Tonik - Serving the underserved: Operational growth and digital transformation at Tonik Bank

Serving the underserved: Operational growth and digital transformation at Tonik Bank

Serving the underserved: Operational growth and transformation at Tonik Bank

digital Bank

Tomasz Borowski, Chief Operations Officer discusses Tonik Bank’s mission to provide financial solutions for the 70 per cent unbanked population of the Philippines.

Based in the Philippines, Tonik aims to revolutionise how money works in Southeast Asia by providing a transformative digital banking service.

nderpinning the business is a belief that unbanked Filipinos deserve a better choice of simple, accessible and competitive financial services.

Tonik puts its customers first with its products which include retail financial products, including deposits, loans, savings accounts, payments, and cards on a highly secure digital banking platform.

Tomasz Borowski, Chief Operations Officer at Tonik joins us to shed light on the digital transformation and mindset behind the bank’s operational growth.

Tomasz’s role is to prepare Tonik for rapid growth and oversee the upscaling of its services. He begins by explaining how in the past few years, Tonik has built everything from the ground up as the first digital bank in the Philippines.

“In the last few years we’ve been building everything from scratch – from developing our applications to attracting clients for our deposit products,” recounts Tomasz. “We moved on to building additional products and developing our loan services. Now we’ve finished the

building phase, so it's time for scaling. This is the most exciting time in operations – when you get to scale a business.”

As Tonik turns its attention to scaling, Tomasz explains the vital importance of digital transformation in the bank’s journey so far.

banking, meaning the branches, or they have been underserved by those traditional banks if they can reach them.”

Digital transformation hinges on innovation, but Tomasz highlights how it is the mindset behind the innovation that sets Tonik apart from its competitors.

“The Tonik journey started because we saw and felt the need to offer a more user-friendly approach to banking and help to address financial inclusion issues,” says Tomasz. “This is particularly relevant in the Philippines, where a significant portion of the population, 70 per cent, are still unbanked and that's why we are here as a digital bank. Digital banks, such as Tonik, provide access to financial services for people who traditionally may not have easy access to physical

“Of course, you need to invest money into new technologies, automate processes and explore new platforms. But where we need to start is with our mindsets. Here is where Tonik differs from the mindset in traditional banking. We are not digitalising traditional processes, we create digital processes in the first place. For instance, we were in discussions with a potential partner and exploring the services they were supposed to provide us in the future. They proposed to send

“We can always strive to provide a better customer experience whether that’s related to products that they use or how we understand our clients to better serve them”

Tomasz Borowski, Chief Operations Officer

us an email every day with the register of the services that people used. That might have worked at a traditional bank but at Tonik we ask questions and approach suppliers differently. If you want to be our partner, you need to think about how to create a digital process first instead of suggesting a typical, manual process that we must digitalise in the future.

“The majority of people still think

there are makers and checkers in operations. I think personally that the era of the makers is finished. With all the algorithms and all available technology at our disposal in operations, including AI, human makers are already less reliable. Digital banks need only the checkers, humans who are making sure that digital processes are executed properly by machines. The mindset is where it all starts.”

Further, Tomasz stresses that operational growth at Tonik also banks on the belief that operations can always be better.

“What I find exciting about operations is that it’s a neverending story,” says Tomasz. “We never stop improving. In other industries, the product improvement cycle takes years, if you look at cars as an example – in retail banking operations,

you constantly challenge existing processes, improvements are implemented every month and that's what I really love about the job.

“There is always space for standardisation or automation of processes. And this applies to all areas that operations are involved in, starting with customer service. We can always strive to provide a better customer experience whether

that’s related to products that they use or how we understand our clients to better serve them. Then there’s security. We can always try to improve the security of our transactions, enhance our data privacy or minimise potential issues that might arise. Let’s not forget external collaborations as well because they are an important part of Tonik’s existence. We are very demanding in terms of choosing our business partners to make sure our cooperation is based on the same level of professionalism and understanding of our customer needs and Tonik’s highest standards.”

