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MAY 2019
Connecting with customers through technology
Commitment to data driven customer centricity
DISRUPTIVE TECHNOLOGIES FOR DIGITAL TRANSFORMATION Managing Director and CEO of ERGO Digital IT, Joe Lapierre, discusses the company’s strategies for disruption
TOP 10
Mobile wallet platforms
FOREWORD
W
elcome to the May issue
how APIs can form the ‘digital glue’
of FinTech Magazine!
for connecting businesses in an open
“We are the agile and technology
banking landscape.
facilitators of digital transformation,”
Don’t forget to take a look at our
says Joe Lapierre, CEO of ERGO
in-depth company reports on
Digital IT. It’s a bold claim by the
Yorkshire Building Society Group,
unit of insurance company
DNB, Judo Bank,
ERGO Group, backed up
Department of Finance,
by a measured and
Affinity Plus Credit Union
focused strategy for
and Alliant Credit Union.
applying disruptive technologies and methodologies to the
Joe Lapierre Managing Director and CEO ERGO Digital IT
evolving insurance space. For our lead feature, we explore how ERGO Digital IT has been instrumental
Each organisation is leveraging technology to transform its operations and enhance
the experience of highly valued customers.
in supporting its parent company to
For this month’s Top 10 article, we’ve
remain at the forefront of the industry.
chosen some of our favourite mobile
We also take a look at MuleSoft, a leading provider of integration software which enables businesses
wallet platforms, and as always we’ve also brought you a list of upcoming must-see industry events.
to connect applications, data and
Enjoy the issue!
devices – a vital piece of the finance
Olivia Minnock
industry puzzle. Danny Healy explains
olivia.minnock@bizclikmedia.com w w w.f i nte c hma ga z i n e. com
03
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CONTENTS
12 Disruptive technologies for the digital transformation of insurance
34
THE ROLE OF API’S IN A COMPETITIVE BANKING ARENA M AY 2 0 1 9
42 Blockchain’s impact on incumbents: a blessing or a curse?
50 Enabling convenient, secure cross-border payments
62 On the money: finance management for a new generation of banking
72 86 The biggest industry Events
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CONTENTS
90 Yorkshire Building Society
136 Judo Bank
116 DNB
154 Department of Finance
166 Affinity Plus Federal Credit Union
184 Alliant Credit Union
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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
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12
M AY 2 0 1 9
Disruptive technologies for the digital transformation of insurance WRITTEN BY
MARCUS LAWRENCE PRODUCED BY
JAMES PEPPER
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13
ERGO
Joe Lapierre, Managing Director and CEO of ERGO Digital IT, ERGO’s digital technology unit, discusses the measured and focused strategy for applying disruptive technologies and methodologies
14
A
mid the industry’s rapid and exciting changes driven by disruptive technologies,
German insurance firm ERGO set up an IT unit dedicated to pushing the technological enablement of its digital transformation: ERGO Digital IT. “As my boss says, ERGO Digital IT is seen as the tip of the spear,” says Joe Lapierre, Managing Director and CEO of the unit. “We are the agile and technology facilitators of the digital transformation.” The unit currently has offices in Berlin and Warsaw, and was devised from the ground up to augment ERGO’s operations with technology. Its operations are closely entwined with all other IT entities within ERGO, and its projects are driven by colleagues across all disciplines, sites and expertise. M AY 2 0 1 9
15
w w w.f i nte c hma ga z i n e. com
Digital superheroes are born – or made by us. Everyone talks about change. We design it. With digitalization, companies face the challenge of transforming their business models. Anyone who wants to become a digital superhero must learn from the digital natives. BearingPoint shows you what that means in concrete terms, from the further development of your business model to the generation of network effects through the integration of different services. You benefit from our many years of experience as management and technology consultants and from the platforms and software solutions we have developed.
Consulting. Solutions. Ventures.
Imagine for a moment that you are the world’s most modern insurance company The pace has changed. More insurance clients are digital natives and expect seamless and effective communication with a free choice of touchpoints and channels. Are you prepared for this? Do you have a 360-degree view of your customers no matter the channel they choose or the concerns they have? Are you able to identify and fulfill additional services your customers need based on the data you have? Using innovative technologies in combination with a deep understanding of clients, the markets and business needs will help you get there. Client expectations are changing. Especially when it comes to claim. Expected and requested services need to reflect the highest standards of both quality and speed. What if sensors could detect a dishwasher has a leak and it gets repaired before it causes major damage? Wouldn´t this avoid inconveniences for the client and save you costs? The modernization of insurance platforms in combination with AI, IoT, and process automation technology will get you there. Combined that with the data you need to predict and proactively handle the process, and the client will see you in a different light. The organization needs to be ahead. Being adaptive and creative enough to manage innovative technology, being stable enough to be there for your clients 24/7 and being strong enough to fulfill the growing complexity of regulatory requirements are challenging and can push organizations to their limits. Can you manage different speeds within your organization without sending parts of it off into a black hole? Careful but goal-oriented change of your organization and processes, especially change that reflects your business-specific starting position, will enable you to create your own path, to make you a leader again instead of a follower. The whole. Technology can be the engine driving your business. Can you make the right decisions for your business and implement them? Are you able to keep track of the latest startup technologies and see the potential impact they will have on your daily business? Holistic but predictive handling of technologies in combination with your business capabilities will identify the right balance between existing and innovative solutions and provide you with a stable but future proof and flexible environment. Imagine for a moment that this is reality.
“Our ambition and passion turn imagination into reality. Combining a deep understanding of your business with people who have a finger on the pulse of technology make us at BearingPoint the right choice for getting you there. You are not only an insurance company: for us you are the insurance company.” • • • • •
Your technology advisor Your business advisor Your change advisor Your trend scout Yours
www.bearingpoint.com
ERGO
“ You don’t want to get too carried away with new technology: look at it, blend in the new with the old, and make it practical” 18
— Joe Lapierre, Managing Director and CEO, ERGO Digital IT
M AY 2 0 1 9
ERGO Digital IT was equipped with the full range of skillsets to make a success of its endeavours, including designers, engineers, developers, program managers, testers, DevOps, cloud and product owners. ERGO Digital IT has been instrumental in supporting its parent company to remain at the forefront of the industry as technology becomes increasingly vital in meeting customer needs and expectations. “What we’re trying to do is add a digital ecosystem where there’s a host of reusable assets
ERGO – COMPANY REVIEW 19 that can be leveraged independent of where you are, which language you speak and which technology you’re currently running, to accelerate the time to market and make smaller ERGO entities more competitive,” says Lapierre. From the outset, Digital IT has been given the flexibility and dynamism it needs to drive digital transformation at ERGO IT in the most effective way possible. “We were set up in Berlin and Warsaw on purpose, in order to be able to attract talent here,” notes Lapierre. With both Berlin and Warsaw, ERGO Digital IT’s offices are located within w w w.f i nte c hma ga z i n e. com
hunterPac WHO ARE WE?
There is one thing you need to know about hunterPac, we love people and the journey that we undertake with them. Most importantly we learn new things about people every single day: what they enjoy, what engages them and where they see their future guiding them. This is what drives our managing director, Ken Owiti, as he strives to grow the people and relationships that are so important to Ken and the team. Respect for people is one of the guiding principles at hunterPac, be it the many that make up a company, or the one that is looking for guidance to help grow their career. We know people; we find people; we
place people; we coach and mentor people, so that they will make a positive impact in the companies they are placed with, leaving both the company and the individual stronger for the experience. We partner with you to enhance performance, productivity and deliver the right business outcomes. Ken and the team, after many years in the industry, have gained in-depth experience in the Insurance, Technology, HR and Operations domains. We bring simplicity, clarity and authenticity along with our experience, working with corporations to clarify and distil exactly what and whom they need to make them stronger.
OUR TEAM Ken Owiti Director Genie Khan Principal Anthony Page General Manager, Tech Ventures
CONTACT US
FIND OUT MORE
EXECUTIVE SEARCH, CONSULTING, CONTRACTING & TECHNOLOGY VENTURES WE WILL GET YOU WHERE YOU NEED TO BE We have a long history of partnering with Blue Chip clients across a range of industries from Retail, IT, Government, Mining, Media, Telecommunications and Financial Services. Our passion for people with specialised, complex skill sets has led us into regions such as Asia, Australia, Europe and Africa, one of the world’s fastest growing markets. We pride ourselves on our network of talented executives, giving us the ability to quickly identify appropriate people to meet your needs, and provide a thorough and efficient evaluation of their strengths in relation to what you seek.
WE’RE THE BEST PEOPLE TO EVALUATE YOUR BEST PEOPLE When clients seek people for short term, defined outcomes, we draw on the services of Recruitment & Contract Resourcing via specialist Genie Khan and her team. hunterPac offers organisations seeking to broaden their capabilities a unique Consulting approach to support organisations who wish to quickly tap into specialist skills, seek advice or solve specific problems in the short term. Mirroring our approach to Executive Search, the team maintains our networks of professionals within our specialist domains. We coach, develop and mentor your team, but it goes beyond just increasing skill. We’re increasing the intelligence, understanding, capability and culture within the business with our holistic approach.
HELPING DEFINE THE VALUE OF HUMANISTIC PURPOSE The end result being a more balanced team with refreshed and restocked knowledge, skill and strategic understanding, more capable of driving your business forward as a strong and confident team. hunterPac recently launched its Technology Ventures division headed by Anthony Page, leveraging its network of leading specialists to help illuminate old issues, fast track those lightbulb moments, drive new possibilities and opportunities to make a real impact.
DIGITAL DISRUPTION IS REDEFINING THE BUSINESS PARADIGM At hunterPac Technology Ventures, we are putting effort into the future. Not just sitting on the sideline, but invested, engaged and involved. We are helping to tie the physical world to the virtual world and building understanding of customer activity prior to the digital engagement. By doing this we help our clients unlock their potential. We are heavily involved with research and development into business intelligence platforms utilising artificial intelligence, including Machine Learning and Deep Learning.
DATA WITHOUT A FOCUS IS JUST NOISE We strongly believe that if you can’t measure it, you can’t manage it. Henry Ford once said “If I had asked them what they wanted, they would have said faster horses”. The horse is a person’s reference point, which makes the answer very logical and therefore not very innovative - insight is the name of the game. We recognise the need to do things differently, to innovate and create insight. To that end we are investing in Bio- analytics technology start-ups and incubating talented people and companies, supporting them with our networks of leading specialists. Our R&D investment can help your business stay ahead of the ever-changing business technology environment, deliver insight, extend corporate radar and stay ahead of the competition and excel in the moments that matter.
BUILDING STRONG, TRUSTED RELATIONSHIPS hunterPac will find the missing piece of your jigsaw and together we will construct a stronger future while helping you grow, opening your eyes to new technologies and opportunities. hunterPac delivers skills that will create balance, intervene and change your course. We bring knowledge of people, process and industry. And most importantly we leave having made a difference, having built something together. Two of the most significant advantages that hunterPac brings are intimacy and immediacy, together they make the world smaller.
ERGO
“If we decide to switch to Microsoft Azure in the future, that will be easily done” — Joe Lapierre, Managing Director and CEO, ERGO Digital IT
22
M AY 2 0 1 9
two of Europe’s most active and
“I also encourage startups to talk
exciting tech startup scenes. Lapierre
to other startups,” Lapierre adds,
has been involved in fostering positive
crystallising the benefit to ERGO
development of startups in both
Digital IT of having someone at the wheel
Asia and Europe, having worked and
who takes it upon himself not only to
mentored multiple fintech startups in
nurture tech startups but to glean ideas
Hong Kong prior to his current role.
and inspiration from some of Europe’s
“I try to provide guidance, direction,
most innovative minds. “I’m a practical,
practical common sense and some-
common sense digital person,” he
times just motivation,” he says. “The
explains. “You don’t want to get too
Tech Stars Berlin Programme, that I
carried away with new technology. You
personally support, runs a mentorship-
need to look at it, blend in the new with
driven accelerator which provides
the old, and make it practical. Don’t go
startups with feedback and helps them
too far off one way or the other and
to focus on what they’re aiming for,
keep a level head on your shoulders
what they’re trying to implement, who
when you’re integrating newer
their audience is and how they engage
insurtech or fintech solutions into your
with their customers”.
IT environment.”
E XE CU T I VE PRO FI LE
Joe Lapierre Joe Lapierre is a Digital Technology and Customer Experience expert who helps large multinational corporations tackle the huge task of digital transformation. Outside of work he also volunteers as a mentor and helps fintech startups build an audience and grow their customer base. Lapierre has worked extensively in the US, UK, Europe and Asia.
w w w.f i nte c hma ga z i n e. com
23
ERGO
24
M AY 2 0 1 9
“People who gave a lot of pushback two years ago and have since become some of our most vocal supporters” — Joe Lapierre, Managing Director and CEO, ERGO Digital IT
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25
N W
E z
In close cooperation As a family-owned IT solutions provider founded on craftsmanship, we work in close cooperation with our customers.
Learn More
We help organizations create frictionless and highly personalized experiences for their customers, consumers and citizens.
Find us:
ERGO – ’DIGITAL IT’ 27 This mentality has been vital to
protection, ERGO Digital IT has used
Digital IT’s key focus when considering
Kubernetes software to run containers
and developing ways to drive ERGO’s
within the system. “Kubernetes keeps
digital revolution. To facilitate a smooth
a lot of our workload portable, creating
transition from legacy platforms to
silos where we can reassign content
modern solutions, IT has created an
relatively easily from place to place,”
application programming interface
Lapierre says. “If we decide to switch
(API) factory to make the back end less
between providers in the future, that
dependent on old tech and drive it
will be easily done. It also helps us to
towards the target architecture. Amidst
stay elastic between cloud and on-prem-
this change, the foundations have been
ise solutions.” In itself, these actions
laid for flexibility in the future. With
unlock enormous opportunities for
a security driven cloud strategy that is
improved operations. ERGO Digital IT
closely aligned with compliance to GDPR
has devised its own distributed data hub
and consumer expectations of data
where its data sets are combined to w w w.f i nte c hma ga z i n e. com
ERGO
28
provide a comprehensive view of the customer. “The customer expects us to communicate with one voice, being aware of all interactions the customer had with ERGO through all channels, and being able to access all data on contracts, addresses etc. from every point of contact. In short: the customer wants the best, most convenient and fast access to all their data and speedy answers to all questions. We pull all the data from multiple sources M AY 2 0 1 9
2016
Year founded
250
Approximate number of employees
29
into a single repository to enable this,”
If it wasn’t a sale, what else could the
says Lapierre.
customer potentially want? How can
To utilise data more efficiently for the
we service the customer faster or more
customer and also to lighten the work
easily or reach out to them in the future?”
load regarding repetitive tasks, ERGO
AI-driven automation has already taken
Digital IT also supports initiatives within
effect for certain internal processes,
ERGO to apply AI and explore machine
enabling the firm to unburden employees
learning. “We’re looking into things like
from basic tasks. ERGO Digital IT works
speech-to-text where you can receive
closely together with other IT entities
a phone call, convert that to text
on these projects. “One business had
automatically, and then analyse it to
approximately 100 people who were
provide better service to the customer.
classifying emails as they were coming w w w.f i nte c hma ga z i n e. com
Driving insurers
digital future into a
At Cognizant, we’ve invested in the end-to-end capabilities needed to help insurance organizations not just do digital, but be digital. We partner with our clients to unlock new value and through the power of digital technologies and new ways of working, we help them evolve into more competitive, progressive versions of themselves. Learn more at Cognizant.com
Copyright Š 2019 Cognizant
“ We pull all the data from multiple sources into a single repository, our distributed data hub” — Joe Lapierre, Managing Director and CEO, ERGO Digital IT
31
in, and that is now achieved through an
RPA back office processes currently
algorithm which allows the AI to do the
in use,” says Lapierre. “The AI-driven
job and reroute them directly,” says
email classification didn’t fall into the
Lapierre. His AI ambitions for ERGO
RPA category because it was more
Digital IT do not end there, however:
logic based than it was just repeating
“We are using Amazon Web Services
existing processes, but simple things
(AWS) with Hortonworks to create an
such as calculating commissions for
entire AI platform which will allow us,
an agent or broker are where we have
like the distributed data hub, to take,
applied it. As part of our straight-through
modify and utilise that AI learning for
attempt to digitalise everything, there
other projects.” In the back office, robotic
are certain steps along the claims
process automation (RPA) is also being
process that have had RPA applied to
leveraged to free staff from repetitive
them with a view to gradually automating
tasks. “ERGO has about 13 different
the whole process.” w w w.f i nte c hma ga z i n e. com
ERGO
32
M AY 2 0 1 9
This incremental application of technology is in keeping with Lapierre’s practical and measured approach to transformation, which is again found in the firm’s internal change management. “We have a lot of people who have worked at ERGO for over 20 years that are experts in their areas, and we cooperate closely with these strategic business people,” he says. The agile approach to transformation within ERGO IT overall has seen considerable success. “We increasingly work across all business units, IT specialisations, locations as well as adapt new technology and have changed our role within the corporation considerably – IT is a driver of business development.” This positive shift is emblematic of the success of ERGO Digital IT since its inception, with Lapierre at the helm. Appreciating the difference between what can be done and what should be done has been crucial to the success of ERGO Digital IT’s operations as a digital transformation facilitator. With the groundwork laid for continued flexibility and clarity, this success is well set to continue on its upward trend.
