FinTech Magazine – June 2019

A digital banking experience with cooperative principles www.fintechmagazine.com

JUNE 2019

CUSTOMER EXPERIENCE DRIVEN DIGITAL TRANSFORMATION

Digital transformation in the financial industry

API infrastructure drives open banking CIO Russ Fitzgerald explains ‘excellence through specialism’ and enhancing the customer and broker experience

TOP 10

digital banks

Building an ecosystem?

Connect the dots. “Your journey to cloud must navigate pitfalls and opportunities that are unique to your business. We support you in imagining and delivering your cloud journey and making it run�.

Eric Meistermann, Deloitte Partner in charge of AXA Group

FOREWORD

W

elcome to the June issue of

a close eye on where open banking

FinTech Magazine!

is going is essential for HTB as an

Across the globe, finance is being

organisation,” he said.

disrupted by APIs and the potential

This issue also features the first of

they offer in developing open

our series of Money20/20 content

banking. Organisations must

from this year’s Asia iteration in

get to grips with this digital

Singapore. In an exclusive

disruption fast, or risk

video, we caught up

being left in the dust. At

with Zennon Kapron,

Hampshire Trust Bank,

who founded

which has a 50-year

the consultancy

legacy and specialises in helping SMEs grow,

Russ Fitzgerald, CIO, Hampshire Trust Bank

this challenge is being faced head on – and turned into an opportunity.

Kapronasia to help businesses navigate the continents evolving finance landscape.

We’ve also chosen our 10 favourite

In this month’s cover feature,

digital banks, and brought you the

CIO Russ Fitzgerald sat down with

must-see events for industry

Sophie Chapman to explain how

leaders. Don’t forget to check out

HTB is transforming its operations

our other exclusive company reports

to leverage API infrastructure –

on Logix and Alterna Savings.

and how working together is key.

“Collaboration with fintechs is a key component of my role and keeping

Enjoy the issue!

Olivia Minnock olivia.minnock@bizclikmedia.com w w w.f i nte c hma ga z i n e. com

03

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OLIVIA MINNOCK CREATIVE DIRECTORS

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CONTENTS

12 Hampshire Trust Bank: open banking through API infrastructure

26

JUNE 2019

34

42

54

Challenger banks and the future of business banking

62 76 TOP 10 digital banks

The biggest industry Events

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“We need to make the world more how we want to see it.�

- Scott Saunders, CEO & Founder, Happy Money

Happy Money & Alliant Credit Union proudly celebrate 2 years of partnership, changing the way people think about and use money.

CONTENTS

80 Alterna

98

IGM Financial

110

Logix Federal Credit Union

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12

Hampshire Trust Bank: open banking through API infrastructure WRITTEN BY

SOPHIE CHAPMAN PRODUCED BY

JAMES PEPPER

JUNE 2019

13

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HAMPSHIRE TRUST BANK

With its mantra of ‘excellence through specialism’, SME-focused Hampshire Trust Bank is undergoing a digital transformation journey to improve efficiency, collaborate with fintechs and enhance the customer and broker experience

H

ampshire Trust Bank (HTB) is a specialist bank staffed by experts focused on helping UK businesses realise their ambitions. The bank’s

primary operations are development finance and specialist mortgages, and specialist business finance, focusing 14

on wholesale, block-discounting, classic cars and other asset finance categories. HTB also provides award-winning savings accounts to individuals and businesses. Russ Fitzgerald, Chief Information Officer (CIO) at HTB, discusses the digital evolution of the bank: “Although the bank was initially established back in the 1970s in Hampshire, it was acquired by private equity investors in 2014.

Soon after, it moved to London and has been successfully growing its business since, moving to its current Bishopsgate headquarters in 2017.”

Fitzgerald joined HTB in April last year as an IT Director and soon progressed to CIO in September the following year. “I was introduced to HTB having spent the last 20 years or so working for large financial institutions. After I left my previous role I felt less attracted to the larger institutions and wanted to work for a smaller bank where I could play a greater part in defining and delivering the JUNE 2019

15

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HAMPSHIRE TRUST BANK

“ We’re not on a digital journey to replace human interaction – this is a digital journey that enhances the human interaction” — Russ Fitzgerald, CIO, Hampshire Trust Bank

also provide a first-rate service, delivering dynamic support for smaller banks.

They’re less rigid than mainstream suppliers, which works particularly well for us and suits our agile operating style.”

When Fitzgerald joined HTB, he established a strategy for the board and prioritised plans for technology and infrastructure development. The bank introduced an application program-

16

strategy,” he says. “HTB has turned

ming interface (API) infrastructure as

out to be everything that I’d hoped for.”

part of its high-level architecture, which

The CIO’s role involves managing IT,

enables data services and collaboration

security, business transformation, facili-

capabilities. This infrastructure involves

ties, operational resilience and supplier

consuming data services to improve

management.

operational efficiency, credit risk pro-

With an impressive growth trajectory

cesses, and customer and broker expe-

in terms of staff and revenue, the bank

rience. With this infrastructure in place,

targeted digital as the key to its expan-

the bank can maximise the potential for

sion. “In line with our growth and to sup-

fintech collaboration opportunities.

port this development, the next stage

“Integral to our strategy was the

of our transformation relied heavily on

introduction low-code tools into HTB.

technology. This initiative launched our

Having assessed the marketplace, we

digital transformation journey,” says

forged a strategic partnership with

Fitzgerald. “Fortunately, the bank was

MatsSoft (Netcall) to use their low-code

built on robust foundations – this is a

environment to develop workflow and

credit to those who established the

front-end integration with data and

business in 2014. It runs on a core bank-

services, such as Phoebus which can

ing platform called Phoebus, which

help improve operational efficiency and

provides all the services the bank has

underwriting capabilities,” he adds. HTB

needed to date. The team at Phoebus

found that MatsSoft (Netcall) enabled

JUNE 2019

CLICK TO WATCH : ‘BUSINESS MONEYFACTS 2018 WINNERS OF BEST BUSINESS FIXED ACCOUNT PROVIDER’

E XE CU T I VE PRO FI LE

Russ Fitzgerald Russ leads Hampshire Trust Bank’s Information Technology, Information Security, Business Change, Business Intelligence, Facilities Management and Process Improvement capabilities. He has over 20 years’ experience in IT and business change as a leader of operational and change capabilities.

Previously he has performed roles with Nationwide Building Society, Lloyds Banking Group and The Royal Bank of Scotland and has undertaken key consulting assignments both as an independent and working with major consulting firms.

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17

Market-leading technology and proven expertise.

Why settle for less?

As a market-leading provider of technologies for challenger banks, building societies, lenders and third party servicers, Phoebus Software Limited (PSL) provides optimum operational efficiencies to over 25 clients in the UK & Ireland. Our clients range from Tier 1 institutions to smaller scale operations and start-ups.

Our ethos is about creating a true working partnership that delivers success. We believe that the initial implementation is not the only part of a relationship where our clients want to be highly satisfied; we believe in delivering exceptional client engagement throughout the full life cycle of the relationship with our clients.

With over 30 years’ experience, PSL is a genuine business enabler that enhances and automates originations and servicing activities for lenders and deposit takers in both retail and commercial financial services companies. Over £50 billion of assets are managed on behalf of over 100 companies on the Phoebus servicing solution, administering products such as residential and

LE ARN MORE CONTACT US

commercial lending, equity release, development finance, bridging and unsecured lending. In addition, a full range of savings products are catered for across retail and commercial clients.

Compliant Open Banking API’s and an integrated workflow solution deliver automation of any lending or savings process thus optimising efficiencies and providing ROI. In addition to enabling multi-channel originations across multiple lending and savings products, Phoebus provides a highly automated primary and special servicing solution.

Modules are available to support areas such as securitisation, syndication / sub-participation and portfolio migrations. An integrated General Ledger and inherent double entry principles ensure complete financial integrity of all accounts administered on the system.

Work with PSL and you’ll be able to drive your business forward using a highly automated solution, delivered by an experienced team focused on delivering solutions that are proven to meet your needs.

We know our systems, We know your business When you hear the name Phoebus Software, it is generally associated with reliability, robustness and experience. This is because for over 30 years, Phoebus Software Limited (PSL) has been at the heart of supporting the banking and lending sectors by providing mission critical platforms, on which today are serviced over £50 billion of varying asset types in Sterling and Euros.

Today, we continue to see the immergence of varying digital solutions especially in the challenger bank and lending sectors. The launch of an array of new Fintech providers has created real diversification in the marketplace with suppliers looking for their own specific USPs, especially in the area of the user interface (UI). Users today are labelled in many ways whether they be either Generations X or Z, the iGeneration or Millennials, but they have one thing in common – they expect digitised efficiencies with a look and feel they can relate through their personal online interactions in areas such as gaming.

Open Banking is now a major driver in the banking sector and software providers are required to deliver to the requirements of this exciting opportunity. So how does Phoebus fit in with providing such solutions in this new digitised age?

The balance the industry needs to find is in the area of innovation verses the requirements of a highly regulated environment. For a software supplier such as Phoebus Software Limited, this provides opportunity as through implementing Phoebus, banks can build their foundations on a proven, compliant and scalable platform, and then opt to use whatever technologies they require (whether Phoebus or otherwise) to deliver the customer experience they want using compliant Phoebus APIs. Take Hampshire Trust Bank (HTB) as an example.

Proving PSL’s partnership approach to client delivery, the relationship between the two organisations actually dates back over thirty years when the Phoebus solution was developed and implemented to run Heritable Bank’s full banking operations. Heritable Bank was a multi-currency, multi-product merchant

bank and key individuals within its management team became the management team that took over Hampshire Trust Bank in 2014 using PE backing. As a previously trusted partner that supported all of HTB’s day 1 product and distribution requirements, it was a natural choice for Phoebus to be selected as the platform to provide HTB’s functionality in these areas.

Neil Dyke, CTO at Phoebus Software comments, “we have various specialist banking clients and HTB in particular is one with evolving, forward thinking requirements that means that Phoebus needs to be able to support various digital solutions for them.

Working with HTB allows us to ensure that our core solution supports the digital requirements of a modern bank such as HTB, whilst supporting mission critical areas such as financial and regulatory requirements which are core to the Phoebus platform”.

“What we have delivered to many clients now is a range of APIs allowing the 2-way movement of data between Phoebus and other solutions required as part of a technology stack, whether that be mobile applications, Phoebus developed, or 3rd party digital originations platforms or more specialist solutions such as treasury providers, valuation companies, etc. This approach fits in with HTB’s and other clients future strategies which we regularly review with them”.

