The future of digital banking and payments
Get the latest insights from the pioneers in fintech, with a special focus on digital banking and payments.
The future of digital banking and payments
Highlights from FinovateSpring
The Technology Battlefield for Financial Services
Hear it From the Experts
Escaping Payments Purgatory
Take the Personal Out of Business Travel
Best of Show
The Evolution of the Finovate Demo
"We Are Careful not to Fall in Love with Fintechs Looking for a Problem"
Frank Rocha, Director of Global Financial Services Strategy and Solutions Nuxeo
Jill Castilla, President & CEO, Citizens Bank of Edmond
Tim Urban, Founder, Wait But Why
Daniel Latimore, Senior Vice President, Banking Group, Celent
Jacob Jegher, Senior Vice President, Banking & Head of Strategy, Javelin Strategy & Research
Karen Mills, Former Member of President Obama's Cabinet
Steven Ramirez, CEO, Beyond the Arc
Olivier Guillaumond, Global head of Fintechs, ING
from Greg Palmer
We’re only halfway through 2019, and it’s already been a big year for fintech. The last few years have given us exciting fintech developments with a lot of potential, and it looks like this is going to be the year where those promising new technologies make the transition to real-world solutions.
No area of fintech exemplifies this trend more than AI and machine-learning. At our recently concluded FinovateSpring event in San Francisco, 25 of the 60 demoing companies were using AI/ML in some way. That’s notable in and of itself, but what’s more interesting to see is the variety of areas where that technology is being applied. We saw AI applications being applied to areas like alternative credit scoring, customer-care, marketing/sales, financial advising, financial inclusion, stock-trading, and call-center among others.
The diversity of the solutions that are using AI shows how ubiquitous the technology can be. In 2017 or 2018, you might have been able to get attention simply by standing on the Finovate stage and telling the audience that you were using AI. Now the conversation has shifted, and what’s ultimately important is how you’re using AI. This is a vital step in the adoption of this technology into the broader fintech ecosystem, and it’s something that I’m sure we’re going to see plenty of in the future.
"In 2017 or 2018, you might have been able to get attention simply by standing on the Finovate stage and telling the audience that you were using AI. Now the conversation has shifted, and what’s ultimately important is how you’re using AI."
Of course, fintech is about much more than AI, and this issue of the Finovate eMagazine takes more of a deep dive into digital banking and payments, and the technology shaping this particular section of the industry. Read on for a recap of FinovateSpring, insights from some of our exciting speakers, an overview of the 8 companies that the audience selected as Best of Show, and more.
Our goal at Finovate is to take large trends (like AI) and present them in a broader context. Fintech will always be bigger than the latest trend or technological capability, and the experts and innovators who come through our orbit are well-positioned to provide the bigger picture.
Happy reading, and as always, keep innovating!
"If You Want to be an Innovator, You Need to be at Finovate"
The highlights from FinovateSpring
Fintech innovation continues at a blistering pace, and the opportunities for financial institutions to harness new technologies and embrace digital transformation have never been greater. In San Francisco, FinovateSpring brought together 130 expert speakers; 60 cutting edge demoing companies and 1,100 attendees to explore and debate a path to change in the brave new digital world. We pride ourselves on bringing together players from across the fintech ecosystem with a huge range of experiences and perspectives and FinovateSpring did not disappoint.
Two days of over 60 live demos once again put innovation front and center on the stage. Our unique demo model showcased the most transformative solutions currently being created across the whole fintech value chain and gave the audience the chance to speak to the innovators behind the most exciting tech in finance.
Our main content day started with a fascinating review of the key messages to take from the 2019 demos from Steven Ramirez, CEO of Beyond The Arc. His number 1 takeaway? It all comes back to customer experience and if financial institutions don’t take any action they will lose the war to new competitors. This thought was echoed in our ever-popular analysts all-star session by Paul Berg, Senior Managing Consultant at Gallup: “Only 1 in 5 customers is emotionally connected to their bank – this is a huge opportunity and a massive threat”.