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33
LEADERSHIP
34
THE ROLE OF APIS IN A COMPETITIVE BANKING ARENA APIS ARE VITAL AS BANKS MUST COLLABORATE IN ORDER TO REMAIN COMPETITIVE. MULESOFT’S DANNY HEALY DELVES DEEPER INTO WHAT THEY REALLY MEAN FOR THE FUTURE OF FINANCE… WRITTEN BY
M AY 2 0 1 9
OLIVIA MINNOCK
35
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LEADERSHIP
T
echnology giant MuleSoft is a leading provider of integration software which enables business-
es to connect applications, data and devices. In an increasingly connected
world, having the right infrastructure in place becomes ever more vital for the finance industry. With the sector being disrupted by open banking and every institution or fintech worth their salt adopting APIs, what exactly does this mean for a connected financial future? 36
“ IF YOU CAN ORGANISE YOUR CAPABILITIES INTO AN APPLICATION NETWORK, YOU CAN ESSENTIALLY PLUG IN NEW FEATURES TO EXISTING BACK-END SYSTEMS” Danny Healy Regional Executive MuleSoft
DIGITAL GLUE An application programming interface, or API, is described by MuleSoft’s Danny Healy as “digital glue”. The financial technology evangelist contin-
can organise your capabilities into an
ues: “They are what makes it straight
application network, you can essen-
forward for one application to exchange
tially plug in new features to existing
data and communicate with another
back-end systems’,” he explains.
application.” For example, mobile apps
This way, a bank needn’t develop all
can connect to a database belonging
the software or tech it needs by itself,
to an organisation via APIs to facilitate
and can collaborate with technology
communication and allow the device
organisations to improve its offering.
to access the right data.
This has promoted a shift in the way
The connectivity afforded by this
even the largest FIs operate. “The way
“digital glue” allows banks to utilise third
banks think about their application net-
party capabilities, says Healy. “If you
work is not just the systems exposing the
M AY 2 0 1 9
37
capabilities within their own data centres,
OPEN BANKING BRINGS TECH FORWARD
but potentially plugging in capabilities
APIs and the collaborative open
from third parties,” Healy adds.
banking landscape they facilitate have
This doesn’t just mean banks can
really changed the meaning of technol-
work on their own apps and networks,
ogy within finance. “First, we need to
but they can add their services to
understand what technology looks like
another organisation’s app – such as
within banks,” Healy begins. “The way
adding their loan or insurance offering
the technology landscape has evolved
to the website or supplication of a car
over the last couple of decades hasn’t
dealership for mutual benefit. “It really
happened with any kind of plan.
extends beyond just the bank’s trad-
Technology was accumulated in banks
itional legacy systems,” says Healy.
in a project by project way – so today w w w.f i nte c hma ga z i n e. com
LEADERSHIP
38
many banks have silos that don’t
APIs and technology transformation is
communicate with each other.” With
a mammoth task for even the largest
technology operations siloed, the
financial institution. “In terms of where
same is true for data, meaning the
data and banking capabilities are
plethora of information at companies’
today, it’s not the most accessible,”
fingertips has yet to be utilised by
says Healy. “It was all based on tech-
banks for the greatest possible benefit.
nology from 10 or 20 years ago, not
“Innovations are now starting to
the sort of tools a mobile developer
appear within mobile banking apps
would use, for instance. However, they
from a number of banks,” Healy
can move forward by making those
continues. “Some of that is in response
older systems look to the develop-
to challenger banks which have created
ment teams building those kinds of
a more competitive environment.” This
mobile apps. They can expose their
competition has promoted banks to
underlying capabilities with a set of
look at the way they utilise their data and capabilities, and adopting APIs mean they can firstly better connect their legacy systems to make the most out of what they have, and then innovate with the help of third parties. “There’s a lot of data there, but it’s very fragmented,” Healy comments. “So they’ve thought about how they can expose this data in such a way that their banking capabilities can be consumed really easily into a new innovation project.”
BRINGING DATA TOGETHER With all the information in their possession, bringing this together through M AY 2 0 1 9
“ THERE’S A LOT OF DATA THERE, BUT IT’S VERY FRAGMENTED” Danny Healy Regional Executive MuleSoft
CLICK TO WATCH : ‘API ECONOMY – HOW APIS CAN BREAK UP YOUR COMPANY’S BALL OF MUD’ 39 APIs so it becomes more consumable.” Banks are becoming more and more interested in looking at third party applications to make the most of their
managing their current account as they do from their favourite social media platform. Bringing legacy systems into line and
existing capabilities. Indeed, MuleSoft’s
transforming the customer experience
recent Consumer Connectivity Report
isn’t just a question of having the right
found that 30% of banking customers
technology in place – banks must also
in the UK would consider getting
change their way of thinking. “They
banking services from Google, Apple
need to think about how teams are
or Facebook, with the figure increasing
organised to support the operating
to 45% within the 18-35 demographic.
model,” says Healy. “For example,
Banks cannot afford to ignore this
when a new feature needs to be built in
shift in customer expectation, and the
a mobile app, that doesn’t happen
facts are that customers expect the
automatically – you need some enabling
same seamless user experience when
technology, like a catalogue. But you w w w.f i nte c hma ga z i n e. com
LEADERSHIP
40
also need teams to be enabled to use
open banking ecosystem which breeds
this central catalogue and to know how
this kind of innovative startup. “Fintechs
to discover it, know how to try out an
come in all shapes and sizes, and banks
API, to understand, play around, and
will want to adopt the right strategy to,
then to consume it, without having too
yes, compete with them in some cases.
much dependence on the underlying
Increasingly, however, banks will look
teams and back end systems as this
to fintechs to partner with. Not all the
will cause a bottleneck.”
good ideas can be thought of within a bank, and API strategy allows you to
THE RISE OF THE FINTECHS
put the capabilities in the hands of peo-
While APIs have given banks a tool to
ple outside the bank who might have
compete against fintechs like challeng-
great ideas.”
er banks, they have also created an M AY 2 0 1 9
APIs, concludes Healy, are key to the
“ FOR BANKS TO CONTROL HOW THEY OPEN THEIR DATA, APIs CAN BE A TURNSTILE” Danny Healy Regional Executive MuleSoft 41
strategies banks need to develop their
a turnstile: if people want to access
services, both in terms of collaborating
your capability and get data from
with third parties and exposing their
underlying systems, they should go
own underlying capabilities. “That is
through an API. This makes sure
the reason MuleSoft provides technol-
underlying services are accessed to
ogy to organisations,” he explains.
the greatest potential, in a secure and
“They want to have the flexibility to be
controlled way – which will be increas-
able to plug and play and change with
ingly vital for banks.”
capabilities over time. Ultimately, we don’t provide products banks use as a whole: we provide the capability to build products. For banks to control how they open their data, APIs can be w w w.f i nte c hma ga z i n e. com
BLOCKCHAIN
Blockchain’s impact on incumbents: a blessing or a curse?
42
Igor Pejic, Head of Marketing at BNP Paribas PF AT and author of the recently published Blockchain Babel, explains how the technology can work with financial institutions rather than replacing them WRITTEN BY
M AY 2 0 1 9
IGOR PEJIC
43
w w w.f i nte c hma ga z i n e. com
D I G I TA L T R A N S F O R M AT I O N
M
ost of the time novelties are introduced by incumbents; less frequently, entrepreneurs working by themselves come up with a technological
breakthrough. Bitcoin was completely different. In
a concise, mysterious paper from 2009 the world’s first real cryptocurrency was presented for the first time. The author of the paper was Satoshi Nakamoto. Despite vivid speculation to this day, nobody knows the real identity behind this pseudonym. It is not even known whether it is one person or a group of people who wrote the paper. 44
There was also no company behind it, no classic business case as you would expect. The motivation behind the world’s first real cryptocurrency was ideological, rather than monetary. The idea was to create an alternative financial system and to get rid of banks and any other incumbent financial institution. 10 years later we have come a long way from that idea – technologically as well as ideologically. Though not supported by any official corporation or institution, the idea spread quickly, especially since it fell on fertile ground. The post-financial crisis anti-banking sentiment helped the message blossom quickly. People around the globe started to send money directly via the bitcoin protocol. Later, bitcoin alternatives, called altcoins, became available too and competed with the pioneer. Soon the frenzy reached the broader public and the discussion fell prey to very pertinacious myths. The first M AY 2 0 1 9
“ The motivation behind the world’s first real cryptocurrency was ideological, rather than monetary” — Igor Pejic Head of Marketing BNP Paribas PF AP 45
w w w.f i nte c hma ga z i n e. com
BLOCKCHAIN
was the equation of bitcoin and the
blockchain, which is the mechanism in “Using the the background that enabled cryptoblockchain to transactions in the first place. To this day, hardly any discussion around underpin fiat blockchain can do without mentioning even if only to explain what it is. currencies is bitcoin, Another major myth was that cryptoa silver bullet currencies represent the end of banking that they will make any kind of trusted solution to –institutions obselete. While the blockchain mechanism indeed fells many problems” intermediaries, it cannot obliterate all
— Igor Pejic Head of Marketing BNP Paribas PF AP
46
institutions managing money and its movement. At the very least you need somebody to guard your data offline, i.e. when they are not in a transaction. In the cryptocurrency world this is usually done by exchanges – that is, unless you want to store seemingly endless alphanumeric sequences in a paper wallet. But those institutions have been hacked in the past and unlike with licensed banks, users are not guaranteed they will see their possessions ever again. This shows that while the process can be streamlined, the endpoints will still need institutions of trust. These endpoints are currently occupied by banks. Hence it is no surprise that
M AY 2 0 1 9
‘IGOR PEJIC, AUTHOR BLOCKCHAIN BABEL, KOGAN PAGE [BULL.IO BLOCKCHAIN BUSINESS CHALLENGES]’ rather than fretting about it, bankers
example, it is tricky to keep track of
are embracing blockchain technology.
who owes what to whom. Thanks to
Earlier this year 90% of finance
a unified ledger, it is not necessary
executives said it will have a positive
any more to keep multiple databases
effect on the payments industry.
in unison.
The payments space is by far not the
In order to harness the blockchain
only application field for blockchain in
for their core business, banks have
finance. Loan issuance, trade finance,
been developing and adapting the
the issuance and management of
technology so much that cryptocur-
securities, and raising venture capital
rency enthusiasts consider what has
are just some of the most prominent
been developed as rather blockchain
areas to be streamlined by blockchain.
inspired applications. In a first step
The messier and more labyrinthine
banks have separated the currency
the current processes, the larger the
idea from the mechanism in the
benefits. With syndicated loans, for
background. They had realised that w w w.f i nte c hma ga z i n e. com
47
BLOCKCHAIN
having a currency that is not linked to
that simply uses some principles of the
an economy and not managed by
blockchain. Ripple’s xCurrent ledger
a national bank implies multiple serious
technology is a prime example, on
problems: above all, the high fluctua-
which many banks rely for cross border
tions in the exchange rate. Using the
transactions. Estimates of the potential
blockchain to underpin fiat currencies
operational savings are said to be
is a silver bullet solution to many
around US$20bn annually, starting
problems. Then banks moved to more
from 2022.
centralised models, which today are
48
It is not all that easy, however. While
increasingly named Distributed Ledger
for most areas of finance the block-
Technology (DLT). Most recently we
chain is clearly a blessing, there is one
have another major change in the
front that will crumble: payments.
setup, namely interledger technology
Facilitating the movement of money
“ Another major myth was that cryptocurrencies represent the end of banking” — Igor Pejic Head of Marketing BNP Paribas PF AP
M AY 2 0 1 9
does not require a license, yet at the
from one of the large tech companies.
same time the blockchain lowers the
For banks, the blockchain idea has
entry barrier. New entrants no longer
evolved from representing an alterna-
need to build a global network of
tive financial system to enhancing the
intermediaries and partners, but can
current one. This journey from threat to
move money with using one of the
tool is typical for much of groundbreak-
exiting blockchain protocols. Various
ing innovation, yet which incumbents
offers of Blockchain-as-a-Service
will ride the wave of success will be
(BaaS) even enable smaller players to
determined by who understands the
profit from the technology without the
new competition and the new arenas
excessive significant investment that
of competition. Above all, they must
goes into building an application
understand the fatal consequences of
from scratch. Instead, they can rent it
losing grip of the payments realm. 49
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M O B I L E PAY M E N T S
50
Enabling convenient, secure cross-border payments MARIO SHILIASHKI, CEO OF EMEA AT PayU, DISCUSSES HOW THE PAYMENT SERVICE PROVIDER ENABLES SECURE, BORDERLESS AND CONVENIENT PAYMENT OPTIONS TO CONSUMERS AND MERCHANTS AROUND THE WORLD WRITTEN BY
M AY 2 0 1 9
M ARCUS L AWRENCE
51
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M O B I L E PAY M E N T S
N
aspers-owned PayU, a payment technology provider for online merchants established in 2002,
processes around 1.2mn transactions every day and has established itself as a leading financial services provider worldwide. Serving merchants across the entire ecommerce spectrum, PayU specialises in simplifying cross-border payments with its easily integrable PayU Hub, which connects enterprises to 18 markets and over 250 payment methods. Across those markets, which include Asia, Central and Eastern
52
Europe, Latin America, the Middle East and Africa, PayU facilitates payments for around 2.3bn consumers. Mario Shiliashki, CEO for the Europe, Middle East and Africa (EMEA) region at PayU, highlights Central and Eastern Europe as a particular hotspot for demand for cross-border payments. As a collection of smaller markets where businesses and consumers alike are more likely to engage in cross-border trade, PayU understands the importance of having accessible, functional and reliable payment infrastructure in place. “The interesting thing about Europe is that, even if you’re an SME, you’re thinking about opportunities beyond your local market,” says Shiliashki. “We offer these merchants M AY 2 0 1 9
53
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M O B I L E PAY M E N T S
a single plug-in, a single connection
expansion markets,” he adds. “It’s
to our platforms, that allows them to
making it much easier for small
accept payments across Europe in
businesses to expand into new
each of their relevant markets.”
markets. Once they integrate, they’re
Shiliashki notes that the spectre of
able to simply switch to local payment
establishing secure and efficient
methods as they expand into new
payments can be a daunting one for
geographies. I think it’s one of those
SMEs, but notes that PayU’s solutions
unique value propositions that we’ve
are more than capable of assuaging
built at PayU, and one which we
those fears. “We help them to navigate
continue to expand out and strengthen
the paymentscape and the relevant
as we add new payment methods in
legal and compliance frameworks,
our markets.”