Richard Pike, sales and marketing director at Phoebus Software adds, “the market requires flexibility and we have built our digital strategy around this.

There are highly aspirational innovative banks out there that have launched having gone down the full system development build route that will undoubtedly come to the conclusion, probably driven at a point of scale, that a more robust core engine such as Phoebus should be used to ensure financial integrity and compliant activities. Customer facing innovation can continue to be developed in areas such as UI and UX by these organisations which can easily be integrated via Phoebus APIs. Our experience of working with such institutions in critical areas such as migration means PSL is very well placed to assist such businesses”.

“WE’VE RECEIVED SOME AMAZING BROKER FEEDBACK ON THE PLATFORM” Russ Fitzgerald, CIO, Hampshire Trust Bank

Apak Group, a Sopra Banking Software company, have been providing leading global software solutions to the banking and asset finance sectors for four decades.

Our Sprint solution offers industry-leading front and middle office functionality for Lenders and Intermediaries, with point of sale finance applications for smartphone, tablet and desktop.

LEARN MORE CONTACT US

“ Our API Infrastructure enables HTB to play a greater role in the SME lending ecosystem” — Russ Fitzgerald, CIO, Hampshire Trust Bank

it to build development capabilities with

Virtrium, a Chaucer Group Company.

ease and speed, due to its ability to offer

“Virtrium helped us identify, procure,

API integration. With low-code, the firm

contract and assess the architectural

has commissioned a series of develop-

implications of various API orches-

ments within its operations, such as a

tration layers,” notes Fitzgerald. “In

new mortgage platform. “The bespoke

September 2018 we commissioned

platform targets specialist lending. It will

this transformation work with Virtrium,

be integrated through API infrastruc-

and by December we had settled on a

ture with Phoebus later on this year and

contract with SnapLogic. By the end

will give us much needed operational

of the month, we had implemented the

efficiencies through data collection

API infrastructure into our production

with both internal and external data

environment and had a proof of concept

sources. Opportunities to collaborate

up and running.” Throughout the year

with fintechs within the property market

ahead, HTB will invest in its existing

remains an opportunity waiting to be

applications and develop further plat-

tapped,” says Fitzgerald.

forms focused on improving operational

The bank has also formed a valuable partnership with consultancy firm

efficiency, underwriting capability and broker experience. w w w.f i nte c hma ga z i n e. com

21

Maturity Assessments

Third Party Assurance

Business Resilience

Virtual CISO Strategic Advice

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At ICA Consultancy, all our personnel have previously held industry positions, resulting in unrivalled security expertise spanning multiple disciplines and industries. This ensures we are able to provide our clients with the right advice and deliver solutions quickly and effectively. Combined with our strategic partnerships, we are able to deliver a broad range of security services, all complemented by our trusted advice.

Talk to us today on: info@icaconsultancy.co.uk or find out more at: icaconsultancy.co.uk

During last year, the firm developed a series of core applications which HTB plans to integrate with back-end platforms using Snaplogic’s API infrastructure. The applications have been created in order to improve efficiency as well as broker and customer experience. “We’ll use them to underpin the specialist advice that we give on a face-to-face basis to brokers and their clients. HTB has also invested in the Sprint platform from Apak Group, a Sopra Banking Software company.

“Our partnership with Apak has worked well for us,” comments Fitzgerald. “Our

23

collaborative development of their Sprint platform services the brokers of

‘Capability as a Service’ to supplement

our Specialist Business Finance Divi-

our strength. We have a great relation-

sion. We’ve had some amazing broker

ship with Ben de la Salle from ICA Con-

feedback on the platform. “It is now in-

sultancy, as he gives us the capabilities

tegrated to HTB via our API infrastruc-

of a big bank CISO when I need to set

ture and will shortly integrate Sprint

strategy and direction, as does Cliff

with APIs for Asset valuations and HPI

Ratcliffe from Techana who brings the

checks, further improving efficiency

IT architectural knowledge and lessons

with more opportunities on the horizon.”

learnt from bigger banks to the benefit

On the subject of capability, Fitzger-

of HTB. Cliff has proven to be a valuable

ald notes: “While we have the ambitions

partner for us and I have the benefit of

to build the services and capabilities

them on site on a part time basis as and

of larger competitors, we sometimes

when we need them.”

lack the senior capabilities to help lead

HTB recently refined its credit

us through the journey. I draw down on

risk strategy with help from partner w w w.f i nte c hma ga z i n e. com

digital transformation experts for Financial Services Chaucer advises on: • Leveraging technology to innovate • Establishing open banking platforms • Identifying and contracting the right technology partners • De-risking delivery to accelerate value Find out more at www.chaucer.com/financial-services

Deloitte. As a result of this, the bank is

interaction and allows us to drive up

investing in modelling, decisioning and

our proposition, improve our operating

data analytics capabilities. “Deloitte

efficiency and draw information from

were key for us in helping set our strat-

internal and external data sources that

egy and stretch our ambitions,” com-

will greatly improve the way in which

ments Fitzgerald. “With Deloitte’s guid-

we underwrite and assess proposi-

ance and support we have invested

tions,” says Fitzgerald.

in a complete refresh of our data and

“We have established our high-level

BI technology stack, which resulted

architecture and identified, contracted

in a decision to invest in Snowflake’s

and purchased our API infrastructure,”

database architecture and the Tableau

Fitzgerald concludes. “Our API Infra-

visualisation tool.”

structure enables HTB to play a greater

“We’re not on a digital journey to

role in the SME lending ecosystem. We

replace human interaction – this is a

have further commissioned low code

digital journey that enhances human

development tools to develop our capa-

JUNE 2019

2002

Year founded

1,800

Approximate number of employees

25 bilities in this space and worked closely

As the company continues on its digi-

with flexible platform providers to tailor

tal transformation journey, it is focussed

our proposition. We will further utilise

on using data services to improve op-

data and services with a view to benefit-

erational efficiency, underwriting ability,

ing from open banking opportunities in

and the customer and broker experi-

the short term. Our detailed infrastruc-

ence. “Collaboration with fintechs is a

ture strategy underpins this and dem-

key component of my role and keeping

onstrates how we manage capacity and

a close eye on where Open Banking is

compute capabilities across a hybrid

going is essential for HTB as an organi-

of our own data centers and the public

sation,� notes Fitzgerald.

cloud. This allows us to be an agnostic provider in our approach to transitioning capacity and compute to the cloud, which is aligned with our agile delivery approach,� states Fitzgerald. w w w.f i nte c hma ga z i n e. com

CYBERSECURITY

MAKING THE CASE FOR CYBERSECURITY INVESTMENT 26

Spencer Young, Regional Vice President EMEA at Cybersecurity leader Imperva, explores how businesses need to take decisive action and address today’s complex cybersecurity threats WRITTEN BY

SPENCER YOUNG

JUNE 2019

27

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CYBERSECURITY

28

2

018 turned out to be a significant

year for cybersecurity with breaches and attacks making

formal cybersecurity policies in place.

While this discrepancy is worrying, it shines the spotlight on why business

the news far too often. In fact, a recent

leaders are yet to fully embrace the

report released by the Department

value of cybersecurity.

for Digital, Culture, Media and Sport

Although we’re in the era of digital

revealed that over four in ten businesses

transformation, many organisations

(43%) in the UK experienced a

are looking for guaranteed returns

cybersecurity breach or attack last year.

from their technology investments.

The same report goes on to highlight

Therein lies the problem – with

that despite the growing number of

increasingly tight budgets, senior

cybersecurity threats and attacks fewer

leaders view of cybersecurity systems

than three in ten businesses (27%) have

is currently framed as insurance. So,

JUNE 2019

“ALTHOUGH WE’RE IN THE ERA OF DIGITAL TRANSFORMATION, MANY ORGANISATIONS ARE LOOKING FOR GUARANTEED RETURNS FROM THEIR TECHNOLOGY INVESTMENTS. THEREIN LIES THE PROBLEM” — Spencer Young, Regional Vice President, EMEA at Imperva

29

how do we shift this mindset so that

required to prepare for these new

senior leaders can better understand

compliance landscapes, they are

that the value of protecting business

putting security strategy decisions at

critical data extends far beyond just

the top of the priority pile of boards

covering your assets?

and exec teams.

Board members, in particular, are

CYBERSECURITY AND THE BOARD

responsible for establishing good

In recent months, we’ve seen the

governance practices and policies for

introduction of new regulations such

driving better financial performance

as the EU’s GDPR, as well as

and growth. For this reason, it is vital

constantly shifting privacy laws in

that they have a comprehensive view of

nearly every geography. While there

their organisation’s cybersecurity

are considerable levels of effort

strategy, and the required level of w w w.f i nte c hma ga z i n e. com

CYBERSECURITY

30

“ A RECENT REPORT RELEASED BY THE DEPARTMENT FOR DIGITAL, CULTURE, MEDIA AND SPORT REVEALED THAT OVER FOUR IN 10 BUSINESSES (43%) IN THE UK EXPERIENCED A CYBERSECURITY BREACH OR ATTACK LAST YEAR” — Spencer Young, Regional Vice President, EMEA at Imperva

investment for buying down their risk.

Where cybersecurity may have previously been considered one subset of operational IT, a cursory glance over the press clippings in recent years will have alerted them to the real challenge. A growing number of business leaders are awakening to the fact that a data breach is all but inevitable. What they need to know is, how they can limit the scope of damage from a data breach with the right level of investment.

STEP 1: MAKING THE CASE TO SENIOR LEADERSHIP As the levels of liability for failing to govern risk and protect critical data are transferred from the IT department to senior leadership, these leaders need a quantified measurement of risks including:

• Compromised customer data • Diminished brand and reputation • Loss of investor and consumer confidence and loyalty

• Stolen sensitive intellectual property • Compliance and regulatory sanctions • Business disruptions JUNE 2019

CLICK TO WATCH : ‘MEET THE NEW IMPERVA – DEFENDING YOUR BUSINESS GROWTH TODAY AND TOMORROW’

STEP 2: ASSESSING THE CURRENT SITUATION

The next step requires you to conduct a

Once these risks are quantified, due

thorough inspection of your current

diligence will require leaders to

security posture.

assess the steps their partners and

STEP 3: DO A COMPLETE AUDIT

This involves understanding where

competitors are taking to avoid

your critical data currently resides, who

exposure. Relationships with

requires access to it and more critically,

technology suppliers and lenders then

who actually has access to it.

become less transactional, and more

While it’s a drum we beat perpetually at

of a long-term advisory partnership,

Imperva, many leaders don’t understand

as they’re best placed to provide

the risks of a potential data breach by

advice on the current trends within

careless, compromised, and malicious

your marketplace.

insiders. Not all data assets carry the w w w.f i nte c hma ga z i n e. com

31

CYBERSECURITY

same level of risk, and not every employee should be given carte blanche access to all organisational data.

