VAS – The Future Of The Banking Industry

Nowadays, the banking industry is going through a major shift. Traditional banks are slowly fading into history, and modern, 100% mobile neobanks are coming to the forefront. If banking companies want to survive, they have to adjust to this new business landscape and offer their customers something more than just “storing money”. And it happens already. Financial institutions are becoming multi-purpose hubs that extend many incentives and services, not even strictly related to finances. So, let’s talk about VAS!

The banking companies have already understood that they have to be fast and mobile if they want to compete in today’s market. According to Business Insider Intelligence’s Mobile Banking Competitive Edge Study, 89% of survey respondents said they use mobile banking. A massive 97% of millennials indicated that they use mobile banking. But it doesn’t suffice any longer. It has become a standard, so to move forward, you have to propose even more. Be where your customers are and give them exactly what they need. And this is the place where Value-Added Services (VAS) come into play. The stakes are high – you can considerably extend Lifetime Value (LTV) of your customers. The profits are obvious – the longer they stay with you, the more money you make.

VAS in modern banking – the challenge

Generally speaking, value-added services are not strictly related to the institution’s offer per se.

Good VAS should:

  • Make customer’s life a bit easier
  • Allow getting something valuable or desirable
  • Address some higher purpose or corporate social responsibility (CSR).

Above all, it has to be ground-breaking. Consider Finn, a digital banking service that JPMorgan Chase bank has offered for just one year. In June 2019, they decided to shut it down altogether. Why they did so? Naturally, the answer is complicated. Partly, it happened due to lack of distinguishing mark – Finn didn’t offer consumers anything they couldn’t get elsewhere.

The appropriate way to design and offer made-to-measure value-added services consists of four paths.

PATH 1: know the customer and their needs

Financial institutions are vested with enormous amounts of data about their customers, including their habits, expenses, and incomes. It’s an essential source of knowledge that should be utilized for designing VAS. Silicon Valley Bank is an example worth mentioning. If you are an entrepreneur and you create an account in SVB, you also get access to many start-up insights, market insights, and wealth advisory to help you run your business. It is a perfect example of understanding customers and their needs. SVB targets start-ups and entrepreneurs, groups that are constantly thinking of growing and scaling up their business. And support in achieving that is exactly what they get!

PATH 2: guarantee individualization

Let your customers adjust their account or services they’re willing to use to their needs and preferences. One of examples of such adjustments derives from N26, a German digital bank. N26 offers you many modifications to fit your needs. For instance, you can create up to 10 sub-accounts alongside your main account, for reaching diverse saving goals.

PATH 3: build partnerships

You can become a sales channel for other products and services that your customer might need, and, through them, extend your offer. This is what Revolut does. Revolut has started cooperation with such organizations as Google,, Fiskl, Slack, Pipedrive and several others in order to offer discounts and preferential terms for the business account owners.

PATH 4: create new services

Many companies decide to broaden their offer for the entirely new services. One of the recognizable examples is a telecom company T-Mobile. They have decided to introduce a new financial service called T-Mobile Usługi Bankowe (T-Mobile Banking Services) to the Polish market. It is a joint venture of T-Mobile and Alior Bank. Within just a year after launching, T-Mobile Banking Services has acquired over 500,000 customers!

Many companies that we talk to are afraid of creating new services or designing individualized offer because it requires tremendous know-how and a team of experts with multidisciplinary experience. Thankfully, not at all! Companies like Innovatika specialize in designing and implementing new products and services on behalf of their clients. This allows you to save quite a bit of time and money because we already have all the necessary know-how, so we can start work from day one.

VAS in modern banking – the sources 

We can assign four significant sources of value-added services:

  • Discounts and benefits
  • Higher purpose/CSR
  • Support in the accomplishment of customer’s jobs to be done.
  • Knowledge coming from data

Set yourself as a versatile assistant for your customers. If you want to give them discounts or benefits, let it be something useful. For instance, Santander Bank has extended its mobile app for the option to purchase public transport tickets, pay for a parking lot, order a taxi, or make a donation for charity. Another good idea is to offer a discount for many products and services, exactly as Revolut does. Another financial company that does so is Brex. If you have their Brex for Start-ups or Brex for E-commerce account, you can get a discount on services to run and grow your company. The list comprises almost 40 discount opportunities with total value of over 50,000 USD. 

You can also support your customers in their tasks and duties. PKO Bank Polski – a Polish financial institution, has created a variety of additional services for the company account holders. Through online banking, each entrepreneur can order legal assistance or the debt collection services. If that’s not enough, PKO BP will help you in setting up your eCommerce shop and provide an online assistant to help you manage your finances. 

Increase your customers’ awareness with VAS

Now, let’s consider CSR and higher purpose. While it’s not strictly a financial company, Beijing subway has made a new way to pay for the tickets accessible. You can pay for your ride with… used plastic bottles. Special ticket-vending machines have been installed over the last years in the subway stations of Beijing. Bottles are scanned so that their value is calculated depending on the plastics’ quality (typically 5-15 cents). In return, the machine issues a public transportation credit or extra mobile phone minutes.

Another example originates from They call themselves a Green Banking Services company. When you use their credit card, you get cash back on every dollar you spend – with extra rewards for socially conscious shopping. The company ensures that they commit to donating 10% of earnings to charities helping struggling Americans build a better life and that no deposits are used for fossil fuel exploration or production.

LTV is at stake!

What is the purpose of all these efforts around VAS? Is it really profitable to design new products and services, individualize offers, and build partnerships with other companies? Or is it just a fad? We can say, without a shadow of a doubt, it’s not a fad. Chiefly, because that’s a demand coming directly and continuously from the market. If you don’t respond, your company will soon be overtaken by more market-aware firms and institutions. It’s not a possibility. It’s a necessity. 

The length of your customers’ lifetime value is at stake. And keep in mind, nowadays, customers are very fastidious, and if you don’t provide the service they expect, they will simply leave your company, without warning. Take a look at the 2019 Customer Expectations Report, made by A whopping 63% of surveyed customers switched to a competitor with better service. 52% without any warning. 

Fortunately, you can do something about it. And Innovatika is the perfect place to find out how! Just drop us a line or give us a call. Let’s talk about the challenges you face. Together, we will outrun your competitors!

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Katarzyna Królak-Wyszyńska
Katarzyna is an expert in discovering potential areas for development and turning them into effective businesses, products and services, primarily digital. She concentrates on user-oriented design and quick concept validation. She co-created and organized the Future Makers Challenge, a program connecting corporations with students. Co-creator of The Heart Warsaw. Co-author of the MIT EF accelerator program in Poland. She sits on the Jury of MIT Innovators Under 35 in Europe and South America. A Startups mentor.

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