Dropbox banking: The backbone for Fintechs and a probable model for banking in the future

The argument about if Fintechs and Banks are frenemies would never end. And it’s justifiably so.

Retail banks have a model of providing checking, savings, investment account services. Of course, they layer that with credit cards, personal loans, mortgages, etc. Fintech showing up on the scene means one thing, banks would be losers. There isn’t any clearer way to say it.

Think about it this way, banks earn money from these services and would want to continue that way. Fintechs showing they could do it better means they also want to gain something as well. So, any of these could happen: banks would lose, and Fintechs could gain; Fintechs and banks would gain from increased service cost and customers would pay more; Fintechs would lose, and banks would be cool.

There is also the friction that comes with who owns the customer experience. Most banks loathe to see new players sandwich between them and the customers and would prefer to control every single data point. On the flip side, when customers start to use apps for Personal Financial Management and their bank accounts, they start seeing the banks as a repository of their funds or provider of loans.

Retail banks don’t even trust Fintechs as their services tend to aggregate and disintermediate. None of the banks want to be a bucket for storage.
But wait, why not?

The traditional model makes losers out of the retail banks for Fintechs to win, maybe the only way would be to have a new type of bank, modeled from grounds up to take away the arguments of retail banks.

So imagine a bank, fully licensed but whose interaction is via APIs that Fintech and others can use to connect to it. Fintechs are the actual customers because the banks help them to hold their customers’ funds and loans in compliance with the regulation.

Dropbox was happy to become the programmatic storage for many apps, and that cemented its position in the world of cloud storage. Of course, Google Drive, Box, Microsoft OneDrive, etc. support the same approach but nothing represents personal commodity storage more than Dropbox.

A bank, fashioned after Dropbox, could have the same model and would face no pressure to compete with Fintechs but be the backbone for them. Such a bank, with no direct customer interface, would be barebones to run with the most minimal of operational overhead.

Could this be a viable model?

If this model works, then it’s possible that the future of banking will be the gradual transformation to the utility company providing services to the Fintechs who will own the customers. Nevertheless, there may not be a total elimination of the traditional model though, or one where all banks become a full-scale utility.

The harsh reality for Fintechs is that banks still own the customers’ trust for now and that counts for a lot.

Being a utility player offers no room for differentiation, and it simply becomes a case of the best bank offering ease and variety of API integration (across the various requirements of the Fintechs – Risk and Regulatory Compliance – i.e.  KYC, AML, security of deposits, etc.).

What is likely to happen is more of a gradual acceptance of the Fintechs services as options for customers in areas where the banks may not have the capabilities. For example, Santander is selling SME lending via Kabbage or providing Personal Financial Management via Meniga, the ultimate Fintech bank that will provide an integrated suite of all the customers’ required financial services may just not be on the horizon yet.

But it will be interesting to see how this pans out for the future of banking.

#Note
Contributions from Ladi Asuni

Multitasking is Good, Focus is Even Better!

I almost freaked out when I found out that I could cut steel and concrete with just a bottle of water, or simply by shining a torch light. Wait, with my bottle of Nestlé PureLife, I could cut down the Eiffel Tower?
Ok, I know that sounds dramatic and impossible, but the real gist of this is that you can cut steel or concrete with a water jet or laser. It sounds like science fiction, but that’s the power of focus.
Taking it further, I remember a very razz proverb from my grandma that says that you can make your pee foam – if you aim it at just one spot.
Science fiction or razzness aside, there is so much you can achieve in life and your career – just by the power of focus. It allows you to put together your mental, financial, and professional energy on what is imperative. Hopefully, you can have the superlative success that nobody would have imagined you are capable of.
The power of focus also goes into the everyday things we see around us. Think about how a small push of the brake pedal can stop the humongous SUV we are using to harass innocent Fiat Punto drivers on the roads. The little force from our spindly legs is multiplied by focusing it on a small area of the brake mechanism.
So it boils down to this: if you are trying to do many things at the same time, you may be praised as the master of multi-tasking, but the chance is pretty high you won’t achieve anything.
How this affects your career and your life
I once mentored a young woman. Bright and intense nonetheless, she was never able to break into the big league because of a major problem – she wanted to do so many things. From project management certifications to doing ACCA (sorry, accounting sucks), to running a hair salon side gig. Ultimately, her attention, energy, and intensity stretched thin. It was simply not enough to achieve success.
So, if you need to have a transformation that lasts and gets you there, the first big question would be – what would you rather be successful in… if you had just one chance?
Unfortunately, it’s hard to find an answer to that deceptively simple question easily. No wonder it has been hard to be successful as well. Sad.
So let’s say you are one of the few who knows what they want to be, the next thing would be to focus on it like a religion. Act like your life depends on it. The focus does the magic!
Run the distance
Focus is magic; but every magician will tell you, if you don’t have the crowd, you don’t have the magic! You need to run the distance for the focus to show its effect.
This reminds me of the few times I did some sit ups, then I gingerly touched my pouch, feeling for anything that looks like the start of a six pack. Of course, once I fell off my schedule after a few days, only the one pack stayed behind.
Simplification is deceptive
Before sauntering into the evening, I need to warn you that simplification is a façade. Yes, you need focus, and then you need focus to run the distance to achieve anything. Errm, that isn’t all to succeed. You need to run smart; you need a dose of luck.
Gosh! We need many things just to get a chance to succeed.