whilst simultaneously optimising their 54
This ability to provide such services
ability to accept as many relevant
through a single plug-in, the PayU hub,
payment methods as possible in their
is unique in the firm’s operational
M AY 2 0 1 9
CLICK TO WATCH : ‘PAYU – PAYU SOUTH AFRICA’ 55
markets, and sets PayU apart not only as a facilitator of cross-border trade, but as a convenient one. “We don’t have a single platform,” Shiliashki explains. “We instead rely on the fact that we have multiple technology platforms across our geographies over which we have our consolidation layer, the PayU hub.” Striving for a level of universality with its payments offering, PayU partners with organisations around the world to ensure it can provide the best local offerings as well as intermarket solutions. “Our model
“ Consumers and merchants can feel secure in the knowledge that if a transaction’s approved then it’s good” — Mario Shiliashki, CEO of EMEA at PayU
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M O B I L E PAY M E N T S
“ We partner with a number of players in various markets around the world to be able to provide a seamless buy now, pay later checkout experience” — Mario Shiliashki, CEO of EMEA at PayU 56 is based on partnerships, and we aim to partner with each and every bank in every one of our countries to ensure that we truly can provide the best offering to both local merchants, and international merchants who are looking to expand.” Shiliashki stresses the value of these partnerships as being vital to success, symbiotically enabling enterprises whilst driving business for the financial institutions with whom they collaborate. Every partnership ultimately builds towards one of PayU’s key aims, which Shiliashki outlines as: “To say we truly can serve your payments needs M AY 2 0 1 9
anywhere in the world.” With a strong sense of advancement and a focus on innovation, Shiliashki highlights PayU’s endeavours to augment consumers’ payments with additional financing options. “Around the world, we increasingly partner with both banks and independent financial institutions to enable consumer credit options,” he says. “We partner with a number of players in various markets around the world to be able to provide a seamless buy now, pay later checkout experience.” Shiliashki adds that the company is also exploring merchant credit options as well, broadening the scope of its offering even further. Looking at the financial services industry from an even higher level, Shiliashki notes the new open banking infrastructure in Europe as a result of Payment Services Directive 2 (PSD2), as a particularly disruptive industry shift. This advancement of the original legislative framework of PSD seeks to advocate the rise of fintech firms by enabling them to engage directly with consumers in the same manner as big banks. With a customer’s permission, payment solution providers and w w w.f i nte c hma ga z i n e. com
57
M O B I L E PAY M E N T S
merchants can access their account data directly, streamlining the process by removing the necessity for intermediary payment services such as Visa and PayPal. “I think it will absolutely transform the world of banking,” he says, “but also the world of payments. We will have faster, more seamless access to consumers’ bank accounts. The key there is going to be making sure that all the measures are in place for that to be secure and for the consumer to have full control of who 58
has access to their accounts.” Shiliashki says there has been a considerable shift in recent years
“ PayU is making it much easier for small businesses to expand into new markets” — Mario Shiliashki, CEO of EMEA at PayU
M AY 2 0 1 9
59
towards convenience backed up by
payment convenience with security.
security, gradually eroding the tradi-
“We have partnered with Feedzai,
tional friction experienced between
a leader in fraud detection technology
achieving both ideals in a transaction
and risk management, who have
without sacrificing part of the other.
helped us to enable our systems to
Investing in better, faster ways to
detect fraudulent actions before they
identify customers at the point of
even happen,” says Shiliashki. “Con-
payment, through technologies such
sumers and merchants can feel secure
as biometric authentication, data
in the knowledge that if a transaction’s
analytics, machine learning and
approved then it’s good.”
fraud detection, has enabled PayU to remain at the forefront of marrying w w w.f i nte c hma ga z i n e. com
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B I G D ATA
62
On the money: finance management for a new generation of banking GARRY LARNER, REGIONAL DIRECTOR UK FSI AT GLOBAL ENTERPRISE SOFTWARE COMPANY OUTSYSTEMS, DISCUSSES HOW BANKING WILL NEED TO ADAPT FOR A YOUNG, MODERN DEMOGRAPHIC’S FINANCE MANAGEMENT NEEDS WRITTEN BY
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GARRY L ARNER
63
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B I G D ATA
G
etting better at money management is among the top five New Year’s resolutions made each year, with
32% of us vowing to save more and spend less. It’s also one of the most commonly
failed ambitions, and now almost halfway through the year it is likely that many of that proportion have given up. Many adults struggle with financial literacy – all year round. A study by Cambridge University and UCL last year found that a high proportion of UK adults have difficulty 64
with basic financial management. A separate study found two-thirds of millennials had never been taught how to budget, and struggle to work out which financial products suit their needs. It’s not just those with low financial literacy who want help managing their money. The new generation of banking customers is accustomed to having data at their fingertips. Before making decisions about everything from what to eat to where to go on holiday, the mobile information generation expects to be able to consult relevant data, get recommendations and compare alternatives. Why should financial decisions be any different?
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‘82% of millennials are open to switching banks’ 65
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B I G D ATA
66
‘The younger generation is typically far more open about its spending habits’
There’s a definite market demand for consumer banking solutions to help people gain better control over spending and saving, but the traditional banking sector has been slow to respond. However, the advent of open banking, allowing customers to share their financial data with third parties, has prompted new market entrants offering money management apps that put customers in control. This competitive threat has given traditional banks the impetus to develop their own solutions, and they have little time to lose.
BREAKING UP WITH HIGH STREET BANKS – TODAY’S CUSTOMERS ARE FICKLE WITH THEIR FINANCES It used to be said that you were more likely to get divorced than to break up with your bank. Bank account switching has historically been low in the UK with the big four High Street banks enjoying strong brand loyalty.
— Rupert Spiegelberg CEO, IDNow
They can’t afford to be complacent, though, as this isn’t the case for younger customers. 82% of millennials are open to switching banks, and just over half of them say they would switch to a different bank if it
M AY 2 0 1 9
CLICK TO WATCH : ‘OUTSYSTEMS: SOME DEVELOPERS HAVE THE BEST ADVICE...’ 67
offered a better mobile app or other
habits and prepared to share valuable
superior digital facilities.
data if doing so offers tangible benefits.
Money management tools are high on
These might include an app that
the list of factors influencing the choice
automatically transfers money from
of bank for younger customers.
one account to another to prevent it
Research by Business Insider found
going overdrawn, that automatically
that features such as being able to set
sweeps any extra cash into a savings
spending limits, see all their accounts
account or provides alerts when better
through a single interface and even being
deals on financial products become
able to compare their spending habits
available. Automation that delivers
with others are important to customers
the best customer outcome without
when choosing who to bank with.
them having to make any effort is a
The younger generation is typically far more open about its spending
crucial feature across many money management tools. w w w.f i nte c hma ga z i n e. com
CYBERSECURITY
As the market changes, both established and challenger banks must create and roll out these kinds of products faster than ever before to compete for increasingly ‘switchy’ customers, and money management tools are a key battleground for differentiation. This demands a swifter, more iterative approach to highly customer-centric product development. Being digital-first is no longer an option for banks, it’s a necessity.
68
DIGITAL-FIRST DEMANDS A DIFFERENT DEVELOPMENT APPROACH Of course, just like New Year’s resolutions, saying you want to take a digital-first approach and actually achieving it are two different things. If you’re a traditional bank, you have the challenge of integrating with legacy systems, and even relative newcomers to the industry need to have the right development platforms and approach to keep pace with a sector that’s becoming increasingly dynamic. A company that anticipated the changing shape of customers’ money management needs earlier than most is thinkmoney. Designed to take the stress out of budgeting, their current M AY 2 0 1 9
account holds money needed for regular bills separately and tells customers exactly how much they have available to spend. This helps ensure that bills are paid on time, and gives users 24/7 visibility of their money situation, leading to improved credit scores and total peace of mind. The thinkmoney account has proved very popular, but the company faced a conundrum. Positioned in between traditional banks and recent market entrants, thinkmoney has an opportunity to build on the advantages of both traditional brand heritage and recententrant agility, but it needed to innovate faster to consolidate its position, take advantage of the opportunities of open banking, and meet its customers’ demand for fast banking services. To solve this issue thinkmoney entered a partnership with OutSystems to create a digital factory enabling it to transform into a fully digital-first organisation. Using low-code rapid application development thinkmoney’s digital factory brings together business staff and developers to deliver features such as biometric authentication, a streamlined account opening process that onboards new customers in minutes, w w w.f i nte c hma ga z i n e. com
69
B I G D ATA
70
and integration with the wider financial ecosystem. Across all these initiatives, consistently providing an exceptional customer experience is the critical consideration, which is faster and easier to achieve thanks to the capabilities of the OutSystems low-code platform, which delivers a six-fold productivity increase compared to traditional coding. By operationalising innovation in this way, thinkmoney has put a sound foundation in place to ensure it stays competitive as the industry develops. M AY 2 0 1 9
‘Faster application delivery means more scope for innovations’
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CUSTOMER EXPERIENCE IS A TOP PRIORITY FOR 2019
seamlessly with legacy systems and
Faster application delivery means
the wider banking ecosystem will
more scope for innovation as new
become critical.
new products that integrate
features can be easily tested and rolled out, ensuring continuous improvement of customer experience. Customer-centricity is a major focus for banks in 2019, and as the banking sector wakes up to the competitive benefits of helping customers manage their money better, the ability to quickly develop and bring to market w w w.f i nte c hma ga z i n e. com
T O P 10
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73
We all know the likes of Google, Apple and Samsung Pay, or big names like Venmo. This month, FinTech Magazine looks at mobile wallets that offer something a bit different, to bring you the 10 we’re most excited about… WRITTEN BY
OLIVIA MINNOCK
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T O P 10
74
10
Due
California, USA
With the slogan ‘Payment processing made awesome’, Due offers digital technology that allows users to instantly send one another money. The platform includes a group payment option for splitting costs, as well as a social platform where users can engage with each other during the transaction process. Additionally, the Due Cash payment system allows people to make, share or receive payments from anyone in the US with a phone number or email address, even if they use the service.
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75
09
Sage Pay
Newcastle upon Tyne, UK
Accepting any kind of payment including PayPal in over 25 countries, Sage Pay can be customised by a business to match its brands, so it can be used by any kind of merchant. The company also offers the MySagePay solution, a cloud-based reporting tool which leverages a business’ payments data in order to provide key information and insights. As well as fraud screening facilities, the company’s tools also offer a specific invoicing system, ensuring prompt payment processing which is vital to improving cashflow, particularly in small businesses.
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T O P 10
76
08
Gyft
California, USA
In contrast to the ultra-modernist blockchain and crypto based wallets on our list, Gyft focuses on a more traditional form of transaction – the art of giving. The mobile wallet allows users to send gift cards to one another via a secure mobile app. Customers can manage, store and check the balance of their plastic gift cards, while also using the app to directly redeem cards straight from their phones. Gyft works with major credit cards, PayPal and Bitcoin, and has relationships with popular retailers like Target, Whole Foods, Starbucks and Sephora.
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07
Adyen
77
Amsterdam, Netherlands
More a platform than a wallet, Adyen allows users to accept online payments through a variety of methods. By affording its clients the tools to accept any kind of payment, Adyen allows businesses to get their services up and running quickly and securely, so that merchants of any size can create personalised checkouts. As well as partnering with popular streaming services such as Facebook, Spotify and Netflix, Adyen reflects the true ethos of fintech in that its integrated platform makes it easier for businesses of any size to access payment solutions which will allow them to scale. It has strong growth applications, with SVP Jussi Lindberg telling Gigabit: “The work is still not done. The world is not covered. There’s no need that is 100% fully met.”
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T O P 10
78
06
Coinbase
California, USA
Coinbase is a digital currency exchange which enables the trading of Bitcoin, Ethereum and Litecoin cryptocurrencies, allowing users to exchange them with fiat currencies. The wallet allows users to trade in over 40 countries and to store currency in around 10 countries. Founded in 2012, by the end of 2017 Coinbase had over 13mn users. It also offers an insurance policy to cover cryptocurrency saved on its server. To date, over $150bn worth of digital currency has been exchanged via the platform.
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05
Facebook Messenger California, USA
The popular social media messaging app allows users to link their accounts with debit cards or PayPal accounts, allowing them to make payments via mobile: both business transactions and peer-to-peer (P2P). Currently, Facebook only allows payments to recipients in the same country, and its peer-to-peer facility it set to be discontinued on 15 June 2019. This could be related to the news that Facebook is also looking to launch its own cryptocurrency using the WhatsApp messaging platform owned by the company, allowing payment transfers all over the world. It’s likely the Messenger app will, however, continue to be vital for small businesses which are supported through Facebook SMB.
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T O P 10
80
04
Ilium software: eWallet Michigan, USA
Ilium is an independent software vendor which produces a range of applications for Windows, Mac, Android and more. The company focuses on security and has been in business since 1997. Now, it has developed an eWallet which helps keep payment details, such as cards and passwords, safe yet accessible across multiple devices. The eWallet can be used for business as well as personal use, helping employees create and store strong passwords, as well as allowing teams and departments to share access in a seamless, secure way.
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03
Tez (Google Pay) India
While the Indian payments app has been acqired by Google Pay, it continues to operate under its own brand, which is built to appeal to an Indian audience and serve the unique payment needs of that specific demographic. Money can be sent and received with zero fees, straight from a bank account to almost any recipient – even contacts who are not on Google Pay. The solution can also be used instore, and Tez has partnerships with brands that are popular in India such as Reliance, Foodpanda, Jet Airways and Redbus.
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T O P 10
02
Paytm
Noida, India
The second Indian payment wallet on our list is Paytm, which can be prepaid eliminating the need to be linked directly to a bank account. It is used by Indian customers
82
for a variety of services such as mobile credit, utilities payments, paying to ride the metro and making donations. Paytm is the largest payment gateway in India and works with both consumers and merchants – indeed, 7mn merchants accept mobile payments from the platform. The company has recently launched Paytm Payments Bank, which aims to provide payment services to underbanked communities across India. Paytm has seen investment from the likes of Softbank and Alibaba.
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T O P 10
01
GrabPay Singapore
Born out of popular Singaporean ride-hailing company Grab, GrabPay uses the same seamless in-app technology users enjoy on the Asian answer to Uber to enable
84
payments not only for rides, but in shops and for GrabFood deliveries. Users have the option to save card details on the app, but they can also choose to top up funds so they have a prepaid account. In addition, GrabRewards can be earned at GrabPay merchants, enabling users to make significant savings.
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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
86
21–22 MAY 2019
ICT Spring Europe [ LUXEMBOURG ] This year, ICT Spring Europe promises
Convention Centre, minutes from
to focus on three key topics:
Luxembourg airport, and the event
digitalisation, space and of course
programme is packed with seminars
fintech. As such, attendees can expect
and presentations. In 2018, notable
to hear about AI, insurtech, venture
speakers were Xavier Bettel, Prime
capital, IoT, telecommunications and
Minister of Luxembourg; Susan
satellites. The two-day conference
Coleman, a Managing Director at
is made up of over 5,000 key decision
PwC; and John Thornhill, Innovation
makers across various business sectors.
Editor at the Financial Times.
ICT Spring is held at the European
M AY 2 0 1 9
03–05 JUNE 2019
17–19 JUNE 2019
Money 20/20 Europe
Retail Finance Connect
[ AMSTERDAM, THE NETHERLANDS ]
[ MIAMI, FLORIDA, USA ]
Boasting over 6,000 attendees and
Organised by WB Research, Retail
2,000 companies from around 82
Finance Connect aims to bring together
different countries, over the course of
senior finance executives across
the three-day event more than 490
retailers, brands and manufacturers to
speakers are set to deliver around 80
explore the challenges in the industry
hours of insightful content. Money 20/20
and give opportunities to network.
dubs itself as “where the payments,
Businesses who attend the Connect
fintech and financial services industries
events include Amazon, Best Buy,
come together”. Attendees are promised
Walmart and more, with this year’s retail
original content on both a regional
finance focused event set to feature
and global scale, 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
Europe event featured prominent
the topics up for discussion interesting,
speakers including Ralph Hamers, CEO
such as ‘the new state of retail finance’,
of ING Group; Andy Maguire, Group
‘the implementation of cashier-less
COO of HSBC; and Steve Wozniak,
checkout’ and ‘integrating AI and RPA
co-founder of Apple.
into your finance department’.
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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
05–06 SEPT 2019
19–20 JUNE 2019
Blockchain Expo Europe
88
AI in Finance Summit [ NEW YORK ]
[ AMSTERDAM, THE NETHERLANDS ]
Oganised by global summit creator
Blockchain Expo is a series of confer-
ReWork, the AI in Finance Summit is
ences which take place in Europe and
co-located with the AI in Insurance
North America. A total of four co-located
Summit and Women in AI Dinner. The
events throughout the year welcome
previous iteration of the two-day event
over 36,000 attendees, over 1000
included a host of practical workshops
speakers and over 1000 exhibitors.
and informative presentations.
The Europe Expo takes place at
Confirmed speakers for 2019’s event
RAI Amsterdam with 10,000 guests
includes Joan Gelpi, SVP and Head of
expected. Notable speakers on the
Data Science at AIG; Manuela Veloso,
agenda come from Maersk, Gucci,
Head of AI Research at JPMorgan
Volkswagen, Shell and IBM as the con-
Chase & Co; and Charles Girve, Lead
ference looks at the many uses of this
Data Scientist at Deutsche Bank. With
disruptive technology. Topics to be
hours’ worth of networking opport-
discussed over the two-day event
unities, event is recommended for data
include cryptofinance, blockchain for
scientists and engineers, financial
enterprise, cybersecurity and supply
regulators, C-level executives, venture
chain management.
capitalists and more, so there truly is set to be something for everyone.
