The Connector Podcast - DFS 2023 - Fintech Belgium - Isabel Group

Ever wondered about the journey of the oldest FinTech in Belgium? Meet our guest, Frank Verhaest, a banking evangelist at the Isabel Group. He takes us through their riveting evolution from a joint venture between the four largest banks in Belgium to a unified payment platform that now includes 27 banks. From using diskettes and CDs to operating an internet-based platform, Isabel 6, the Isabel Group's transformation is nothing short of remarkable.

We’ll explore the group's strategic acquisitions that have reshaped its positioning and propelled it into new realms, such as the world of open banking through Ibanity. Frank also talks about the future of data exchange with PSD3 and how Isabel Group intends to stitch different solutions together to provide a holistic approach to banks. As a bonus, we delve into the impact of blockchain technology and its application in Know Your Customer (KYC) protocols. 

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Koen Vanderhoydonk
koen.vanderhoydonk@jointheconnector.com

#FinTech #RegTech #Scaleup #WealthTech

Transcript

Introduction: 0:01

Welcome to the Connector podcast, an ongoing conversation connecting FinTechs, banks and regulators worldwide. Join CEO and founder Koen van de Hoidong as you learn more about the latest available trends and solutions in the markets.

Koen Vanderhoydonk: 0:21

Welcome to another podcast episode with the Connector and FinTech Belgium, and today I have the oldest FinTech from Belgium around with me in the podcast. Frank, can you tell us more about yourself and the Isabelle group?

Frank Verhaest: 0:38

Hi Koen, thanks. I'm happy you didn't say I have the oldest guy here.

Koen Vanderhoydonk: 0:43

I wouldn't dare, I wouldn't dare.

Frank Verhaest: 0:48

So my name is Frank Fithaust. I'm a banking evangelist at the Isabelle group. I've been here for lots of years Looking at Isabelle. Well, the company started in 1995, so that's about 28 years now. It changes every year, so it's 28 now.

Frank Verhaest: 1:07

It started as a kind of a joint venture between the four largest banks in Belgium to create a payment platform that would be unified between the four banks. Today we've grown to 27 banks in Belgium and the evolution over the years was going from a software that you would upload, with CDs, you know, and now it discates. It started with discates, cds, the floppies, yeah, the old floppies. And then in 2010 we went towards the internet and we created Isabelle 6. And then it was completely different. Of course, because you're another model, you can make changes to the applications directly, it's shown to everybody. So it was another way of thinking.

Frank Verhaest: 1:56

But after that it was nice doing payments, but the world evolves and we started thinking like what else can we do? So we've had a few acquisitions over the years. 2016, we started with Codabox, which was our entry into the accountancy Coda files data you know, it's completely different world. And then just banking. And then we had the acquisition of Ibanity, steps to PSD2 API, so completely different also. And we went back to accountancy with ClearFax in 2018.

Frank Verhaest: 2:32

And then, in 2020, we thought, yeah, we have this new technology called blockchain and we have this thing that banks need to go, which is called you know your customer. So let's try to do something with that. We started that and we continue, in fact, in digital identity, which because digital identity is something that's going to be more and more important, not only for consumers, but also for enterprises. And then 2021. Last acquisition, clearnox, which is a debt collection software. It's a French company, so it's first steps towards other countries. In Belgium, well, we have Luxembourg, sorry, and we also have 50% participation when you dockle together with Telenet, and that's where we are today. So a lot of things have happened, diversification of activities.

Koen Vanderhoydonk: 3:21

So it's fun, it's fun to be here, super interesting and what would be the most pivotal moment for you and the company?

Frank Verhaest: 3:29

I think when we acquired KonaBox, it was really going away from pure banking and going to something completely different. That's one, and the second one is when we acquired this little company called Ibenity, which opened us the new world of open banking and PSD2 and APIs and stuff like that. So these are really two big innovations that came there.

Koen Vanderhoydonk: 3:57

Well, talking about Ibenity, what does Ibenity bring to the market? What does it bring to the table?

Frank Verhaest: 4:04

Well, ibenity you can see them as a middle man between banks and software integrators Need to be able to create a solution to access the bank accounts of people and companies and they need to be able to inject payments to get the bank statements, and they're in between. So this whole E-group PSD2 thing opened up the banking but created also difficulties because every bank started to implement the APIs in their own way. Every software integrated wanted to connect every bank one by one, and then you got this the banking didn't have enough resources to talk to all the software integrators. So you have something and we decided to put something in between called Ibenity, which was access to accounting it's called on our side which allows to connect to different banks through one middleware. I would say, which is what we're doing and on one hand, we connect to the banks and we offer this solution to software integrators so that they can create an in-bet in their solution. This whole PSD2 open banking.

Koen Vanderhoydonk: 5:19

Well, that's in a short period. Yeah, thank you. If you talk about PSD2, of course you also talk about PSD3 and potentially also data collaboration. That's happening at large within the industry. So how does Ibenity then positions itself to accommodate the things that are coming?

Frank Verhaest: 5:38

Yeah, well, ibenity is focusing really on this exchange of data and preparing itself for whatever is coming with PSD3, of course.

