Pradyut Hande: Hi guys. Welcome to another insightful episode of the MarTechno Beat, especially a curated podcast series powered by Netcore solutions. Here’s what you gain cutting-edge insights from leading marketers, product champions, and MarTech influencers on all things like user growth, engagement, retention, and AI-led personalization. I’m your host once again, Pradyut Hande, and today I’m joined by a very special guest from Jakarta Indonesia, Mr. Khalid Raheel, CMO at Amar Bank. Welcome Khalid, so glad to have you on board for this particular episode.
Khalid Raheel: Thanks Pradyut, lovely to be here.
Pradyut Hande: So Khalid, in his current role is in charge of driving the transformation and change that occurs at the intersection of consumer experiences and AI-led intelligent financial transactions with Tunaiku and Senyumku. Welcome once again, Khalid. So in today’s episode, we are going to highlight how a leading FinTech brand like Tunaiku is crafting in delivering personalized user experiences, powered by data analytics and AI. So what do you say, Khalid? Let’s jump into it?
Khalid Raheel: Sure.
Pradyut Hande: Khalid, my first question for you is for starters, could you briefly walk us through Tunaiku, whose genesis and growth story, and also give me that interesting insight that you shared before this particular session on what Tunaiku actually means and where the name of the mobile app comes from?
Khalid Raheel: So Tunaiku belongs to a group called Tolaram Group. This was a group that was formed about 70 years ago from somebody who migrated from the Northwestern frontier, which has since. It was started 70 years ago, as you know, they streamline into a lot of different businesses while they started in textiles, and then went on to investing in FMCG products, infrastructure textiles. So Tolaram Group took over something called an Amar bank. So there’s this whole notion, if you want to get into any kind of banking solution, you need to be backed by a bank. Amar Bank was taken over by Tolaram Group and it launched the Tunaiku. Tunaiku is the first lending product in Indonesia. So as two other principals and pioneers in this field while we started in 2013, the launch actually happened in 2014 as a brand. So primarily Tunaiku basically is a lending product for the blue ocean segment basically means that we are giving you loans without any collateral within the value of 2 million to 20 million, approximately works out to be about 200 Singapore dollars to 2000 Singapore dollars. So Tunaiku is cash actually, who is the colloquial way of saying mine or me? So my cash is what Tunaiku basically means. Okay. So we started in 2014, we are a very well established brand since we came in as Indonesia mobile-first, you know, lending says when one of the biggest challenges at that time was to kind of to look at how people are changing from very branch banking kind of scenario to see how, when you’re taking a loan or when you’re actually giving or going to a bank group, keep your funds or your deposits. There’s a lot of repo that comes in when it comes to branch banking, but in digital everything is on a platform. So there were certain challenges, but since we entered into a lending platform, in a normal scenario, if you look at bigger banks, you see them getting into the two sides to banking, there is a liability side and then the reserve asset side of the business. So normally most of the banks actually enter on the liability side of the business, where you are into banking services. This is where you actually get ready to understand what people want. And that’s when you look at the savings side of it and see who will be the best customer to kind of approach, to give them a loan form. So on the liability side of the business, you don’t really make money. You make money on the asset side of the business. So normally after certain years of establishment on the banking side, then you will go to the lending side. But then we started the lending side. So we started cashiering. Since we were backed up by the Tolaram Group, we knew that there was a huge Delta, a gray area in terms of connecting people who not just want the loan, but need a loan. That is what has been our profession. And that’s what has been our mission. So this is also backed up by a mandate that comes from the government of Indonesia saying, look, there are 113 million people who are underserved and unbanked, how are we going to uplift their lives? Hence was our vision or a purpose form when it comes to Amar bank. That technology must not just be there to create experiences and convenience, but it should also improve lives. It should actually have an impact for the better of people. People should smile. And hence our vision statement basically says that we want to bring 200 million smiles by the end of 2025. So basically solving life’s problems, not just giving a loan or not just helping them save some money but by understanding finances or behavior, because there is a relationship that is continuing, hence this is the own story of what and how we kind of approach this. What does that actually sit in the mind and what is it that we came to and what’s our purpose and what are we solving in the marketplace? And that’s when Tunaiku started, but Amar bank also has a brand called Senyumku. Senyumku, it is a beta version launched to understand how it functions, it’s AI-led intelligent banking. I would actually call it an intelligent savings platform because it intelligently not just