While this may be time-consuming, leaving no stone unturned at this stage of the audit will give you a clear understanding of where your security measures stand currently and benefit you greatly in the long run.

FINAL STEP: DETERMINE THE RIGHT INVESTMENT FOR YOUR BUSINESS By appraising your data assets in 32

terms of their value and risk, you can then begin targeting your investments towards timely threat detection and incident response.

No matter the time and effort invested, it is important to remember that data breaches are inevitable.

Framing this approach as a risk/ reward equation and using a tiered security approach ensures that your organisation can protect high-value targets that would cause significant harm if they were compromised.

At the very least, senior leaders need to be made aware of the growing threat they face every day from external cyberattacks and internal data JUNE 2019

“A GROWING NUMBER OF BUSINESS LEADERS ARE AWAKENING TO THE FACT THAT A DATA BREACH IS ALL BUT INEVITABLE” — Spencer Young, Regional Vice President, EMEA at Imperva

33 breaches. A single breach has the potential to irreparably damage the financial condition of even the most successful business, and ruin the careers of those leaders involved.

Rather than packaging your cybersecurity spending rationale within IT investments, these really need to be highlighted as a high-level risk mitigation strategy.

w w w.f i nte c hma ga z i n e. com

LEADERSHIP

34

JUNE 2019

Taking the risk out of expansion ZENNON KAPRON, FOUNDER AND DIRECTOR OF KAPRONASIA, EXPLAINS HOW CONSULTANCY CAN HELP FINTECHS AND MORE TRADITIONAL FINANCIAL INSTITUTIONS TO GROW AND SCALE IN A CHALLENGING REGION WRITTEN BY

OLIVIA MINNOCK

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35

LEADERSHIP

H

aving begun his career at Citibank in 1998,

Zennon Kapron has seen the finance industry evolve significantly over three decades.

Since leaving Citibank for an MBA and moving

to Asia, he can understand both technological advancements and geographical differences.

“One thing I noticed when I started my career in China was a lack of actionable research and insight on what was happening in the financial industry,” he comments. In 2007, this led to the foundation of Kapronasia, now a leading consultancy which enables finance and fintech businesses to under36

stand and navigate the challenging Asian landscape. Kapron says that his experience in banking has been instrumental in allowing him to put himself in the shoes of his clients. “Being able to relate to the challenges of the financial institutions and help financial technology providers understand what those challenges are is very beneficial,” he comments. “I think a balance of technology and banking knowledge has helped us make a footprint and develop our brand in the region.”

THE RISE OF THE FINTECHS “Fintech is much more of a reality on the ground here in Asia than it is in other markets,” says Kapron, noting that while many traditional financial institutions may initially see challenger banks and other fintech startups as a threat, the key is to adapt and JUNE 2019

“ FINTECH IS MUCH MORE OF A REALITY ON THE GROUND HERE IN ASIA THAN IT IS IN OTHER MARKETS”

37

collaborate. “Here in Asia, you have companies like Alibaba, Grab and Go-Jek disrupting millions of dollars of business of the traditional banks. There’s been a blurring of finance and technology that is really unique to the market here, with super apps like WeChat or Alipay where you’re not just doing finances and payments, but also wealth management, booking taxis, paying your phone bill… a number of different things.”

In Asia, notes Kapron, collaboration with fintechs is more prominent than other markets.

“The original idea of fintechs disrupting the w w w.f i nte c hma ga z i n e. com

LEADERSHIP

entire business of the traditional banks

vying increasingly for first place. “In

hasn’t really played out that way,” he

general, consumers make a choice

explains. “We’re starting to see fintech

when they use any of these new

players cooperate with banks to provide

platforms like Alipay and Grab – there’s

various products and services.” For

a certain amount of data individuals are

example, some larger Chinese fintechs

giving up,” says Kapron, noting that

are able to work with rural banks in

this is also a unique aspect of the Asian

China to help develop end-to-end core

market. “People are willing to make

banking services which the banks may

that choice about privacy and security

not have been able to do on their own.

and to share some of the data for

A key issue thrown up by the rise of

better financial return or a better

technology in finance is prioritising

experience. In China for example,

security or convenience, with the latter

millennials are more willing to give up data – however, in certain places,

38

especially for the financially excluded,

“ ONE OF THE BIGGEST CHALLENGES FOR TRADITIONAL FINANCIAL INSTITUTIONS IN ASIA IS FRAGMENTATION” Zennon Kapron Director, Kapronasia

this might be the first time they’re interacting with a digital platform or even with a financial institution — developing trust is really critical.”

A CHALLENGING MARKET For the market segments that fintech is best placed to serve, Asia is rife with opportunity as well as challenge.

“Across the region, there is a strong portion of unbanked and underbanked individuals, in places like Indonesia and the Philippines.” Geographical issues mean it’s often not cost effective for larger banks to serve a region, so

JUNE 2019

CLICK TO WATCH: MONEY20/20 ASIA HIGHLIGHTS 39

a fintech can swoop in to fill a gap in

across this disparate region, Kaprona-

the market.

sia aims to “take the risk out of

“I think one of the biggest challenges

expansion into Asia”. With regulation

for traditional financial institutions in

a challenge for many companies

Asia is fragmentation,” affirms Kapron.

especially as new technology breeds

“You have multiple countries, hundreds

updated rules, the consultancy works

of dialects and languages, multiple

with its clients to provide up-to-date

regulators… there is very little cohesion.

insight. “One of our products is an

The way you’d set up a business in

update service that looks at all the

Singapore is different with how you’d

regulation in China,” says Kapron.

run it in the Phillippines or Indonesia.

“Often for clients, we’ll analyse these

Here in Asia, financial institutions have

regulations and then look at the impact

their work cut out for them.”

for the particular client. How they action

For organisations looking to grow

that is up to them, but we try to equip w w w.f i nte c hma ga z i n e. com

LEADERSHIP

40

them with the insights they need to be

strategies to address those challenges

able to adapt their business.

and opportunities.”

“For our clients, one of the biggest challenges is that what’s news today

THE PERFECT MATCH

may not even be the case in a couple of

For clients to get the most out of

months – staying abreast of changes

Kapronasia’s offering, a consultative

and what they need to do with their

process must take place whereby

business model to excel in the market

client and consultant make sure they

is a big challenge. We want to try and

are the right fit for each other. “It’s

derisk that and help them understand

important to find out their challenges,

what’s happening, make better

needs and pain points in the market,”

decisions and develop more actionable

says Kapron. “Often times, depending

JUNE 2019

on who we deal with, they may not know how we can help or what their pain points are in a particular area.”

On occasion, there might be nothing Kapronasia can do to help a particular client – “they may have their own ideas on how to approach the market or they may not have an immediate need” – but Kapron emphasises that every discussion can be beneficial. “As

“ WE TRY TO ANALYSE THE TRENDS AND HELP PEOPLE UNDERSTAND WHAT’S HAPPENING BEHIND THE SCENES” Zennon Kapron Director, Kapronasia

a research institution, we’re trying to capture all the things that are happening in the market, so engaging them

From global businesses looking to

and understanding their strategies

accelerate its footprint into the region,

benefits all of us anyway, even if it

to a local fintech keen to expand,

doesn’t turn into a paying client.”

Kapronasia can remove some of the

Its diligent research, at the forefront

risk and enable clients to scale and

of industries in Asia, is what makes

grow in what is a mammoth, challeng-

Kapronasia truly stand out. “It’s that

ing, and in some cases relatively

insight our clients rely on — not just

untapped market. Through insights

for projects but for regular updates on

provided by the consultancy, business-

what’s happening in the market,”

es can look to make smarter decisions

affirms Kapron. “Through our website,

and optimise how they drive revenue

social channels and many of the free

and profitability within the region.

reports we publish, we try to bring new viewpoints on the news that’s out there.

We’re certainly not a news organisation but we try to analyse the trends and help people understand what’s happening behind the scenes.” w w w.f i nte c hma ga z i n e. com

41

Covering every angle in the digital age The Business Chief platforms offer insight on the trends influencing C and V-level executives, telling the stories that matter

CLICK TO SUBSCRIBE FOR FREE

w w w.bu si nessch ief.com

BLOCKCHAIN

Capital.com 44

An intuitive, innovative fintech

FINTECH MAGAZINE CAUGHT UP WITH CAPITAL.COM CEO IVAN GOWAN TO LEARN MORE ABOUT THE FUTURE OF TRADING AND THE INNOVATIVE WAYS HIS COMPANY IS HARNESSING TECHNOLOGY TO DELIVER SMARTER, MORE INTUITIVE WAYS OF INVESTING WRITTEN BY

JUNE 2019

DAN BRIGHTMORE

45

w w w.f i nte c hma ga z i n e. com

BLOCKCHAIN

46

L

auded as Most Innovative Broker

ment in the Capital platform over the

at last year’s European Awards,

past year has meant that it’s primed to

the Capital.com platform aims

support the mobile users responsible

to make trading smarter, simpler and

for 80% of the company’s client trading.

more intuitive. Users can access 2,000

A team of 190 technologists are driving

of the world’s biggest markets, utilising

mobile onboarding, which CEO Ivan

market-leading spreads and zero

Gowan believes strengthens Capital’s

com-mission to make their move on the

fintech aspirations compared to its

most popular indices, commodities,

business-led competitors. “It’s as much

cryptocurrencies, shares, and currency

about attitude and aptitude as it is about

pairs via the web and on mobile.

technology competence,” he says of

Founded in 2016, significant investJUNE 2019

Capital’s key staff from tech and finance

47

backgrounds. They have ensured the

a client’s money. “There needs to be

transition from fintech startup to heavily

a degree of maturity in our approach

regulated business, operating under

to building relationships and significant

the FDA and increasing levels of

investment in security and safety of

process and system design, has been

client funds,” he says. “We are reliant

a smooth one.

on seeking approval from regulators

Gowan notes the rise of crypto-cur-

on partnering with banks who store

rencies has attracted a wave of tech-

the money for our clients and segre-

nologists to the industry but believes

gated client fund accounts. There’s

it’s vital to strike the right balance in the

a big onus on us to do due diligence on

team to ensure the levels of financial

our clients, to have in place processes

experience required when dealing with

for Know Your Customer (KYC) and w w w.f i nte c hma ga z i n e. com

BLOCKCHAIN

anti-money laundering and fraud pre-

“ EDUCATING PEOPLE IS PART OF BEING A RESPONSIBLE PLAYER IN THE INDUSTRY” Ivan Gowan CEO, Capital.com

vention. We understand the complexities involved in offering solutions in the financial services domain.”

