“We must be as modular as Lego”

Christian Wolf

By Christof Danz, RBI |

The terms innovation, digitization and customer experience are currently on everyone’s lips. Discover CEE spoke with Christian Wolf, Head of Strategic Partnerships & Ecosystems, about how he interprets these terms, why APIs are is so important and what we can learn from Lego bricks.

When did the topic of digitization start in the banking world?

There is no general answer to this question. Many products, such as the account, have been “digital” for decades. The days when account transactions were still documented on paper are long forgotten. But what has already changed is digitalization at the customer interface. This process began in the early 2000s with the widespread availability of the Internet, continued with the rapid technological development in terms of speed (keyword LTE/5G) and was further intensified by the triumphant advance of the smartphone. In combination with population development (“digital natives”), but also e.g. regulatory steps (abolition of roaming charges within the EU), this led to a massive change in consumer and communication behavior, with all its challenges but also potential.

In other words, the challenge for banks is not digitization per se, but digitization of the front-end?

This is where we as a bank certainly have the biggest challenges. But as is so often the case, the “iceberg principle” also applies here. Building an attractive customer interface is certainly a challenge, but it is feasible. But the big effort lies in what is not visible to the customer: the linking of our historically grown multitude of backend systems with this very frontend. This requires rethinking system architectures, processes, but ultimately also products and sometimes even the business model. This transformation is a step-by-step process that must be carried out with courage but also with caution.

The term customer experience is interpreted very differently. What does it mean to you?

For me, customer experience is something very personal: How do I interact with my bank, what is my experience? In the end, what counts is how far my expectations are met and how satisfied I was with the process. But that also means that the term customer experience cannot be generalized, because it means something different for everyone. For a young customer, it might mean that the bank offers an app with a cool interface and covers functions that support customers in their social interaction, e.g. bill splitting functions, peer-to-peer transfers, etc. For a corporate customer, on the other hand, other features may be crucial. This is probably more about seamless integration of banking services into their own applications and platforms, stability and the availability of a direct contact person.

Thus, customer experience is something very individual. But it’s very difficult to build a separate offering for each customer. That’s why I’m a big advocate of modularization. This is comparable to Lego bricks, where each brick represents a self-contained process or product, but always with the possibility of linking it to others. The combination of different Lego bricks leads to quasi-individualized products, which are usually much closer to the customer than standard products. However, there are similarities everywhere, which can be summarised in a few keywords:: Accessibility, transparency and interconnectivity.

How do we do that?

First, we must identify the relevant processes and design them in such a way that they are self-contained, but with defined and standardized input and output interfaces. This is the only way to link and combine them to create individualized solutions. This is also the reason why we are so intensively involved with the topic of Open API. APIs (Application Programming Interfaces) allow the linking of processes and systems that would otherwise not communicate with each other. On the one hand, this increases the integration capability of our services in third-party platforms (e.g. the direct offer of financing on a real estate search engine), but also the rapid integration of external services into our internal system landscape (e.g. the connection of Fintechs) – ultimately, digitization is important, but the USP is only created through connectivity.

Keyword Open API – for now one year the PSD2 is in force. Can you already draw an interim conclusion? Many experts have called it a gamechanger in retail banking before its introduction.

The PSD2 has been in force since September 2019. It obliges banks to make their payment transactions electronically available to licensed third-party providers upon customer request. Metaphorically speaking, we as a bank have done nothing more than build a water pipe with a tap for the customer. The customers decide whether to open the tap and let their data flow out and who can collect this data, be it a Bigtech or a Fintech. Regulatory speaking, we cannot refuse to release the data as long as customers give their consent and the provider is licensed. So, for me the crucial question is rather: Why does the customer give the third-party provider access to his transaction data? This brings us back to the topic of customer experience. Customers will only allow access to this data if they expect to benefit from it, for example in the form of an app that creates transparency by aggregating and managing multiple bank accounts and ideally offering other additional services.

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