As such Tomasz believes that operational transformation emerges from many small victories. At Tonik, this has included significantly upscaling the operations department without needing to add any new full-time employees, the way the bank processes customer feedback, improving their deployment of AI chatbots and building a robust AIbased quality control system and AI analytics module among dozens of other projects.

Securing these victories that help Tonik build and scale as a

company relies on productive strategic partnerships. In banking, Tomasz divides partners into two groups.

“First, there are partners that you can fully outsource a process that is not from the bank’s core business, not really adding the value to our clients or building the value of the bank,” says Tomasz. “The second group of partners, on the contrary, are those who have the expertise in one particular area, who were focused on a specific topic for years and mastered the solution, be it a system or module covering a particular process.”

On the topic of software partnerships, Tomasz focuses on the importance of onboarding clients and Know Your Customer (KYC) procedure. Strict compliance rules and the difficulty of client verification in the digital space elevates this process to one of the most critical processes in digital bank operations.

“As a digital bank, we never see the clients in person,” explains Tomasz. “That is why

we need to rely on professional software during the client onboarding process that can identify the relevant documents, decrypt the data from different types of documents, authenticate these documents, recognise a client’s selfie and match it with

the photo in ID and then verify collected data with other sources and perform the necessary x-checks in real-time. With partners like Daon, Tonik is able to rapidly increase the number of clients attracted by our offer and services level.”

Seamless KYC or secure CIAM?

Most digital identity providers only offer one or the other

With Daon you don’t have to choose

• Instant digital trust with any customer, anywhere – in minutes, not hours

• Identity Continuity, Daon’s seamless integration between KYC, CIAM and account recovery

• Patented, NIST certified AI/ML powered biometric algorithms

• Cross-channel solutions for however customers access your services: mobile, web, contact centre or in-person

Tonik Bank chose Daon to create frictionless, futureproof digital experiences for their banking customers.

Choices matter. Choose Daon.

“With partners like Daon, Tonik is able to rapidly increase the number of clients attracted by our offer and services level”

So what does the future hold for Tonik?

Tomasz emphasises how Tonik is in an exciting scaling phase of its journey and the business is looking ahead with growth in mind.

“We are always preparing for the next phase. Currently, that means scaling our loan products. We already have a wide range of products, starting from buy now pay later loans, via unsecured, small ticket size cash loans and unsecured

Tomasz likes learning and embraces it as a way of life. Ten years ago, his curiosity led him to artificial intelligence, and he recalls the excitement he felt for its potential to revolutionise technology and operations.

He draws attention to the current hype surrounding ChatGPT and the concerns about potential risks it might pose. Tomasz is less concerned with things like chat functionality and instead relishes the technology's potential deployments elsewhere.

personal loans addressed to clients with a bit bigger loan amount needs, up to a secured, home equity product, up to 5 million Philippine pesos for entrepreneurs. We finished building the current product range last December, we tested

them and finally, we are ready to scale them now. The plan for the next 12 months is to double the number of clients we have currently.”

To learn more about Tonik Bank, visit their website tonikbank.com.

Connect with Tomasz

“I've been involved in and aware of AI for 10 years. Back then I started thinking how it would be fantastic if we could use the technology for automation and analytics.

“I recognised that if you had much more power to analyse all the data that we are producing in operations every day, then you could improve your processes in a more complex way, much more efficiently. The best examples are quality control, training and customer interactions. For us in operations 10 or 15 years ago, all these processes were handled manually.

“But with voice-to-text technology and AI analytics you can automate 100 per cent of quality control function by verifying all interactions with clients, evaluating those interactions and automating the creation of training materials, agent's evaluation and their profile matching with our clients to ensure the highest service level.

“Coming from a world ruled by manual processes, the potential of AI is an exciting, empowering phenomenon and I look forward to seeing how our implementations will improve our operational processes even further.”