you, based on your patterns as to where you should be spending, should you be spending right? Or should you be splurging or should you not be spending? So basically increasingly it is like lifting somebody’s financial discipline, so basically, this is how we are wanting to impact people’s lives. So this is what Amar bank sits as a mother brand today and has two sub-brands or rather product brands called Tunaiku and Senyumku which moving forward with sip together to basically create the overall financial solution and not just be a box more, not just be a box more in the sense, look, you need a loan, you take it from Tunaiku. Look, you want to save something you save on sending, no. We would want to kind of put those two brands and bring them together across, proliferate it at the intersection of behaviors, transactions, and emotions; emotions in the sense that what is it that people want then have they achieved, are the problems solved? So the whole idea is to not just give a loan, but also consult a mentor to tell them that, look, if you’re taking a loan, this is all you need to repeat. This is all you need to manage your answers. This is how you need to not curb your spending like intelligently spent, intelligently saving, it’s the whole idea. This is where the solution bit comes through.
Pradyut Hande: Right. It’s very interesting. Two things that really stood out in your response to my first question is the fact that you aren’t just transforming a traditional industry by using technology and tapping into evolving consumer behavior trends, but you’re also looking to solve an actual socio-economic pain point. And the fact that you value the impact that you create in society, not basis the number of mobile app downloads or the kind of revenues that you generate, but actually going to address on-ground pain points and bridging that gap between the population that is not connected to the banking system or the lending system, and actually bringing them under the ambit of that. I think that speaks volumes for what you guys have been trying to do over the years. So if you’ve seen how FinTech as an industry has gained a lot of moment over the last two to three years, and it has literally taken center stage over the last 12 months, especially in the aftermath of the pandemic, setting this backdrop, could you really highlight some of the key user behavior trends or habits that you have witnessed at Tunaiku during this time?
Khalid Raheel: Yes, of course, I mean, the pandemic, nobody even guessed that they would shoot up that labor did create a momentum shift from how in-branch banking or even at a larger perspective, physical to digital acceleration that happened, which basically defy natural progress. So naturally or organically, if we looked at what pandemic changed 10 times, 10 folds, in terms of how staff people started adapting to digital behavior that ended up forming a habit. So of course, yes. So while we saw a sudden surge in terms of the end of the day, we started as a digital-only. So we are somebody who has been in that space of digital-only for five years since the pandemic, even five years before the pandemic hit. So while there was a lot of, as I said, this was more for a blue ocean and for very wide audiences without having any credit score, without having any bank accounts. So this is the product that is actually getting into liquidating loans in these people’s lives, people who do not have bank accounts. So Ojika also comes back and says, look, we need to look at those 113 million, 115 million people who are also having hopes, but they cannot get a loan now in a traditional format. So how do we go about this? So that is where the mandate from the government also is to see how we uplift these areas of society and so on and so forth. But during the pandemic, yes, we did. We did see a lot of behavioral shifts when it comes to our own existing customers like the loan sizes, our ticket sizes went up. So, what was also important to look at from a banking perspective, while we talk about the whole customer experience, while we talk about CX, while we talk about technology, user experiences that are changing, people’s way of dealing with their financial data, the payments, their transactions, so on and so forth, but it also somewhere not on the door and said look, while they’re a CX, can you also help human? Now it’s not just about customers. So how human are you and what is your brand getting into and giving that human experience. So pandemic is a time when you actually look at how you deal with what pandemic has brought in people’s life, and how do you kind of go play that role to make sure that the life is not that badly hit, even in terms of finances, in terms of loans, even in terms of, the negative delta that people started having thumbs of, should I save, should I not spend more? The whole trend changed in terms of how many were looked at? Lots of people lost jobs, steady financials and incoming funds stopped. So of course, while this started happening, we started to see a lot of inflow of obligations. So Ojika also mandated saying that look, while you’re now, your objective is to re-look at your customers, re-look at your new customers, re-look at your applications, but it’s also very important to add a COVID filter to it because there could be that it would be a lot of frauds that could be attempted. So hence, while we saw that there needs to be a human angle to what we are doing, there needs to be the good side of a