Following on from Steven, we had a sit up in your seat keynote address from the renowned author Tim Urban, of Wait But Why fame. Tim’s topic was The Rise of the Machines – The Artificial Intelligence Revolution And The Road To Super Intelligence, and he took us on a fascinating journey of the milestones of Artificial Intelligence and how we are on the road to AI teaching itself; very soon the smartest thing on earth will not be a human but a computer. His rather scary conclusion? “The stakes are high – Artificial Intelligence is the last invention we’ll ever make; the last challenge we’ll ever face”.
"Only 1 in 5 customers is emotionally connected to their bank – this is a huge opportunity and a massive threat"
Paul Berg, Gallup
A panel of those at the vanguard of digital change - from Wells Fargo; Marcus by Goldman Sachs; Ondot Systems; Alliant Credit Union and HSBC - debated how financial institutions can capture the fintech opportunity and partner with start-ups. Their advice? Creating partnerships will always be challenging because of legacy systems; legacy culture; internal stakeholders and regulation so, before you start on the journey, make sure you have picked the right partner. Dave Mooney, President & CEO of Alliant summed the challenge up brilliantly: “Pick what (and what not) to do and focus on management attention and intent….to avoid innovation theater.”
Across the main content day and the 2 summit days we covered a myriad of topics – from payments to lending; community banking to cyber security; investing in fintech to financial inclusion. Time and time again we came back to the critical importance of customer experience; the ability to harness data and the need to embrace new technologies for real business reasons not for window dressing. Four packed days culminated with the always popular Accelerator Showcase where leading accelerators brought along their newest start-ups – these are the people reimagining how fintech can transform financial services and are undoubtedly some of the rising stars of the future. FinovateSpring ended on an optimistic note; opportunities abound for financial institutions who have a roadmap to embrace meaningful change to face the challenges that lie ahead.
"FinovateSpring ended on an optimistic note; opportunities abound for financial institutions who have a roadmap to embrace meaningful change and to face the challenges that lie ahead."
Here are some of my favourite quotes from the show. See you next year!
“10 years ago at Finovate the fintechs were going to eat the banks’ lunch – that’s no longer the case. Fintechs and banks need each other; they have to partner and they have to do it well.”
Dan Latimore, Chief Research Officer, Celent
Small business lending will see transformational change and what has made this change possible is technology.
Karen Gordon Mills, Former Adviser to President Obama
What I love in my entrepreneurs is people who are coming at fixing financial services from a different discipline but they have a deep understanding of the end user of financial services.
Mike Sigal, Partner, 500 Startups
Payments are being looked at very differently by the next generation of entrepreneurs; payments are being seen as a means to a greater end.
Ramneek Gupta , Managing Director, Citi Ventures
Enough of the scare talk. Good news, banks: we have customers. At Umpqua Bank, we sold Pivotus to Kony to focus on our people. We know we can compete and win with customers on how we use tech with our people.
Rilla Delorier, Chief Strategy Officer, Umpqua Bank
Watch the highlights from FinovateSpring
The Technology Battlefield for Financial Services
Frank Rocha explores the importance of leveraging your content and data
There are a number of challenges facing financial services organizations, all of which ultimately point back to how well organizations can deliver a positive customer experience. Today’s highly connected digital consumers no longer differentiate their expectations across industries. If a customer has a positive experience from one provider, they expect similar results from all providers - regardless of the industry.
What that means for banks is that your competition is no longer just other banks. Today, your competition are the organizations that excel at operating business models that are hyper-focused on the customer - the so called BigTech companies.
It was Steve Jobs who famously said, “You’ve got to start with the customer experience and work back toward the technology, not the other way around,” and this is now becoming the new norm for a generational cohort who have already demonstrated little tolerance or brand loyalty when their expectations go unmet.
