Hohmann. “You can start a bank tomorrow by using their services. I think this is a great example of the financial industry redesigning the value chain. This is the part where distribution and understanding the client’s needs and servicing them, becomes disconnected from the balance sheet and from the banking licence. BillPro has a great vision of how to conquer that market – and we are part of that journey.” At the other end of the banking scale is another client, the 300-year-old Dutch private bank Van Lanschot (part of the Van Lanschot Kempen wealth management group). It came to Five Degrees with what Hohmann describes as a spaghetti bowl of different systems. “We helped them to restructure their IT landscape and they have an orchestrating hub now between the channels and their product systems, putting them in control of all the data,” he says. The project was particularly complex, due to Van Lanschot Kempen’s multiple entity structure, the swathe of people involved and the more advanced due diligence process required. But one of the more striking outcomes was that onboarding times were reduced from weeks to hours as the bank ramped up its know-your-customer processes. “With the Five Degrees system in place, Van Lanschot is working on a digital experience, which is much simpler because we can offer all the APIs for any type of activity that the bank wants to bring online (via apps or portals),” says Hohmann. "I believe it has become the most modern private bank in the Netherlands – maybe in Europe. “Now it can consider connecting other products and services that it doesn’t really want to own but still wants to deliver to customers. Our digital banking platform lets it do all this without the heavy cost of having certain products that it doesn’t have the skill to manage. “Meanwhile, the bank can support its clients with other services, such as book-keeping, accounting services and so on, because it runs through our digital banking platform.” In his experience it’s always the middle office in banking where frustration peaks – which is not surprising when you consider the number of applications being used at any one time. www.fintech.finance
“If you look at the Tier 1 banks across Europe, they have probably 1,500 to 2,500 different applications in one landscape,” says Hohmann. “So, although our system can handle it perfectly, these are not typically the banks we target. We just feel that these IT landscapes are too old, too complex and beyond repair. “In our opinion, the Tier 1s should just start all over again and move their clients to a new platform instead of trying to incrementally renew their landscapes. But it will take them five to 10 years, and I’m not sure how much time they have. “I would never want to digitally transform a Tier 1 bank. The question is: are we going to start seeing the mid-tier banks becoming far more agile and far more prominent in people’s lives?” Hohmann, who worked with ABN AMRO for many years, believes that the customer is probably the larger banks’
The Tier 1 banks across Europe have probably 1,500 to 2,500 applications in one landscape. We just feel that these landscapes are too old, too complex and beyond repair biggest asset and, as such, they need to maximise their value during the next five years or lose them to more nimble operators. He believes customers would rather be with a bank that not only protects but maximises their data for the customer’s benefit. “Banks should help me as a customer to leverage that data to get the best out of my life. If banks understand that, they can come up with great propositions based on modern technology that customers would love,” he says. To that end, cognitive banking is the hottest trend that Five Degrees sees at the moment because cognitive IT systems can learn and improve from changing customer information or as an organisation’s needs evolve.
Cognitive IT is anchored in machine learning, natural language processing (NLP) and human interface technologies, which makes it easy for it to interact with users, other devices and data sources. Compared to legacy computing, which orders and calculates on the back of preconfigured rules and programmes, cognitive systems work with dynamic situations – even information-heavy ones. It thrives on a diet of data. Munnypot, a robo wealth advisor in the UK, for which Five Degrees provides customer relationship management (CRM) and business process management (BPM) solutions, is a prime example of leveraging machine learning to predict financial needs in wealth management. In retail bank sectors, a similar solution could proactively recommend personalised loans or suggest transfers to a savings account. As far as IT goes, cognitive is the ultimate destination and data is the fast-moving vehicle that takes you there, says Hohmann. “Cognitive banking is something that many people talk about and not many do, but it is the future,” he says. “In our experience, cognitive banking can help tremendously to support the clients’ needs faster, better, reliably and consistently.” Hohmann sees Five Degrees’ role as that of a data orchestrater, understanding the relationship between data, who has access to it, who can change it and who is allowed to use it. “We understand all these relationships, rights and rules on the data and we can expose it to either the customer, so he/she can control his/her own data, or to an agent that’s been appointed by the customer, who can leverage the data on the customer’s behalf.” He sees a potential future role for the banks as ‘data custodians’, using artificial intelligence (AI) to help customers get the best deals in the market. While Five Degrees can deliver the building blocks, the banks still have a raft of responsibilities that can’t be outsourced. “Banks need to have the culture and the drive to become the best for their customers,” says Hohmann. “They still have to be passionate about their long-term vision and I see some really good examples of that in the market. We can support them on their journey.” Issue 10 | TheFintechMagazine
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