brand also now in the times of bad when people really need you, you need to be there, but then hence there is a practical side to the business. So, we had to kind of put that Covid filter and out of the, to be very honest, we received close to about pulling 250,000 applications every month, so that doubled up, and while Ojika mandated that look, you need to bring down your approval rate from 10% to 5%. There was obviously no meaning in spending money to not drive acquisitions, and then ask them to come on our platform and reject. There’s no point that did not make business sense. So we left it in a very organic way, where people started looking at the searches in terms of fast loans went high, collateral less loans went high. Basically, FinTech has kind of changed the notion of the Indonesian mindset, as I said. So FinTech actually includes wallets includes peer to peer lending, includes banks like us, which are loan platforms like us when peer to peer came in, there was this huge notion of high-interest rates, faster loans at the same time, the collection processes are a little not so welcomed because they had different kinds of things used to kind of collect back the money. So FinTech has an overall negative perception in Indonesia when it comes to the perception of what we are as FinTech, they give you a loan, but when it comes to taking back the money, they’re rootless is the perception. So the whole thing was to kind of defy that and tell people, look, it’s not just that because we are a bank and we need to follow certain norms that Ojika lays down even during the collection. So while we saw that, we said that we would take that opportunity to tell people and communicate that this is what we as a bank or Ojika bank practice when it comes to collection. But then people did not bother. They said, let me get the money; let me first apply for a loan. So there are a lot of these trends and habits that changed where people were really desperate for a loan, because either they were on the way to lose a job or probably they’ve already lost a job. So a lot of things went through at that point in time and of course, it was now we saw extreme customers, interested in becoming is basically becoming a must to give the product running also at the same time. So from both the angles; either it may be from consumer angles or also from a product angle. So that was a momentum shift that we saw at the Tunaiku.
Pradyut Hande: Interesting, very interesting point that you made there. The fact that you were able to achieve growth both from a product-centric approach and also by keeping customers at the center of your growth strategy and I think a lot of that stems from establishing those empathetic connections right at the onset, and while you’ve highlighted some of these behavioral trends, let’s look at it from the business perspective and for a mobile-first brands product and engagement strategy, what are some of the key user data engagement or retention challenges that you have been tackling over the last few months?
Khalid Raheel: So see, from a lending perspective or lending per se retention, the categories are a parody. Speed is a differentiator. How soon am I getting the loan? How not as tedious as the process and in the bargain, what am I getting as a document; these three things are the primary parameters sitting in people’s heads. They know that there are 10 different FinTech branches that if everything is right, they will give you a loan, but who gives you the fastest is something that they look at. So when such a scenario exists, loyalty or retention becomes the biggest challenge. Because the switch is just a click away, just a brand new way which is the next page, or the next application of it? So here, what is more important, from a Tunaiku perspective, is why we in fact looked at Senyumku as I said, so we have done the best and kind of beefed up the product based on what experiences have come through. But then, what was the talk in launching selling who does not just have another platform, which is intelligent, you know, how to save, but very importantly, cross plot, proliferate the idea of how disciplines work. And during that discipline, what problems come up, you know, data is not just about what the country is doing, what problems we can have because when a consumer is taking the loan, even before applying or a toddler approaches to go for a search on Google, there are a lot of talks that come. Can I repay it back? What could be the interest rate? What will happen to my other EMIs, can I do it? So these are the outliers that brands are not looking for. So the lands are looking at, are you looking for a loan? Is your credit history very nice? I’m giving it to you, but this is a rat race, but it’s very important to look at its trump, what problems do people have and can we approach and, you know, solve those problems would be the next paradigm shift in how retention works for FinTech. Engagement is about so if we go forward and say, look, you’re looking for a loan, I think based on your trends, I can tell you that you can mitigate this without a loan. So all you have to do is just this. So how bold can I be as a brand, tell you while my revenue comes from a loan that you take, I’m telling you don’t take a loan, is how retention actually works. So it’s more of a trust factor, not just coming from a name or a brand coming, what am I giving you? What’s it that I’m actually solving in your life? It’s a totally value exchange approach.