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23–25 SEPT 2019
InsureTech Connect [ MGM GRAND, LAS VEGAS ]
OCT 2019
Billed as the world’s largest gathering
Finovate Asia
of insurance leaders and innovators,
[ TBC ]
InsureTech Connect (ITC) is highly
Following on from the success of
recommended for industry execs,
2018’s event in Hong Kong as part of
entrepreneurs and investors within,
the city-state’s Fintech Week, advance
and impacted by, the insurance indus-
tickets are already on sale for 2019
try. This is the place to make global
which promises 600+ attendees, 20+
connections and understand what
firms offering demonstrations and 80+
some of the world’s biggest players
expert speakers for a mix of speeches
are doing to remain competitive in
and panels. Finovate Asia advertises
an increasingly digital landscape.
the opportunity for attendees to “meet
2018 hosted a range of experienced
the fintechs, platform players, financial
speakers including Dan Glaser, CEO
institutions, regulators and investors
& President at Marsh & McLennan;
who are redefining the future of
Inga Beale, CEO of Lloyd’s; and Tracie
financial services”. Notable speakers
Grella, Global Head of Cyber at AIG.
in 2018 attended from Danske Bank,
With this in mind, the 2019 event is set
AXA Lab, Accenture, Bank of America
to be a must-visit.
and Alipay.
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90
LEVERAGING AGILITY FOR AN INNOVATIVE TECHNOLOGY TRANSFORMATION WRITTEN BY
OLIVIA MINNOCK PRODUCED BY
JAMES PEPPER
M AY 2 0 1 9
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YORKSHIRE BUILDING SOCIET Y
COO and Executive Director Stephen White and the team at Yorkshire Building Society discuss how the 154-year-old organisation continues to serve customers and communities through staying agile and fostering an innovative, collaborative workplace 92
“Y
BS has been around for over 150 years, and I want to make sure it’s around for the next 150 years,” says
Stephen White, COO of Yorkshire Building Society. “Therefore, we have to evolve.” That’s exactly what YBS has done – described by Director of Transformation Paul Howley as a “goldilocks organisation”, one large enough to invest in new tech and initiatives to best serve customers, but small enough to experiment, collaborate and innovate. YBS has transformed over the past few years to focus on the areas where it excels and to achieve operational excellence. “We have a very clear business strategy to be a mortgage and savings provider – we know the products and we know the customer demographic,” says Portfolio Delivery Manager Ben Sampson. M AY 2 0 1 9
STEPHEN WHITE, CHIEF OPERATING OFFICER AT YORKSHIRE BUILDING SOCIETY ON WHY COLLABORATION IS VITAL
A few years ago, YBS was chasing the tail of ‘big banks’, but CIO Kevin Hunter says priorities have changed. “There was a realisation that we’re a building society and we’re very good at mortgages and savings.” Now, YBS operates with the clear aim of being a leading mortgages and savings provider, with every new initiative from automation to agile methodology put in place with the customer in mind.
A TRADITIONAL FINTECH? ‘Building society’ may sound like a musty, traditional term, but Head of Innovation w w w.f i nte c hma ga z i n e. com
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Between a storied past and a smart future there’s a bridge. The Port of Rotterdam is one of Europe’s most established ports. And with 467 million tons of cargo moving through its docks every year, it’s also the largest. Ensuring the safety of billions of dollars of goods is no small task, which is why they asked Cisco to network the entire port — generating and protecting terabits of data they use to make every aspect of their operation run smoothly, predictively, and securely. If you can imagine it, we will build the bridge to get you there. cisco.co.uk/bridgetopossible
Disrupt or be disrupted... but how? Today, every business is a digital business and our customers are transforming by leveraging digital technologies to create: • New customer experiences - 9 out of 10 companies are competing primarily on customer experience4, • Innovative business models to improve performance - 23% faster time to market is achieved with digital processes in manufacturing5 • Empowering workforce experiences - 50% jump in earnings per share happens with 10% increase in employee satisfaction4 The need to change is well understood and digital companies are 26% more profitable and achieve 12% higher market valuation than their competitors2. However, too many companies see transformation as an episode they must endure, just like weathering a storm. Organisations are continually transforming, and business model reinvention occurs on average every 1 – 3 years1.
To have a real impact a connected approach to change is needed – operate within the Orchestration Zone. Organisations have to conduct transformation just like an orchestra playing a symphony. Start with guiding objectives of the transformation that you are hoping to drive. 1. What is the value creation opportunity (Cost Value, Experience Value, Platform Value). 2. What is the strategy - harvesting (winding down), retreating (exiting), disrupting (disrupt your own business or create a new market) or occupying (outcompete rivals) a market. Just like an orchestra there are different sections and instruments. Go-To-Market (Channels, Offerings), Engagement (Customers, Partners, Workforce) and Organisation (Structure, Incentives, Culture). Think about enabling connections and mobilising resources. Businesses need digital business agility, which consists of three core attributes all delivered securely…1:
$2.1Tn is being spent on digital transformation in 20196, but our customers are struggling with the ‘how’ to transform and recent research suggests that only 5% meet or exceed expectations of the business3.
1. Hyperawareness – sensing changes in the company’s environment, workforce and customer base. Cisco Collaboration, IoT – connected service business etc… 2. Informed Decision Making – Know what to act on! Cisco DNA and AppDynamics insights and analytics; 3. Fast Execution – Automate the response. IT assets, need to be dynamically orchestrated, and shifted quickly and seamlessly when priorities change. Cisco Multicloud, programmable and software defined infrastructure.
Cisco alongside our partners are helping customers to evolve their infrastructure to achieve digital business agility – the capacity to change, raise greater awareness of the threats that disruption presents whilst maximising the opportunity of seeking new forms of value.
Why choose Cisco for digital transformation? Cisco gives you a solid foundation for digital transformation. We bring software, processes, and systems together in a digital-ready infrastructure that is simple, intelligent, automated, and highly secure.
Cisco is focussing more on how we become the Secure, Intelligent Platform for Digital Business. Just like a building, a digital business needs strong foundations and we describe these as the 5 technology pillars.
• Simple - Our products and services are cloud ready with flexible consumption models • Intelligent - We provide analytics to unlock the value of data. Its insights will help you make rapid decisions; • Automated - We can automate many parts of your business to help you become more lean and agile; • Secure - We help secure your infrastructure from end to end so you can detect and remediate threats quickly.
• • • •
Intent-based Networking – simplify and scale networks Enabling the Multi-Cloud World - productionise cloud. Unlock the Power of Data – better decisions faster; Personalise customer and employee experiences – new customer experiences; • Security Everywhere - reduce business risk How should businesses execute digital transformation? Fundamentally, transformation is change, which is inherently difficult and, in general, businesses are risk averse and take a traditional approach to change management. - silo’ed initiatives and small-scale pilots. The transformation dilemma exists as organisations are entangled, just like a knotted rope, by three characteristics1: scale, interdependence and dynamism.
Watch Now: A secure, intelligent platform for digital business.
Sources: 1. Global Centre for Digital Business Transformation (Cisco & IMD) 2. MIT/CapGemini 3. Bain & Company “Orchestrating a Successful Digital Transformation” 4. Gartner 5. SCM World 6. IDC https://www.idc.com/getdoc.jsp?containerId=prUS44440318
YORKSHIRE BUILDING SOCIET Y
“ We’re now working much more closely with partners to drive solutions, but also to challenge our own thinking” 96
— Darren Newbould, Head of Technology Operations
Delivery Natalie Juryta argues the institutions are innovative by their very nature. “We talk about crowdfunding today,” she begins. “Building societies were stated by individuals who pooled money together until each owned their own home. That was innovation – it’s at the heart of who we are.” In addition, a key part of modern fintech is to cater for financially underserved customers, and YBS supports people who might be turned away by bigger providers (such as the self employed) to get on the property ladder. “We are carrying on that purpose 154 years after we started,” says Howley, and indeed YBS still views itself as a community focused building society, no matter how much growth and innovation it undergoes. For example, YBS has partnered with End Youth Homelessness (EYH), raising £424,000 in 18 months to support over 107 young people into their own home. Its member-led community focus also makes YBS more thoughtful with its spending. “Every pound we spend is a pound of our members’ money,” Howley comments. “We strive to have real respect for our members, which
M AY 2 0 1 9
STEPHEN WHITE, CHIEF OPERATING OFFICER AT YORKSHIRE BUILDING SOCIETY EXPLAINS THE IMPORTANCE OF HAVING A COMMUNITY BANK
means getting the best value out
fintech challengers and innovations
of any investment. It drives a culture
have been focused on current
of responsibility throughout the
accounts and payments. Now, we’re
organisation.”
seeing mortgages become essentially a digital business,” he comments.
A CHANGING LANDSCAPE
Across the board, consumer expecta-
With its refreshed focus, YBS has
tions are on the up – and as Juryta
looked to evolve within a changing
stresses, competition isn’t just coming
financial landscape while still keeping
from other banks or building societies.
what’s important in mind. Digital
“We are consumers of products and
disruption is “only just starting” in the
services, and the things that used to
mortgage and savings market, says
mark those out don’t exist anymore,” she
Director of Digital & Innovation Ant
explains. “Organisations like Apple and
Warrington, and YBS is keenly aware of
Google are blurring the lines, and we’re
the long journey ahead. “For years,
thinking about finance in a different way.” w w w.f i nte c hma ga z i n e. com
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GEP Drives Digital Transformation of Procurement and Supply Chain for YBS
Yorkshire Building Society (YBS) and GEP have a strong partnership that has enabled YBS to define its digital procurement strategy and launch tech-driven transformation. Together, the two companies have created an agile, flexible procurement and supply chain function that helps YBS gain a competitive edge and drive innovation.
YBS sought a procurement partner capable of delivering end-to-end, source-to-pay (S2P) solutions — strategy, services and technology. It chose GEP for the depth, breadth, and effectiveness of its solutions — and for its established track record as a digital pacesetter. The choice was quickly validated; the good chemistry between the two firms rapidly produced a multi-pronged strategy focused on technology deployment, process redesign and organisational restructuring — with a vision of achieving 360-degree procurement and supply chain transformation.
Redesigning the Procurement Organisation GEP worked with senior stakeholders at YBS to enable cross-functional collaboration and bring source-to-contract (S2C), SRM, contract management, procure-to-pay (P2P) and technology all under the single umbrella of procurement. Aligning category experts with each business unit gave the YBS procurement organisation a better handle on its spend. Optimising Processes for Enhanced Performance GEP collaborated with the YBS team to deliver enhanced productivity by identifying and tackling process gaps in areas including sourcing, spend management, contract management and category planning. Together, the teams also instituted 360-degree risk scans for every procurement engagement — significantly reducing business risk. Enabling Technology-Driven Transformation Implementation of the AI-driven SMART by GEP ® procurement platform played a pivotal role in this transformation initiative. Powered by SMART by GEP, YBS gained an agile and highly automated procurement function with streamlined procurement processes, unobstructed enterprise-wide visibility into the procurement chain and robust reporting capabilities. Transforming Procurement, Redefining Outcomes GEP helped YBS succeed in transforming not only its procurement organisation, but the way that organisation was viewed by the rest of the business. Crucially, the procurement team achieved the trust of its business users — a trust that those users, in turn, were better empowered to gain from the firm’s customers.
290%
Jump in Savings Achieved
400%
Increase in Supplier Coverage
100+
Users on SMART by GEP
200+
Suppliers Enabled on SMART by GEP
Special Project: Business Consulting PSP – Sourcing
Special Project: Digital Transformation – SRM, Sourcing
YBS GOAL: Reduce spending with Tier 1 consulting firms.
YBS GOAL: Identify and engage suppliers of enterprise-wide, sustainable digital transformation solutions.
WHAT GEP DID: Identified consulting firms that could address multiple business needs in a single sourcing engagement and implemented a flexible model to enhance P2P model longevity. WHAT YBS GAINED: More than 5 percent in savings, improved governance over usage of Tier 1 consultants, and preferential treatment as a key account for these firms.
WHAT GEP DID: Analysed spend data using SMART by GEP to pinpoint high-priority areas for transformation and assess overall benefits. WHAT YBS GAINED: A select group of new suppliers, onboarded by GEP, capable of delivering sustainable transformation with the added bonus of ~15-20 percent savings.
“YBS and GEP have created a co-sourced supply chain team that has been at the heart of delivering real help for our members and customers. Over the last three years, we have moved from a reactive supply chain function to one with capabilities to anticipate our customers’ requirements well in advance and collaborate with relevant suppliers to meet these requirements. Our supplier risk management capabilities have also been transformed through technology and best-in-class processes to ensure that we are protecting our customers and colleagues. The blend of YBS colleagues with a fantastic service and value for money ethos, combined with the GEP expertise and knowledge, has proven to be a winning recipe for us.” – Paul Howley, Director of Transformation, Yorkshire Building Society
YORKSHIRE BUILDING SOCIET Y
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INDUSTRY LEADING AWARDS
delivering cost reduction, improving
To adapt, survive and thrive, YBS has
NPS and enhancing the service we
already made leaps and bounds toward
deliver,” says White, speaking in an
a digitally driven financial future. Having
office littered with trophies and awards
been awarded Best Mortgage Lender
at every bank of desks.
for its Accord brand last month at the
“We’re not finished on that journey
Mortgage Strategy Awards, with the
yet. We’re through part one. Part two
Accord broker residential mortgages
will take us into 2020, when we’ll
NPS having grown from -11 in July 2015
complete our new mortgage platform
to +84 in February 2019 – a truly industry
and introduce a new digital platform.
leading transformation. Other awards
We’ll also add digital support into our
include ‘Most Innovative Approach to
branches to create a blend of branch
Driving Cultural Change’ at the Global
and digital, as well as reducing our
Process Excellence Awards 2019.
cost base while continuing to deliver
“The last three years have been really
more options and better service for
successful in laying the foundations,
our customers.”
M AY 2 0 1 9
AN AGILE TRANSFORMATION
innovation to lead the culture transfor-
To continue its legacy of supporting
mation of YBS.
communities as well as being proactive
White is joined at the Leeds office
in competing and innovating across
by a cardboard cut-out called James.
a new market, it’s important YBS puts
James is YBS’ ‘customer in the room’,
the proper foundations in place. White
present in meetings to ensure teams
has led a significant restructure to
remain conscious of the impact their
streamline operations and foster
ideas and decisions will have on the
a culture of innovation and teamwork.
customer. Even for a C-level exec, it’s
“It was about ensuring we had the right
an important reminder. “We’ve done
structure to take the organisation
all this change – branch closures,
forward in an agile way,” he explains.
brand closures, system migrations,
White has taken his learnings from five
investments – while still maintaining or
years in Asia and Australia earlier in his
improving customer satisfaction,” he
career and used this experience of
says. “That’s why we’re here: to have
E XE CU T I VE PRO FI LE
Stephen White Stephen White is COO and Executive Director at Yorkshire Building Society Group; he is also the Chairman of the YBS mortgage broker Accord. Having joined the company in February 2016 he has been involved in a significant culture shift surrounding the group’s technology transformation journey to promote innovation and better serve its customers. Prior to his role at YBS, White was Group Chief Operating Officer for Allied Irish Bank (AIB). He also brings a plethora of experience from the innovative Asia Pacific region, with eight years at National Australia Bank under his belt.