Online Banking without Offline Annoyance

The drumbeat for payments and all things digital has been beating loud and long (and annoying, almost like a banshee!). At face value, this seems to be one thing customers and banks can agree about.
Banks don’t want customers in the branches anymore (because it cost more to serve them in-branch) and customers don’t even want to go to the branches to do transactions. It cost more to get there; the tellers aren’t as pretty as before; you could spend the last years of your life stuck in traffic and lastly; woe betide you if your favorite branch got robbed, a junior thief could use your pot belly for target practice.
Unfortunately, while it seems there is an agreement, almost every bank seems to struggle with getting customers online.
Many issues are to blame.
The processes are designed by sadists who don’t understand what customers want or able to even let the customers know what needs to be done online.
Even when the processes can be decrypted by the CIA and NSA, it mostly involves a trip to the banking hall.
But then, good news is, sadists are getting a change of heart and banks are seeing the light. Hallelujah.
Curiosity killed the cat
In the age where Zenith, Wema, etc. let you open an account with your USSD code, I was wondering if these banks won’t let me have internet banking without seeing their shops. So huddling with a friend, we trolled banks to find out the current processes of getting customers to register for Internet banking (hey, we didn’t touch mobile, don’t beef!) and whoa, we have an intriguing result.
Summary
Out of the 21 banks surveyed, 57% or 12 of them allow you to start and end your registration for online banking. However, most would want you to view just your balances. You must still ferry your backside to a branch to get token.
Of the lot that really understand the perspective of the customer, 50% of them allow you to complete the end-to-end enrollment and start doing transactions without any branch visit. Kudos to their product management team – you guys have balls!
Full Data

BankEnd-to-end self-enrollment?Self-enrollment allows transactions?Authentication method
Access BankYesNoValid account number to register; an activation code is sent to registered email and mobile number via SMS
Diamond BankNoNot applicableDownload and fill form and submit at branch
EcobankYesYesValid account number to get OTP via SMS
FCMBYesYesUse valid account number, use Debit card information to validate
Fidelity BankYesYesUse account number to get OTP, fill online form, use debit card information to validate, download a token app and start doing transactions.
First BankNoNot applicableCall FirstContact to begin registration or visit a branch
Guaranty Trust BankNoNot applicableDownload and fill form and then submit at branch for activation
Heritage BankNoNot applicableRegister online, print and take to branch for activation
Jaiz Islamic BankNoNot applicableDownload and fill form and then submit at branch for activation
Keystone BankNoNot applicableDownload and fill form and then submit at branch for activation
Providus BankYes Use valid customer ID, OTP sent via SMS
Skye BankNoNot applicableRegister online, print and take to branch for activation
Stanbic IBTCYesYesUse valid account number and phone number; set up secret questions, OTP is sent via SMS
Standard CharteredYesYesUse Standard Chartered ATM, Debit or Credit card information to validate to get OTP sent via SMS, alternatively get
Temporary ID (Received via Email)
Temporary Password (Received by SMS)
Sterling BankYesNoUser valid account number and Phone number
SunTrust BankYes User customer number, identification number, e.g., Passport or National ID card, date of birth and branch name
Union BankYesNoUse valid account number to get OTP via SMS
United Bank for AfricaYesYesUse Valid account number, use Debit card information to validate, use OTP to consummate instant transactions
Unity BankNoNot applicableDownload and fill form and submit at branch
Wema BankYesNoUse valid account number
Zenith BankNoNot applicableDownload, complete, and submit request form at any branch or via email

