DTWS: KBZ’s success is a “wake-up call” for telecoms industry to embrace KYC

The CEO of Myanmar’s KBZ Bank, Michael DeNoma presented his insights on customer experience and financial inclusion in a session called ‘The art of the possible: CX strategies for launching new products and services’ at Digital Transformation World Series (DTWS).

Digital transformation success stories often focus on technological innovations, but the real secret isn't about technology, but giving customers the best possible experience. That means embedding customer care deep into your digital strategy – even if that means starting from scratch.

That was the key takeaway from a keynote presentation from Myanmar’s KBZ Bank at the virtual event on October 29. DeNoma outlined the company's radical transformation from traditional bank to leading-edge fintech player in one of the world’s most underdeveloped finance markets.

Two key aims

KBZ – which began operation in 1994 – launched a mobile money initiative with vendor partner Huawei in March 2018. The aims were to transform the bank into a digital finance powerhouse and create a digital finance ecosystem that would provide financial inclusion for everyone in Myanmar by 2028. At the time of the announcement, KBZ’s branch and ATM density were among the lowest in the world. Fewer than 40% of adults had a bank account and fewer than 40% of homes had electricity. The finance market overall was immature and lacking in up-to-date skillsets. Seven months later, KBZ launched its mobile wallet, KBZPay, which made innovative use of geospatial data, and enabled full know your customer (KYC) onboarding of customers using biometrics. DeNoma said this is the key because true financial inclusion is more than just setting up a lending account.

“Financial inclusion means allowing somebody to enter the financial system for free with an instant, real-time payment account,” he said.

Clean-slate strategy

DeNoma added that doing this meant adopting a “clean slate” strategy and starting over, rather than try to give the old offers a digital twist. “The advantage of a clean slate is you can create something innovative and distinctive, and given what's happening in the world today, there are a lot of design-thinking criteria that you could take advantage of,” he said. They include the data-driven use of artificial intelligence and machine learning (AI/ML), and mobile distribution of geospatial intelligence. KBZ adopted all of them through its partnership with Huawei. KBZPay also transformed all KBZ’s staff members into banking agents, right up to the top management, he added. “Every employee from top to bottom has identical onboarding goals – to onboard 30 customers quarterly.”

Two years later, the KBZPay app has processed over 200 million transactions and records over $1 billion in transactions monthly. Its KYC onboarding and agent-banking approach has doubled KBZ’s customer base and extended branch distribution by 90 times as each of the bank’s 45,000 agents is, in effect, a branch.

“That makes us almost twice as large as the largest branch infrastructure in the world, which I think is the Agricultural Bank of China with 27,000 branches,” DeNoma said.

Wake-up call for telecoms

Aaron Boasman-Patel, Vice President of AI and Customer Experience, TM Forum, commented that KBZ’s story is “a huge wake-up call” for the telecoms industry to ensure KYC means putting yourself in their shoes when designing services.

“I'm feeling all passionate about this, because if you can launch a banking system as big as China’s, and you can give the unbanked banking just by thinking of things a little bit differently, then think about the types of services operators can offer globally,” he commented.

That said, DeNoma also noted that KBZ had the advantage of Myanmar being generally behind the times technologically speaking. Mobile services barely existed until the early 2010s when the market was liberalized. By the time KBZPay was launched, smartphones (rather than feature phones) were ubiquitous, data was cheap, and data consumption in urban areas was double that of Singapore. “The only reason we've been able to come up with this new paradigm, or a new combination of elements, is because Myanmar has been hidden from the world for the last 50 years and didn't get the opportunity to take any of the banking innovations up until now,” he said. “So it came out of the fog after 50 years, and it can take advantage of the latest technologies and the latest approaches.” You can watch the full session on-demand now. Watch the rest of Digital Transformation World Series content live and on-demand now too! Not registered for DTWS yet? There’s still time. Join 12,000 of your peers online through November 12. CSPs receive complimentary passes. Sign up here.