to the same person, for example, all using
different payment rails but a single TAN authentication code.
13
As checkout is paper- and wet signature-free for all products except mortgages (i.e., current accounts,
loans, mutual funds, car and home insurance, and brokerage services), it takes only a few clicks.
14
17
At the time of writing, mBanks mGame does not allow players to exchange points for prizes. They can
exchange badges for stars, which are then used to determine the players positions within the leader board.
15
To address adoption and privacy concerns, Facebook integration is explicitly opt in, with the user turning
each service on/off separately.
16
Panowiczs team based this strategy on research that suggests that 99% of interactions on social networks
involve people speaking to people; only 1% are geared toward companies. As such, companies will have
more impact if they give people something to share, rather than attempting to infiltrate the conversation
themselves. Source: Mikolaj Jan Piskorski, A Social Strategy, Princeton University Press, 2014. Mikolaj Jan
Piskorski is associate professor of business administration at Harvard University.
17
mBank is not a de novo bank, but the digital team has had to deliver a platform that will scale to more
than 4.2 million customers across two banks in Poland as well as mBanks subsidiaries in the Czech
Republic and Slovakia.
18
In a recent article, $40 million was quoted as the build cost for the new mBank, which is slightly
rounded up. Source: Mary Wisneiwski, The Cutting Edge of Online Banking, as Practiced by a Polish
Bank, American Banker, September 27, 2013 (http://www.americanbanker.com/issues/178_188/thecutting-edge-of-online-banking-as-practiced-by-a-polish-bank-1062460-1.html). However, mBank has
publicly communicated 100M PLN, which was around $33 million, depending on the exact exchange rate
at the time. Panowiczs team obtained this funding by securing agreement around three points: 1) that the
digital life of mBanks customers had changed so dramatically since 2000 that it was no longer OK to offer
table-based banking; 2) that its competitors had largely caught up with the online banking model it had
pioneered in the early 2000s; and 3) that digital services would be the key battleground for tomorrows
customers.
19
Winning new customers to a new brand is substantially harder than converting existing customers to a new
platform. In Forresters view, therefore, direct comparisons with banks like Moven, Simple, and Alior Sync
are unfair. Nonetheless, mBanks success in converting 500,000 customers to its new platform shows that
traditional financial institutions can beat startups at their own game.
20
Three-quarters of those logins are from customers with only six weeks experience of the new platform,
which suggests that customers are quickly converting entirely to the new platform.
21
Alior Sync is the rival online-only bank in Poland that made a splash when it launched in 2012.
22
Some products are intrinsically complex, but other products are complex because of the processes that
underpin them whether its the credit checks required for a personal loan, a credit card, or a mortgage
or the identity verification, background details, and proof of income required for the application process.
Traditional banks may shy away from reducing this complexity for fear of increased compliance risk or
because they depend on the branch to conclude sales, but in doing so, they leave themselves vulnerable
to disruption. It is only a matter of time before firms like Capital Access Network, ezbob, FundingCircle,
Kabbage, OnDeck Capital, Prosper, SocietyOne, and Zopa come along with a more efficient process.
23
18
However, many banks use video for branding and how to guidance but dont support product selection
and sales. Forresters research suggests numerous potential benefits from online videos, including
explaining products better than text can, improving education efficiency, generating new leads, encouraging
users to linger on site, and helping find new audiences by syndicating content to social sites. See the August
11, 2011, Use Video To Drive Online Financial Service Sales report.
24
With a good CRM engine in place, banks are extremely well positioned to spot behavioral patterns in
customer spending and match that to products in a relevant way and they get the halo effect of being
the face of that reward for their customers. The retailer, meanwhile, is interested in reaching certain
customers and giving them a great offer. Given fully automatic redemption, they dont have to train their
people or notify their staff its all done on the back end. They just get a beautiful report that shows the
demographics of the group that bought, how much the basket changed, and what value they got out of
it. One of the most impressive things for merchants is that they pay only for sales i.e., the rebate for
transactions that actually happened not for traffic. Meanwhile, all that data is very nicely sandboxed
from a privacy perspective. Retailers never see the name and addresses of those who bought with them;
they just see a transaction ID so that they know the transaction actually happened. All that data and
segmentation analysis stays with the bank, and the retailer gets the extra sales. For further background, see
the May 25, 2011, Boosting Revenue With Merchant-Funded Offers report.
25
In Michal Panowiczs words: Too often, business leaders specify ambitious plans; IT then feels its being
forced to do something that wont work; and the business is left thinking its been cheated out of its idea.
With design teams, which typically know little about technology and even less about financial products, IT
and business teams seldom respect what they bring to the table. By putting them all together on one floor,
mBank bred mutual trust and respect.
26
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