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DELIVERING SIMPLY BRILLIANT CUSTOMER EXPERIENCES
Drive value and create customer loyalty through AI powered, omni-channel contact centre solutions. Be your business’ chameleon for change. START YOUR TRANSFORMATION
Modern Digital Solutions for Financial Services The pace of change occurring in the financial services sector is phenomenal, with a noticeable shift towards becoming digital-first in the quest for delivering simply brilliant customer experiences. Financial service institutions are in constant competition for customers. With increasingly standardised product sets they are forced to differentiate their offerings through customer experience, putting enormous pressure on customer facing operations such as contact centres and branch networks. Financial services have a powerful motivator to optimise digital omni-channel performance. They must deal with evolving service expectations of today’s online, mobile and social network enabled customers. Those which have already invested and simplified the experience offered to customers are finding efforts rewarded by increased loyalty, market leading Net Promotor and Customer Effort Scores. Yorkshire Building Society Group (YBSG) are the UK’s second largest building society, with over 3 million members and assets of £43 billion, who through a customer driven culture have developed a market leading brand for customer excellence and quality. YBSG are passionate about delivering simply brilliant customer experiences to members, using technology to enhance market differentiation and to underpin their continued leadership. YBSG have made a significant investment in a modern, digital cloud contact centre platform and unified communication service to support their customer facing, back office and branch environments. Following a detailed market assessment, which saw YBSG evaluate 15 potential providers, Olive were invited to spend time with YBSG, carrying out operational and technical assessments over a 6-week period. This collaborative approach provided Olive with a deep understanding of YBSG’s existing technical environment, their current operational model and requirements for the new service. This insight enabled Olive to design a service that is closely aligned to YBSG’s digital and customer first strategy. At the heart of the service being delivered to YBSG is Olive’s Cloud Managed Service Platform (CMSP). The platform is a customer engagement ecosystem, providing secure and simple access to best of breed
contact centre tools that are delivered as a single cloud service, aligned to tailored YBSG user personas. Olive’s CMSP inter-connects into Mitel’s market leading Cloud platform, integrating leading services from Redbox, Teleopti and Eckho. All customer applications will be deployed in a separate “private” cloud environment, providing the most secure and resilient cloud service available in the market whilst meeting YBSGs security requirements. The service supports YBSG’s digital ambitions and will enable them to deliver consistent customer satisfaction across all customer touch points including; voice, e-mail and chat. Designed to improve the customer experience is a speech enabled front door, allowing customers to seamlessly navigate through to the right contact centre colleague first time, avoiding the frustration of redirection and repeated conversation. The service also includes innovative automation capabilities, delivering modern self-service opportunities using innovative speech and AI capabilities. Once implemented, YBSG will benefit from a cost effective, highly resilient, agile contact centre and telephony service that meets the demands of the business today but can evolve as the needs of their members change. Through Olive’s CMSP, YBSG will consume the customer interaction tools they need to deliver simply brilliant customer experiences, removing duplication, complexity and cost whilst ensuring that they have the agility to scale and flex in-line with operational requirements. Olive, an award-winning Cloud Managed Service Provider and Mitel Platinum Solutions Provider, has a track record of success in delivering modern digital solutions for financial services – supporting all aspects of the modern digital customer journey. Working with leading organisations such as Reassure, 1st Central Group and One Family; Olive has deep industry experience of the key drivers impacting customer experience delivery in the financial services sector.
LEARN MORE
STEPHEN WHITE, CHIEF OPERATING OFFICER AT YORKSHIRE BUILDING SOCIETY. HOW TO HAVE AN AGILE ORGANISATION
a genuinely positive impact on our
hierarchy: we need people to feel they
customers’ lives.”
can be innovative and that it’s OK to try
“Structurally a lot has changed,” adds
something and fail on a small scale.”
Hunter. “At my level, we went from 45
“We’ve also started to implement a new
down to 15. That’s significant: if you talk
‘culture journey’,” says Juryta. “We create
about an agile way of working, 45 people
cultural ambassadors to help nudge
at director level trying to make a decision
the culture in the right direction. Regula-
is very difficult.” Throughout the organi-
tion has driven a tightly controlled
sation, silos have been turned into ‘tribes’
organisation which stifled creativity,
and Kanban boards keep everyone on
but we have helped people feel they
task. “For a business to become agile,
have a voice and it’s OK to speak out.
we need a culture that is transparent,
Our CEO Mike Regnier encourages
challenging and empowers people to
people to ask for forgiveness rather
take ownership,” says Sampson. “We
than permission – that’s a very power-
don’t want too much structure or
ful statement.” w w w.f i nte c hma ga z i n e. com
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YORKSHIRE BUILDING SOCIET Y
“ Innovation is at the heart of who we are” — Natalie Juryta, Head of Innovation Delivery
THE INNOVATION CENTRE This philosophy comes in physical form too, with YBS’ glass-walled innovation centre located at the front of its office, open to colleagues and the public. “We were conscious for it not to just be seen 106
as an IT initiative,” says Newbould. Created over seven weeks, the centre is a testament to the creative, agile nature of YBS colleagues. “We had 40-odd events there last year, and only a handful were solely IT,” says Hunter. “Having a place to go which isn’t anyone’s patch – a common ground – is really important. I’m not a technologist – I’ve got a business process background. I say to people if they can think it out in their heads, it’s technically feasible, so focus on the problem that needs to be solved and go from there –we’ll fit the technology around it.” “Lots of teams use the innovation centre to solve problems,” adds White. M AY 2 0 1 9
“We haven’t given them objectives or a template: we’ve given them the environment, technology, equipment and space to think differently. You have to create a culture where people feel they can win fast and fail fast. Leaders need to learn to let go,” he adds. “If you create the framework and culture, you can step back and let people create that leadership, which develops agility and better governance.” In addition to the innovation centre, YBS organises regular ‘hackathons’. “We’ve created a methodology and then smaller hacks happen in different business areas,” Juryta explains. She adds that White as COO has been a true ‘catalyst’ for innovation at YBS, and that communicating end goals to each member of the organisation is key to moving forward. ‘Our Story’ at YBS introduces staff to the society’s ‘five to thrive’ priorities, and each department and individual thinks about where their role fits to align with these objectives, forming what Hunter describes as a ‘golden thread’ throughout the organisation. “If the guys running the IT desk can’t see themselves in that ‘five’, we haven’t moved forward,” he explains. w w w.f i nte c hma ga z i n e. com
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YORKSHIRE BUILDING SOCIET Y
108
M AY 2 0 1 9
MOVING TO DIGITAL
organisation takes a business and
The right culture must be enabled by
solution led view. “We do a lot of proof
the right technology tools, which are
of concept pilots,” says Sampson. “We
leveraged at YBS internally and
start small, and get to something that
externally. White is keen to stress,
either proves a business case or doesn’t.
however, that digital won’t replace
If it’s going to fail, we want it to fail fast.”
the human touch. “It’s about offering
Automation and robotics have been
flexibility of choice. We believe in our
used to optimise processes. “We have
migration to digital, but it’s not about
a number of robots deployed to improve
‘either/or’, it’s about ‘and’. We’ve stream-
speed and accuracy or processing,”
lined branches and added technology
says Head of Technology Operations
but we still believe in having our mem-
Darren Newbould. “That drives direct
bers served by people and we believe
business benefit into some tasks which
in our colleagues.”
were originally done manually, taking
With a world of tech at its fingertips,
agents a number of hours. We’re building
YBS might be tempted by shiny new
on that capability as we speak,” he adds.
objects like RPA, AI or IoT, but the
Juryta also believes artificial intelligence
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YORKSHIRE BUILDING SOCIET Y
110
M AY 2 0 1 9
“ For a business to become agile, we need a culture that is transparent, challenging and empowers people to take ownership” — Ben Sampson, Portfolio Delivery Manager
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YORKSHIRE BUILDING SOCIET Y
112
will be vital moving forward. “AI can help
great work that has been done – not
increase efficiency and accuracy of
with heavy infrastructure projects but
oversight so we can make sure we’re
more nimble, digital, paperless, self-
delivering on the front line in the best
service… looking at the efficiency of
interest of our customers,” she explains.
the organisation and really transforming
“In the last five years, we’ve invested
a lot of the services our members want.”
in lots of new capabilities, a lot of
New technology YBS puts in place is
infrastructure work and tackling legacy
added to a reliable existing system
IT issues,” says Howley. “The next five
which has seen no unplanned
years is about springboarding on the
downtime in over a decade. “We’re
M AY 2 0 1 9
1864
Year founded
4,500
Approximate number of employees 113
replatforming our applications – our
foundation to build a digital business
core banking and all the subsidiary
on top of.”
applications that support that – from “That will enable us to use cloud technol-
COLLABORATION ACROSS A CHANGING LANDSCAPE
ogy – our new technology platform will
“Change will not be successful if we
be cloud based. This is important for
don’t bring the right parties on board,”
us in reducing the cost of IT and change
says Howley. “We very much take the
going forward, as well as improving
view that we’re looking for partners, not
operational resilience. It’s an important
just suppliers. A partner is a specialist
HP US to Red Hat Linux,” says Hunter.
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YORKSHIRE BUILDING SOCIET Y
in their field who we want to collaborate with to understand the best way of delivering business outcomes. We work with some great international players as well as an ecosystem of partners based in Yorkshire. We have a mutual respect and culture because we don’t just dictate what we want – we ask for support and help. Our colleagues join us in our societal purpose and so do our partners.” Notably, YBS partners with technology giant Cisco, Mitel and Olive for cloud and communications, GEP for 114
procurement and supply chain software, IT consultancy giant TCS, and business process outsourcing advisory WNS.
“ We’re seeing mortgages become essentially a digital business” — Ant Warrington, Director of Digital & Innovation M AY 2 0 1 9
“I believe strongly in the view of the ecosystem,” says White. “When we choose partners now, we go through a very strict procurement exercise to ensure they’re right for us and can show us appropriate case studies, so it’s tried and tested.” For Newbould, communication is key. “We work best when we’re open with our agenda, our digital transformation and our technology journey,” he comments. “The second point is to recognise we don’t have all the answers. All the
115
experts aren’t necessarily within our
passionate about serving the community.
own organisation and we need support
As fintech challengers emerge and
and strategic direction from outside
innovations are developed to keep up
the business. We’re now working much
with growing consumer expectations,
more closely with partners to drive
YBS’ societal commitment is a solid
solutions, but also to challenge our
foundation that will not be swayed.
own thinking.” In order to keep thriving for the next 154 years, Yorkshire Building Society must remain nimble, agile and innovative while not forgetting its roots. YBS is there to improve people’s lives, and each member of the organisation is w w w.f i nte c hma ga z i n e. com
116
ETHICALLY HARNESSING DATA TO RECONNECT WITH CUSTOMERS WRITTEN BY
MARCUS LAWRENCE PRODUCED BY
JAMES PEPPER
M AY 2 0 1 9
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DNB
Aidan Millar, Chief Data Officer at DNB, discusses the bank’s transition to digital services and the importance of leveraging data to reconnect with customers as a trusted data custodian 118
D
NB is Norway’s leading financial services provider – not just in regards to size, but also with its progressive
digital transformation program; with over 2.1mn retail customers and 221,000 corporate customers. DNB reduced the number of branch offices in Norway from 116 to 57 in 2017, driven by changes in customer preferences. The success of the channel shift is remarkable. In a Finalta benchmark analysis of the international banking sector, DNB was ranked number one in the world based on the efficiency of its branch network. Digitalisation has brought explosive growth in data, bringing new challenges and opportunities to the business. For DNB the imperative is, and will always be, to stay relevant to M AY 2 0 1 9
119
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DNB
120
“ Customers are talking to us every second on our digital channels – we just need to listen” — Aidan Millar, Chief Digital Officer, DNB
M AY 2 0 1 9
CLICK TO WATCH : ‘NORWAY’S FINEST RESIDENTIAL’ 121 customers in their daily digital lives.
and stay relevant to our customers on
“Our customers are talking to us every
digital channels.”
second of the day on digital channels,
Millar is deeply passionate about
and we have to have the ability to
handling data in a legally compliant
listen and respond effectively to their
and ethical way. “We’ve got to be seen
needs,” says Aidan Millar, Chief Data
as the trusted data custodian that
Officer at DNB. This is the challenge
capitalises on data driven insights to
of digitalisation that he believes is too
deliver value for our customers, and
often overlooked. “Everyone talks
we’ve got to do this in an ethical and
about going digital, but if you’re not
compliant way.” This commitment is
capitalising on data streams that
a defining element in establishing the
are generated through your digital
customer centricity that Millar aims to
channels, then you’re going digital
drive through data driven insights. “It
without listening. My role is to leverage
starts with people and organisational
digital interaction data to reconnect
culture. Culture eats strategy for w w w.f i nte c hma ga z i n e. com
Celebrus: The Real-Time Customer Data Platform from D4t4 Solutions Celebrus’ unique first party data capture capabilities in combination with the ability to deliver data within milliseconds, enables individual level, in-the-moment risk, fraud or next best action decisioning together with in-page content and offer personalisation.
Our Channels:
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“Our customers are talking to us every second of the day on digital channels…” – Aidan Millar, Chief Data Officer, DNB
“Our customer listener is the Celebrus Customer Data Platform…” – Head of Digital Sales, Leading Multinational Bank
Find out more: Watch our banking video, read analyst authored research, download our banking brochure or contact us.
DNB
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breakfast, so you have to fuel your enterprise data strategy with a passion for data,” says Millar. The DNB transformation to a data driven organisation is underpinned by a focus on the ethical and compliant use of data. “Regulations are often seen as a burden and should be reframed as best practice, but why wouldn’t you want to be compliant with best practice?” says Millar. The General Data M AY 2 0 1 9
Protection Regulation (GDPR) is about protecting customer data and data rights, who would disagree with that as a principle, he asks. The emerging Basel Committee regulations on data (BCBS239) are also important, he says, setting out where data comes from and its efficacy in risk reporting processes. “The ethical use of data will be a strategic differentiator for
“ Building trusted partnerships with niche providers to co-create and build reciprocity” — Aidan Millar, Chief Digital Officer, DNB
banks of the future. Companies that haven’t used their data in an ethical
and Microsoft Azure have been lever-
way will lose trust, and one bad
aged as the bank migrates onto
customer experience can mean that
scalable and adaptable cloud plat-
trust is lost forever.”
forms. “From a data perspective the
The data itself is managed within
cloud platforms provide highly secure,
DNB’s multi cloud solution, whereby
massively scalable and agile delivery
both Amazon Web Services (AWS)
solutions,” says Millar. The cornerstone
E XE CU T I VE PRO FI LE
Aidan Millar Aidan Millar is passionate about the positive disruption of technology and advanced data analytics on the financial services industry. He has over 25 years of professional experience partnering with senior executives to implement large-scale IT change and data related initiatives to drive competitive advantage; a Positive Disruptor͛with the courage to make things happen!
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NAVIGATE YOUR NEXT Make your #DataDoMore
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“ We have to stay relevant and add value to customers in their daily digital lives” — Aidan Millar, Chief Digital Officer, DNB 127
of DNB enterprise data and analytics
big banks went with one data vendor,
platform, Millar says, has been the
but that didn’t enable them to leverage
establishment of DNB’s advanced
the niche capabilities of multiple
cloud based data science laboratory
partners.” DNB has taken a different
which provides the analytics capability
route, bringing in the flexible, best of
and the technical scalability required to
breed solutions: R-Studio, Jupyter
process the massive volumes of data
Notebook, Spark and Neo4j, among
in near real time. Amazon AWS comes
others, for their data science capabili-
in as DNB’s primary big data appliance,
ties; Syncsort (Trillium) for data quality;
but Millar is quick to add that DNB
Collibra for its crowdsourcing business
takes a holistic approach to its vendor
orientated data governance toolset;
partnerships, representing a break
and Celebrus, the real-time Customer
from the approach the sector has
Data Platform from D4t4 Solutions Plc
taken in the past: “Traditionally, most
for leading edge tagless digital w w w.f i nte c hma ga z i n e. com
DNB
2.1mn
Personal customers
1.3mn Internet banking users
128
269mn
Payment transactions in 2018
M AY 2 0 1 9
129
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We advance pushing the boundaries of what data can do by building products that make data more useful – helping you solve for the present and prepare for the future
CLICK TO WATCH : ‘DNB – S FOR SAVINGS AGREEMENT’ 131 channel capture; as well as Infosys as
ultimately builds customer-centricity
the strategic data partner, leveraging
through innovative solutions such as
their capabilities and accelerators
a Data Marketplace, which helps drive
related to data engineering, data
data driven actionable insights. One
governance and analytics. When it
area that has benefitted from such
comes to managing this array of vendors,
insights is the continued development
Millar believes that DNB’s approach
of DNB’s online and mobile digital ser-
promotes reciprocity. “I see our technol-
vices. “We’re looking at digital channel
ogy solution vendors as trusted solution
interaction data to asses customer
partners,” he says. “We work closely
journeys on our digital channels using
together to foster these trusted partner-
a leading-edge digital capture solution,
ships where we co-create and deliver
provided by Celebrus”, Millar explains.
value together.”
“We can assess whether our digital
All of this advanced technology, and the work involved in implementing it,
channels are aligned to customer preferences and continuously improve w w w.f i nte c hma ga z i n e. com
DNB
132
the digital experience.” The platforms can
continuously enhancing core busi-
also be optimised to deliver highly tail-
ness operations. Its internal efficiency
ored digital offerings to meet anticipated
program DigiDrift is delivering results
customer needs and wants, he says.
