"Blue oceans for banks"

Why is it that startups like facebook and whats app, that have been in business for only a decade ,can have billions of users but banks that have been around for centuries struggle to expand their global presence?
We believe that in a race to compete with rivals, banks have lost focus and failed to look at the bigger picture.
In today's interconnected and international world the strategies that have been traditionally employed  for market expansion are only leading to stagnation. Rather than competing head on with rivals, we need to realign our focus and create new markets that make the existing competition entirely irrelevant. We need to look at the bigger picture.
Based on three months of research we've created a simple plan that can help our partner bank create blue oceans of uncontested market space for itself and in the process become a truly global entity that can serve the needs of trillion dollars, recession proof industries.

The underserved markets
“Companies can succeed not by battling competitors, but rather by creating ″blue oceans″ of uncontested market space” (sounds similar to Thiel's 'Zero to One' message about competition and the deliberate creation of monopolies as a fundamental business strategy to employ in early companies)
The standardization of banking services over the last decade has come at the cost of product differentiation and user expansion. There is no way for the customers to tell one bank from the other and hence there’s no reason for them to choose any particular bank. For continued growth a bank needs to invest in conquering new markets and uncovering new sources of customers.  The best markets are the ones that are underserved and already deeply rooted in the lifestyles of users.

Just how sweet is the pie?
-The combined worth of airlines ($750 billion), hotels($550 billion) and video games entertainment (91.95 billion) industries is $1.4 trillion. All of these industries operate internationally, deal with the inefficiencies of cross border transactions and have customers around the globe.
- All of these industries have unmet banking needs. Airlines, for example, loses 2% of its revenue every year to "credit card processing fees" and requires manual effort to  move money for 4% of it's earnings.
- These industries are a rich source of e - KYC(know your customer) data. Airlines alone served 2.8 billion passengers in 2011. Every person who checks into a hotel has to supply his/her ID proof. The exact documents that are required for opening a bank account are verified and maintained individually by these industries.


What will it take to grab a piece?
A partner bank that can reduce the operational costs of these industries stands to gain billions of new customers. No need to invest in new infrastructure or to bet on unproven technologies. Our solution is old school, low tech, financially regulated and immediately implementable.
- We are working on wrinq, a platform that can help banks gain billions of new customers by building a cross collaborative banking solutions.
- We propose truly international bank accounts modelled after the best features of digital wallets: easy user on boarding, ability to hold money in multiple currencies and fast unrestricted exchange of funds within the internal banking network. A network that is as big as facebook.
- The account holder will be charged a fixed account maintenance fee and will not be billed continuously for every transaction that is made. Predictable fees for the users. Huge profit for banks due to the high volume of customers.

The side effects
“A business that makes nothing but money is a poor business.”
The effect that we’ll  have on the industry can’t be measured in just monetary returns. What we’re doing is completely new and has the potential of changing the way people look at international banking and international banking services. With the implementation of our solution there is:-  
- An opportunity for banking apps for cross industry collaboration. A scenario where every customer who books with, say vrigin airlines, gets a bank account with our bankng partnerr.
- An opportunity for bank to make its services more compatible with the lifestyle of the people. A scenario where in game transactions are taking place through the internal banking network of our partner bank.
- An opportunity for banks to change the way people trade internationally by nullifying currency exchange losses with help of multicurrency accounts.

Acquiring and retaining international customers aka The Plan
“Over the past years, tourism has proven to be a surprisingly strong and resilient economic activity and a fundamental contributor to the economic recovery by generating billions of dollars in exports and creating millions of jobs”
According to UNWTO report a staggering 1.1 billion tourists travelled abroad in 2014. That’s about 27 Million tourists a day or 1500 high capacity jumbo jets flying every hour full of adventurers eager to explore the world.
Such is the effect of tourism that we’ve optimized air transport, hotel stays and advertisement campaigns. We’ve special travel packages catering to their needs. We’ve shops that sell exotic products. There is food that tastes different from anything they've tried before. There are clothes that are unlike anything they’ve seen before. 
Every industry is capitalizing on this explosion of global tourism with the noticeable exception of banking.

The poor foreign traveller
While there are places to go, clothes to buy and foods to try the buying experience of an international visitor is surprisingly substandard. The prohibitively high costs of foreign transactions significantly reduce the spending capacity of an individual. There’s an unfortunate state of mind where a person wants to spend but is apprehensive of the high charges that may be levied to each of his/her purchases. There’s membership fees, foreign exchange fees, card reload fees and  basically any fees that you can make up, is levied on the poor visitor.

The dazzling banking service
Away from their home the traveller has to deal with all sorts of inexplicable expenses. We can make life easier for them by:-

Issual of special prepaid payment instruments (PPIs) to the users. Quick KYC, Quick dispersal and no foreign exchange fees. All transactions will be local and there'll be a fixed usage fee. Every member of a family will have their own PPI.
Collaboration with key players in the tourism industry chain to capture customers at various points in their journey. A PPI may be issued when a user lands on the airport/checks into a hotel.
Management of PPI’s with an easy to use mobile application. The user may request for a card, reload a card and view all the transactions done from the card. An option for the user to buy discounted services from our channel partners.
An exchange of existing international travel cards with PPIs to get rid of cash advances by converting a credit only card to a debit only PPI.

Can this get any better?
A successful execution of our plan will:-
Bring more revenue to the banks as the income generated through PPI will be separated from an individual transaction. The bank will charge the card holder upfront and therefore get rid of all the unnecessary hassles. No reload fee would mean that the PPI holder would reload more frequently.
Bring Recurring revenue in the form of cross promotional partnerships. We’ll issue themed PPI’s to increase the brand recognition of our partners. For example we can charge Virgin airlines a small fee to create  a Virgin themed PPI and  display Vrgin specific content on the PPI management app.
Open up international markets for local banks. Banks have the opportunity to capture customers that could otherwise never be acquired. People from all over the world who’d never open an account in a foreign country would gladly purchase a PPI that would reduce their transaction fees.
Allow upgradation of local PPI’s to multi currency international cards (after submission of extended KYC docs) so that the same cards can be reused by the travellers when they visit some other place.

A global tourist bank need not just be a concept. The foundation required to build such an entity is already present. All we need is a bit of goal realignment to realize the immense benefits of a trillion dollar , recession proof and a truly global industry.

originally posted by: 

Akshat Jiwan Sharma: akshat@wrinq.com