ARTIFICIAL INTELLIGENCE To manage those complexities, Capital has invested in artificial intelligence (AI) to enable systems capable of analysing client trades and spotting trading patterns known to be associated with practices that can be negative for trading outcomes. “It’s this type of inno-vation that sets us apart from some of our competitors,” Gowan says

48

of the efforts made to build a modern infra-structure hosted in the cloud via specialist data centres for financial services, such as the Equinix LD4 in London. “It’s our mission to help traders perform better,” he adds. “Educating people is part of being a responsible player in the industry.”

To enhance its AI capabilities, Capital has studied the impact of psychology and emotions in trading to leverage behavioural finance research. “We codify some of these biases into the AI system where we’re looking to assess whether our client’s trading patterns are aligned JUNE 2019

CLICK TO WATCH : ‘AN INTRODUCTION TO CAPITAL.COM’ 49 with some of these known biases,”

world of trading, you’re getting skin in

explains Gowan. “People exhibiting

the game, you think something is going

an over-confidence bias, for example,

to happen, you put a trade on and

may have had a couple of wins so think

sometimes your analysis can be spot

trading is easy and start taking on a

on, but your timing is not quite right…”

lot more risk. Increasing trade sizes

Markets can behave irrationally, he adds,

substantially can be risky for your

either over exuberant or over correcting,

outcomes, so it’s really important to

so it’s important to be able to accept

stay measured and balanced to avoid

a small loss to preserve capital and

wiping out your profit. It’s an easy bias

avoid a bigger loss.

scenario to detect in our system.”

Gowan notes there are many others,

“We detect 25 different types of trading bias or behaviour and then provide our clients with personalised

such as urgent bias, seen in all areas

insights around the specifics they are

of life. “We don’t like to lose and in the

exhibiting in their trading. For us, it’s w w w.f i nte c hma ga z i n e. com

BLOCKCHAIN

“ WITH THE POLITICAL LANDSCAPE IN THE UK DOMINATED BY BREXIT, WE’VE SEEN A HUGE AMOUNT OF INTEREST AROUND WHAT’S HAPPENING WITH COMMODITIES” Ivan Gowan CEO, Capital.com

50

about delivering education in a modern

context sensitive engagements with

way as opposed to just giving someone

clients to deliver useful information.”

an e-book,” says Gowan, who feels time is up for the old school approach.

MOBILE

“We have this macro trend right now

Aligning itself with the new school,

where everyone is more digitally con-

Capital launched as a mobile first

nected and more easily distracted

platform, easy to dip in and out of and

and people want bite size chunks of

keep an eye on the markets. “Under-

information through videos, etc. In that

standing the usability and quirks of

context, when you are grading the

mobile is really important,” he advises.

markets, you want information that is

“The sequential and serial nature of

going to help you with what you are ex-

user experiences on mobile makes

periencing right now. It’s about how we

them more singularly focused on one

can create those highly personalised,

task at a time, making it very effective

JUNE 2019

CU RREN CY Currency is the world’s first regulated tokenised securities exchange and run independently of Capital by Gowan’s team. “With Currency, our goal is to help people who have been early adopters of cryptocurrency to be able to invest that in more traditional markets,” explains Gowan.

“We’ve seen a big demand with over 100,00 people on our waiting list. We are providing a way of diversifying their holdings so they can use Bitcoin and Ethereum to invest in other assets. And those assets are able to be invested in as tokenised assets that are available on the blockchain, so people can buy into Facebook token shares or Amazon tokenised shares.”

w w w.f i nte c hma ga z i n e. com

51

BLOCKCHAIN

for engaging with customers when you don’t have to cater for the need to do several things at once.” User experience is key, as well as maintaining consistency across devices. “This is a core com-ponent for Capital. We do all of our user experience and interaction design in-house with the same people working on desktop and mobile, sharing our approach to colours, to interaction and widget styles to keep differences to a minimum.”

A changing political landscape Capital covers a wide range of markets 52

across the globe, pulling in all the major industry sectors from the US, UK, Europe, China and Japan alongside the big commo-dities from traditional industrial metals like copper, precious metals, and oil and gas. “Foreign exchange is another big area of speculation and investment,” adds Gowan.

“With the political landscape in the UK dominated by Brexit, we’ve seen a huge amount of interest around what’s happening with commodities with the pound versus the euro and the dollar; against the backdrop of what is happening to UK PLCs and which companies may or may not be affected by a hard Brexit.”

JUNE 2019

“WE DO ALL OF OUR USER EXPERIENCE AND INTERACTION DESIGN IN-HOUSE” Ivan Gowan CEO, Capital.com

A SECURE OUTLOOK Capital’s technology base is primarily hosted on Amazon Cloud Services where it benefits from the inherent security of Amazon’s infrastructure.

“We use leading DDoS (Distributed Denial of Service) protection and make a concerted effort to protect our customer data,” says Gowan. “We have full PCI, DSF specification for handling client payment details and being able to take payments on behalf of clients.

We have bank accounts with segregated client funds, so our UK entity has a banking partnership with RBF, and our European regulated entity has relationships with Raiffeisen, RBI, based in central Europe. We also have a partnership with Well Pay who are a leading Capital received its licence from the

global PSP, Payment Service Provider

SCA last year, which Gowan cites as

for taking card payments. All of this is

a major milestone as the company

audited by our partner Deloitte.”

pushes towards regulation across the

Currently live in 20 languages and

biggest jurisdictions on the quest for

onboarding clients from more than

global expansion of its operations.

50 countries, on the road ahead, global

A big part of that journey lies in educat-

expansion remains the goal for Capital.

ing the user with a dedicated app. Invest Mate allows Capital to break down complex subject matter, so users can keep on track and achieve their goals across a changing landscape. w w w.f i nte c hma ga z i n e. com

53

M O B I L E PAY M E N T S

Challenger banks and the future of business banking 54

PHIL MORTON, HEAD OF STRATEGY AT UX DESIGN COMPANY, FOOLPROOF, DISCUSSES HOW INCUMBENTS MUST TAKE ADVICE FROM CHALLENGER BANKS OR RISK FALLING BEHIND WRITTEN BY

JUNE 2019

PHIL MORTON

55

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M O B I L E PAY M E N T S

DEFINING THE FUTURE OF BUSINESS BANKING Whilst most banks recognise the value of delivering a great user experience in order to win and retain retail banking customers, business banking has been left largely untouched by the disruption triggered by the entrance of mobile-only challenger banks. For many years, the wisdom has tended to be that most business banking users are not necessarily the corporate decision makers, and therefore they don’t have a choice in who they bank with. As long as the fees are competitive, it didn’t seem to matter that the digital experience was poor. The accounts stuck.

56

Inertia prevailed.

That’s set to change, and the pace of that change will be rapid for two reasons. The first is that the lines between retail banking and business banking are blurring. Business users are consumers in everyday life, and their expectations of what makes a ‘good customer experience’ is maturing – they expect to find this in all parts of their life. Secondly, challenger banks are setting their sights on business banking customers, and will bring their customer-centric recipes for success with them.

Banks need to take a fresh approach to the products and services they offer to business customers, and restructure their internal teams and working cultures to bring better conceived and delivered experiences to market before their customers vote with their feet.

JUNE 2019

“ Challenger banks are setting their sights on business banking customers, and will bring their customer centric recipes for success with them” — Phil Morton, Head of Strategy, Foolproof

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M O B I L E PAY M E N T S

THE CHALLENGER BANKS ARE COMING FAST Monzo and nimbler organisations like Tide are already making business banking more competitive. The recent funding from RBS’ alternative remedies package has helped more players enter the business banking space. Competition is healthy for customers and will help to promote positive change.

Monzo trialled 100 business bank accounts earlier this year, and is rolling out more as a result. This is unsurpris58

ing: Monzo has created a great product by taking an iterative approach to experience design and considering the needs of end users across every touchpoint. Monzo’s success in retail banking comes from its culture which retains a relentless focus on customers, including them in the design of new features and services.

Other challengers such as Anna, Tide and Coconut have introduced their own business banking services with varying degrees of success. Fundamentally, Monzo nails the right ingredients and methods at an organisational level (i.e. people and approach) to tackle business banking’s problems from JUNE 2019

“ Monzo’s success in retail banking comes from its culture” — Phil Morton, Head of Strategy, Foolproof

a user-first perspective. This formula for success is what incumbent banks fail to understand and is a big part of why their experiences fall short of the mark.

CUSTOMER EXPERIENCE REFLECTS ORGANISATIONAL EXPERIENCE Everyone knows that incumbent banks struggle with legacy systems which are difficult to maintain and costly to replace. There are many multi-millionpound digital transformation projects to remedy the technological challenges of running a large bank in the modern age. However, just fixing the technology will not allow incumbents to replicate the success of challengers unless they focus on changing the way that they work as well. A customer experience is only as good as the organisation that creates it. Banks must improve their internal team culture, skills and capabilities to help teams put customers first. Only by empowering their teams to make decisions that work for the customer as well as for the bank will they succeed in the long term.

Customers ultimately decide whether banks have been successful w w w.f i nte c hma ga z i n e. com

59

M O B I L E PAY M E N T S

or not, and no company can create sustainable value for its customers without a deep understanding of human behaviour. To stand a chance, banks must equip themselves with the people, skills and processes to place themselves in a position to make great user experience and iterate on it.

Monzo shows that it’s possible to do this at scale: with almost 2mn customers it still listens to its community to inform product decisions. The challenger bank releases services that 60

aren’t quite finished and feels the backlash, it ships changes to its code base every day. This is only possible with the right internal culture and ways of working. Every employee knows their role is

THE OPPORTUNITY IN BUSINESS BANKING

to improve the lives of customers, and

Business banking is lucrative and funding

teams are not afraid of failing to figure

is making the space more competitive.

out how to do this.

Unless they learn from new entrants,

In contrast, teams in traditional

established players risk falling behind.

banks often have the best intentions

Monzo’s strength in retail banking doesn’t

to serve customers but face organi-

necessarily guarantee an easy or quick

sational silos, outdated processes

win in business banking. But their culture

and needless red tape. Reforming

will ensure that they translate their com-

their internal design processes and

mitment to the customer into the busi-

transforming their culture should

ness banking domain, and that business-

be a priority if banks want to improve

es can look forward to useable, painless

the experience they deliver.

and exciting products and services.