– DNB has employed robots in as many
“Our analytics capabilities are focused
as 35 processes so far - the compa-
on meeting delivering the right product,
ny’s chat-bot Aino can talk to 3,000
at the right price, through the right
customers at the same time and there
channel, at the right time,” says Millar.
is more to come. DNB is embracing
In addition to developing new and innovative digital products, DNB is M AY 2 0 1 9
technologies and expects changes to accelerate in the years to come. The
€5.2bn Approximate revenue
1822
Year founded
9,225
Approximate number of employees
Bank has entered into a partnership
process that understands the full
with the Norwegian University of
context of the document and can
Science and Technology (NTNU),
process it as if it were a human being,”
sponsoring three professorships
he continues. Millar stresses that no
focused on machine learning, Natural
part of this endeavour is aimed at
Language Processing (NLP) and
replacing staff, but is instead about
augmented Robotic Process Automa-
applying people to tasks that require
tion (RPA). “We want to take our RPA
higher value human insights. Making
to the next level where we can digitise
the benefits of digital transformation
paper documents into a systematic
clear to employees and allaying w w w.f i nte c hma ga z i n e. com
133
DNB
134
M AY 2 0 1 9
concerns of what it could mean for their roles has been vital to the success of the journey so far. Through the application of data and advanced technologies to optimise both internal efficiency and the customer experience, DNB is well on its way to maximising the value of the bank’s digital transformation. The focus on reconnecting with customers, not only to deliver added value but also to generate impactful insights to steer strategy effectively, is bolstered by Millar’s unerring dedication to maintaining DNB’s reputation as a trusted data custodian. As the bank’s customers continue to transition to its digital offerings, it is certainly positioned to continue with its powerful and successful data driven digital transformation journey while reinforcing its admirable corporate values of a trusted service provider.
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136
M AY 2 0 1 9
JUDO BANK EXPLAINS WHY IT DOESN’T DO DIGITAL TRANSFORMATION WRITTEN BY
SOPHIE CHAPMAN PRODUCED BY
ALEX PAGE
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JUDO BANK
As Judo Bank continues to expand its business, the company’s CIO tells us how it is connecting with its customers
J
udo Bank was established to serve small and medium enterprises (SMEs) lending needs, and has recently been granted a
full banking licence that will allow it launch full 138
deposit-taking capabilities. Alex Twigg, co-founder and Chief Information Officer, helped launch the business as the first challenger business bank in Australia. The company “Like most start-up businesses, Judo started as wishful idea that we’d discuss informally —I don’t think any of the founders imagined how fast it would take hold,” reveals Mr Twigg. “It’s been a rollercoaster ride that has exceeded all of our expectations. We initially raised around AU$20m worth of seed capital to get the business launched, then followed that with an AU$120m Series A funding round -the second largest pre-revenue raising for a start-up in Australian corporate history.” Judo Bank’s ‘judo strategy’ outmaneuvers the incumbent banks by using the nimbleness of its M AY 2 0 1 9
139
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JUDO BANK
modern technology to rejuvenate the
technology mindset. The bank uses a
dying craft of artisan business lending.
clear technology strategy, with nine
Judo Bank has built a system that is
simple principles to drive how they will
enables traditional relationship
operate the entire technology environ-
banking backed by modern, legacy-
ment. The firm’s nine principles include
free technology, processes and
not owning IT, being open for business
systems. Lending decisions are based
with the adaptable Open Architecture
on the performance of the business;
and Open Platform, and ensuring its
not just the value of the available
technology is invisible to the consumer.
security, or “collateral” that the
Judo also ensures it is always prepared
incumbent banks concentrate on.
to embrace change and evolve
When the company was founded in 2016, it was established with a digital 140
its security operations, as well as prioritising all it’s clients’ data privacy.
“This is the best system I’ve ever used, only having one system for everything is a breath of fresh air, meaning I’m much more efficient and more importantly can spend more time with my customers” — Ben Tuszynski, 14 years business banking experience working for major banks both in Australia and the UK
M AY 2 0 1 9
CLICK TO WATCH : ‘JUDO BANK – TESTIMONIAL’ 141 The company will also look to the cloud
architecture into which all of our
first, will be identity-led, and will take a
applications can run in any cloud, and
holistic approach to its solutions whilst
whichever is the primary cloud, we
always considering the business’s
have a backup in the other cloud,”
evolution.
states Mr Twigg.
“We don’t do digital transformation
Judo uses Microsoft Azure and
– we do digital. We have built an
Amazon Web Services as its cloud
architecture that is entirely focused on
providers and has created a role-
a digital business model that enables
based, rule-focused, access manage-
human relationships. There is nothing
ment infrastructure using Microsoft
to transform, we started with a blank
Azure Active Directory to enable a
sheet of paper and take a do-it-once,
federated single sign-on environment
do-it-right approach.” Mr Twigg
for customers and staff. “Digital Identity
notes.“We have a multi-cloud ap-
is very important in the ecosystem and
proach, and we have created an
is key to having that role-based access w w w.f i nte c hma ga z i n e. com
REVOLUTIONISING SME BANKING From the WORLD’S NUMBER 1 banking software provider, comes the next generation in banking software. Cloud-native, cloud-agnostic solutions to accelerate cloud adoption.
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THE BEST OF TECHNOLOGY ENABLING THE NEW SME EXPECTATION Small and medium-sized enterprises (SMEs) are the backbone of the economy in Asia and Australia. In fact, in Australia, the SME sector has created over 5 million jobs and employs around 40% of the nation’s workforce. SMEs account for 33% of the country’s GDP and pay over 12% of total company tax revenue. SMEs are essential for Australia’s future stability and growth, therefore, should be a priority for the banks today. However, the SME sector is the most underserved market in the region, often regarded as too expensive and risky to serve. For banks seeking to target this outstanding opportunity, it’s important to remember SMEs are a very diverse demographic. They range enormously in scale and ambition, from fast growth tech start-ups to stable, medium-sized manufacturing businesses. In order to serve the needs of the SME sector, financial institutions need to invest in technology platforms and digital channels which provide services that help SMEs better manage their operations. Crucially, the changes needed to deliver these goals must also be initiated across all levels in the organisation - structural, operational and technological. One financial institution taking this challenge head-on is challenger bank, Judo Bank. Shaking up the status quo, the bank has zeroed in on the SME segment, forging meaningful relationships with companies with a turnover of up to AUD$20mn. Judo CIO, Alex Twigg, summarised the firm’s core ethos by noting that: "Judo’s mission is to bring back the craft of relationship banking, powered by the best of modern technology.” To make this vision a reality, Judo teamed up with the world’s leader in banking software, Temenos, who partner with banks and other financial institutions to transform their businesses and stay ahead of a changing marketplace. Over 3,000 firms across the globe, including 41 of the top 50 banks, rely on Temenos to process both the daily transactions and client interactions of more than 500 million banking customers. Temenos offers cloud-native, cloud-agnostic front office and core banking, payments, fund management and wealth management software products, enabling banks to deliver both consistent, frictionless customer journeys and gain operational excellence.
Judo has leveraged Temenos’ global expertise and 25 years of experience in providing proven, packaged, upgradeable software, selecting Temenos T24 Transact, Analytics, Financial Crime Mitigation and Channels – a module of Temenos Infinity – running on Temenos Cloud. By leveraging advanced API-first architecture, Temenos T24 Transact will integrate with Judo’s existing systems via its zero-trust-network and identity management system, allowing third-parties to connect easily and creating an open banking ecosystem. As a challenger to the market, Judo was looking for a strategic technology partner that was well-known and established in Australia. Moreover, the technology needed to be able to support Judo in the long-term, and have a full set of products and features, that would enable it to get to market very quickly. Enabling customers with self-service apps whilst still maintaining an appreciation for human contact, Judo is transcending channels and touch-points to create a unique journey based on customer needs. Twigg outlines that the company’s partnership with Temenos has helped to make this vision a reality.
“
With the big banks’ shift to industrialisation and centralisation, SMEs have lost the human interaction and tailored service that they so deserve and crave. Judo’s mission is to bring back the craft of relationship banking, powered by the best of modern technology. With Temenos’ commitment to providing core banking as-a-service, we can continue to focus on empowering our customers, the businesses that are the backbone of the Australian economy.” ALEX TWIGG, COFOUNDER AND CIO, JUDO BANK
Talk to one of our experts
JUDO BANK
144 and privilege-based security model.
have the benefit of being able to use
Because of our approach we can
the modern security platforms
simply bolt on new products and
available in the cloud, you can probably
services, as long as they can support
secure your data better than you can in
open standards.”
a significantly more costly on-premises
Mr Twigg argues that Judo leverag-
solution with a very blunt firewall round
ing the global cloud providers scale
the outside,” adds Mr Twigg. “It’s a
has been critical to the company’s
different model that needs a very
world class security infrastructure. The
different mindset to think about how to
CIO argues that most large banks
secure data in the cloud.”
around the world would not be able to
Headquartered in Melbourne with
compete with the investment Amazon
offices in Sydney and Brisbane the
and Microsoft are channeling into
company is expanding quickly enabled
security infrastructure. “If you are
by technology. As the firm expands, its
architecting from scratch, and you
relationships with its customers
M AY 2 0 1 9
strengthen. “I find it so energizing to
to create the-best-way, for people to do
be able to just drive straight into writing
something they’d rather avoid. It’s
loans with systems that are so logical
frustrating that as an industry we spend
and straightforward after years spent
so much time and effort trying to make
time wasting with outdated, clunky,
customers do what we want them to do,
illogical dinosaur era systems,” claims
rather than actually trying to serve
Rebecca Evans, a career business
customers and helping them do what
banker passionate about making
they want to do. That however is the
a tangible difference to her clients
result of the industrialization of our
businesses.
industry through cost-out pressures.”
Mr Twigg is aware of the reluctance
In order to appeal more successfully
of customers within his industry to use
to business owners, Judo aims to make
banking services. “Banking is boring,” he
the advanced technology it uses
says candidly. “Ironically, as an industry,
invisible. Mr Twigg argues that “by
we spend billions of dollars a year, trying
making the technology a product of
E XE CU T I VE PRO FI LE
Alex Twigg, Co-Founder & CIO, Judo Bank Former UBank CEO, Eftpos Australia NED and Board Advisor to several Australian Fintechs, Fellow of FINSIA, ACID graduate, Alex was a global pioneer of technology innovation and is now a member of a very small club, being onto his 3rd successful start-up bank, Egg, UBank, and Judo Bank, an SME focused bank designed to blend the best of traditional relationship banking with the very best technology.
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the relationship, rather than the driver
all data flows from the front to the back.
of the interaction, our customers and
We would automate data entry
bankers can get on a do what they’re
wherever humanly possible, and if we
best at doing.” “Bankers can build
couldn’t automate it, we would
relationships and customers can build
automatically quality check it. So a
their businesses,” he explains. “This is
banker should be able to visit a
why we say that Judo is not a technol-
customer’s place of business, review
ogy driven fintech, rather a people
the books, agree a deal, complete
enabled bank.”
everything on their iphone and send
The technologies that Judo uses enable efficiency. “A banker in one of
the docs to the customer before leaving the car park.”
the Australian incumbent banks would
Judo has also established a
have to at least log into, and probably
real-time dashboard process that
double-key information into, some-
allows customers, bankers and
where between 15 and 22 different
brokers to all collaborate on a deal.
systems, which has horrible customer
Each participant can contact each
service and efficiency implications. We
other and be able to see different
set out to have one ecosystem where
levels of data depending on who they
“ If you’re game enough to have the idea of starting your own bank, then you have to be prepared to face new challenges every day” — Alex Twigg, CIO, Judo Capital
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147
JUDO BANK
are and what access privileges they have. “It means that if a broker sends a
at
io
ment agencies for validity, and auto148
nsh
c ip Oriented Te
ma
te
d
Selfcontained Digital Ecosystem
We are OPEN for Business
hn
ol
o
Evolving/ Responsive Security
Identity Led
system will OCR that driving license, automatically check it against govern-
Data Differentiation
L e a n A u to
in
R
el
Cloud First
gy
Desi gn Pr in ci pl
nk
Everything as a Service
w h e re
Design with the End in MInd
does, they can send a copy of their driving license, for example. The
Ba
A ny
that message before the broker
ses
m
customer simultaneously,” Twigg explains. “If the customer sees
es
g
f ro
to both the broker and the
Made to Change
les ncip Pri
information, they can message out
Te ch
Be Invisible
Pr oc
on it and needs another piece of
We Don’t Own IT
gy lo no
deal to Judo, when the banker works
es
Private & Confidential
Sec
u rit y P ri n c i p l e s
matically use it as part of the customer identity validation process. At every
Amazon, Judo Bank has achieved
step of the way, all parties are kept fully
significant advances by partnering with
informed of the progress of the deal..
a small group of likeminded, customer
That’s probably a really tangible
focused businesses, like Over The
example of the way we’ve tried to make
Wire, Itoc, JB HiFi Solutions, BankSight,
the technology invisible.”
Realtime, Temenos, Vermeg, GTreas-
As well as working closely with
ury , Domo, RapidID, TSS, RIA Advisory
global tech companies Microsoft and
and Unifii, who they bring together as a team, all actively sharing information and collaborating to optimize Judo’s offering. Working with Australian telco Over the Wire, Judo Bank has implemented a full IP telephony system with CRM integration onto every banker’s mobile phone and
M AY 2 0 1 9
THE 9 PRINCIPLES OF JUDO BANK TECH
1 We do not own IT: We are “Service First� and as a green field we do not want to deal with the overhead of owning and maintaining on premises technology. 2W e are open for business: Our Open Architecture and Open Platform will be extensible and adaptable, enabling us to easily change the services we consume and adopt new ones with limited impact. 3 B e invisible: Technology is a natural part of our working day, enabling and automating, not complicating customer service. 4 M ade to change: We recognise that things change and embrace it by building a platform that can adapt to change by enabling the on-boarding of new services and new technologies as they become available. 5 E volving and responsive security: The platform is
designed with security and privacy as a fundamental functional requirement of every component, not as a perimeter fence. 6P rivate and confidential: We will treat all data the same by having the same (highest possible) privacy and confidentiality controls across all services. 7 D esigned with the end in mind: Our solutions will be designed considering the evolution of the business and the IT environment from an holistic and strategic perspective. 8 I dentity led: Identity is at the centre of our approach, with identity controlling access to information and processes at every point in the architecture. 9C loud first: When choosing and designing Technical Services we look to Cloud based Services before others
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RIA A DV ISORY
WE KNOW THE APPS AND WE KNOW THE GAPS! Considering modernizing your Pricing & Billing Systems to increase revenue opportunities and plug in the leakage? Consider RIA Advisory. With Expertise, Experience & Innovation RIA Advisory delivers a unique set of offerings in Customer Engagement, Pricing and Billing industry. RIA works with Global Banks, Insurance and Healthcare companies to simplify complexities in Revenue Lifecycle Management offering a combination of Products, Advisory, IT and Consulting Services.
305.421.6303 info@riaadvisory.com
OUR SITE
CONTACT
“Unlike most systems I have used before, that blocked me, BankSight is intuitive and flexible, helping me to get on with my job and deliver to my customers” — Simon Hardiman, 15 years business banking experience working for major banks both in Australia and the UK enabled Judo to become one of the first
Unifii,BankSight and RapidID have
banks in the world to establish a
worked closely together to provide a
zero-trust-network (ZTN), the founda-
full CRM, onboardingand commercial
tion of its entirely SaaS operating model.
loan origination system supported by a
On top of the ZTN, Judo Bank has
banker App that facilitates true
worked extensively with Itoc, it’s cloud
customer relationships. “The Contact
ops partner and TSS our security
App, is an interesting piece of technol-
partner to develop a single role-based
ogy that effectively automates the
access control and monitoring platform
capturing of compliance records for
using Microsoft Active Directory, B2B
any customer banker communication,
(Business to Business) and B2C
irrespective of the channel they use.
