Russian bank exec says Apple Card has 'few innovative features' [u]

Posted:
in General Discussion edited December 2019
Sberbank's chief technology officer David Rafalovsky says the credit card industry is failing to really use technology to innovate for its customers, including Apple Card.

Apple Card


David Rafalovsky, chief technology officer of Russia's state-owned bank Sberbank, says that there is little special about Apple Card or any other credit card. Speaking on a panel at CNBC's East Tech West event in Guangzhou, China, he described it as being solely a regular card with an accompanying digital wallet.

"It's another credit card with a few innovative features," he said. "It's well received on the market, and I'm happy it happened this way. But it's another credit card."

As originally reported, Rafalovsky was said to be dismissive of new features such as the way Apple Card lacks fees. However, he has since contacted AppleInsider to say that he made no such comments and is concerned only with fostering a discussion about what he called "true innovation in Financial Services, may of which are driven by great Apple technology."

Rafalovsky told us he believes Apple Card is a great credit card with great features, but that in the end, it is still a regular credit card.

During the original CNBC panel, he talked about a lack of anything genuinely new in this field. "[I challenge anyone] to give me an example of great, ground-breaking innovation in consumer banking," he said.

He was also making the point that all banks are currently working in the same way. "[They are] all investing, more or less, in the same ingredients," he said.

Regarding how Apple Card is presented by Apple but actually provided by Goldman Sachs, he said that he wondered how traditional banks are going to fare in the future. Rafalovsky argued that banks now need to use voice, that they should adopt voice technology, but that there may ultimately be a problem for them.

David Rafalovsky, CTO of Russian state-owned Sberbank
David Rafalovsky, CTO of Russian state-owned Sberbank


He talked about all the assistants such as Siri and Google Home, but for an example, picked Alexa.

"If you're a bank," he said in a panel about what are called fintechs, companies that focus on financial technology, "there is absolutely no tactical reason not to build a voice application, a skill, to become one of the thousands or tens of thousands of skills in the Alexa ecosystem."

"But from a consumer point of view, when you say 'Alexa, transfer $100 from account A to account B,' who are you interfacing with?" he continued. "Who do you have emotional attachment with? Who do you think you are transacting with? Is it the bank who provides that actual transaction service, or Alexa because this is the assistant name you used?"

"Will [banks] retreat and become a back-end to fintechs and large tech companies with a huge install base and user-base? Or they will actually innovate in their own right and drive product innovation on par, if not better, than the big tech companies," he continued.

He says that his own bank, Russia's largest, is diversifying away from solely finance into, for instance, investing in a food delivery service. "The growth of non-financial products overall dramatically exceeds financial products," Rafalovsky said. "I think many financial companies -- not all -- will do it exceedingly well and I suspect, and I certainly hope, that the Russian market will be used as an example of how financial companies can innovate."

Currently, Apple is the prime example of a technology company providing a front-end to a bank, although Siri does not yet include Apple Card shortcuts. However, according to CNBC, Google has said that it plans to move into providing checking accounts next year.

The company already offers a Google Pay service, but in a project codenamed Cache, Google intends to partner with firms such as Citigroup to offer more financial services.

"We're exploring how we can partner with banks and credit unions in the US to offer smart checking accounts through Google Pay," a spokesperson told CNBC in a statement, "helping their customers benefit from useful insights and budgeting tools, while keeping their money in an FDIC or NCUA-insured account."

Apple Card was launched in the US on August 20 this year, and Goldman Sachs described it as the "most successful credit card launch ever."

Updated: 11:45 ET: David Rafalovsky emailed AppleInsider to clarify and correct the interpretation we got from CNBC's coverage that he was criticising Apple Card.
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Comments

  • Reply 1 of 38
    The irony of a CTO from a Russian state owned bank commenting on “lack of innovation”
    qwerty52razorpitlordjohnwhorfinStrangeDaysrobin huberjbdragonmagman1979flyingdpcornchipjony0
  • Reply 2 of 38
    steven n.steven n. Posts: 1,226member
    Banks should be....  wait for it.... Banks. 

    They should be old stogggie conservative institutions concentrating on keeping money fluid and safe.

    Yes, invest in new tech (including block chain if it can improve security) to add convenience but stay out of delivery, automotive, aerospace...

    Banks should be trusty risk adverse. 