"Everything comes back to the understanding that today’s consumer wants an experience, not a transaction from their financial services institutions."
But BigTech is not the only competition.
FinTech, BankTech, InsurTech, whatever label you want to put on them, are more nimble and digitally agile than traditional financial services institutions. These players come into the market place and are not saddled with legacy systems or legacy thinking. They are free to throw out the rule book and think along the lines of “First Principles.” Without the burden of legacy, they can look at business challenges through a clear lens that asks “What business problem am I trying to solve?”
What differentiates this new competition is innovation, speed, the delivery of a highly personalized experience, and the ability to connect with consumers more deeply and closely than ever before. This is an area that traditional financial services organizations can learn significantly from.
But everything comes back to the understanding that today’s consumer wants an experience, not a transaction from their financial services institutions. Understanding the customers needs; what their financial goals are; being in tune with their life events, and delivering solutions that are relevant, customized and accessible is how traditional financial services organizations can and must compete.
Using information intelligently
The life-blood of any financial services organization is “information.” But the amount of information created by any financial services organization is staggering - just think of the decades of information that these organizations already have on their customers. For established financial services organizations, information typically started as “paper.” Policies, Loan Documents, Statements, Notices, Bills, Correspondence - decades of files taking up expensive floor space. Records centers with tens-of-thousand of boxes stacked to the ceiling along endless rows of racks.
Take all the information that a financial services organization stores - all the types; all the formats; all the repositories scattered across the enterprise. Now try to find a specific piece of information that you need to do your job. We all know how simple this should be, but how hard it is in practice. This is where Nuxeo comes in.
A strategic battleplan
Nuxeo enables organizations to store and manage any type of content - from traditional documents to today’s rich media. Organizations can gain actionable insights from their information - all with amazing performance and scalability, that legacy information systems simply cannot deliver.
Nuxeo understands content and how critical content is to business strategy and operations. However, vendors have long promised financial services organizations the nirvana of content stored in a single repository - solving every content problem known to man. The reality was not quite so heavenly.
Why? Consolidating all of the content within an organization into a single repository doesn’t make sense. Every organization has numerous systems that each perform specific tasks and have specific needs - you cannot provide a single solution to deliver against that. Then add mergers, acquisitions, point solutions, and executive mandates into the mix, and the ability for a single solution to address this disappears.
Information needs to live across the enterprise - in different places and different systems. Nuxeo connects into these various content repositories to create an information hub - managing content in place, providing a single, central place to manage, classify and get value from corporate information. Migrating content to Nuxeo is an option - but not a requirement.
Finally Nuxeo is re-inventing how data is related to content. Legacy systems retain the minimal amount of metadata - just enough to be able to retrieve the information later. Most organizations now realize that a minimalistic view of information isn’t sufficient - but trying to extend that metadata model on legacy systems is incredibly difficult, and typically causes performance and scalability problems - if it is possible at all. Nuxeo provides the most extensible metadata model on the market to allow businesses to enrich and augment their information systems as much as they want and need in order to gain value from their content.
Preparing for future battles, today
2019 is seeing Artificial Intelligence (AI) blossom into a truly beneficial tool for the business. AI models that can be customized to specific business requirements in order to help businesses gain more insight from their content are starting to emerge. Imagine receiving an email and being able to automatically determine the service being requested, route that email to the individual with the proper skill set and availability, then provide suggested responses to that email.
AI is capable of delivering this - today. This huge time saver for businesses eliminates the misrouting of service requests to the wrong department, or the sending of requests to someone who is not available or cannot service that request.
Configuration-based solutions (as opposed to fixed products) have significant benefits allowing users to quickly create applications using drag-and-drop design tools. This low code approach provides organizations with the ability to rapidly prototype, build, test and deploy applications that solve real world business problems in a minimal amount of time compared to traditional development methodologies.