Pradyut Hande: Got it. I think that’s very interesting. And again, it harks back to the fact that you aren’t just looking to disperse loans or approve loans and just sort of like keep that revenue engine running, but you’ve understood what makes your customers tick. And that comes from the bare, basic fact of understanding of what was their keeping point. And as you said, a simple search or a basic analysis of behavioral data is not going to tell you those things. So you guys are going one level further granular. It’s very interesting. So Khalid now, given the fact that the mobile app is central to your larger user growth and product adoption strategy, especially in an increasingly tech-savvy market like Indonesia, what would be some of the use cases or perhaps some of the innovative campaigns that you may have run especially leveraging high conversion and high-impact mobile marketing channels, like push notifications or in-app messages?
Khalid Raheel: Yes, so Pradyut, the industry in Indonesia as a FinTech itself is very nascent. So it primarily looks at, okay, there are a set of customers. There is a basic transaction segmentation that lies within. So based on that transaction segmentation, can I do up-sell, can I go across and increase the ticket size? Can I look at a top-up; can I look at a repeat? So most of the messaging, our use of in-app pushes around these objectives. Let’s forget tonight, or forget the industry Tunaiku. Also, we haven’t been able to go a little creative to ensure that we can do some contextualizing. Can we look at an extended behavior? Okay, we have, we understand the core behavior of transactions. Can we marry behavioral trends into the transactions and say, look, you know, this is what we need to learn as a FinTech, as an industry from e-commerce. So e-commerce today is such an established real-time nudging platform. They basically understand that there are three kinds of audiences or segments. So there is a need-led segment, people who need the money, need the loan. At that point in time, they will go out of the way to get it. That’s a loan. But there are people who, for them, a loan is not a need, but somewhere they don’t realize it’s a necessity. So that’s the next segment. It is the necessarily led segment. It is very important to intervene and tell them that look, I think it’s a necessity because you don’t have to worry about repayment because there are industries. So we understand their arena of how they look at and how they repay and we come in there and make that necessity a need. And then there are outliers who want to suppose you’re contemplating a holiday. You are reading about a hotel in Bali, Indonesia. You would do it only after, so if you look at the intrinsic behavior of a human, when would you plan a holiday? You would plan a holiday one and a half years ago in your head. So if you are going to, if you want to get out in December, so you start looking at it, you know, when you plan and then try and say, look at, can I look at the tickets six months before I fly because I might get a good rate. Can I look at booking the best hotels that are better priced? So you are looking at it from what you have saved. But if I, as a brand, intervene and say, look, keep what you have saved, but I can give you a better rate and I can help you, this is where I come in and intervene. Look, I also can give you a pay later option. Can we kind of, modify our products or our offering is somewhere this whole nudging, our whole understanding, contextualized push, or even interacting with certain messengers. So, whatsoever lies there? So if we can harness that data through our app, harness the behavioral data to the app, nothing like it. So obviously yes, we need to, or we want to go towards context, realized push notifications, behavioral, push notifications, geo-fencing push notifications. Once we know that, yes, we have funded your holiday. Why not go geo-fencing; based on, okay, don’t spend so much, don’t do your parameters around having fun. So don’t look at it from splurging, no things like that is what it’s all about. That is how we can actually look at certain innovative campaigns to come in a real-life scenario. Because one of the days when brands positioned themselves in the mind of the customer today since digital has evolved, we have transformed today. There’s an opportunity to position the brands in the life of the people who should into their life, show them that the brand can actually solve a problem. So that’s when we got to look at it that way. We have to always forward integrate our product and ship it to a backward integrated need that is necessarily backward integrated. So that’s where the actual marrying or likely retention comes from.