    Be a bank. 
    robin huberjbdragonmagman1979flyingdpdavgregentropyscornchipwatto_cobra
  • Reply 3 of 38
    jimh2jimh2 Posts: 402member
    Everyone expects huge changes in everything when a new product is released. It is a credit card with some minor differences. For most the only way to improve the credit card experiences are ridiculous rewards programs or 0% interest rates.
    Solispice-boywatto_cobra
  • Reply 4 of 38
    lkrupplkrupp Posts: 9,991member
    I can’t help but think this article was posted for the express purpose of generating responses here. Here we have a Russian oligarch, one of Putin’s  army of yes-men, talking down the Apple Card. The CTO of the state bank of a totalitarian dictatorship that puts on the airs of a democracy comments on innovation? This is so bizarre I can’t wrap my head around it. But then we now kowtow to the mighty Chinese Communist/Capitalist blended juggernaut. Meanwhile the West slowly devolves into a socialist dystopia. How long till we are a Communist/Capitalist blend with established social scores? Oh wait, we already have them, they’re called “credit scores”. 
    edited November 2019 qwerty52williamhrazorpitAndy.Hardwakejbdragonmagman1979flyingdplenny491entropyscornchip
  • Reply 5 of 38
    asdasdasdasd Posts: 5,685member
    In Soviet Russia credit card owns you.
    qwerty52razorpitlordjohnwhorfinAndy.HardwakeStrangeDaysrobin huberjbdragonmagman1979cornchipwatto_cobra
  • Reply 6 of 38
    asdasdasdasd Posts: 5,685member
    lkrupp said:
    I can’t help but think this article was posted for the express purpose of generating responses here. Here we have a Russian oligarch, one of Putin’s  army of yes-men, talking down the Apple Card. The CTO of the state bank of a totalitarian dictatorship that puts on the airs of a democracy comments on innovation? This is so bizarre I can’t wrap my head around it. But then we now kowtow to the mighty Chinese Communist/Capitalist blended juggernaut. Meanwhile the West slowly devolves into a socialist dystopia. How long till we are a Communist/Capitalist blend with established social scores? Oh wait, we already have them, they’re called “credit scores”. 
    It looks like the west should adopt more socialism if the Red Commie Chinese are doing so well. 

    lordjohnwhorfin
  • Reply 7 of 38
    RTMRTM Posts: 6member
    While some people won't read the text of this the article and comment here - what he's actually saying is true. And he doesn't dis on Apple, despite how this headline might think it is. He's simply stating the reality of the banking industry. And in fact, he even gives Apple credit. As always, reading matters. Understanding words matters.

    What Apple did *was* add just a *few* new innovative features. They didn't overhaul the credit industry, as the last week as most certainly proven. They didn't offer some fantastic new thing that everyone needs to go out and get. They added a few things that some people find useful. As much you or I would like to dismiss this as just a random Putin dude (and he is of course), it doesn't make the content of what he's saying incorrect.

    And, if you're into banking enough, there's some solid nuance into it too. For example, the inclusion of wanting to get folks to put money into FDIC insured places is directly a ding against Cryptocurrencies (setting aside banks desire to keep money in their banks).

    Just because Apple/Goldman claim something is the "most successful card launch ever", doesn't mean it's the most innovative or the best card. It just means they signed up the most people (assuming they did). In fact, for a lot of people, they'd be far better off choosing cards with more/better rewards (albeit without the Apple privacy restrictions).
    avon b7tokoloshflyingdp
  • Reply 8 of 38
    robjnrobjn Posts: 263member
    This is of course a product that is not available to non-US residents, so this guy probably has less first hand experience with it than the average US consumer.

    Almost all the innovation is in the user experience and especially the wallet app. You have to experience it to appreciate what a big step forward it is.
    cornchipwatto_cobra
  • Reply 9 of 38
    badmonkbadmonk Posts: 1,073member
    Using Alexa to transfer money between two Russian bank accounts...what could go wrong?  

    Honestly, he is disparaging Apple because it minimizes the potential for graft and corruption.

    Contrary to how a non-technical figurehead  perceives the world, there is a lot of technology involved with Apple Pay and Apple Card.
    qwerty52Andy.HardwakeStrangeDaysjbdragonmagman1979flyingdpcornchip
  • Reply 10 of 38
    Is there any innovation in the Apple Card at all? For me (in a market where there is no Apple Card), it looks like a card that has various standard features when it comes to rates and perks, looks good,  is integrated with Apple Pay and has an app showing where your money has been used.

    Nothing new about any of this.

    The card is all about good execution rather than innovation - which is perfectly fine.
    rogifan_newpascal007chemengin1
  • Reply 11 of 38
    RTM said:
    While some people won't read the text of this the article and comment here - what he's actually saying is true. And he doesn't dis on Apple, despite how this headline might think it is. He's simply stating the reality of the banking industry. And in fact, he even gives Apple credit. As always, reading matters. Understanding words matters.

    What Apple did *was* add just a *few* new innovative features. They didn't overhaul the credit industry, as the last week as most certainly proven. They didn't offer some fantastic new thing that everyone needs to go out and get. They added a few things that some people find useful. As much you or I would like to dismiss this as just a random Putin dude (and he is of course), it doesn't make the content of what he's saying incorrect.

    And, if you're into banking enough, there's some solid nuance into it too. For example, the inclusion of wanting to get folks to put money into FDIC insured places is directly a ding against Cryptocurrencies (setting aside banks desire to keep money in their banks).