Both AI and Low-Code development capabilities are in production today, with innovative and forward-looking financial services organizations taking advantage of the agility, insight and scalability provided by Nuxeo’s Content Services Platform.
Hear it From the Experts
Behind the scenes interviews from FinovateSpring 2019
Fintech innovation continues at a blistering pace and it can be hard to keep up. Here, we distill the key concepts with fintech pioneers, fresh off the stage. So, what did the experts have to say?
Jill Castilla, President & CEO, Citizens Bank of Edmond sits down with Steven Ramirez of Beyond the Arc to talk innovation in community banking, pushing the norms with legacy technology companies and being organically invested to seek out new opportunities.
"It's projected that AI could save banks $200bn dollars in the coming years... with that financial services could become super efficient."
Tim Urban, Founder, Wait But Why
AI continues to be a buzzword within the financial industry, with estimates pitching investment in AI to hit around $2bn in 2019. So we asked Tim Urban, Founder, Wait But Why, to explore the impact of the rapid advancements and what is likely to happen when AI inevitably becomes the smartest thing on the planet.
Daniel Latimore, Senior Vice President, Banking Group at Celent explores partnerships, solving banking pain points and improving customer experience.
Almost half of Americans own or work for a small business, yet they often are not given the priority. During FinovateSpring, We spoke to Karen Mills, Senior Fellow, Harvard Business School and former cabinet member under President Barack Obama as Head of small Business Administration, about how important small businesses lending is to the health and well-being of the businesses and ultimately the economy, and how technology may transform this process.
Jacob Jegher, Senior Vice President, Banking and Head of Strategy at Javelin Strategy & Research talks about banking for freelancers and why community banks should start seriously considering it.
Escaping Payments Purgatory
Julie Muhn casts an eye over the current payments landscape
Let's face it-- we're not to the point of transacting on the blockchain for daily expenses. What’s more, Apple wallet hasn't reached massive adoption, and tap-to-pay NFC payment schemes aren't taking off.
In some ways it seems as if we are regressing. BBVA's Simple just launched paper checks and fintech headlines have been cluttered with the news that newcomer Binji is launching a credit card that promises to combine all of a user's credit and debit cards into a single card. Both options work as methods of payment, but they are physical, not digital.
So it's 2019 and we're somewhere in between a 3 to 4 day ACH transaction and a near-instant crypto payment. Despite the fact that payment methods and rails are stuck in this payments purgatory, there is movement in the space that goes beyond a swipe, tap, or wave.
A handful of fintechs are aiming to make cross-border payments less of a headache by fostering a network of banks across the globe. By making exchanges within their own network, they can undercut the traditional interbank exchange rate.
Physical point of sale technology
While point of sale (POS) technology isn’t new, there have been fresh entrants in the space in the last decade. The competition has spurred positive change that not only makes it easy for small business owners to keep up with regulations, but also creates a more enjoyable user experience for both the merchant and the customer.
Inventory management, for example, can be streamlined on a touchscreen device. Instead of searching for a product code, cashiers can simply look for a picture of the item to quickly input the customer’s order. And from a security perspective, some POS technology providers have reduced friction for the end consumer by using biometrics such as a fingerprint, a photo, or an iris scan to authenticate the user for the transaction.
PFM may be a fintech dinosaur, but it is another area of development. Tracking payments has come a long way since Mint took the Finovate stage in 2007. Small businesses have the opportunity to view and manage cashflow in a way that spreadsheets could never make possible.
On top of that, credit card fleet management solutions have come onto the scene to allow companies to safely distribute credit cards to their employees. Not only can these fleet management companies establish payment limits, they can also set up geofencing payment rules and send push notifications for spending approvals.
Additionally, the explosive growth of AI has made massive waves in spending categorization. By cleaning and analyzing massive sets of data, banks can offer their customers a clear view of their spending habits. And banks themselves stand to profit. In analyzing consumers’ transaction data banks can gain insight into their customers’ financial lives and spending habits to create more effective marketing initiatives and provide them access to useful financial products and up-sells.