Pradyut Hande: Right. I think that’s a solid point there. How do you become so deeply ingrained and weave your service or your product into the everyday fabric of your target audience? And I think that is the key to retention. The fact that your brand becomes so subliminal in nature, where anytime they think of anything finance-related or loan-related, they think of you and the fact that you guys will be launching another app. It gives you an opportunity to further build out your customer data platform and develop that 360-degree view of customers across both of these platforms in the future. All right, so we spoke about you know, we touched upon the mobile marketing strategy and some of the use cases that you guys are looking to address. I’m now going to come to something that has grown to be more than just a buzzword. It has become a real game-changer for a lot of companies across industries. And it has emerged as a major conversion and retention lever. I’m talking about personalization now. But in a lot of my conversations with brands across industries, I’ve come to realize that it means different things to different rights. So I’d like to know what personalization means to a digital lending platform like Tunaiku and how you guys leverage this to drive higher platform, stickiness, loyalty, or revenue growth.
Khalid Raheel: So digital lending as a platform or as an application, you don’t see people or customers frequenting back, they will come in, take the loan, liquidate it, or if it’s dispersed, they will come back to check if there is an EMI date, or there is a notification coming for the pay date. Otherwise, they have nothing else to do within the application. So from that angle, the stickiness is not looked at. We look at loyalty as I just say, look, you need to solve a larger-than-life problem. We need to not just box move alone, but also understand why they are taking the loan? Can we avoid that loan? Can we be that board as a brand? And of course yes. While we harness that there are certain behaviors that we mine and sit on, that is basically our transactional behavior, which puts across with your RFM model, which means Recency, Frequency, and Monetary model. So from that angle, yes, we look at opportunities as to where we can sell? Where can I cross-sell? Where can I make it incremental? Can I do a high-ticket top-up; can I do a high ticket, and repeat about somebody whose credit scoring is very high? So obviously there are segments and buckets that are sitting as to who’s an ideal at the top. Customer in mind, segmentation of recency and frequency when it comes to what kind of anomaly the loans are, even for productive reasons, when people are wanting to take a loan for basically, you know, for productive purposes rather than a conservative purpose. So there are a lot of these x-axes, y-axes, z- axes, and very variable axes that actually sit and maybe look at what would be our ideal customer and how should we be harnessing and growing that because there’s always a risk factor to what we are doing because there are no collaterals when we leave us alone. And from that angle, yes, today’s customers are very high in their expectations. The evolution of DFS, as I thought, was very organic production, but 2020 has changed the speed. People have just gotten. And now the biggest objective or the challenge is to see when this whole herd has gotten to this side of the fence, how do we hold them? What is it that we need to create? Where is the value exchange coming from? Because these are the ones who were very happy with the traditional way, but now, since they’ve come, tried and tested, they’ve kind of gotten hooked on them. So how can we now look at driving value through how we increase stickiness? What is it that we can offer beyond just a loan where people will come in every day? What are the loyalty indicators? What are the loyalty factors? What are the parameters that people consider loyalty is, you know, visiting at the brand side, we should not be talking wildly because loyalty is more from a customer side? He would say I’m loyal to a certain brand. And I say that, look, the customers don’t know, because as I said, today, the FinTech is operating on our price point the day, somebody else offers a better price, the switch will happen to people and say today so they’re not just downloading Tunaiku as an app and sitting and waiting to apply for a loan. No, they are very smart. They are very great learners, they know what is happening. They understand where to get their things sorted from. But if I can get in and see and help create a value within those small little gaps or gray areas that they find, then that is where the revenue and the loyalty come from.