TGIF but one last thing
I know the stories won’t hit the headlines but banks still get shafted, once in a while, by fraud. However, I’m very sure that the ease of onboarding, the rapidly ramping revenue from transactions and even the demand for modern banking would force everyone to be at parity within the next 2 years. Mark my word, time would come when the last bank to get onboard self-enrollment would be beaten up by the horde of irate customers.

Get your private email, with custom domain, free!

Whether you are bootstrapping a small business, fought your boss and launching into the deep on your own or just side-hustling, there are some key things you need to do so people can take you seriously.
It could also be that you have a political activist group or running an NGO for orphans (I’m one, please help me!), you still have needs for certain work tools.
Having your domain name for your emails is sacrosanct if not people will think you are a joke. If you don’t think a custom domain email is important, trust me; you are probably a joke. But when Google Suite and others cost about $5 per user per month, being a joke could be less evil.
For small companies and NGOs, cash is always hard to get. And if you happen to be in Africa or especially Nigeria, many of the services you need: such as emails with your domain name, file hosting, etc. would be priced in US Dollar, something so rare to get these days. As rare as pink elephants.
Recently, while working on a project, I bumped into Zoho Mail, awesome email service but with a twist; there is a free plan!
With the free plan, if you can register your own domain name ($10 per year), you can get up to 25 users with 5GB of space for each of them for free. Your own [email protected]! As space is limited to 5GB, you won’t be able to keep a lot of junk in there. But then who cares? After all, once you have landed the big project and your magas have paid, you can always upgrade to the paid tier.
Years ago Google allowed anyone to create customer domain for up to 50 users free and then gradually reduced it until it became zero. This is how we host our Olowe.com email. Microsoft did the same thing with Outlook.com but bad belle people; they offered 500 users and then yanked everyone off!
By the way, if you are as vain as me, and you want your own [email protected] type email, Zoho Mail free plan will be OK for you, your siblings and your parents (if you still have them around). Being your family email administrator should make you relevant for the first time in your life; the feeling is awesome!

