HugoBank is a joint venture primarily driven by The Getz Group and Muller & Phipps, in collaboration with Singapore’s Atlas Consolidated, the parent company of the rapidly growing Wealthcare and savings app Hugosave. The bank received its No-Objection Certificate from the State Bank of Pakistan in January 2023. Muhammad Faysal, who leads Partnerships, Growth & New Bets at HugoBank, shares more about its journey with Qorus’ Boris Plantier.
The demographics of neobank users are often surprising; it is not only young people who are signing up, but also older age brackets. What is the standard profile of your target customer? What has been key to your customer acquisition success?
At HugoBank, our target customer spans a broad demographic. While we initially focused on digitally savvy young professionals, we’ve seen significant interest from older demographics who appreciate the flexibility and seamless service digital banking offers. Our core customer profiles include young urban professionals, self-employed individuals, and increasingly, small business owners who are drawn to the convenience of our digital services for managing their financial needs efficiently.
Our success in customer acquisition lies in a combination of strategic partnerships and customer-centric innovation. By leveraging the expansive networks of our parent companies, Getz Pharma and M&P, we reach diverse customer groups who see the value in digital banking for everyday transactions and business needs. In addition, we prioritize user education and engagement, making it easy for new customers to experience the value of a digital-first approach to banking.
There is sometimes a perception that neobanks are convenient for travel purposes but people maintain a different primary bank account for most of their banking needs. How do you convince people to use neobanks as their primary bank, where they keep a majority of their money and turn to for all of their financial needs?
We understand this perception and have designed HugoBank with the goal of becoming a primary financial partner, not just a secondary convenience. We address this by focusing on a comprehensive suite of services tailored to our customers' day-to-day financial needs. Our digital account solutions include competitive features like instant transfers, high-security standards and seamless account management – all accessible through a mobile-first experience.
Moreover, we aim to embed ourselves into the lives of our customers through unique offerings, such as financial management tools, automated budgeting and embedded finance options for small businesses. By focusing on building trust through transparency, data protection and responsive customer support, we foster confidence that customers can rely on HugoBank for all their financial needs, making us their primary banking choice.
While neobanks have shown impressive numbers in terms of customer acquisition, the transition to becoming profitable is proving more challenging. How do you make the necessary leap to becoming profitable while still maintaining the pace of your user acquisition?
Profitability in the digital banking space is indeed challenging, especially when prioritizing rapid user acquisition. Our approach to achieving this balance hinges on developing revenue streams through both consumer and business banking products. By partnering with local businesses and offering tailored services like SME lending and merchant financing, we tap into profitable customer segments without compromising on our growth strategy. Additionally, our embedded finance solutions enable us to integrate financial services into various digital ecosystems, creating new revenue channels.
Operational efficiency remains crucial, and we use advanced data analytics to optimize our service offerings and maintain a lean digital infrastructure. This way, we reduce overheads typically associated with traditional banks, which allows us to allocate resources effectively toward customer acquisition and revenue generation.
Being a bank without branches, customers only interact with you digitally. How do you ensure an excellent customer service experience with interactions being 100% digital? Are there certain advantages or challenges compared to banks that need to manage physical spaces?
Without physical branches, delivering a superior customer experience digitally becomes paramount. At HugoBank, we prioritize intuitive user design, ensuring that customers can navigate our platform effortlessly. Additionally, we invest heavily in our digital support channels, and will be providing 24/7 assistance via chatbots, instant messaging and live customer support. By centralizing all interactions digitally, we can continuously monitor and improve the customer experience based on real-time feedback.
Operating as a purely digital bank offers a distinct advantage in flexibility and scalability. We can respond quickly to changing customer needs and focus on innovation rather than the constraints of physical infrastructure. However, the challenge lies in bridging the ‘personal touch’ that traditional banks offer through in-branch interactions. We address this by fostering proactive, personalized communication through data-driven insights that help us understand and anticipate individual customer needs.
What are your international expansion plans? Could you describe the regulatory or technical challenges to becoming a truly national/global neobank?
Our current focus is on establishing a strong foothold in Pakistan, particularly through our upcoming pilot phase, with aspirations to expand regionally. We’re exploring partnerships in neighboring markets and assessing the regulatory landscape to build a compliant, scalable foundation. Our international strategy also involves setting up a presence in the Gulf, with early outreach to regional banks and digital transformation entities.
The challenges we face include adapting to the diverse regulatory requirements in each market, especially around data privacy, KYC/AML standards and cybersecurity. Technically, building a scalable yet adaptable infrastructure is critical, allowing us to meet the unique demands of each jurisdiction while maintaining consistent service quality.
How do you see your bank evolving in the next five to ten years? And more generally, how do you see neobanks competing in the future banking landscape?
Over the next decade, HugoBank envisions becoming a leading player in financial inclusion across Pakistan and the region. We aim to build a holistic financial ecosystem, incorporating AI-driven personalization, robust API integrations and value-added services tailored to both consumers and businesses. Our partnerships with established players in healthcare and logistics provide a unique edge, allowing us to innovate in niche markets and embed financial services into everyday life.
In the broader banking landscape, we expect to see neobanks and traditional banks moving towards collaboration rather than competition. Traditional banks will increasingly adopt digital practices, while neobanks will leverage the infrastructure and regulatory know-how of established institutions. In the long run, we believe the lines will blur, with customer experience, digital innovation and ecosystem integration defining the leaders in the banking sector. HugoBank is poised to be at the forefront of this evolution, driven by our mission to make banking accessible, relevant and empowering for every customer.
