FinTech Magazine – May 2019

COO Stephen White on laying innovative digital foundations www.fintechmagazine.com

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

CLICK TO SUBSCRIBE FOR FREE

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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

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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.

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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

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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

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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

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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

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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

LEADERS SUMMIT HONG KONG 28th – 29th May 2019 | Harbour Grand, Hong Kong 28th May 2019 Platform Evaluation Day 29th May 2019 Main Conference

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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

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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.

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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

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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.

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‘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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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

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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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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

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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

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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

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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

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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

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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

93

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

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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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101

DELIVERING SIMPLY BRILLIANT CUSTOMER EXPERIENCES

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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

107

YORKSHIRE BUILDING SOCIET Y

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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

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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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111

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

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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…”

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DNB

124

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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125

NAVIGATE YOUR NEXT Make your #DataDoMore

Infosys is a global leader in next-generation digital services and consulting. We enable clients in 45 countries to navigate their digital transformation.

At Infosys, we believe that data is the life and blood of any enterprise that aspires to be digital. Data is a strategic asset that not only helps enterprises drive continuous innovation, but also to create new digital experiences for their customers.

Today, coupled with the power of AI, data is emerging as a major economic force that lies at the epicenter of every enterprise’s transformation journey. And as enterprises aspire to respond to change nimbly, become more productive, a new economy is emerging -- the data economy. This will drive industry disruption, new business models, net new demand and catalyze governments’ role towards shaping the future of Enterprises, Society and Economy. In order to thrive in this economy, enterprises must digitally network and connect the data divides within the enterprise and across in the economy to create new dominant plays in the industry.

Infosys is helping enterprises across the spectrum monetize their data by navigating them through the data economy to mitigate risks, achieve new revenue models and operational efficiency in order to deliver better customer experiences.

Your data holds the key to your next big innovation. Unlock your data’s potential to navigate your next, with Infosys.

Visit www.infosys.com/data-analytics to see how Infosys (NYSE: INFY) can help your enterprise navigate your next. Write to us at Datadomore@infosys.com

“ 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 organize data everywhere, to keep the world working We use our experience so you can quickly extract value from your critical data anytime, anywhere

Syncsort’s powerful enterprise software provides a simple way to optimize, integrate and advance data anywhere, so you can work more efficiently, grow faster and achieve more.

We optimize data infrastructure to improve performance & control costs across the full IT environment, while assuring data availability and security

We integrate connecting today’s data infrastructure with tomorrow’s technology, and ensuring data quality, to fuel AI, machine learning and predictive analytics

Learn more at www.syncsort.com

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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135

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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137

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.

Temenos Infinity Customer-led solution for your digital banking transformation.

Temenos T24 Transact The next-generation core banking solution. temenos.com

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, COFOUNDER 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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145

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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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149

RIA A DV ISORY

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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

155

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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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159

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

1300 835 723

“ “ 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.

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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

185

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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.”

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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

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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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197

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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