While a range of point of sale options has emerged in ecommerce, there hasn’t been much consolidation in the space. Regardless, we’ve seen a rising popularity of payment options such as shop now, pay later solutions, as well as more traditional point of sale lending technology.
Security and authentication tools— which can fill an entire other article—are an ever-evolving component of ecommerce. Online merchants are not only required to protect their consumers information, they also need to protect themselves by authenticating their users. This is especially true in card-not-present transactions. AI technology has opened up possibilities for behind-the-scenes fraud detection and the prevalence of smart phones has allowed the use of both physical and behavioral biometrics.
Even though payment methods remain stagnant, there are plenty of payments technology solutions that are making headlines these days. Hopefully we’ll see renewed interest in alternative payment rails and methodologies in 2020, but until then, we can rely on other developments within the space (voice-powered transactions!) to satisfy our inner fintech nerd.
Take the Personal Out of Business Travel
Make personal cards unnecessary for business trips
It’s common for companies to ask employees to pay for business expenses with their personal credit card – especially those who travel infrequently. In fact, recent research by Visa and industry experts suggests there are approximately 77 million full-time employees (FTEs) who do not have their own corporate credit card. If the need to travel arises, they will use their personal credit card to pay for it. The practice of paying for business travel expenses with a personal card isn’t limited to a company’s FTEs. There are also contingent workers – interns, contractors/freelancers, consultants, guest speakers and recruits to consider.
The impact of using personal cards for business travel
- Coupled with the time it takes for an organization to process reimbursements, paying business expenses with a personal card can be a financial hardship for some employees. Slow reimbursement could lead to the employee incurring finance charges. Balances left unpaid until reimbursement could negatively affect their credit score.
- For the employee with little access to or poor credit, paying for business expenses with a personal card can be both stressful and embarrassing. The employee could face card declines, need to ask a manager to book business travel on their card, or ask co-workers to help cover out-of-pocket expenses, such as dinner, while traveling.
For some, a credit card is a cushion for unforeseen emergencies. Business travel, especially if it’s last minute or expensive, can wipe out that cushion, leaving the employee unable to pay for their unexpected personal emergency.
Similarly, consider the instance where an employee doesn’t have a corporate card and reaches out to their manager for help booking business travel. A manager using their corporate card to book employee travel could quickly exceed their credit limit. When using a shared card, it’s hard for the manager to differentiate expenses by the person using it. It also means less control for the manager.
Despite the points outlined above, many companies readily allow employees to pay for business travel with their personal card. As a result, many of these companies are wary about adopting a corporate card program. Fearful of the impact that low employee engagement and morale can have on their company, many don’t want to challenge the status quo.
And some finance professionals believe that a corporate card program is too costly. If the bill is paid by the organization, there’s a belief that it creates more work for the finance department. Corporate cards run the risk of fraudulent use and questionable expenses because employees have no “skin in the game.”
The proven value of commercial cards
When implemented with well documented and communicated expense management policies, corporate cards can offer significant financial, operational and security benefits.
Best of Show
Who impressed the crowds at FinovateSpring?
It’s always interesting to dive into the Best of Show roster more deeply. Not only does each individual winner have a compelling story to tell, the overall group of winners says a lot about the ecosystem as a whole. As a reminder, Finovate’s Best of Show awards are 100% decided by our audience, and the winning companies not only have amazing technology in their own right, but they also tell us a lot about what types of solutions are resonating among the industry. Let's take a look at the Best of Show from the recent FinovateSpring 2019.
In alphabetical order, the Best of Show winners at FinovateSpring 2019 were:
- Arkose Labs
- Invest Sou Sou
- Neener Analytics
On its face, this is a pretty diverse group of Best of Show winners, but there are some common threads among them that are noteworthy.
