Touch Bank is off to a flier. The Russia-based digital and mobile only bank, launched by Hungary’s OTP Bank, set up shop as recently as April 2015. Its Touch Bank card has proved an instant hit with 60,000 customers and 30m ($34m) deposits in the bank’s first year. Douglas Blakey reports
Touch Bank has launched with a single card – The Touch Bank card – but it is a product that offers customers access to a range of services including current account, deposit, credit card account and cash loans.
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Digital-only sub-brands launched by established banks have become all the rage in the past decade, with varying degrees of initial success.
Think Hello Bank, the BNP Paribas digital startup initially launched in Belgium and Germany in 2013, followed by France and Italy. Or Raiffeissen’s digital sub-brand Zuno, rolled out in 2010 in Slovakia and the Czech Republic; but Touch Bank is a Russian first.
Speaking at CI‘s sister title Retail Banker International‘s annual London conference in May, Touch Bank’s digital director Alexey Maklakov said: “Touch is a balanced combination of modern banking technologies and easy-going human approach, manageable virtually by a single touch.”
He added: “The Touch Bank Card is a personal financial assistant which gives and supports access to all banking services in real time, via an online app. The card offers a range of tools that allow cardholders to tailor and customise the relevant banking services to suit their needs and habits.
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By GlobalData“Its services are aimed at people that try to optimise their costs and efforts in such a way as there is no need to obtain credit in one bank, service a card in another one and service a deposit in the third one.”
Touch Bank’s vendor partners include Backbase, IBM, Tieto, SAP and SaesForce. Initial IT investment in the project was in the region of 31m ($34.9m).
“The whole project took 12 months from scratch, including putting together the development team, getting the technology right and product innovation.
“We started in April 2014 and by April 2015 Touch Bank became fully operational,” said Maklakov.
Following a regional rollout from April until October, the launch promotion extended to 89 Russian cities and towns including all cities with over one million in population across the country by the end of 2015.
According to Maklakov, the Russian market is ideal for a digital startup bank to prosper. “The demand for remote banking services is high as Russians, contrary to popular belief, are not conservative in terms of using online financial services.
“They eagerly embrace modern technology, as shown by the growing share of customers who prefer making account applications and conducting transactions online rather relying on face-to-face banking.”
Maklakov explained that before Touch Bank launched, customers downloading an app or signing up for an account would wait up to five working days for a letter containing their PIN.
Indeed, he said that a new account would require the customer to wait for three letters containing user information for mobile, internet and telephone banking.
With Touch Bank, customers’ online account opening application takes between two and seven minutes with the card received the next working day.
In addition to a rouble account, Touch customers can also open accounts denominated in euros, US dollars and UK pounds.
The success of Touch, in particular among young Russian professionals, will inevitably lead to speculation that OTP will seek to expand the Touch brand to other markets.
In a statement, Andrei Kozliar, Touch Bank’s CEO, said: “We are proud of what we have accomplished over a short period of time: our brand has a positive image in the market, and the high demand for our services is reflected in a stable growth of our customer base, deposit volumes, and a growing interest in our credit products.
“Next year, we will continue focusing on customer service, and our customers will be pleasantly surprised with our banking innovations.”
