Setting up a new Australian digital bank: A CMO’s story
- 12 September, 2019 13:23
This week, Australia officially got a new digital bank: 86 400. Pitching itself as a smarter way to do banking, the offering centres around making money management easier by helping consumers see what’s actually going on with their finances through app-based tools and data insights.
86 400, which is owned by payments provider, Cuscal, is in fact one of two digital banks to launch in the Australian market recently – Xinja is the other. Which means competition to win the hearts and minds of customers should be nothing short of fierce.
Leading the way in the 86 400 camp is chief product and marketing officer, Travis Tyler. Tyler has been in the banking industry for 23 years, working across functions such as finance, product and operations before switching to digital, where he spent 12 years working to build digital business including at Westpac. Not only did these experiences build his passion for marketing, it also gave him a strong grounding in customer-centred design – something key in every aspect of 86 400’s launch.
Joining 86 400 14 months ago, Tyler told CMO work had been undertaken by branding agency, Hulsbosch, on brand identity, and the group had already picked its name: 86 400.
Using these foundations, he’s built out brand identity, product and the new business proposition. To do this, 86 400 has taken a more “purist” view of marketing compared to many financial services firms, he said. For a start, Tyler’s remit includes product, marketing, design and customer acquisition.
“This presented me the opportunity to start with research and work with customers, build the product and brand at the same time, then use this in our go-to-market in terms of marketing, communications and brand identity. We’ve had a red thread all the way through everything we’re doing,” he said.
Supporting Tyler is a small team of highly capable people with digitally-fuelled skillsets, he said. Half the organisation’s staff have an engineering background, and many come from ecommerce rather than financial services. 86 400 chairman, Anthony Thompson, is also a former marketer, and Tyler said the pair have worked on brand creative and execution. In addition, the company has established partnerships with boutique creative agency, Bashful.
Building a customer-centric brand
The overarching premise of 86 400 is offering banking all through one smartphone app. It’s connected to various pay systems such as Apply Pay, Google PayTM and FitBit Pay, offers instant payments via Osko, and has a Visa Debit card that can be used through 10,000 ATMs nationally.
Getting here started with 16 rounds of customer testing with its app, initially every 2-4 weeks. 86 400 similarly conducted testing across every part of its product offering.
“We did have that point of inflection where we got a bit stuck both with how we were going to come to market, as well as the essence of our product,” Tyler said. In stepping back, what became clear was it lacked a solid handle on the purpose of the business. So Tyler worked closely with his marketing lead, chairman and a UK brand strategist to better devise the company’s approach.
Where 86 400 got to is the purpose of helping Australians take control of their money. Understanding that helped rally the business, made the mission clearer and ensures the group is building products true to its brand promise, Tyler said.
“Even the way we to go to market has benefitted from this, and it became our North Star,” he said. “The purpose should be there, but when you’re running as fast as we are as a bank startup in a heavily regulated space, everything you need to do has to be safe and secure. But having that purpose helped solidified what we were trying to do. It gave us much more discipline around executing to that.”
First product cabs off the rank for 86 400 are transaction and savings accounts: Pay and Save. Key features include no monthly fees, a 2.5 per cent variable interest rate, visibility of all banking accounts in one place, and smart features aimed at helping customers to better manage their money and achieve interest bonuses. For example, customers will be alerted to upcoming bills, subscriptions and direct debit payments in advance of payment.
“Our position is we are Australia’s newest smart bank, so all our products emphasis this,” Tyler explained. “For example, you can join in 120 seconds – something we had very positive feedback on with customers. You immediately get two accounts, no monthly fees. And you’re connected to 150 institutions to our bank, so you get instant value when you join 86 400.
“We immediately have 12 months’ worth of data from those accounts, which gives us insights to help you in advance with your savings. For example, we can alert you that your electricity bill is due in 13 days, or about gym memberships or Netflix and Stan subscriptions.”
Tyler noted recent research showed Australians spending $2.7 billion each year on unused subscriptions, and being charged $1 billion in late fees.
“With traditional banking, it’s always what has happened,” he said. “We are looking at what’s going to happen and giving people total visibility so they can make better financial decisions.”
Up next: How 86 400 found its target market, plus its marketing strategy
Clear target market
Knowing exactly what its target market is and needs has been another key step. 86 400’s target customer is 25 to 45 years old, or what Tyler dubbed an “aspirer”.