First off, the personalization of financial services continues to be a major theme. BlueRush’s Individeo platform allows financial services companies to provide personalized, interactive videos to customers to get people more engaged with their finances and provide a powerful sales tool for financial institutions. Everplans goes a step further, helping advisors create personalized plans not just for their current clients, but for their clients’ children and families as well.
Neener Analytics looks at personalization from a different angle, using an advanced analytical engine to answer a question that all banks wish they could ask every borrower that they do business with: “Are you REALLY going to pay us back?” With a greater understanding of who borrowers really are, banks can lend with confidence and ultimately do business with more customers. The same could be said of Invest Sou Sou, which gives customers the ability to create a “sou sou” (a cooperative savings system), customize it to their unique group, and ultimately save, build stronger credit, and invest together. Both of these solutions use personalization to help banks engage with thin-file and no-file customers in a safe and productive way, and grow their customer base.
The second common thread among the BoS winners was creating a seamless customer experience. Customer expectations are growing exponentially, and it’s never been more vital to ensure a smooth, clear customer experience. Glia (formerly SaleMove) won their sixth all-time Finovate trophy for their continued strong work in providing a truly seamless cross-platform customer journey. They enable effortless switching between chat, video/voice calls, co-browsing, and (of course) a basic online portal in a way that lets each customer choose the experience they want to have.
Blytzpay also delivers a smooth customer experience around billing and payments, facilitating the flexibility for users to pay via text whether they’re using a card, check, or cash. Voca.ai (who, incidentally, just won their third BoS trophy in a row on three different continents), uses AI to improve the call-center experience, with a smart, human, and empathetic virtual assistant. Their demo has to be seen to be believed, but once you watch it, you’ll see why their technology resonated with our audiences in Hong Kong, London, and San Francisco.
There’s one company among our BoS winners who is on their own little island, and that is Arkose Labs. Their technology tackles the multi-million dollar fraud problems faced by companies all over the world through it’s system that invisibly recognizes the context, behavior, and past reputation of an inbound request to classify it as authentic or inauthentic. While Arkose was the lone fraud-prevention tool among the Best of Show winners, security and fraud prevention/response was a major theme of the event. Alissa Knight from Aite delivered a devastating 15 minute presentation that shined a light on how vulnerable APIs and mobile devices are, and several other demoing companies also presented solutions designed to keep customers and banks secure.
Based on how the audience voted, it’s clear that rising customer expectations, the benefits of personalized financial services, and the ever-present threat of fraud are top-of-mind right now for those driving fintech forward. And honestly, it’s not hard to understand why.
Finovate events are much more than the handful of companies who win Best of Show. Not all of our previous winners have had the impact they would have liked, and many of the companies that slip under the radar go on to do great things. I’d recommend that you look at as many demo videos from FinovateSpring as you can to get a true sense of where fintech is heading.
Watch the Best of Show demos
The Evolution of the Finovate Demo
Steven Ramirez reflects on the recent demos and what they tell us about fintech today
As the CEO of Beyond the Arc, Steven Ramirez and his team use data science and their expertise in marketing to help clients improve customer experience. He’s a long-time member of the Finovate community and a thought leader in fintech, so we asked him to give us his thoughts on the demos of FinovateSpring 2019.
What did the demos at FinovateSpring tell you about the fintech journey?
I identified four key themes that convey the current state of financial technology.
First, I was struck by innovative uses of existing technologies. These are the new spins on everything from SMS/text messaging, to novel email platforms, to co-browsing and chat.
Second, Machine Learning is embedded. This means that predictive learning algorithms are baked-in to a wide array of platforms and apps.
Third, affordable cybersecurity. With data breaches becoming an almost daily occurrence, banks without a billon dollar IT budget need robust protection they can afford.
And finally, scalable empathy. Banks and credit unions want to deliver on the promise of personalization. Digital offerings, eventually powered by AI, can help them to better know, and respond to, each customer in a way that’s most appropriate for that relationship.