JUNE 2019

“ Incumbent banks must not be complacent as they were when startups entered the retail space” — Phil Morton, Head of Strategy, Foolproof

Incumbent banks must not be com-

61

and employees) must come first. If

placent as they were when startups

incumbents can reform their internal

entered the retail space a few years

structures and ways of working, they

ago. Thinking that business banking is

can have a voice in defining the future

“too complex” or “too hard” for Monzo

of business banking. Many have the

or its peers to impact is wishful thinking.

ingredients, customers and data to do

Incumbents must update their internal

so – what’s missing is the right approach.

culture, ways of working, tools, skills

Without commitment of this kind at an

and technology while they have a head-

organisational level they will see their

start. This means bringing customers

market share slip away.

to the forefront of everything they do. If they are to be successful in this space, the needs of people (both customers w w w.f i nte c hma ga z i n e. com

T O P 10

TOP 10 digital banks 62

The global banking landscape is changing. As technology changes the way money is managed, dozens of digitalonly alternatives to traditional banking have sprung up. FinTech Magazine presents our list of the top 10 digital banks challenging the financial status quo WRITTEN BY

JUNE 2019

HARRY MENEAR

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T O P 10

64

10

Neat

Hong Kong

Part of a new wave of digital banks springing up in Hong Kong, Neat was founded in 2015 by David Rosa and Igor Wos. While the bank offers a personal current account service, which contains an option for a prepaid Mastercard aimed at users travelling abroad, Neat’s flagship service is its business account. Offering corporate Mastercards with competitive exchange rates, budget management software and transaction recording for expensing purposes, the Neat Business account is principally aimed at startups and SMEs, aiming to provide a versatile alternative to establishment national business banking options.

JUNE 2019

09

65

Doconomy Stockholm

The youngest and smallest online bank on the Top 10 list, Doconomy was founded in 2018 and operates from offices based in Stockholm, Sweden. Billed as a mobile banking service for everyday climate action, Doconomy helps its users understand the environmental impact of their purchasing decisions. Its first solution, DO, was launched last year and is the world’s first credit card that allows users to track their carbon impact and compensate by investing in sustainable, positive impact projects. “We want to enable and encourage behavioural change. It should be easy to manage consumption and savings, as well as choose a more sustainable lifestyle,” says Doconomy CEO, Nathalie Green.

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T O P 10

66

08

Nubank São Paulo

The leading fintech in Latin America, Nubank, is headquartered in São Paulo. The company launched its first product, a fee-free credit card, in 2014 and now has over 6mn users. To date, Nubank has raised in excess of US$420mn, including $180mn from Chinese internet giant Tencent in October 2018. The Tencent investment pushed Nubank’s valuation beyond $4bn, making it the third Latin American company in history to achieve unicorn status.

JUNE 2019

67

07

N26

Berlin

Founded in 2013 as Number 26, today the German digital bank and card provider has over 26mn users in 24 markets across the UK and Eurozone, with plans to enter the US market in 2019. N26 has raised more than $500mn from the world’s most established investors, including Insight Venture Partners, GIC and Tencent.

Like most cutting-edge digital banks, N26 offers its users an online current account with an intuitive app, money management solutions and fee-free foreign currency withdrawals.

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T O P 10

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06

Up

Melbourne

Founded in 2017, Up Banking is based in Melbourne Australia, and was designed, developed and delivered through a collaboration between Ferocia and Bendigo Bank. As standard, Up offers a standard card and current account service. Where the bank excels is in its financial insights, which are designed to give its users complete clarity on where and when they spend their money. From location, time and recipient identity, Up creates month by month spend analysis and insights for its users.

JUNE 2019

69

05

Tangerine Toronto

Tangerine Bank, a subsidiary of ScotiaBank (the third-largest financial institution in Canada), was acquired in 2012, making it one of the oldest digital banks on the Top 10 list. Due to the backing of a larger traditional bank, Tangerine offers users a wider range of services than the traditionally specialised offerings from independent banks.

A money back credit card, low-fee investing, business accounts, chequing accounts, GICs, Mortgages and tax-free savings accounts are among a few of the products on offer.

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T O P 10

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04

Starling Bank London

Based in the UK, Starling Bank was founded in 2014 by former Allied Irish Banks COO, Anne Boden. Setting itself up in opposition to other digital banking heavyweights like Monzo and Revolut, Starling has quickly racked up a number of awards for its slick service – winning Best British Bank, Best Current Account and Best Business Banking Provider 2019. Starling also specialises in business with the Eurozone, allowing users access to a free Euro account.

JUNE 2019

71

03

Revolut London

Founded in the UK by Russian entrepreneurs Nikolay Storonsky and Vlad Yatsenko, Revolut is one of the leading faces of UK challenger banking, achieving Unicorn status in April 2018. Its online service allows users to convert money into 24 currencies, up to ÂŁ5,000 a month, as well as use money management tools and engage in cryptocurrency trading. Revolut is currently pursuing or recently acquiring banking licences in the UK, US and Russia.

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T O P 10

02

Chime

San Francisco

Headquartered in San Francisco, the capital of the US West Coast’s fintech economy,

72

Chime is leading the campaign to provide Americans with quicker, easier banking options than those offered by traditional banks. Because Chime deposits salaries and other payments immediately into consumer accounts once it receives notification of a pending deposit, users of its service can reportedly receive money two days faster than through traditional banks. Earlier this year, Chime closed a $200mn funding round and reportedly plans to use funds to continue its rapid growth, as well as introduce new products in the credit and lending space over the course of 2019.

JUNE 2019

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T O P 10

01

Monzo London

Among the UK’s leading challenger banks, Monzo offers everything you’d expect from a digital bank – a well-designed app, free

74

international payments, money management advice, etc. The company has also placed its vibrant, coral pink cards into the hands of over 1mn users, and by February 2018 over £2bn had been spent through the bank.

In May, Monzo launched its new, Monzo Plus product as part of a campaign to make 2019 the company’s most feature-packed year to date. Co-founder and CEO, Tom Blomfield said: “We want to finish 2019 with a whole host of new features that make people say ‘I can’t believe banks haven’t always done it this way.’ And over the next year, teams across the company are going to work on actually building those features.”

JUNE 2019

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EVENTS & A S S O C I AT I O N S

The biggest events and conferences around the EDITED BY OLIVIA MINNOCK world for fintech leaders

03–05 JUNE 2019

Money 20/20 Europe

76

17–19 JUNE 2019

[ AMSTERDAM, THE NETHERLANDS ]

Retail Finance Connect

Boasting over 6,000 attendees and

[ MIAMI, FLORIDA, USA ]

2,000 companies from around 82

Organised by WB Research, Retail

countries, Money 20/20 will see 490

Finance Connect aims to bring together

speakers deliver around 80 hours of

senior finance executives across

insightful content. The three-day event

retailers, brands and manufacturers to

claims to be “where the payments,

explore the challenges in the industry

fintech and financial services indus-

and give opportunities to network.

tries come together to connect and

Businesses who attend the Connect

build the future of money.” Attendees

events include Amazon, Best Buy,

are promised original content on both a

Walmart and more, with this year’s retail

regional and global scale, breaking news

finance focused event set to feature

announcements, product launches,

CFOs from US Auto Parts, Howard’s

networking opportunities and access to

Appliances, Le Tote and MillsFleetFarm.

exciting startups and innovators. 2018’s

Fintech enthusiasts will find many of the

Europe event featured prominent speak-

topics up for discussion interesting,

ers including Ralph Hamers, CEO of ING

such as ‘the new state of retail finance’,

Group; Andy Maguire, Group COO of

‘the implementation of cashier-less

HSBC; and Steve Wozniak, co-founder

checkouts’ and ‘integrating AI and RPA

of Apple.

into your finance department’.

JUNE 2019

19–20 JUNE 2019

05–06 SEPT 2019

[ AMSTERDAM, THE NETHERLANDS ]

[ NEW YORK ]

Blockchain Expo is a series of confer-

Organised by global summit creator

ences which take place in Europe and

ReWork, the AI in Finance Summit is co-

North America. A total of four co-

located with the AI in Insurance Summit

located events throughout the year

and Women in AI Dinner. The previous

welcome over 36,000 attendees, over

iteration of the two-day event included a

1,000 speakers and over 1,000 exhibi-

host of practical workshops and inform-

tors. The Europe Expo takes place at

ative presentations. Confirmed speakers

RAI Amsterdam with 10,000 guests

for 2019’s event includes Joan Gelpi,

expected. Notable speakers on the

SVP and Head of Data Science at AIG;

agenda come from Maersk, Gucci,

Manuela Veloso, Head of AI Research at

Volkswagen, Shell and IBM as the

JPMorgan Chase & Co; and Charles

conference looks at the many uses of

Girve, Lead Data Scientist at Deutsche

this disruptive technology. Topics to

Bank. With hours of networking opportu-

be discussed over the two-day event

nities, the event is recommended for

include cryptofinance, blockchain for

data scientists and engineers, financial

enterprise, cybersecurity and supply

regulators, C-level executives, venture

chain management.

capitalists and more, so there truly is set

Blockchain Expo Europe AI in Finance Summit

to be something for everyone.

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77

EVENTS & A S S O C I AT I O N S

The biggest events and conferences around the EDITED BY OLIVIA MINNOCK world for fintech leaders

23–25 SEPT 2019

InsureTech Connect [ MGM GRAND, LAS VEGAS ]

78

25 SEPT 2019

Billed as the world’s largest gathering

Blockchain Live

of insurance leaders and innovators,

[ OLYMPIA, LONDON, UK ]

InsureTech Connect (ITC) is highly

Blockchain Live aims to create a ‘festival

recommended for industry execs,

of content’, promoting discussion and

entrepreneurs and investors within,

debate around how to best accelerate

and impacted by, the insurance industry.

the global adoption of blockchain.

