For banks, negotiating transformation and integrations effectively can be a huge challenge. KPMG assembled a panel of people who know how to do it from experience for a discussion on Integration not disintegration – Delivering effective transformation with FinTechs. They covered:
On the panel were Allan Woodcock, Engineering Director, Lloyds Banking Group; Paul Lindley, Test Director – Quality Assurance & Testing Services, KPMG UK; Conrad Ford, Chief Product Officer, Allica Bank; Melvin Chin, Technical Account Manager, 9Spokes; and Emily Lloyd-Penny, VP Solution Consulting, Trade Ledger, as well as moderator Priya Raju, Director, Technology Transformation, KPMG UK.
“Fintechs are no longer seen as a disruptor to traditional banks – they are more seen as an accelerator to the digital transformation journey. There is a huge level of collaboration in the industry.”
Allan agreed. “We don’t go to the fintechs to buy tech. Effectively what we do is work with our fintech partners…what we're looking for is innovation, new ideas, and collaboration.” He said that things have changed in banking: “As a large organisation, risk appetite is everything. What we’ve seen over the last few years is more of a willingness for the large banks to try things out, to be prepared to fail fast.”
Emily said fintechs can find the banks’ requirements a challenge. “It’s sometimes easy to underestimate the aspects of things like governance and the hierarchy and bureaucracy that might be involved in some of the processes.” She was part of delivering a project that required more than 40 approvals just at the proof-of-concept phase.
But this experience has ultimately led to success, with the Trade Ledger platform delivering loans for customers in 7 countries and with a further 6 imminent. “We’ve been increasingly avoiding the big bang transformations, and making sure that we’re delivering incremental value. That may be starting with a proof of value or initial pilot phase where you can drive confidence and prove adoption with the technology – that’s something we’ve had real success in.”
This can be a surprise to banks, though. “We want to be adding incremental value through new features and functionality, on a continuous basis, and that is quite contradictory to the more traditional release management, testing, governance and signoff processes,” she said. “But," she added,
"Banks can see that they get more value than just the product – they get access to new innovation.”
Emily continued: “If banks can start to see fintech and tech vendors as more of a strategic partner, they can really tap into the fact that the product offering has been evolved based on extensive user feedback and input from multiple different areas. This might expand what historically might have been quite siloed [at project specification stage] or just creating a custom development solution. At Trade Ledger we’re seeing more and more that prospects and clients see us as a strategic vendor, mapping out what the future state could look like in terms of next-generation working capital. For us specifically that’s where the future is – innovation and co-creation.”
Conrad summed up: “In the end to make a successful fintech partnership or internal deliverable, you have to have people who have a bias towards action, are willing to take responsibility and accountability, and occasionally to take risks. It will always come down to people, whether you build it yourself or buy from a fintech.”
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