How have the demos at Finovate evolved over the last few years and what do you take from that evolution?
Fintech partnering strategies now dominate the conversation, on all sides. As an industry, we’ve seen fintech move away from an “us” vs. “them” mentality. In San Francisco, we heard a lot about “white label” solutions. In the most recent demos, startup companies emphasized how they work with banks and credit unions. Visit the Finovate website and view some of the videos from 5 years ago to see what a huge shift this is.
By the way, I would note that the banks’ perspectives have also changed. They realize that there is a lot they can learn from fintech startups. The technology development process within a bank is optimized for reliability, not agility. Aside from a select few, most banks cannot get new digital services to market quickly.
Fintech can help banks pivot, changing their focus so that the bank understands, and meets, the needs unique to each and every customer.
The other evolution is the growing acknowledgement by fintech of the importance of compliance. New companies are adding compliance advisors even at the earliest stages. They realize that while a bank may agree to a pilot, it won’t move forward into full production unless all of the requirements are met. As a result, the demos at Finovate generally reflect startup companies have done their homework.
What are the customer pain points that can be solved with new technologies?
In financial services, legacy providers have been product-centric. They offer accounts, they assume that people shop for accounts, and they do their best to match customers and prospects with those accounts.
But, what if I’m not in the market for an account? Instead, what if I want to build a stable financial foundation, plan for the long-term success of my family, and pursue the things that bring me personal joy? There’s no account for that.
Fintech can help banks pivot, changing their focus so that the bank understands, and meets the needs unique to each and every customer. The focus isn’t just on removing the pain points and easing friction. At the heart of this is financial wellbeing. And it is different for everyone.
What type of organization helps people to clarify what is personally important to them? Helps them create strategies to reach their goals? Provides tools to monitor their progress? And perhaps, offers advice to get them there more quickly? I’ll wager that no one answered, “a bank”.
The promise of technology is that an FI can offer this personalized experience at scale. They can serve more people, far beyond what today’s staffing model allows. Using insights from machine learning, banks can help people see around the curve. This is what it means to be customer-centric, and to begin creating experiences versus offering products.
How will changing consumer behavior transform financial services? Can customer empathy be scaled?
As consumers, we’ve seen other industries evolve to better meet our needs. They understand what we want, they deliver value, and some become an integral part of our lives.
You can blame Starbucks, Netflix, Amazon, and a handful of others for spoiling us. We take these expectations into the online and in-person interactions we have with our bank.
And most banks, credit unions, and other FIs don’t measure up. Our bank doesn’t really know us, doesn’t reward us for our loyalty, and certainly doesn’t offer experiences that delight us.
To deliver empathy at scale, I think it requires two things. First, incredibly deep customer insights. Second, you have to actually use those insights to tailor the product, experience, and message to each person.
Interested in demoing your latest innovation?
"We Are Careful of Not Falling in Love with a Fintech Looking for a Problem"
We talk with Olivier Guillaumond about finding the right fintech partner for your goals
Since March this year Olivier joined the Innovation Office Management Team as Global Head of FinTechs overseeing the scouting, selection and partnering between all FinTechs and all ING units. Here, we catch up with him about his work at ING and how he decides which fintech to partner with.
Before becoming Global Head of Fintechs at ING you served as the company's Global Head of Regulatory Change. How has your experience with regulation helped you in your current role?
First it allowed me to build up a solid international network within ING Group and the regulators, which comes handy when implementing innovative solutions at scale.
It also demonstrated the complexity of implementing regulations in a large international organization and consequently the massive opportunity lying in front of us to find and collaborate with the right RegTech partners.
What qualities do you look for in fintechs when scouting potential partners for ING?