Pradyut Hande: Interesting, interesting analogy there of how migration to digital channels and consumption has gotten an entire segment of customers to the other side of the fence. And now, I guess just taking that analogy a little further, like, you need to figure out how you ring, fence them, how you move some of them into the higher CLTV segments and just sort of figure out how, you know, you can keep them loyal on the app. And as you rightly mentioned, loyalty is a commodity that is a perception in the minds of your customers. So on a lot of stages and at a lot of times even data is not going to tell you the real story. So that’s an interesting perspective on that and just building on that. My last question to you today on this really insightful session Khalid is a technology that has definitely expedited you know, digital behaviors especially in the FinTech space and for Amar bank and Tunaiku who the fact that you guys have been one of the early movers way before a lot of the other players in the market gotten this space that gives you in a large sense, the first-mover advantage, but just put your futuristic thinking cap on and just share a few insights on how you think the use of artificial intelligence, predictive analytics, etc is going to impact the entire domain of FinTech moving forward.
Khalid Raheel: Great. So as I just a couple of questions before then I mentioned set name, Senyumku is a thought or a product that is shaping up and getting launched to basically create this site, this context of FinTech, making predictive analytics a reality, and not just a reality in terms of what can AI do, it is how can AI help somebody’s life, somebody’s finances, somebody’s financial discipline, and at the same time predict and go out there and say, look I think in the way you’re spending, probably you will need a loan in the next 14 months. So here it is much ahead of its time. And this is how predictive analytics should be working in a FinTech led environment. AI should be not just creating experiences and not just connecting two different boards sitting, working independently, but AI should actually come out as a solution. That’s when AI is like when it comes to some businesses that are vouching on what a lot of them are doing and how they are helping, right. So it’s not just about the technical side of it, but how technology is affecting and impacting people’s lives. It’s time to rethink from our brand positioning perspective to byproduct, by and large to every product, every vertical, every sector, because digitization has made this whole thing, very simple, unlike the digitization, we as marketers, so only to the mines, we could not look, look at lives and we couldn’t dive deeper into what are the passion points of people? What is it that they would love to spend on where the spending habits, dispensing habits even extend, even augmented by what people love to listen to, what people love to cultivate hobbies on, and so forth. But now it’s possible. So we need to kind of look deeper in people’s lives and then take a backward integration of products when we leverage AI and predictive analytics to the core and to the, what you have, what we are bringing in FinTech. So that’s where we can say, this is an opportunity to reshape the whole idea of what FinTech can do. So personalization is key, and this is what will take the industry to the next level of 2.0. If you, if you ask me, yes, in terms of what can come in as AI, predictive analytics, even NLPs, the chatbots, so answering specific queries is still not a trend but can be a game-changer; loan assessment, credit rating scoring use extended, augmented, ancillary, expanding, spending data habits, behaviors. And this is not AI, not just creating certain brackets and getting them together, but also how we look at industries in deals go down. That is where AI should be working securing transactions. People’s biggest fear is data security. Think a lot of them go there, find out there are suspicious interjections and stop sharing our data, protect the hacking and predict the hijacking. Can we do that? So these are the moral thoughts that when it comes to, how this whole industry should be moving forward, or what we should be doing when we say when we claim our products are AI-led and machine learning-led, what are we learning? Are we learning how much you are spending? No, we need to go up a notch beyond and learn why he is spending. So we need to like slice and dice data, data points, behaviors, and then that’s when the actual product comes out, which is a robust model of solving a problem.
Pradyut Hande: True. I think there are very interesting insights there. And as you rightly mentioned, I think the next bastion for FinTech would be to go beyond what, why, and actually start telling people what next or why next. So I think you’ve done a fabulous job just sort of breaking things down for us, and I’m sure our global audience is really going to benefit from a lot of these insights that you shared with us today Khalid. Thank you so much for making the time and being a part of this episode of the MarTechno Beat.
Khalid Raheel: It was a pleasure Pradyut.
Pradyut Hande: Thank you so much, guys. Also out there listening to us and for more such content, please subscribe to MarTechno Beat.