(Business to Consumer) products into
Bringing together voice, email and
which all the SaaS providers ‘plug-in’ to
messaging into a single App, ensuring
provide a single sign-on for both
it can all be instantly retrieved for
customers and staff.
customer service or compliance
Temenos is providing the core
needs,” Twigg said. Domo was one of
banking platform alongside Vermeg
the very first partnerships developed
and GTreasury, who are providing
by Judo Bank and provides near
regulatory reporting and treasury
real-time insight into any element of
capabilities as a service respectively.
the Judo operation, available to w w w.f i nte c hma ga z i n e. com
151
SOFTWARE EXCELLENCE FOR LEADERS IN FINANCE
TO ACCELERATE DIGITAL TRANSFORMATION
INSURANCE
BANKING&WEALTH
DIGITAL TRANSFORMATION
80
Approximate number of employees
2016
Year founded
HQ
Melbourne Australia M AY 2 0 1 9
“ It is an absolute privilege to work with the Judo technology team, they are the best of the best and make magic happen every day” — Alex Twigg, CIO, Judo Capital
everyone in the company, from their desktop on smart phone. It was also the pre-curser to Judo Data Achieve Vault Environment (DAVE) which is an event based data lake, built in AWS, that captures real-time data and telemetry from every part of the Judo ecosystem and will become the foundation of Judo’s machine learning capability. As the bank continues to develop, Mr Twigg reveals the challenges Judo Bank is yet to face: “If you’re game enough to have the idea of starting your own bank, then you have to be prepared
Graham Dickens, Chief Technology Officer
Glen Appleby, Chief Information Security Officer
to face new challenges that you never expected, every day. It’s a big mountain to climb, but it’s a lot of fun. Our success will come down to the satisfaction of our customers and our constant focus on trying to get that right. The reason Judo Bank understands small business better
Andreas Piefke, Niko Bielovich, Chief Data & Analytics Chief Service Officer Management Officer
than anyone else is because it started as a small business. It is an absolute privilege to work with the Judo technology team, they are the best of the best and make magic happen every day.”
Jeff Nel, Chief Platform Officer
Hannah Borash, Chief Business Intelligence Officer w w w.f i nte c hma ga z i n e. com
153
154
Department of Finance WA: Improving process through people-driven digital transformation WRITTEN BY
MARCUS LAWRENCE PRODUCED BY
MIKE SADR
M AY 2 0 1 9
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G O V E R N M E N T O F W E S T E R N A U S T R A L I A – D E PA R T M E N T O F F I N A N C E
ANDY WOOD, EXECUTIVE DIRECTOR – CORPORATE SERVICES AT THE DEPARTMENT OF FINANCE WESTERN AUSTRALIA, DISCUSSES THE DYNAMIC DIGITAL TRANSFORMATION JOURNEY THAT HAS IMPROVED PROCESSES, SERVICES AND OPERATIONAL EFFICIENCY
T 156
he Western Australian Government’s Department of Finance has undergone an important period of innovation and
change, driven by disruptive technologies and a people-first approach to both its customers and employees. Andy Wood, the Department’s Executive Director of Corporate Services, has led Finance’s transition to cloud-based operations and continues to encourage a focus on data analytics and the exciting possibilities afforded by AI and automated services. “Adopting a digital approach is absolutely vital in everything,” Wood says. “With it, we can drive practical, cost-effective and quality outcomes across government, which will ultimately benefit the people of Western Australia.” At the root of the Department’s digital transformation is its approach to vendor management - building a strong level of symbiosis between provider and customer. “If you really want true success or innovation, you’ve got to treat them M AY 2 0 1 9
157
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G O V E R N M E N T O F W E S T E R N A U S T R A L I A – D E PA R T M E N T O F F I N A N C E
“ Adopting a digital approach is absolutely vital in everything” — Andy Wood, Executive Director – Corporate Services, Department of Finance WA 158
as partners,” says Wood. “This helps
isolation and rather understand the
them provide the best offerings to enable
full scope of Finance’s digital transfor-
and achieve strategic outcomes.”
mation.” Of its vendor-partners,
Wood describes this as a paradigm shift
Microsoft has been important through
in procurement thinking, where tradition-
the Department’s digital transformation
ally vendors would offer their best price
journey, particularly as a provider of
to deliver a service or product to exact
vital cloud capabilities. “Our previous
specifications, limiting the ability to
operating model was very heavy and
understand the problem and collabo-
lethargic in that we would buy a piece
rate on solutions. “We take an approach
of kit, we’d put it in place and it would
whereby we select a small number of
stay there for 10 years and we’d never
strategic partners which not only
innovate with it,” said Wood. “Cloud
challenge us and our preconceptions
computing has become a building block
but also look beyond technology in
of Finance’s digital transformation. It’s
M AY 2 0 1 9
what our strategy is built upon and the key foundation of everything we want to achieve.” Over the next decade, the Department plans to continue its prolific usage of cloud technology across its infrastructure services, creating a Platform as a Service (PaaS) for each of the software and service offerings it provides to its customers. The adoption of cloud has also given the Department a more complete understanding and access to its data,
The Department of Finance’s ABW environment incorporates wireless access in three zones across each floor, including a quiet zone
enable it to drive increased efficiency through data-driven insights. Its cloud-enabled data platform collates information sets, not only from within
E XE CU T I VE PRO FI LE
Andy Wood Andy Wood has 20 years’ experience in leadership roles across Banking, Superannuation, Professional Services, Local and State Government. Prior to being appointed as Executive Director, Corporate Services in February 2016, Wood spent six years as a Director with a global outsourcing firm, leading their Citizen Services business in Western Australia. Wood is the senior responsible officer for the Department of Finance’s Digital Transition Program and holds a Masters in Business Administration specialising in Leadership and Innovation.
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Digital Transformation executed locally with global vision. Velrada congratulates the Department of Finance on it’s vision to drive digital transformation across the Western Australian Public Sector. Recognised globally as the Number 1 Microsoft Partner, with a focus on Business Advisory, Microsoft Dynamics 365, Office 365, Data & AI & Azure Cloud Services. Our large and experienced local WA team offer international expertise to Mining, Oil&Gas, Private and Public Sector organisations who want to drive positive outcomes through a digital transformation journey.
Velrada are proud to have partnered with The Department of Finance Microsoft Global Partner of the Year on its successful Digital transformation Gold Partner Dynamics 365 for Field Service Global Partner of the Year Dynamics 365 for Field Service
velrada.com
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“ “ W Wee treat treat cybersecurity cybersecurity as as more more than than an an IT IT issue issue” — — AndyWood, Wood, Andy ExecutiveDirector Director– Corporate Services, Executive – CorporateofServices, Department Finance WA Department of Finance WA
reused across the organisation. This was a massive step forward for us.” The Department is now moving towards harnessing data to be more predictive, particularly regarding cash analytics and optimising cash flow to mitigate wasted spending and accurately forecast the Department’s financial situation over given lengths of time. In order to achieve continued success, the Department recognises the importance of engaging staff and instilling a culture of innovation and disruption. “In any transformation there are three questions that need to be answered: the strategy question, the
the Department itself but also different
technology question and the people
areas across government, to enrich
question. The people question is the
decision-making processes, and its
hardest to answer but is absolutely
swift uptake has resulted in positive
paramount, and how well you answer
impacts. “Business intelligence has
it ultimately determines the level of
been rapidly adopted across the
success you’ll have,” says Wood.
organisation,” notes Wood. “We started
A culture of embracing change has
out with a small proof of concept to get
come through instilling an understand-
50 people from the organisation using
ing that challenges along the way will
Microsoft’s Power BI to visualise reports
ultimately benefit every stakeholder
from the massive data source we have.
in the business. A key element of this
Within 12 months, it has exploded to
is affirming that people, not technology,
about 350 users actively investigating
are leading the transformation. By
and developing reports both in the front
incorporating Kotter’s 8-Step Change
and back ends, meaning they can be
Model to ensure new capabilities are w w w.f i nte c hma ga z i n e. com
161
G O V E R N M E N T O F W E S T E R N A U S T R A L I A – D E PA R T M E N T O F F I N A N C E
A$1.4bn+ Approximate revenue (AUD)
2011
Year founded
1,000
Approximate number of employees 162
incorporated into processes effectively
inspiring them to believe that they are
from both an operational and skills-
responsible, the creators, of the future
based point of view, the Department
state,” says Wood. “That really is what
has ensured that staff remain focused
drives cultural change.”
on their end goals and aware of the
Cybersecurity was also a priority
mounting benefits throughout the
of the Department due to the enormity
journey. “Keeping people focused on
of financial, operational and sensitive
the endpoint, which in many instances
data that it accrues. In a report released
was only six to eight months away,
by CompTIA this year, it was found that
saw us through. You instill a common
60% of IT professionals in Australia
understanding about what we’re
and New Zealand deem employees
collectively working towards and
to be the biggest risk factor to keeping
what we’re trying to achieve, while
data safe, and Wood is with the majority.
M AY 2 0 1 9
Engaging Department of Finance WA staff is a key component in Finance’s digital transformation
163
“We treat cybersecurity as more than
its transition to the cloud has benefit-
an IT issue,” he says. “Fundamentally,
ted again from the Department’s
the weakest point of any organisation’s
close work with Microsoft, enabling
security practices is its people.” To that
multi-factor authentication through
end, the Department has ingrained a
the Azure platform along with proven
culture of awareness and vigilance
concept trials around Azure data
amongst its employees to mitigate this
protection capabilities.
risk as much as possible. The Depart-
“It’s about framing the metadata
ment has also established an informa-
within documents and adding different
tion security management framework
security controls around how and
that complies with the ISO 27001
with whom those documents can be
international standard, with around 114
shared, and preventing the ability to
security controls in place. At an IT level,
share externally if certain parameters w w w.f i nte c hma ga z i n e. com
G O V E R N M E N T O F W E S T E R N A U S T R A L I A – D E PA R T M E N T O F F I N A N C E
are not met,” says Woods. “For us, it’s a top priority not only for the data we hold but also the data that’s shared with us from other government entities or third parties.” Wood outlines the five key goals of Finance’s continued digital transformation: 1. Empowering customers to interact with the Department in the ways that best suit them; 2. Converting every transaction to a digital format; 164
3. Maximising the value of data through generating increased actionable insights; 4. Developing and maintaining a strong cybersecurity culture that ensures information is shared with relevance and responsibility; 5. Ensuring that the Department is prepared for the digital future. This final goal, the future-proofing of the organisation, has already partly taken effect to the extent that this is what’s driving the achievement of the others. “We’re in a position now where we’ve freed ourselves to be able to look at new technologies as they M AY 2 0 1 9
The Department of Finance oversees complex building projects including Optus Stadium and the surrounding Stadium Park
“The people question is the hardest to answer but is absolutely paramount. How well you answer it ultimately determines the level of success you’ll have” — Andy Wood, Executive Director – Corporate Services, Department of Finance WA 165
appear, assess them quickly, and decide if it’s something we want to spin-off as a proof of concept,” he says. “Under our old operating model, we couldn’t do that. We were too busy just trying to get the lights on.” The future is certainly bright for the Department of Finance WA; positively positioned for its ongoing digital transformation with a culture that embraces change and finds excitement in a digital future in place.
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AN AGILE, PEOPLE-FOCUSED DIGITAL TRANSFORMATION WRIT TEN BY
CATHERINE S TURM AN
166
M AY 2 0 1 9
PRODUCED BY
ANDY TURNER
167
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AFFINITY PLUS FEDERAL CREDIT UNION
Recognized by Forbes as Minnesota’s ‘Best-In-State Credit Union’ in 2018, Business Chief finds out how Affinity Plus has fully digitized its services and technology foundation in a world class transformation 168
P
lacing people before profits, Affinity Plus Federal Credit Union has gained a unique edge amongst traditional banking
service providers. A financial cooperative owned by the members of the credit union, those who have accounts are also the company’s owners. With a genuine belief to always develop and continuously improve its services for its members and employees, Affinity Plus Credit Union has recently been recognized by Forbes as Minnesota’s “Best-In-State Credit Union,” an achievement of which the company is extremely proud. Since its inception in the early 1930s, Affinity Plus has grown to serve nearly 200,000 members with loans, credit cards, mortgage services, investment accounts and much more. Responsible for the company’s operational performance, President and CEO Dave Larson is leading the way M AY 2 0 1 9
169
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AFFINITY PLUS FEDERAL CREDIT UNION
“ Technology is moving fast; our members’ behavior in how they interact with the credit union is evolving” — Teri Laufers, CIO, Affinity Plus Federal Credit Union
only did she seek to execute high standards while implementing a robust digital infrastructure across a three-year transformation, she was also the executive project sponsor during the conversion journey, ensuring that the needs of both members and employees were top of mind. “We have transformed seven of our major systems in three years. The goal was to improve these systems, drive efficiency and allow for better service, both for employees and for our members,” she explains. “The systems
170
had to be adaptable and flexible as in the delivery of affordable and
the credit union continues to progress,
sustainable financial services which
and be increasingly responsive to our
improve the lives of the credit union’s
members’ needs. We wanted the
members.
ability to be more nimble. Technology
To support employees and cater to
is moving fast; our members’ behavior
growing member demands for agile,
in how they interact with the credit
digital financial services that provide
union is evolving, and we need to be
increased accessibility, exceptional
able to respond effectively. Moving
performance and ease of use, the
forward, we feel confident in our
credit union has undergone an
ability to do so.”
extensive digital transformation which
In 2016, the company undertook an
impacts all areas of the business. At
extensive review of its financial and
the heart of Affinity Plus’ technology
digital systems, which started the
foundation, Chief Information Officer
slate of conversions in motion. The
(CIO) Teri Laufers explains that not
credit union’s real estate loan origina-
M AY 2 0 1 9
CLICK TO WATCH : ‘AFFINITY PLUS MYPLUS REWARDS’ 171 tion system, Encompass, was the first
mobile apps forecasted to generate
major launch in this slate of changes,
approximately US$189bn in revenues
and catered towards increased
by 2020 via app stores and in-app
member demands for these services.
advertising, it was imperative for
By the end of 2018, the implementa-
Affinity Plus to take advantage of this
tion of a new core processing system
growing opportunity. The credit union
included 65 vendor integrations and
set a Board goal to launch the new
85 custom programs.
mobile and online banking platforms in late 2017, but this task was not
DIGITALLY ENABLED
without its challenges. Through
One area of focus was of particular
extensive testing and fixes over
importance to Affinity Plus: the
months, Larson explains that Affinity
implementation of a much-needed
Plus did not feel the system was in the
innovative, mobile-first, member-ori-
best place to support members.
entated digital banking platform. With
“We were having latency issues w w w.f i nte c hma ga z i n e. com
AFFINITY PLUS FEDERAL CREDIT UNION
172
which would have impacted the quality
the challenges that you face is just as
of experience for our members, so we
important as talking about the
made the decision to push the launch
successes. Employees know that we,
back a couple of months. In reality, we
as an organization, have challenges –
could have launched our new mobile
just like they do themselves.”
app on schedule as planned, but we
Placing members at the heart of its
didn’t think it was the right thing to do,
services, Laufers stresses that
and we had the full support of the
millennials have acutely disrupted
Board in this decision,” Larson says.
traditional communication methods,
“We went to the employee base and
leading Affinity Plus to place further
told them that we were going to hold
investment in providing intuitive,
off because we didn’t feel that it was
digitally-led solutions. “What we’re
what the members would want for
finding in our research is that a lot of
their experience. I believe that sharing
millennials are not just ‘mobile first’
M AY 2 0 1 9
– they are moving toward ‘mobile only’,”
union’s desire to cater to the evolving
she explains. “We really feel that for
needs of its members, as well as for
many, mobile is an easier way to
further self-service options and a
communicate, and I think it’s a great
better overall digital experience. In
way to further build that relationship.