Getting them high: Challenges of onboarding customers to digital services

Digital services, which include cards, online banking, mobile apps for finances, USSD for transferring money you don’t have, etc., are essential services. In fact, financial inclusion has been elevated to the level of fundamental human rights. However, unlike things we derive joy from using – Whatsapp, Tinder, Facebook, to mention a few, digital services are like toothpaste; nobody gets too emotional about them – you just want them to be affordable, available, easy to use and then get them out of the way before you lose your mind. That is if you have a mind to start with.
Challenges facing purveyors
But then, the horror eating at digital bankers, the unloved purveyors of FinTech (Ok, I want to stop using this buzzword, it’s no longer cool) products and other financial thingamajigs, is the low onboarding or usage rate despite a captive market. When I say captive market, I’m talking about banks with large customer bases but whose customers just don’t sign up for electronic services. You would think customers love going to those crowded and nightmarish banking halls. Hell, freaking no! They continue to complain about having to visit branches to get things done. To make matters worse, even the tellers in the branches aren’t smiling or friendly, so what’s the point?
What customers want
I know quite a bit about what customers want with digital services because I’m one of them. As crazy as it sounds, I’m a customer, so I’m speaking for the hordes of ill-served and hapless customers.
The average user isn’t a techie, but yet products and services are designed such that you need to be a professor to figure things out. How to get the products is never clear; the screen flow is more complicated than flying a space shuttle, and the error messages leave you scratching your head. I can imagine how hard that is going to be for bald customers. For example, the password instructions about using special characters, upper, middle and lower cases, etc. can drive even the most patient Moses impersonator to tears. Why can’t I choose a password I’m more comfortable with? After all, if I use a complicated password and my money gets stolen, the bank still won’t be doing a refund.
By the way, using passwords such as Password123, for example, is like painting a big fat red ‘X’ on your back and then taking an evening stroll through a war zone.
Customers want convenience so asking me to visit a branch to request internet and mobile access is just, pardon my language, insane. Until someone explains why Facebook and Whatsapp never set up offices to sign up users, but my bank has to force me to endure the unfriendly Customer Service Officer, I won’t ever understand this. The pseudo-professionals talk of security and risk management, I only see mental laziness. While the risks have not disappeared, banks have launched USSD services, virtually all via self-enrollment, and the world is yet to end. Why the same approach can’t be used for all other electronic services baffles me.
My accounts have simple ten digit numbers, but the various digital banking services require different profiles and credentials. The multiple systems don’t talk to each other or even know my preferences. Does it make sense to have a different username and password for the internet and mobile services? Why can’t I manage my cards within these applications?
And the most annoying thing ever? – Even after I have taken Keke Marwa to visit the branch, endured the overzealous security guard, prayed through 10 chapters of Psalms that the branch doesn’t get hit by robbers on the day I visit, complete a form that stretches over a thousand pages, made to fill all my information over and over again, sign in 10 different places and then, oh, the customer service officer says “you have to come back to get your token as we have to make a request to head office.” Darn it!
Why digital initiatives and products have failed
Of course, customers aren’t idiots, so they rebelled against the products, come to the branches to cause trouble and continue to add to the blood pressure of digital bankers when they have to explain their weak numbers at monthly performance meetings.
My opinions on why things failed are few:
It starts from the top. Senior management and executives don’t understand the retail customers. In their rarefied offices, they practically get everything done for them. If you don’t walk in your customers’ shoes, you can’t get things done for them. In fact, let’s take a bet; if you work in a bank and 50% of your senior management use digital products regularly, I’ll give up my salary for next month.
Many products are developed by techies, who obviously have orgasms making complex products than serving dumb customers like me. The world has moved beyond digital products being hobbyist items; experts in customer experience and human computer interaction need to work on the flows and processes that are simple and a joy to use. Banks and FinTech (oops, I used the word again!) have to start doing product management and not product delivery.
Risk management is essential but isn’t everything. Every business has an element of risk; if you don’t want to get bruised, don’t play games. Many of the processes and product requirements are designed by sadists who think risk avoidance is the same as risk management. Not to be hard on them, if you have ever seen a massive fraud once in your career, you could be worse than them. Trust me, EFCC cells don’t have air conditioners.
Data practice is poor, and customer information is scattered everywhere in database silos. The silo data means the customer’s phone number on the card management system is different from the one on that of internet banking; the address filed on the mobile app request form was never updated into the core banking application; the madness goes on and on.
Making life easy for everyone
It’s not all doom and gloom. The strides made by some banks, especially those leading the USSD trail (GTBank, Fidelity, Access, Zenith, etc.) have shown that when the right mindset is applied, magic can happen. The simple workflow and self-service options for USSD banking have been so successful that it has led to over 200% growth for interbank transactions in 2016 alone.
Banks should develop integrated products or make efforts to integrate what they already have. Let the ATM know that I have the mobile app; let the mobile app be able to change my card PIN (yes!), set limits and allow me to make requests from my phone.
Processes that involve branch visits should be streamlined; Forms should be designed by humans (not sadists) and for humans; requirements should be clear and reasonable.  For instance, setting up a company online banking profile, with various mandate instructions remotely, will always be difficult but not impossible. At least, that process shouldn’t be an attempt at mental genocide.
Banks should clean up their data and also implement a single-source of truth. It’s never going to be done in a flash, but the process can start now.
FinTech and banks should understand what risk management is. Instead of making things too loose (FinTech) or too hard (Banks), elements of quantitative and qualitative risk assessments should be applied, and banks should learn to set a portion of income aside for fraud and loss compensations.
Things can change
The frenetic pace of changes over the last few years is an indication of things to come. I honestly believe that many of the issues outlined above can be resolved. After all, we didn’t get here in one weekend.  Additionally, the regulatory demands of Cashless would drive the banks, financial service providers and the average Nigerian towards more robust digital services.