With companies in attendance including

Some notable speakers at this year’s

insurance giantslike Allianz, Lloyd’s,

event will include the Blockchain

Prudential and AXA, this is the place to

Research Institute’s Hilary Carter,

make global connections and under-

Global Digital Finance’s Teana Baker-

stand what some of the world’s biggest

Taylor and the Blockchain Policy

players are doing to remain competitive

Centre’s Caroline Malcolm. This year’s

in an increasingly digital landscape. 2018

event will include a Tech Connect

hosted a range of experienced speakers

Stage which will explore the technical

including Dan Glaser, CEO & President

challenges and opportunities presented

at Marsh & McLennan; Inga Beale, CEO

by blockchain and distributed ledger

of Lloyd’s; and Tracie Grella, Global Head

technology and the benefits it can

of Cyber at AIG. With this in mind, the

hold for information security, sharing

2019 event is set to be a must-visit.

and management.

JUNE 2019

OCT 2019

Finovate Asia

04–08 NOV 2019

Following on from the success of 2018’s

Hong Kong FinTech Week

event in Hong Kong as part of the city-

[ HONG KONG & SHENZHEN ]

state’s Fintech Week, advance tickets

The world’s first cross-border fintech

are already on sale for Finovate Asia

event, the week takes place in both

2019 which promises 600+ attendees,

Hong Kong and Shenzhen, China. Each

20+ firms offering demonstrations

year, the week includes more than

and 80+ expert speakers for a mix of

10,000 senior executives and features

speeches and panels. Finovate Asia

over 250 fintech founders, investors,

advertises the opportunity for attendees

regulators and academics. Notable

to “meet the fintechs, platform players,

previous speakers have included

financial institutions, regulators and

Ant Financial CEO Eric Jing, Ping An

investors who are redefining the future

Executive Vice President Jessica Tan

of financial services.” Notable speakers

and Standard Chartered regional CEO,

in 2018 attended from Danske Bank,

Benjamin Hung. Last year, the week

AXA Lab, Accenture, Bank of America

was sponsored by many big names

and Alipay.

including Standard Chartered, Citi,

[ TBC ]

Tencent, PwC and Finastra.

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ALTERNA: DIGITAL BANKING WITH A SOCIAL PURPOSE WRITTEN BY

OLIVIA MINNOCK PRODUCED BY

JAKE MEGEARY

JUNE 2019

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A LT E R N A

WITH A 110-YEAR HISTORY, ALTERNA HAS MOVED WITH THE TIMES TO TAKE ON BIG BANKING PLAYERS – CEO ROBERT PATERSON EXPLAINS HOW IT STILL RETAINS ITS COMMUNIT Y VALUES

D

escribing himself as a ‘career banker’, Rob Paterson has been in financial services for almost 30 years. From building a bank

in Vietnam to working for names such as JPMorgan 82

Chase and CIBC, his latest role is President and CEO at a Canadian Credit Union that is developing a truly digital experience from the foundations of a century old legacy. Founded in 1908, Alterna Savings offers services across a network of 35 branches in Ontario – not counting its digital offering, Alterna Bank, which is available nationwide.

Alterna, Paterson believes, can be David taking on Goliath in the banking world, all thanks to digital transformation and disruption of the status quo.

“I’ve grown up around the world,” Paterson comments. “I’ve always been looking at technology and the evolution of banking on a universal and global scale. At Alterna, it’s helped me take on this organization that’s 110 years old and use my knowledge and relationships around the world to start looking at the next 110 years. In the last three JUNE 2019

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A LT E R N A

“ I ’VE ALWAYS BEEN LOOKING AT TECHNOLOGY AND THE EVOLUTION OF BANKING ON A UNIVERSAL AND GLOBAL SCALE” 84

— Rob Paterson, CEO, Alterna Savings and Alterna Bank

years, we’ve shown we can reach every province. Canadians really resonate with our unique digital banking experience and our philosophy of being the ‘good in banking’. We’re very much focused on trying to help Canadians reach their home ownership and retirement needs, and doing it with a social conscience,” he adds.

The bank’s ethos has been omnipresent through its digital journey, with Alterna leveraging the latest technology to create the best possible experience for the customers and communities it serves. “We wanted to see if we could take our cooperative background, modernize and transform it into the digital banking world.” Rather than tempting new customers in with teaser rates and gimmicks, Paterson is keen to highlight that Alterna maintains high rates on deposits and low rates on lending.

A FULLY DIGITALIZED EXPERIENCE A key achievement for Alterna has been delivering the first ever fully end-to-end digital mortgage in Canada.

Paterson argues this didn’t happen in spite of Alterna’s relatively small size, but because of it. “As a unique small JUNE 2019

CLICK TO WATCH : ‘ALTERNA SAVINGS MYRECEIPTS™’ 85

institution, we were able to do some-

informed customer around how much

thing that none of the Big Five banks

debt you should take on, neighbor-

had been able to deliver: the ability to

hoods you want to live in, choosing a

purchase your home completely on

realtor and finding the home of your

mobile or tablet, without having to

dreams. That’s a win for us.” Keeping

come into a branch or even get on the

customers and communities informed

phone.” Throughout this process,

about their money is paramount to

Alterna applied its strong principles by

Paterson and to Alterna. “We’re trying

ensuring it was as informative as

to be stewards of what banking used to

possible, and only gathered necessary

be, which is something that helps

data from clients without overreaching.

promote the wellbeing of its customers

Even those who do not apply for a

and the communities they live in. A

mortgage are still offered useful

bank should be a catalyst to the growth

insights. “We can help you be a better

of Canadians and their communities.” w w w.f i nte c hma ga z i n e. com

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A LT E R N A

88

CREATING JOBS FOR CANADIANS

banking: the Big Five could say no

With this community focused drive,

because they had other interests

Alterna took on the mantle as one of

globally or in the US. Three years later,

Canada’s only ‘cannabis banks’ – a

we’re proud of that. We’ve helped some

venture Paterson says none of the Big

of these companies grow into some of

Five would support. “The cannabis

the biggest Canadian corporations,

companies were licensed and legal,

creating employment in areas where it

right?” he argues. “We didn’t have the

was badly needed.” This is where, for

right to say no: these are organizations

Paterson, being a ‘David’ pays off yet

that will employ Canadians. It’s a

again. “We don’t have the SVPs and

growing sector of the economy. We

EVPs of ‘no, you can’t do that’. We don’t

really took it on as a cause because we

have all the politics and bureaucracy

felt this was what was wrong in

that goes with big corporations.”

JUNE 2019

GROWTH THROUGH PARTNERSHIP

“We realize it has to be a win-win and

As the bank grows to compete with

we don’t overcomplicate agreements.

the Big Five, Paterson is keenly aware

This allows us to get to market quickly

that Alterna can’t do everything by

on things that are going to create less

itself. Now, the bank is renowned for

friction in the banking experience.

its collaboration with startups as well

That has become a core strength.

as larger software giants. “We’ve built

For our staff, it’s fantastic to have

a tremendous reputation in the

the experience of working with other

industry with fintechs, both domesti-

agile, innovative companies,” Paterson

cally and globally,” he comments.

adds, noting that the company is

“They see that we are advocates for

approached proactively by fintechs

them. We’re not like the larger institu-

on a regular basis.

tions that say: ‘If you deal with us, you

A key partner for Alterna has been

can only deal with us exclusively in the

Backbase, one of the premier UX

Canadian marketplace.’

interfaces for mobile and web, with

E XE CU T I VE PRO FI LE

Robert Paterson Rob is President and Chief Executive Officer of Alterna Savings and Credit Union and Alterna Bank, positions he has held since April 2013. Prior to joining Alterna, Rob worked in financial services for over 25 years and has held executive positions within such companies as CIBC, JP Morgan CHASE, Aon Corp, and McKinsey & Company. He sits on the Board of Directors of the Co-Operators, Central 1, Alterna Bank and Enactus. Furthermore, Rob advises many Fintech start-ups across Canada.

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A LT E R N A

1908

Year founded

500+

Approximate number of employees

HQ Ottawa, Ontario, Canada

90

JUNE 2019

91

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A LT E R N A

which the company enjoys “a phenomenal relationship”. “Our partnership with Backbase has helped us to form an understanding of how to develop a more dynamic digital and online front-end,” says Paterson. Backbase’s widget concept provides a holistic digital channel platform that supports the evolution of specific products and services, and allows businesses to be part of an ecosystem that drives digital operability. Through the partnership, Alterna will deliver the first multi-tenanted instance of Backbase in Canada.

92

“Backbase really understands the importance of the cooperative system in Canada, and has really openly partnered with the credit union space here to allow us to accelerate our digital capabilities,” says Paterson.

Meanwhile, Sensibill is a domestic Canadian fintech transforming the way businesses and consumers deal with receipts. “They’ve taken what a lot of people would view as a non-tech category and developed it into a real value-added solution.” Alterna has branded Sensibill’s solution for its own members as MyReceipts. “It allows you to keep track of your spending,” explains Paterson. “Whether you’re JUNE 2019

a small business owner or an individual consumer, you have the ability to digitally capture any receipt for any of

“ W E DON’T HAVE ALL THE POLITICS AND BUREAUCRACY THAT GOES WITH BIG CORPORATIONS” — Rob Paterson, CEO, Alterna Savings and Alterna Bank

your purchases through your smartphone’s camera.” Paterson enjoys a long-standing relationship with founder Corey Gross, who he came into contact with through various Money20/20 and Finovate conferences – together, the pair are working to evolve and develop Sensibill’s solutions.

“Corey has worked with us on an endless cycle of feedback and support,” he comments. “We view him as a great Canadian success story.”

Alongside innovative startups, reliable global organizations such as software provider Salesforce are also key in helping Alterna build scale.

“The Salesforce ecosystem allows us to be bigger than we are,” Paterson explains. “It allows us to plug in partners at a much easier rate. When we developed Canada’s first digital mortgage, we tried to enrich our understanding and knowledge of our members and customers – Salesforce was a great agile partner with an endless series of tools.”

In addition, Salesforce was able to help Alterna connect with other w w w.f i nte c hma ga z i n e. com

93

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“ W E DON’T WANT YOU TO TAKE OUT THE BIGGEST MORTGAGE YOU QUALIFY FOR IF THAT MEANS YOU CAN’T TAKE THE FAMILY ON VACATION, CARE FOR A LOVED ONE OR BUY YOUR KIDS THEIR NEW BIKES” — Rob Paterson, CEO, Alterna Savings and Alterna Bank

A DIGITAL CULTURE “When we started talking about going digital and building out the bank globally, you naturally worry that people will be concerned about leaving the legacy business behind. Within our organization, there was actually extreme excitement,” Paterson reflects.

“Our employees saw this as a great way to stay relevant.” Alterna has gone to great lengths to develop a positive and forward-thinking culture among its staff, celebrating such wins in 2019 as being named one of National Capital Region’s Top Employers (in Ottawa), and scooping the Platinum level status on the Aon Best Employer list.

companies. “We were able to have

Paterson is also keen to highlight the

conversations with those peers about

impact of technology in the office.

their digital journeys,” says Paterson.

