The pandemic has proved to be one of the most challenging and disruptive events the banking industry has faced over the past century.
Shuttered branch locations, limited operational hours and other measures that banks have taken to keep their employees and customers safe have fueled the need for contactless solutions. Financial institutions (FIs) have had to swiftly innovate their services for the new digital normal as a result, making contactless and remote solutions key to their survival now and in the future.
Digital-only and digital-first banks, which typically offer services that are remote by default, have been well-placed to weather many of these shifts. One such player is Belgium-based Aion Bank, a subscription-based digital bank with more than 31,000 customers that operates in 16 countries across Europe. Aion debuted last year just as the world was beginning to grapple with the health crisis.
“We launched literally when lockdown was happening,” Aion Bank Chief Information Officer Tomasz Motyl told PYMNTS during an interview. “We managed to put innovation that would normally take five years into five months.”
While the bank operates four branches in Belgium, prospective customers are not required to visit these locations to prove their identities and open accounts. Motyl explained that onboarding users digitally has become particularly advantageous during the pandemic. Aion provides solutions that are entirely accessible via app, and Motyl said that the bank’s mission from the very beginning was to allow customers to navigate their banking experiences themselves.
Using NFC Technology to Power Digital ID Verification
Aion’s customer verification process leverages near field communication (NFC), a wireless data transfer method that enables smartphones, tablets and laptops to share information when in close proximity. Many countries embed readable microchips containing citizens’ personal credentials into their official photo ID documents, including their passports. This allows them to use their smart devices to transfer the information these documents contain to banks, government agencies and other entities via NFC.
Technologies like NFC have been in heavy demand during the pandemic due to their ability to enable digital onboarding opportunities, but the convenience and time savings they provide are likely to make them popular for years to come. Motyl said Aion’s onboarding solution can verify customers and have them up and running much faster than traditional methods.
“We can get the data from the NFC passport with details about the customer’s name, date of birth and all these things that can be used when you are trying to verify identity,” he said. “We can onboard a retail client in 10 minutes [while it takes] 20 minutes for a small- to medium-sized enterprise client.”
Leaning on Subscription Banking for Digital Convenience
Aion is among the growing number of challenger banks that have embraced subscription models. Motyl said subscriptions can bring transparency to the banking space as traditional payment models often see FIs charge fees that customers know little or nothing about.
“We’ve stripped all of those fees out of the banking experience, and we offer … a monthly subscription fee,” he explained.
Subscriptions are still a novel concept in the financial services sector, and they tend to be more expensive than traditional options that offer free checking accounts with fees. Subscription payment solutions can appeal to consumers by allowing them to choose which level of digital service they receive, which could help them meet their exact banking needs without causing worry about various charges. Motyl noted that a growing number of services are examining the subscription route as consumers become familiar with them in all facets of their lives.
“I think that having a subscription model [like] Netflix or any of the others is a simple business model,” Motyl said. “From the very beginning, the customer pays a flat fee for all the services without the small print explaining the cost of each one.”
Consumers have undergone an unparalleled digital shift during the pandemic, and a growing number have begun to appreciate the convenience as well as the safety that digital banking solutions afford. Challenger banks and traditional FIs would be wise to examine and innovate the digital ID solutions they use to bolster their verification and payments processes as they work to meet the needs of this emerging digital-first consumer base.
Selected by EFXA