“These are people whose lives are becoming more complex – they’re getting married, buying their first property, having kids. Two-thirds of customers are multi-bank account holders, so having one account makes it much simpler,” he said.
“People’s relationship with money in the last five or 10 years has changed dramatically through things like subscriptions, tap and go and we have more direct debits than we ever had. We’ve gone from 30 to 300-500 transactions per month. We can help customers get on top of that, know where they are, and give them options on saving money.”
Tyler said the company worked with Evolving Experiences to build out a stiff mathematical method, looking at all the features it could provide as a bank, then identifying specific products would provide utility for which customer segments. This was overlaid with what would drive advocacy and delight.
“Australians don’t necessarily need another bank, but they need banking in a different way,” Tyler commented. “It was really important to understand what services would drive advocacy in which segments.”
86 400 then took all this research and built out its products, prototyping and testing every couple of weeks in the early stages to arrive at its final propositions.
“We’ve done so much testing, from 18 year olds to 60 year olds, and single income, multi-income and family. This helped us to get clear on who our customer was,” Tyler said. “What also came out from the work was the single problem we are solving.
“People’s money and finances have become too complex. This leaves us feeling frustrated, anxious and stressed. How we demystify money and make it clear what you need to do right now was what we were solving for.”
Data-driven decision making
With so much potential opportunity, however, knowing where to start to have the most impact was a big question to answer. Data has played a significant role here.
“We’re moving very fast,” Tyler continued. “Now we are live, we have real-time data on everything – every customer journey, what these customers look like and where they came from. It’s an enormous amount of real-time data to make decisions on.”
To ensure data is harnessed, 86 400 has invested mobile-based tools, and Tyler said its customer acquisition lead spent a lot of time upfront on data initiatives. On his phone, Tyler has an app for social, another for customer acquisition.
Tyler said he’s also learnt the importance of speed. “I previously worked in very big teams, and I thought alignment and progression was a function of size, but it’s actually a function of speed,” he said.
“We have worked really hard on communication and alignment. We’re doing standups daily, and multiple different ones – I stand up with the call centre every day, for instance, then we have one around customer acquisition. Our closeness to customer makes it easy to come back to what they want, rather than what we want. We have also built a very open culture.
“Our values – frank, authentic, respectful – are key too. And having no hidden politics or agendas makes it incredibly easy to focus on driving a good outcome for the customer.”
In addition, 86 400 is a heavy user of Slack, and is running all communications and product development off Atlassian’s Confluence platform.
“If we start focusing on something, we will have a Slack channel, or if there’s an incident, we’re communicating through Slack. Everyone has access to real-time information. It’s regular communications much more frequently than any bank,” Tyler said.
In terms of marketing strategy, Tyler noted the bank is a challenger in an industry that’s very established, increasingly irrelevant and suffering from inertia. What’s more, the landscape is changing quickly. 86 400 therefore needs to build a brand that’s trusted in order to rapidly acquire customers.
With the goal of being one of the best companies acquiring customers via digital, Tyler said digital channels are a vital part of the marketing mix. However, he also flagged plans to use more traditional media to build non-customer consideration. Advertising will commence from today.
“Plus we need to build trust and credibility as this is people’s hard-earned money. They need to feel comfortable with us as a brand then as an experience,” Tyler said. “But obviously we need to do this far more efficiently than the other incumbents.”
Tyler and the team initially tested campaigns via Facebook post getting its banking licence seven weeks ago to gain learnings. Creative, meanwhile, is all focused on highlighting customer benefits. Visually, 86 400 has adopted a vibrant 18-colour palette, a move that again will visually distinguish it from the primary colours of traditional banks.
“Our variation of creative is significant,” Tyler said. “In channels, we have 656 pieces of creative we’ve developed for a campaign. We have been working with our creative agency, through focus groups and qualitative testing, on what customers wanted. And they said just tell us what you are doing. So we’ll be heavily benefits-focused.”
External partnerships are another piece of the puzzle and Tyler acknowledged 86 400 can’t do everything itself.
“If someone is doing something better, we will partner,” he said, adding experiences are part of this plan. A case in point is the home loan and mortgage market, where upwards of 60 per cent of loans are still secured via a broker. 86 400 plans to release a competitive home loan offering in coming months.
“We want to help as many customers as possible to have a better banking experience,” he added.
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