First, it needs to solve a real customer problem or capture an identified opportunity. We are careful of not falling in love with a Fintech looking for a problem. What we are after is to find partners to further implement our Accelerate Think Forward strategy and to improve the customer experience by making banking personal, instant, relevant and seamless. A very important aspect in our scouting is also to make sure there is cultural fit between ING and the fintech: customer first, transparency, respect and trust are values which are key for any long term partnership with ING. We currently have more than 160 active partnerships of which around 20 investments. We closely monitor and step up efforts to increase success and performance of the partnerships.
What is your biggest challenge when it comes to integrating with fintechs?
Scaling within the organization is probably the biggest challenge as well as the biggest opportunity. It does require you to go through a full on boarding process and have a strong long term internal business sponsor. On the flip side partnerships are great win-win opportunities. We learn about agility, creativity, entrepreneurship, while we offer the fintech a strong brand, a large client base and financial expertise.
We are pragmatic in partnering and being open to all types: from nurturing our own fintechs, like Yolt and Payconiq, to taking equity stakes, like FinCompare and Fintonic, for example. We are also looking at accelerating the roll out of successful fintechs to other countries. This is why we launched ING Ventures, a 300m fintech fund to invest in start-ups and fintech companies that already gained some market traction.
So, you not only help ING partner with startups but you also oversee the launch of startups within ING. What has been your favorite startup launch so far?
We have many and will give you 2 examples. One for the Retail business and one for Wholesale.
Yolt is the smart thinking money app built to give everyone the power to be smart with their money. At the forefront of PSD2 and Open Banking, Yolt was created to end multiple app juggling, enabling users to view their accounts and credit cards in one clear app. The startup has helped shape and drive the Open Banking landscape since its launch in 2017, and it has demonstrated rapid traction and expansion into the Open Banking space, being the first third party provider (TPP) to achieve Open Banking API connections with all CMA9 banks in the UK. What is exciting is that following its launch into Italy and France in 2018, Yolt has been busy preparing and expanding its pan-European connections; actively connecting to available APIs, in line with the European Union’s PSD2 legislation.
The other is Cobase, which offers a bank agnostic digital platform for payments, cash management and treasurers of large corporates. The platform is a single point of access at any bank and/or service provider. Some of the main features of the platform that impress me are the central Payment Hub, Cash Management and Treasury modules. The combination of this functionality with many bank connections in one place offers financial and operational efficiency, especially for medium and large size companies. Users and authorisation schemes can be centrally managed for all subsidiaries or departments and only one security token is needed for each user.
One of your tasks in your new role is to accelerate ING's Think Forward strategy. Tell us about this strategy and how it relates to the ING customer experience.
Accelerating Think Forward was announced on 3 October 2016 (Think Forward launched in 2014). We promised to make banking clear and easy, available anytime, anywhere, to keep getting better. Customers are increasingly digital and bank with us more and more through mobile devices.
People spend a great deal of time on platforms created by tech companies. To buy things, socialise, learn explore, travel. So if that is where people are, and platforms are taking over. Should we become a platform ourselves? We started a path of convergence towards one core digital banking platform – countries with similar value propositions intend to harmonize their business models and develop shared operating platforms.
From 2016 to 2021 we are investing EUR 800 million in continued digital transformation. This will allow us to continue our success in growing our client franchise and diversify our income. Through improved efficiency, the Accelerating Think Forward program is expected to deliver approximately. EUR 900m of annual cost savings by 2021. The role of innovation in the Bank’s strategy is very central. Two out of 4 key priorities are linked to innovation: to make the organisation innovation enabled and to look beyond banking.
Finally, you also hold a PhD in Astrophysics. What attracted you to the fintech space over galaxy formation and stellar dynamics?
Like an Astrophysics working in a FinTech environment is very mind stimulating, full of smart people and great science driven technology. The big difference is the speed at which things are moving. Where a Astrophysics experiment might require 20 years if all goes well, a FinTech can become a game changer in a couple of years.
Cutting-edge fintech in the world's financial capital
23 - 26 September, New York