“We’ve moved to digital training and

The relationship with Salesforce serves

education for all our staff – now, they

to highlight how businesses look for

can learn on a mobile device anywhere

more than just a piece of software from

at any time. We’ve changed the

their partners. “Technology in and of

physical aspects, moving people into

itself isn’t the end state. The ability to

open, tribe-like settings of working

get access to thought leaders, an

with their fellow team members,

ecosystem that will be co-developed

building in electronic desks so they can

by hundreds if not thousands of

elevate work surfaces at different

individuals across the globe, and to be

times of the day.” The CEO is also keen

able to see where they’re going in the

to highlight the positive impact social

future – you can’t put a price on that.”

media has had on his staff, making w w w.f i nte c hma ga z i n e. com

95

A LT E R N A

96

himself available to answer questions

Alterna shows no signs of slowing

on Twitter – even on weekends. “It

down. Over the coming months and

makes everyone feel good that when

years, the bank will continue to

they have a question, they can ask it,

transform the way it serves its custom-

and they’re going to get an authentic,

ers. “The big focus for us going forward

honest response.”

is to really build out our CRM capability so we can create more intimacy. Then

BUILDING ON SUCCESS

we want to deliver better content. We

Having unlocked the cannabis market,

want to improve on the digital dialogue

developed the first digital mortgage

that can happen with the customer in

and scooped a plethora of awards,

terms of chat capability.”

JUNE 2019

“WE’VE MOVED TO DIGITAL TRAINING AND EDUCATION FOR ALL OUR STAFF” — Rob Paterson, CEO, Alterna Savings and Alterna Bank

The bank will also remain true to its

one or buy your kids their new bikes.”

strong principles throughout its

Despite – or perhaps because of –

journey, striving to have honest

technology transformation, this is

conversations with customers. “It’s not

something that won’t change.

so much how much debt you can

“We want to have that conversation

afford, but having the right amount of

with you digitally.”

debt so you can live your life,” Paterson emphasizes. “We don’t want you to take out the biggest mortgage you qualify for if that means you can’t take the family on vacation, care for a loved w w w.f i nte c hma ga z i n e. com

97

98

Digital transformation in the financial Hea industry WRITTEN BY

SEAN GALEA-PACE PRODUCED BY

JAKE MEGEARY

JUNE 2019

Pub

Kerning +25, All titles

adline in blico Light

99

5, leading +2pt

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IGM FINANCIAL

Milorad Stefanovic, Vice President of Digital Technology, discusses how his firm is utilising technology to transform its operating model

A

s it undergoes a strategic digital transformation, IGM Financial has established three key pillars to form its digital

technology strategy. The Canadian wealth and asset management firm aims to create a more engaging experience for its customers, provide a productive insights-driven toolset for advisors 100

and also create a new digital platform for employees. IGM has accelerated its digital transformation significantly over the past couple of years, helping its clients improve their financial well-being and achieve their goals. To accomplish this, the company has leveraged scaled agile delivery to aid the digitization of its processes. “In the last 12 to 18 months, we’ve made significant progress. We’re utilizing technology faster and delivering solutions in an accelerated cycle,” says Milorad Stefanovic, Vice President of Digital Technology. “We believe agile provides a new way of working that allows us to deliver a connected digital experience to our IG Wealth Management and Mackenzie Investments clients and advisors and build a strong culture of collaboration across our joint business and technology teams.”

JUNE 2019

101

“ Talent is absolutely front and center to our digital strategy” — Milorad Stefanovic, Vice President of Digital Technology

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IGM FINANCIAL

“ Salesforce has been an important partner, helping us drive business and technology innovation at IGM as well as by accelerating our digital 102 transformation roadmap” — Milorad Stefanovic, Vice President of Digital Technology

Joining IGM in June 2018, Stefanovic’s previous leadership experience with Royal Bank of Canada (RBC) and IBM has furnished him with an understanding of how technology is transforming business operating models in the financial services industry. “My previous roles focused on digital banking for business and retail banking clients.

I see important parallels between wealth management and business banking when it comes to connected digital journeys for clients and advisors,” he explains. “In both lines of business, there is an important role that the advisor or business banker plays in terms of managing the relationship with clients and growing their practices. I think that experience in business banking and wealth management has helped me to drive the strategic transformation for IG Wealth Management and Mackenzie Investments here at IGM.” Through the implementation of a new integrated toolset, IGM began two large initiatives in a bid to accelerate its transformation and deliver digital capabilities for advisors. “We are rolling out a new Salesforce-based digital platform for our advisors and acceler-

JUNE 2019

ating our transition from paper-based

strategy. “Talent is absolutely front and

processes to a digital business,” Ste-

center to our digital strategy. It’s been

fanovic explains. “We also launched a

recognized as part of our roadmap and

new digital client platform, providing a

is considered one of our main enablers.

seamless omnichannel experience to

We believe in both the importance of

our clients and advisors. Both the client

developing talent within the organisa-

access and the advisor digital capa-

tion and the ability to attract external

bilities are based on Salesforce which

talent as we move forward,” explains

allows us to share the data and insights

Stefanovic. “In terms of development

across online and mobile for clients as

of the talent within the organisation,

well as the digital platform for advisors.”

we have a structured, focused ap-

Recruitment is a vital task for any

proach in developing the key skills re-

company, and Stefanovic maintains

lated to digital technology, specifically

that due to his firm’s digital priorities,

Salesforce as well as the skills related

it has become a central part of IGM’s

to agile delivery at scale. Both agile

E XE CU T I VE PRO FI LE

Milorad Stefanovic As Vice President Digital Technology at IGM Financial Milorad is responsible for the technology organization that delivers omnichannel experience and digital capabilities to IG Wealth Management and Mackenzie Investments clients, advisors, and employees. He is also responsible for the Salesforce Center of Excellence and the Scaled Agile operating model at IGM. Milorad is a seasoned executive with experience leading business and technology transformation, driving innovation, and delivering integrated end-to-end solutions in Wealth Management, Retail Banking, and Business and Commercial Banking.

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103

IGM FINANCIAL

104 and Salesforce are specific learning

deliver relevant and timely advice to our

paths that we have made available to

clients” he says. “Salesforce has been

our employees.”

an important partner, helping us drive business and technology innovation

VITAL STRATEGIC PARTNERSHIPS

at IGM as well as by accelerating our

In order to accelerate its growth, IGM

digital transformation roadmap.”

has established an important partner-

In addition, IGM has established

ship with Salesforce and Stefanovic

other digital partnerships with Slalom

believes collaborations with firms such

and Portag3 as the company contin-

as this has been paramount to his

ues to digitalize its operating model.

company’s digital transformation. “The

“Given the accelerated pace of our

connected experience and capabilities

digital transformation, we aren’t able to

available through our digital platform

develop everything in-house. It has led

allow us to accelerate our transfor-

to us forming several partnerships, in-

mation and empower our advisors to

cluding Slalom as a solutions integrator.

JUNE 2019

105 Slalom is a US-based company with

anticipates an increased focus on

a strong presence in Canada and they

effective application of artificial intel-

have helped us considerably through

ligence (AI) over the next few years.

the integration of the solutions and pro-

“The adoption and application of AI

ject delivery,” explains Stefanovic. “In

and machine learning capabilities is

addition, we have a strong partnership

well under way and these capabilities

with Portag3, the venture capital arm of

will play a central role going forward.

Power Financial Corporation. Our part-

I expect the application of AI in our

nership with Portag3 and the portfolio

industry to become a common prac-

companies will help us stay ahead of

tice in the future with a broad range

the curve moving forward as well.”

of relevant use cases from marketing and sales to operations and service

FUTURE PLANS Looking ahead to the future of the financial services industry, Stefanovic

capabilities.”

Predicting the future for IGM, Stefanovic is confident his company will w w w.f i nte c hma ga z i n e. com

IGM FINANCIAL

106

JUNE 2019

£20bn Mutual Fund Sales

HQ

Toronto, Canada

3,300

Approximate number of employees

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Slalom is a modern consulting firm focused on strategy, technology, and business transformation.

At Slalom, personal connection meets global scale.

Our consultants across the U.S., U.K., and Canada move fast and share insights to deliver high-impact business results.

109

“ We believe we can be the best company in Canada, in terms of delivering relevant and timely investment advice to our clients and helping them reach their full financial wellbeing potential”

continue to be a leading provider of wealth and asset management products and services to Canadians in the upcoming years and beyond. “We believe we can be the best company in Canada, in terms of delivering relevant and timely investment advice to our clients and helping them reach their full financial wellbeing potential. We also feel we can draw a significant market share in the Canadian market too.”

— Milorad Stefanovic, Vice President of Digital Technology w w w.f i nte c hma ga z i n e. com

110

Logix Federal Credit Union’s digital transformation driven by customer experience WRITTEN BY

HARRY MENEAR

JUNE 2019

PRODUCED BY

ANDY TURNER

111

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LOGIX FEDERAL CREDIT UNION

Logix Federal Credit Union is harnessing the power of digital transformation to make members feel welcomed, significant and engaged

F

or firms in the grips of nosediving profits, disgruntled customers and unsustainable business environments, the steps to

effect positive change would be as obvious and simple as flipping a switch. However, for a credit union, which has grown its member base by 89% 112

since 2011, has in excess of US$6bn in assets, and was named the number one credit union in California by Forbes Magazine, the next step might not be so obvious. For Logix Federal Credit Union though, an insightful and experienced leadership team, dedicated to intelligently implementing the latest technology while taking full advantage of a highly engaged workforce, is poised and ready for the future. “We are fortunate in that our members already love us,” says Edward Chuang, Executive Vice President and Chief Information Officer (CIO) at Logix. “The important thing is not to rest on our laurels, because we know that the banking industry is changing, and we know that consumer expectations are changing, too. So, ‘how do we stay number one?’ is really the challenge we’re facing.”

JUNE 2019

113

Š Photos Jennifer Kukawski w w w.f i nte c hma ga z i n e. com

LOGIX FEDERAL CREDIT UNION

“We have an interesting problem to solve, which is that our members already love us” — Edward Chuang, EVP & CIO, Logix

114

In the constant race to stay relevant and with a desire to relentlessly pursue innovation, Logix is undergoing a top-to-bottom transformation. “Logix is going through a very exciting transformation right now, and that began with Ana Fonseca taking the helm as the new CEO of Logix in January of this year,” says Chuang.