Frank Verhaest: 5:53

So they are really constantly looking at what are the new things that are coming from Europe, what are the things that banks are doing, what are the needs of the banks, but also what are the needs of the software partners that want to integrate and always try to innovate and create solutions that can be integrated easy. So they have this whole API marketplace also, this ecosystem that we're building of partners that can integrate into the Punto solution that we have and can add their solution to our solution. So the world is not only open banking, but it's open systems where you create solutions by adding little blocks, you know, and, but based on the basis that is PSD2, where you can exchange data. Of course, psd3 is going a little bit further, like, combating payment fraud will be in PSD3 and there we have other solutions. That is a bit like Confiband, where we do the Iben check, and all these solutions will then be also integratable with all the rest in our marketplace. That's, I mean there's a lot of things that are moving there.

Koen Vanderhoydonk: 7:07

So the intention of Isabelle Group is to continue to stitch the different solutions together to provide like a holistic approach to the banks.

Frank Verhaest: 7:17

Yeah, even more than before. It's really connecting things and making sure that when you need a solution for a problem that you have, we can offer the benefits and the value by having different blocks not only things that we build ourselves, of course, because I mean we're only 350 persons, we cannot do everything but we have partners that have a specific solution I don't know in accounting or whatever and we bring these blocks together through APIs and we exchange data. I mean, the future will be exchanging data. Of course, you'll get less and less. I think front end is created by Isabelle. You will get this embedding of the finance and of the transactions into other solutions. We are the motor that will create that.

Koen Vanderhoydonk: 8:09

Interesting. I mean at the end you are the pioneer of the Belgium FinTech space, amongst maybe others. We are very gifted in Belgium with companies such as Euroclia, like Swift and many others. It's often very infrastructural. What you say sounds a little bit the same. How does that resonate when I say that?

Frank Verhaest: 8:35

Well, it's great to be compared to Euroclia and Swift. I don't think with that. But on what we do, yes, we were the first one to create a multi-banking platform. I mean, there was this something I don't think anywhere in the world that existed. The banks were smart enough 28 years ago to think about let's create one software so that the CFO doesn't have to go into different platforms, log in, get the data, do payments, let's go no, you can see everything into one platform. This was completely innovation. There's something that nowhere was there. We want to continue on that a lot of being innovative and creating new solutions that are adding value to our customers, that bring them benefits so that they can do their work better and focus on their core business.

Koen Vanderhoydonk: 9:27

You mentioned the few countries. You mentioned Belgium, obviously, Luxembourg, but also France. How does it look like if you look at the rest of Europe? What's the place of Isabel within the European landscape?

Frank Verhaest: 9:39

Well, a solution like Isabel 6, even if you embedded this is really focused for the moment on Belgium banks. If you look at it going more towards Europe, well then you have to go almost like PSD2, psd3. So that'll be more the open banking thing. The things that we are doing with specific Belgium accountants is not something that you can just like that bring to other countries, because accountancy rules are different from country to country. But the basis is there. I mean, the logic is there. So just put some other logic behind it and it can work. But it's not our first priority. We're focusing on making the world of payments more integrated, embedding into software, making sure that this API marketplace is working well. So we really focus on that first.

Koen Vanderhoydonk: 10:31

Okay, understood Now. Isabel has been one of the first members of Fintech Belgium. What an early day member. So why are you so?

Frank Verhaest: 10:40

excited about the DFS.

Frank Verhaest: 10:43

Yeah, because it's always interesting the kind of people you invite there. I remember starting with just Fintechs and we were all yeah, happy, happy, joy, joy. We're doing something completely different. But now it has become something more professional. You see large companies with new solutions. I'm thinking of, like, the embedded insurance. Now that's coming with the cover.

Frank Verhaest: 11:13

Of course, we have Mark Munow, our own specialist, who will be speaking there, so I'm very pleased that he'll be able to present our view on open banking. But also you have those, the traditional players like Visa, mustard Card, ion Banking those companies that will be there also to present where they are going, because, I mean, they are also evolving and they're not staying on what they used to. So they also have innovation departments with new technology, with new solutions that they can bring. So that's interesting to see what they can do. Next to the startups and the new companies with new ideas, with young wolves who have yeah, let's create that, because nobody thought about it.

Frank Verhaest: 12:01

The energy that is there in FinTech Belgium and the FSC is always fun, I mean, for people I'm going to make some promo for FinTech Belgium, but for people who never went, if you have a startup, just go at one of the events in the morning, the breakfast things, and you see all these people that are very enthusiastic, so it's really nice. I mean it has evolved. I was there completely in the beginning when everything started, and now it's getting much more professional.

Koen Vanderhoydonk: 12:28

It's super nice to hear the voice of an ambassador. So, frank, maybe a last question, because we're heading towards the end of our podcast. A very simple one when can people contact you?

Frank Verhaest: 12:41

Well, I mean, it's a 21st century, so go on LinkedIn, go to Frankshilhouse, you'll find me, but go to the Isabelle website, Isabellegroupeu. There's a contact button, there's a telephone number. I mean, I think there's only one Frank in the company.

Koen Vanderhoydonk: 12:55

So that's okay, that's easy, that's easy. Thank you very much, frank, for joining this podcast, and thank you also to the audience, and please stay tuned, because we're going to give you more inspiration why you should come to DFS 2023. Thank you very much.

Introduction: 13:11

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