    Just because Apple/Goldman claim something is the "most successful card launch ever", doesn't mean it's the most innovative or the best card. It just means they signed up the most people (assuming they did). In fact, for a lot of people, they'd be far better off choosing cards with more/better rewards (albeit without the Apple privacy restrictions).
    It is not his business to brakes down what Apple is doing, but to bring some innovation himself (if capable at all)
  • Reply 12 of 38
    robjn said:
    This is of course a product that is not available to non-US residents, so this guy probably has less first hand experience with it than the average US consumer.
    David Rafalovsky worked for Citigroup for 20 years, most recently in their Risk & Compliance group…

    While I think he perfectly understands US consumers, his bizarre take that banks should do food delivery is odd. Usually, you’d create a subsidiary that creates a subsidiary for that (like Japanese banking groups do). 
    williamh
  • Reply 13 of 38
    razorpitrazorpit Posts: 1,796member
    asdasd said:
    In Soviet Russia credit card owns you.
    It's been soo long since I've heard one of these. Well played.  ;)
    asdasdcornchip
  • Reply 14 of 38
    Sorry, Russian guy, sorry that the Apple Card (which is definitely marketed as a credit card) doesn't have the ability to, say, interfere in foreign elections. Perhaps Apple are working on that? Can't wait for HSBC to start delivering food... /s
    cornchip
  • Reply 15 of 38
    RTMRTM Posts: 6member
    qwerty52 said:
    RTM said:
    While some people won't read the text of this the article and comment here - what he's actually saying is true. And he doesn't dis on Apple, despite how this headline might think it is. He's simply stating the reality of the banking industry. And in fact, he even gives Apple credit. As always, reading matters. Understanding words matters.

    What Apple did *was* add just a *few* new innovative features. They didn't overhaul the credit industry, as the last week as most certainly proven. They didn't offer some fantastic new thing that everyone needs to go out and get. They added a few things that some people find useful. As much you or I would like to dismiss this as just a random Putin dude (and he is of course), it doesn't make the content of what he's saying incorrect.

    And, if you're into banking enough, there's some solid nuance into it too. For example, the inclusion of wanting to get folks to put money into FDIC insured places is directly a ding against Cryptocurrencies (setting aside banks desire to keep money in their banks).

    Just because Apple/Goldman claim something is the "most successful card launch ever", doesn't mean it's the most innovative or the best card. It just means they signed up the most people (assuming they did). In fact, for a lot of people, they'd be far better off choosing cards with more/better rewards (albeit without the Apple privacy restrictions).
    It is not his business to brakes down what Apple is doing, but to bring some innovation himself (if capable at all)
    But he wasn't attacking Apple's model. It seems like you didn't read what the article said. Or didn't understand it. In fact, the entire article (aside from the headline) actually does a good job of talking about what they're doing.

    That's the problem with taking quotes out of context (as the title did). The rest of the article does explain the context, and what they're doing. But I'm not aware of magical rule (internet or otherwise) that says you can't talk about other products in the market. After all - didn't Apple just do that last week with Chromebooks? It sounds like they should stop doing that based on your comment. After all, if they were to only talk about things they were doing - then using your comment they shouldn't discuss it until they can match the Chromebooks on price, no?

    My point is simple: Read. Understand what's written, and provide meaningful commentary.

    I'm just as happy as the next guy to make Russian jokes here - but what was actually said is rather truthful, and it wasn't actually a knock on Apple.
    chemengin1FileMakerFeller
  • Reply 16 of 38
    asdasdasdasd Posts: 5,685member
    razorpit said:
    asdasd said:
    In Soviet Russia credit card owns you.
    It's been soo long since I've heard one of these. Well played.  ;)
    Its been a while since the Soviet Union as well :-) 

     I think in future I will use "In Putin's Russia..."
  • Reply 17 of 38
    Not sure who the frack would care about what this tool has to say. Something tells me the field of banking has been doing quite well without his opinion and will continue to do just fine without it. Do not give him relevance by mentioning him. He's nary a pus ridden carbuncle on the butt cheek of a derelict country.
  • Reply 18 of 38
    lkrupplkrupp Posts: 9,991member
    razorpit said:
    asdasd said:
    In Soviet Russia credit card owns you.
    It's been soo long since I've heard one of these. Well played.  ;)
    Well, there’s also the other old one. “All your Apple Card are belong to us."
    davgreg
  • Reply 19 of 38
    Americans will be miffed, but he’s mostly right. As a Canadian, I can say that Apple’s credit card offering isn’t impressive at all. Most of what is offered as new or revolutionary has been standard for years here. 
    chemengin1davgreg
  • Reply 20 of 38
    He says that his own bank, Russia's largest, is diversifying away from solely finance into, for instance, investing in a food delivery service.

    Bahaha. Good luck with that.
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