A legacy-free, mobile-first platform, building for scale, and a focus on openness helped digital bank Up reach its first hundred thousand customers eight months after its launch, according to co-founder Dominic Pym.
The bank is a collaboration between software firm Ferocia and Bendigo and Adelaide Bank (Ferocia previously built Bendigo’s Internet banking platform). Up relies on Bendigo’s banking licence; by way of contrast, fellow ‘neobank’ Xinja last year received a restricted banking licence, while Cuscal’s 86 400 earlier this month was granted a full licence by regulator APRA.
In mid-June Up announced that more than 100,000 people had signed up to use its services.
Addressing the Agile Australia conference last month, Pym said that Up is trying to differentiate itself in the market by being “technology led” rather than “banking led”.
“Sounds subtle, sounds small, but actually it’s a huge difference,” he told the conference.
“When I say technology-led, I mean changing the way an industry operates, changing the engagement with a customer, like the way that Airbnb did it in hotels, or the way that Uber did it in taxis or the way that Skype did in telecommunications.”
Although the bank had its public debut in October 2018, prior to that its platform had been in production for a year, with Up working with regulators and operating with a pilot group of customers “just to make sure everything was awesome”.
“We didn’t know whether that would work we launched last October,” the Up co-founder said, but the growth of its customer base indicated its “doing something right.”
“We think that what we're doing right is, is delivering a very transparent, a very open, very agile service,” Pym said.
Up can push software to its customers more than five times a day. The bank, which relies on Google Cloud Platform for its infrastructure, can perform a regression test of its entire banking platform in 26 minutes.
“That would normally take weeks or months at a traditional bank,” Pym said. “It means we can do that twice an hour; that’s 50 times a day. Therefore we can deploy software quicker, so we can respond quicker.”
Up is able to deploy its entire banking platform to the cloud in just 45 seconds and carries out hundreds of deployments every day.
“We are able to move very quickly,” Pym said. Up’s systems were designed from scratch and lack the legacy that can hamper more established organisations, the bank’s co-founder said.
“There is legacy in the industry that we have to deal with, like a lot of the payment networks or a lot of the issues that exist in the industry we have to deal with, because that’s the well-regulated environment that we operate in,” Pym said. “But what we’re trying to do is design from a clean slate, and then create that customer feedback loop.”
Pym outlined Up’s response to a major telco outage in June as an example of how the bank combines an ability to react swiftly with openness. A Telstra outage of enterprise services meant that for hours, the ATM networks of major banks and EFTPOS terminals at some of Australia’s biggest retailers were unusable.
“There were banks all over Australia scrambling on social media, worried that their customers couldn't pay for stuff, couldn’t withdraw money from an ATM,” Pym said. As soon as Up found out about the outage, the bank was able to almost instantly push a notification to customers’ phones.
“We pushed the message straight out to all of our customers within 15 minutes about finding out about the outage,” he said. “Then we communicated with our customers pro-actively every two hours.”
“Now what bank is going to tell you, ‘Hey, the systems aren't working, hey you can’t access your money right now’ but that's exactly what we did openly, and even though wasn't our fault, we took responsibility for it,” Pym said.
“We said, ‘You’re our customer, we have a duty of responsibility to you. This is the problem, this is what we're doing about it to fix it. If you need to get money, you can only get money from these places. If you need to pay for something, you can't use your card at an EFTPOS terminal. It doesn't matter which bank it is, it just doesn't work. But what you can do is use Apple Pay or Google Pay or whatever.’ So we helped our customers through that journey.”
Just as the bank was preparing to send a further push notification, it received word that the problem had been fixed. In the aftermath of the incident, Pym said, Up was inundated by messages on social media praising it for its handling of communications during the outage.
Australia’s established banks weren’t able to respond in a similar fashion either because of their platforms or their internal structures and processes, Pym said.
Banking is an industry where it often feels like there “no middle ground” when it comes to perceptions of customer service, he said: “If the customer service is not completely awesome then it's absolute crap.”
Up has built its customer support service into its app. As a result, anyone with an account has access to 24/7 support.
Typically, responses to customer support issues in the banking sector can take between four hours and four days, Pym claimed. Up has worked to “build systems, technologies and processes to be able to communicate with our customers” in order to deliver an average response time through social media and the app of less than four minutes
“We don't have a big team; we’re less than 30 people,” Pym said. As a result, the bank has invested heavily in automation. However, it’s also interested in a “two way conversation” with its customers as part of developing a feedback loop to help drive ongoing development.
The bank has a public roadmap (dubbed ‘The Tree of Up’) that outlines its plans for new features and products. “We put dates on when we're going to deliver and we don’t always hit the dates,” Pym said. “We know we make mistakes like anybody else, but that level of transparency is unusual, globally, from a bank.”
Having a public roadmap, alongside the bank’s more conventional knowledge base and FAQ documents, is one way that it can reduce the burden of customer communications. But more than that it can also act as another way of engaging customers, which can then feed into Up’s design and development process, Pym said.