A veteran of the finance sector, with 27 years under her belt at Logix, Fonseca stepped into the role of the company’s President and CEO in January 2019. Striking an ever-present balance between the adoption of new JUNE 2019

CLICK TO WATCH : ‘HONORING THE PAST, LOOKING TO THE FUTURE.’ 115 technologies and managing the

transformation are a number of

experience of both members and

initiatives that are really poised to take

employees, Fonseca is excited to apply

us to a whole new level. We call it Logix

Logix’s award-winning customer

2.0 and it includes a brand new

service to its online presence. “We

headquarters building about 30 miles

already have a really great member

north of our current location, a

experience, especially in our branches,

state-of-the-art data center built from

and so we’re driven by wanting to make

the ground up, and taking one of our

our members feel welcomed, signifi-

core strategic principles – consistently

cant, and engaged,” she explains.

excellent member experience – to

“What we’re trying to do is take that

another level. We’re aiming to address

feeling and replicate it across other

all of the ways we serve our members

channels: on our website, within online

and make those interactions seamless

banking, and throughout our mobile app.”

and easy for them.”

Chuang adds, “Bundled in this

Founded in 1937, Logix Federal Credit w w w.f i nte c hma ga z i n e. com

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2019: It’s a digital banking “now or never” Leaders of financial institutions are in the fight of their lives. Giant banks are investing hundreds of millions of dollars to perfect digital banking experiences and stealing market share. In short, the competitive pressures for customers and deposits are creating a “now or never” moment in digital banking.

These moments have often produced some of the greatest innovations in American business. If played right, 2019 could be the year that smaller banks and credit unions reclaim their rightful leadership role as the default choice for financial transactions and services.

by their legacy core providers, giant banks and fintechs gained further ground by innovating and siphoning off customers.

In summary, in 2019, make an honest appraisal of your offering.

Determine if you have the expertise or bandwidth in-house for true digital transformation. Typically, it’s only the mega-banks that have their own fleet of engineers, but you can compete effectively by teaming up with proven outside experts with a track record of success in digital banking.

In particular, there are three key advantages that these financial institutions can – and should – leverage in order to attract and retain customers through digital banking: personalized digital service, the power of partnerships, and organizational agility.

Choosing the right strategic partner is immediately accretive to your bottom line. You instantly ingest their capabilities and deploy their expertise as your own. The right choice can put you ahead of your competition, increase efficiency, and pay for itself with greater assets under management.

Be Number 1 in Personalized Digital Service

Leverage Agility and Your Unique Brand

30 years ago, local banks and credit unions dominated the market because of convenience, ease of access, and personal relationships.

The local branch was the most convenient option at the time. But as technology ushered in new and faster alternatives, consumers gravitated to efficiency and convenience. Digital access gave mega banks and fintechs the upper hand in terms of convenience and ease.

It’s not easy to transform a financial institution into a technology company, but although multi-national banks have unlimited resources and access to talent, smaller organizations have a distinct advantage: They can more nimbly make decisions, test ideas, and execute changes.

For this and many other reasons, banks and credit unions must focus on digital transformation. The authentic human touch remains a fond memory for many consumers, and most Americans prefer to bank locally; they just want an efficient digital experience.

Regional and mid-sized banks and credit unions should focus on amplifying their unique customer brand across all channels. A great example of deploying digital to create closer connections is the “go-to” solution by Umpqua Bank. Their mobile app allows customers to select a personal digital banker and have secure, one-to-one conversations with their banker at any time through a familiar chat-like interface. Your personal digital banker knows who you are, understands you as a consumer and stands ready to assist you through your financial journey in life.

Don’t Out-Spend Fintech or Banking Giants, Out-Partner Them Consumer demand has put massive pressure on banks and credit unions to innovate. As financial institutions first began to evolve, the vast majority of them took the safe road into digital banking by choosing the pre-packaged solutions offered by core providers.

Their apps looked identical to the competing banks, but it was the low-risk and cost-efficient choice at the time.

The legacy core processing providers simply weren’t orientated to create differentiated solutions for each financial institutions; they were focused on the opposite model of creating a simple app they could easily copy and paste for every bank and credit union. As smaller financial institutions experimented with the product sold

There is another advantage to being a smaller bank or credit union: As the pace of innovation increases, there is a growing consumer hunger for brands that don’t innovate themselves into a brand drift.

Successful financial institutions maintain their warmth, accessibility, and customer service throughout all channels. Digital banking should amplify your organization’s identity while delivering convenience and efficiency.

True digital transformation is a corporate culture shift. Leadership must be firmly on board with both feet. Project engineers must remain focused on the end-user’s digital experience. Look at everything through this prism and audit your process to ensure it results in your organization becoming easier to transact with – without drifting away from the core brand that attracted your customers in the first place.

As 2019 unfolds, follow the “digital banking hockey puck” to where it’s going, not where it is. Anticipate your customers’ needs and deliver solutions. Your customers’ digital banking experience will be directly tied to your organization’s overall performance.

By Jeffery Kendall; Executive Vice President & General Manager, Kony DBX

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Union is the largest credit union in Los

closely tied to keeping the company

Angeles County and the seventh largest

abreast of the banking ecosystem’s

in the state. It provides banking services

development. “In the last 10 years,

to over 202,000 members, access to

digital banking has gone through

over 30,000 surcharge-free ATMs, and

multiple miniature evolutions as digital

operates 17 branches in Los Angeles

platforms have matured,” he says.

and Ventura counties. Logix has

“Last year we established a new data

outgrown its current headquarters build-

analytics and business intelligence

ing in Burbank as its employee count

department. That group is chartered

exceeds 725. “We offer nearly all of the

with pulling together numerous data

banking services that any large bank

sources, whether it’s mortgage lending

would, but we’re different. We’re here to

or payments transactions, and creating

help members thrive, not to increase

useful insights about our members and

shareholder profits,” says Chuang.

our employees.” Logix’s commitment

As Logix’s CIO, Chuang’s role is JUNE 2019

to harnessing the power of data is

enhanced by the construction of its

says Chuang. “They pump our data into

new data center. “We’re using some out

a number of AI or machine learning-

of the box products from key strategic

enabled products to derive useful

partners, but ultimately the data lake

reports of member behavior.”

we’re creating is specifically for us with

Adopting new technology to better

our own data and only for our usage,”

gather and utilise data is key to Logix

explains Chuang. Logix recently

improving its member experience even

implemented an Advanced Reporting

further. “It’s all about helping our

for Credit Unions (ARCU) system

members thrive,” reiterates Fonseca.

powered by Jack Henry. “It allows us to

“We want to provide them with value and

create an advanced reporting data-

make sure we’re offering products that

base; we take a daily snapshot of all of

make sense for them. This data is going

our transaction data from our core and

to help us understand what life stage

the analytics team goes to town on it,”

they’re in and what products make

E XE CU T I VE PRO FI LE

Ana Fonseca, President & CEO Ana Fonseca is the President and Chief Executive Officer for Logix Federal Credit Union in Burbank, CA, which serves over 202,000 members and has $6.2bn in assets. Prior to becoming CEO, Ana served as the organisation’s Chief Operating Officer and before that, served as its Chief Financial Officer.

Ana holds an MBA from The Graziadio School of Business and Management at Pepperdine University and completed the Executive Program at Stanford University’s Graduate School of Business.

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119

LOGIX FEDERAL CREDIT UNION

E X ECU T I VE P RO FI LE

Edward Chuang, EVP & CIO Edward Chuang is a highly innovative and recognised senior technology executive and a veteran in leading technology teams and digital transformation for some of the largest financial institutions in the world. Edward currently serves as Chief Information Officer at Logix Federal Credit Union and is responsible for strategy and execution of the company’s information technology platform and project management office to support growth, innovation, and improving the member experience. Previously, Edward was head of Online and Mobile banking technology at Navy Federal Credit Union, the world’s largest credit union with over $103 billion in assets, where his team created award winning applications that serviced over 8 million members across the globe. Edward holds a Master’s degree and a Bachelor’s Degree with Honors from Carnegie Mellon University and a Post Master’s degree in Information Technology and Telecommunications from Johns Hopkins University.

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“We truly aim to provide the best possible banking experience that our members can have”

JUNE 2019

CLICK TO WATCH : ‘THE NEW LOGIX MOBILE APP’ 121 sense for them. For example, if we see

Logix employs data gathering and

they’re shopping at a home improve-

analysis not only to provide its mem-

ment store, we might be able to offer

bers with a sublime member experi-

them a home equity line of credit,

ence, but also to help foster and

because they’re probably working on

maintain a positive internal atmos-

home improvements or maybe a major

phere. “Even though we’ve gone

remodel.” With the data landscape in

through a lot of changes, one thing

constant flux and exponential expan-

that’s very important to us is that we

sion, both Fonseca and Chuang

preserve the culture we’ve cultivated

recognise its importance to the

over the past several years. I would say

continued success of Logix. “Data will

that one of the things that’s really

be the key to winning, and if we don’t

noticeable about our culture to new

leverage it, that will be our downfall. This

employees is how fun it is to work here,”

realisation is really informing how we’re

says Fonseca. “From dress-up days on

using data,” notes Chuang.

Halloween to annual award ceremow w w.f i nte c hma ga z i n e. com

LOGIX FEDERAL CREDIT UNION

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“ We’re driven by wanting to make our members feel welcomed, significant and engaged” — Ana Fonseca, President & CEO, Logix

nies at venues like the Los Angeles Zoo, Logix ensures that the happiness of its employees is maintained.”

Logix’s leadership team also recognises that maintaining positive and open relationships with its employees is a powerful tool for improving business strategy. “The other important aspect of our culture is that we foster open communication,” adds Fonseca. “Our employees have access to everyone on our senior management team, and they are encouraged to submit ideas for things

JUNE 2019

123

that we can do better for our members

from automation to intelligent ATMs

and for employees.”

and teller-less branches – and a

Looking to the future, Chuang is

continuing mission to make the

certain that the future of Logix is in

members of California’s leading credit

safe hands. “With the visionary

union continue to feel welcomed,

leadership of Ana, I think the willing-

significant and engaged. Chuang

ness to transform is something that no

concludes: “We truly aim to provide the

strategy can spell out on paper,” he

best possible banking experience that

says. Fonseca and the Logix team are

our members can have.”

ready to enter 2020 with a more seamless digital experience for their members, a constant dedication to enhancing Logix’s technological capabilities – with solutions ranging w w w.f i nte c hma ga z i n e. com

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