April 2018, the credit union debuted its
Certainly, conversations, texting and
new mobile banking app and online
different kinds of personal connec-
banking platform. Noting that the
tions via mobile are a great way
organization has been highly respon-
to reach the millennial generation
sive in enhancing member experienc-
and others.”
es through mobile, Larson outlines
Affinity Plus’ new digital tools have effectively showcased the credit
that 59% of members are now utilizing Affinity Plus’ mobile and online
E XE CU T I VE PRO FI LE
173
Dave Larson, President/Chief Executive Officer Dave Larson is President/CEO of Affinity Plus, a position he has held since 2013. Prior to this, Larson served as Senior Vice President of Affinity Plus for nine years. As CEO, Larson led the effort to strengthen and rebuild the credit union. The success and organizational culture built at Affinity Plus led to his 2018 recognition by the Star Tribune as ‘Top CEO’ among large companies, and he was also named to Minnesota 500’s list of ‘Most Powerful Business Leaders in Minnesota’. Under his leadership, Affinity Plus was named a ‘Top 150 Workplace’ and designated ‘Best Credit Union in Minnesota’ by Forbes. Larson has a genuine care for the employees, the credit union’s members, and the communities that Affinity Plus serves. He is the Board Chair of the Minnesota Credit Union Foundation and serves on the Board of Directors for Special Olympics Minnesota.
w w w.f i nte c hma ga z i n e. com
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“ Sharing the challenges that you face is just as important as talking about the successes” — Dave Larson, CEO, Affinity Plus Federal Credit Union
says Larson. “We diligently monitor feedback on social media and through our net promoter score program, and we host focus groups and conduct surveys. We really want members to share with us what additional features they are looking for in the mobile app, and we will continue to add to our project list based on their input. We know that digital is a huge part of people’s lives today and are putting appropriate focus there. Our results clearly demonstrate that.” Following the successful launch of its new digital solutions, Affinity Plus
banking services – a 21% increase in
launched its new core operating
mobile app usage in less than one
system in October 2018. “We hadn’t
year’s time. Following its launch, the
changed our core system in 20 years,
new mobile app has received more
and we really felt that the technology
than 19,000 reviews on the App Store
that we were using was, in some cases,
with a 4.8 star rating.
outdated. We really needed to propel
“There’s definitely a lot we want to
ourselves forward,” says Larson. “One
do to enhance the member experi-
of our key objectives overall was to
ence through mobile. With the App
provide members and employees a
Store rating increase from 1.5 stars in
better experience in terms of their
2017 to 4.8 stars today, we could just
interactions, whether working with the
say, ‘Let’s just call it good’. But we
credit union as an employee or
have a strong internal focus on the
interacting with us as a member.”
voice of the member, and we want to
With a new core system in place,
ensure we’re taking their feedback
Affinity Plus will have more opportuni-
into account on an ongoing basis,”
ties in the future to explore the use of w w w.f i nte c hma ga z i n e. com
175
AFFINITY PLUS FEDERAL CREDIT UNION
Our BI group didn’t exist four years ago, and now we have seven employees that work with our data analytics” — Dave Larson, CEO, Affinity Plus Federal Credit Union
176
M AY 2 0 1 9
cloud, the Internet of Things (IoT),
better understand our member
artificial intelligence (AI), chatbots and
information and communicate with our
voice technologies to boost its
members more effectively.”
technology infrastructure. “In recent
Providing exceptional support
years we have also placed significant
Remaining conscious of the
investment in information security and
growing trend for digital innovation,
business intelligence (BI),” says
but also to support those that prefer
Larson. “Today we have an entire
face-to-face interaction or are slower
department supporting our security
to adopt new technologies, Affinity
efforts. Additionally, our BI group
Plus has also placed significant invest-
didn’t exist four years ago, and now
ment in developing next generation
we have eight employees that work
branches, which house open technol-
with our data analytics to allow us to
ogy bars, face-to-face interactions 177
E XE CU T I VE PRO FI LE
Teri Laufers, Chief Information Officer Teri Laufers is Chief Information Officer for Affinity Plus Federal Credit Union. She has nearly 30 years of credit union industry experience, joining Affinity Plus in 2014. She leads a growing, evolving team of information technology professionals, with her purview including operations, applications, system administration, software, technical support, testing and development. Laufers is an advocate for change and has a strong desire to bring superior technology solutions to Affinity Plus members and employees. She has a Bachelor’s Degree in Education and an MBA in Technology Management. Throughout her career she has shared her knowledge and expertise serving on several industry committees, technology councils and software user groups.
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AFFINITY PLUS FEDERAL CREDIT UNION
“ We’re finding that a lot of millennials are not just ‘mobile first’ – they are moving toward ‘mobile only” — Teri Laufers, CIO, Affinity Plus Federal Credit Union
members when they see opportunities – for example, when a member is in line wanting to make a deposit and they’re using their smart phone. “We certainly want to help them with their deposit, but we consider it an opportunity to show them how to get the job done in a different, more convenient way,” he says. “In most cases, they might be aware but are a little afraid. With a technologist mindset, our employees are ready to aid them. I think the environment that we have set up is really conducive for that.” Affinity Plus’ commitment to
178
transparency throughout the converand a plethora of new digital tools.
sion process has proved beneficial to
“The days of having tellers and lenders
both members and employees. Along
in the branch are evolving more
the way the credit union highlighted
toward technologists who can support
the many advantages of the new
members with both their financial and
systems to generate excitement and
technology needs,” says Larson. “The
anticipation for the changes. Getting
reality is that not all of our members
more than 560 employees on board
understand the technology, so there is
and focused on one major initiative is
a lot of opportunity for us to really
no easy feat, yet Affinity Plus took on
assist and engage them, and to show
the challenge with gusto, creating an
them how technological enhance-
entire brand around its three-year
ments in banking can really add
journey, which it referred to internally
convenience to their lives.”
as the ‘Journey Beyond’. “We wanted
Larson adds that employees are coached to offer this support to M AY 2 0 1 9
this extensive project to have a life of its own: a different logo and different
179
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AFFINITY PLUS FEDERAL CREDIT UNION
colors and a lot of fun surrounding the journey really allowed us to bring proper focus throughout the organization. Employee buy-in was key to our success,” says Larson. “Another aspect important to our success is that our senior management group is very visible and accessible to our employees. It was important during a project of this magnitude to have multiple touchpoints.” Employee and member communication peaked at various times during the three year journey, ensuring that 180
Affinity Plus kept the benefits of the changes at the forefront. The credit union also provided outlets for members to ask questions and voice frustrations.
PEOPLE POWER Although technology has been a key driver in enhancing Affinity Plus’ service offerings, Larson is keen to stress that the company would not have achieved its goals without its dedicated workforce. Harnessing a project-oriented mindset, more than 230 employees across the credit union contributed in either a full- or part-time capacity. And that has M AY 2 0 1 9
created the appetite for many to explore what’s next – to take the credit union even further. “We crossed the finish line and we had great success, but our employees are now thirsty for more innovation, more projects, and more opportunities to grow personally and professionally,” says Larson, noting the need for balance in driving innovation and progress while determining when members and employees are ready. With more than 28,000 hours of training and development for employees leading up to the core conversion in October 2018, Affinity Plus doubled the size of its training team and recruited temporary trainers from within its employee base. All employees took part in some form of large group training and completed hours of practice in the months that followed. They learned and stretched and worked outside their comfort zones. And the investment has proved to be invaluable. Undertaking a confidence check at the 30-day mark post-conversion to the new core system, employees reported a confidence level of rating of 4.0 on a scale of 1-5. Moving forward, Affinity Plus has also w w w.f i nte c hma ga z i n e. com
181
AFFINITY PLUS FEDERAL CREDIT UNION
1930
Year founded
560
Approximate number of employees
HQ
St Paul Minnesota 182
partnered with LinkedIn Learning to further provide essential life skills and learning opportunities, which will benefit both members and employees. “We are really proud of what we have been able to do with our mobile and digital offerings. We’re making members’ lives easier by making their experience that much better,” says Laufers. “Our employees have been presented with a lot of challenges, a lot of professional growth and a lot of opportunities in being a part of these projects, and they really rose to the occasion.” M AY 2 0 1 9
“ We’re finding that a lot of millennials are not just ‘mobile first’ – they are moving toward ‘mobile only” — Teri Laufers, CIO, Affinity Plus Federal Credit Union
183
Agreeing, Larson adds: “For the last three years, we had so many projects and conversions happening, yet we
something that continues to give us a tremendous sense of pride.” Through the focus Affinity Plus has
still had to serve our core function
placed on consistently improving and
– running a credit union to support the
advancing its digital offerings, mem-
needs of our members. And we did
bers will continue to see investments
that well. During this time, member
in the cooperative. Growth and
satisfaction on net promoter scores
change – with the member at the
remained high, and we received
forefront – will propel the credit union
positive member feedback and
forward and set it apart from others
awards for running a high-quality
in the field.
financial institution. To be named the top credit union in the eyes of our members and our employees is w w w.f i nte c hma ga z i n e. com
184
Digital transformation for further diversification WRIT TEN BY
SOPHIE CHAPM AN PRODUCED BY
ANDY TURNER
M AY 2 0 1 9
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ALLIANT CREDIT UNION
In 2003,Alliant Credit Union diversified. Since then, it has embarked on a digital transformation journey to draw in new customers.
A
lliant Credit Union isn’t shy about its commitment to what the company calls its “digital shift” strategy. Alliant’s model is to
be a digital-first and nationwide financial institution. The credit union has members in every state across the US, but only one physical branch, located in its 186
Chicago headquarters. “Our model really looks much more akin to a so-called direct bank than a more traditional branch-based institution,” says Dave Mooney, CEO of Alliant. “Historically and today, we are very low cost, which translates into high financial value and high returns to our member owners. We have among the highest deposit rates in the marketplace, and offer some of the lowest loan rates, as well as fewer and lower fees.” When Alliant was established in 1935, it was chartered as the United Airlines Employees’ Credit Union. For 68 years, the company exclusively served United employees and their family members, until 2003 when the credit union diversified. At the time, Alliant had about 170,000 members. “We began to diversify the companies and M AY 2 0 1 9
187
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ALLIANT CREDIT UNION
associations that we partnered with, and we diversified our membership,” says Mooney. “As part of this diversification, we rebranded and became
“ Geographic boundaries are eroding” — Dave Mooney, CEO, Alliant Credit Union
Alliant Credit Union so our name was more inclusive.” By expanding and diversifying with other companies and associations, Alliant was able to continue growing its business and its customer base. The credit union now has more than 450,000 members nationwide. “Now we serve employees of companies and members of associations throughout the United States,”
188
Mooney says. “We have around 130 sponsors – such companies as Google, Kaiser Permanente, BASF, and a number of associations, like the Chicago Bar Association and the California Association of CPAs.” Since Mooney joined the company in 2003, Alliant’s assets have expanded from $4bn to over $11bn. The business has also transformed its operations to focus more on lending, transitioning from what was essentially a money market fund to generating higher yields through loans while still offering customers competitive rates on its deposit accounts. M AY 2 0 1 9
CLICK TO WATCH : ‘BANK ON THE GO WITH ALLIANT CREDIT UNION’ 189
E XE CU T I VE PRO FI LE
Dave Mooney, CEO Dave Mooney is the President and CEO of Alliant Credit Union, one of the United States’ largest credit unions. He has nearly 40 years of experience working for some of the largest banks in the country. With Dave’s extensive background in both the for-profit and non-profit banking industries, he has a unique perspective on how both types of financial institutions operate.
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“The overwhelming majority of our member interactions are done through online and mobile banking” — Dave Mooney, CEO, Alliant Credit Union
191 Along with building a strong lending
The CEO points to the changing
business, Mooney says the other big
dynamics of banking. Previously,
change for Alliant centers around
branch location was the dominating
access and the emergence of digital
factor in consumers’ selection of an
banking channels. “We have invested
institution, and the industry’s primary
heavily in both infrastructure and our
focus was on branches. When the
online and mobile banking services,”
system relied on the exchange of
Mooney says. “Members can do
physical documents, Mooney says,
virtually anything they need to do with
banks relied on having a branch in the
us through digital channels, and the
market because without one, “you
overwhelming majority of our member
were irrelevant.”
interactions are done through online
“In that environment, product, price
and mobile banking, through self-ser-
and promotion were generic because
vice. Over 90% of our new business is
there was no advantage to be had
originated online.”
since choice was all about location. w w w.f i nte c hma ga z i n e. com
ALLIANT CREDIT UNION
E XECU T I VE P RO FI LE
192
Michelle Spellerberg, Vice President Digital Strategy and Innovative Growth As Alliant’s head of marketing, digital banking channels and relationship management, Michelle Spellerberg is the driving force behind Alliant’s digital banking evolution. She is responsible for Alliant’s datadriven digital marketing efforts and led the charge behind Alliant’s new mobile banking app and online banking enhancements. She strongly believes that the consumer experience can be improved via smart yet simple technology. Prior to joining Alliant, Michelle helped companies embrace emerging media and technology to improve customer acquisition, product penetration, sales enablement and overall customer satisfaction.
M AY 2 0 1 9
“We want people to come in and be excited about using the technology, excited about our rates, and excited about the security that we offer” — Michelle Spellerberg, Vice President of Digital Strategy and Innovative Growth
Banks set the rules, which often
ence, digital banking enables transpar-
weren’t known to the customer until
ency and efficient price discovery.
they were used against them,” Mooney
Michelle Spellerberg, the company’s
says. “Since product, price and
Vice President of Digital Strategy and
promotion were generic, there was no
Innovative Growth, says Alliant has a
particular benefit to switching institu-
different approach to technology
tions, which, along with the hassle,
transformation. “In banking in general,
resulted in tremendous relationship
people still think of digital transforma-
inertia. Previously, you were limited to
tion as technology or systems – new
only financial institutions that had a
apps and cool features. For Alliant, our
branch in your area. Now, those
priority is about making the lives of our
geographic boundaries are eroding.”
members as simple as possible by
According to Mooney, the new
solving problems for them through
dynamic of banking centers around the
technology,” Spellerberg says. “It’s
web, which has changed how custom-
about easing the difficulties of day-to-
ers have access to services. In addition
day banking through technology, while
to improving time and place conveni-
a lot of companies are still out there w w w.f i nte c hma ga z i n e. com
193
ALLIANT CREDIT UNION
“ We streamlined that entire process, not only for our members, but also for our employees” — Michelle Spellerberg, Vice President of Digital Strategy and Innovative Growth
194
M AY 2 0 1 9
just trying to create digital features which do not always add value.” For example, Spellerberg says, the company created its own consumer loan origination system, which accepts digital applications for auto loans, credit cards, personal loans and more. Since its launch in spring 2017, the system has processed $1 billion in loan originations, with more than 94,000 loan applications processed in 2018 alone. “We streamlined that entire process, not only for our members, but also for our employees,” notes Spellerberg. “We also developed our own awardwinning mobile app.” Alliant established a proprietary app that focused on design and simplifying the customer experience. The firm added biometric authentication, in-app messaging, debit and credit card management tools, and other enhancements that made banking easier. Over the last four years, Alliant has increased mobile banking users by 208%. Spellerberg says Alliant is also currently working on two more projects aimed at improving and streamlining the digital banking experience for its customers and employees alike. w w w.f i nte c hma ga z i n e. com
195
ALLIANT CREDIT UNION
“One is for what we call our deposit product opening system. We already have our system in place for opening loans, so this system centers around our savings accounts, checking accounts, certificates and individual retirement accounts (IRAs). The system will ensure product openings are as easy and efficient as loan openings, both for our members and our employees,” Spellerberg says. “We also are in the middle of redesigning our online banking platform, with the goal of not only modernizing the 196
$11.2bn Approximate revenue
1935
Year founded
500+
Approximate number of employees
look but, more importantly, simplifying the experience.” Alliant experienced 14% growth in membership last year and will continue
heavily in marketing automation, to be
to expand as part of its digital transfor-
able to utilize data effectively and
mation journey. “We know that these
apply it in terms of smart communica-
new members have higher expecta-
tions with members and prospects.
tions when it comes to digital,” Speller-
We have not begun, in any significant
berg says. “We want people to come in
way, working with artificial intelligence
and be excited about using the
and machine learning, but we will be
technology, excited about our rates,
doing more of that in the future.”
and excited about the security that we
Another area Alliant is emphasizing
offer. We want to delight our custom-
in order to build long-term capability is
ers on a daily basis.”
technical ecosystem integration. “The
Fully embracing technology is key to
technical ecosystem is ever-expand-
Alliant’s continued growth strategy,
ing, with more and more applications
Mooney says. “We’ve invested fairly
and interfaces. Managing that
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ever-expanding ecosystem is a
and dynamics. “We will continue to
significant challenge,” Mooney says.
invest heavily in digital capabilities and
“So, one of the efforts is: how do we
eliminate manual processes over the
architect our technology, and also
next five years,” Mooney says.
architect our organization to be able to
“I envision that we will have developed
deal with that complexity? Which
very robust data and analytics capabili-
again, I think, will enable us to adapt
ties, and embedded consumer-cen-
and respond when we need to, as
tered design across the organization.”
opposed to just getting totally overwhelmed by that complexity.” In terms of the future, the CEO of Alliant has clear ideas for how the company can continue to remain on the right side of marketplace trends w w w.f i nte c hma ga z i n e. com
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3 - 5 June 2019, The Rai
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