The Connector Podcast - DFS 2022 - KBC

Join the conversation with Sigrid De Wever from KBC. She talks about open data and data innovation at banks during the Digital Finance Summit 2022 in Brussels, organised and sponsored by Fintech Belgium. 

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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 Vanderhoydonk as you learn more about the latest available trends and solutions in the markets. This episode is proudly sponsored by

Sponsor  0:23  
FinTech, Belgium, the digital finance Association by and for fintechs. Live from the digital finance summit 2022.

Koen Vanderhoydonk  0:34  
A warm welcome to everyone and welcome into a podcast. And again, it's a podcast live from the digital finance Summit here in Brussels, and I've got the pleasure to have cigarette in front of me. Cigarette, can you introduce yourself?

Sigrid De Wever  0:50  
So I'm Sigrid De Wever. I'm responsible for strategy and innovation for KBC group. That's a bit vague, probably what I exactly do is is we tend to watch and we look at the trends. And then we go define the strategic direction of the group on which topics we need to invest a lot, and in which we need to invest a bit less in order to make sure that we have profitability and customer experience. On top of our mind.

Koen Vanderhoydonk  1:21  
These are already super ingredients to start a podcast. And I think for national, the Belgium audience, or the Benelux audience, Kbc is very known by everyone. Could you just explain a little bit KBC as for our international audience?

Sigrid De Wever  1:37  
Sure. So KBC group is active not only in Belgium, but we are also active in Czech Republic and Slovakia, in Hungary, and in Bulgaria. So there, we have a retail SME and corporate banking business. And the two pillars of our strategy are customer experience and operational efficiency. So our strategies, actually, you need to multiply both in order to be successful. So because if one of them is zero, you're nowhere from from Blind perspective. So that that's our starting point. And the main tech line is that we want to become a data driven organization. So if we see what's happening out there, we need to actually change the interaction with our customers, we need to turn it into proactive, relevant, contextual, hyper personal, if you want to remain the leader, we are in the current countries.

Koen Vanderhoydonk  2:35  
Aren't you not mentioning too difficult things at once? Because in one hand, you say we are a bank? So there's a lot of trusted data that belongs to a customer. It's financial data, and you name it. Yeah. On the other hand, you want to be personalized and super personalized? How does How do you look at it?

Sigrid De Wever  2:57  
That's indeed, if we look from business perspective, the more data the better. But on the other hand, indeed, we're a bank insurer, actually. customer protection is top priority. So we are an incumbent bank insurer, with businesses that have some business requirements, but don't know Henry otherhand, a very well, good compliance and legal and risk department. So whatever we develop in the area of hyper personalization, and data driven, all partners are around the table to discuss this. And if we look currently at what's out there, there are a lot of protective measures we need to take for our clients. And the frustration that we sometimes have is that it's not only incumbent banks and insurers who are active in the data industry, but also like the big Tex and a lot of fintechs, for which they do have regulation. But on entity level, the regulation does differ from what we, as an incumbent bank have to do. And so that's one of the worries we actually have is that do customers always realize what happens to the data. So if you talk to people, and also I have a teenager, I get this for free from Google, and I get this for free from you don't get anything for free, nothing like a free lead. It's in return for your data. And we think that's actually could be a competitive advantage compared to those new entrant entrants in the financial industry.

Koen Vanderhoydonk  4:23  
Now, it's funny that we immediately start talking about the data of customers, whereas the topic today is more open data. So does that mean you're going to open the door of the data of this customer? I don't think I don't think so. That was just a joke. But I'm open data, what does that for you mean?

Sigrid De Wever  4:42  
Open data is actually the data which is freely available, which can be shared in an in in a very accessible manner. Because I think that that's important. So it's data which is free, which is accessible to all and which has multi purpose. So it's not only for the purpose of the profit of companies, for instance, that's for me open data.

Koen Vanderhoydonk  5:08  
Okay. So maybe people would make a bridge with open banking, but then that's something completely different, right?

Sigrid De Wever  5:15  
Yeah, open banking. It's something which was started by PSD to, again, something on data. And so at the moment, we were obliged to open up our accounts to payment providers. And we were thinking, Okay, we need to do this in a cost efficient manner, but without jeopardizing the safety, the security, and also without jeopardizing our customer relationship. Because if all of a sudden payment providers come in between us and our clients who, then we could become a kind of invisible product factory, which is not at the time, our strategy. So this PSD to actually opens the door for open banking, because all of a sudden PSD to it was not an obligation to use API's, but from safety perspective. And because we wanted to save the relationship, we started to act upon API's. And with this plug and play system, we actually started to offer different services to our clients. So within KBC, open banking, we have specific departments devoted to open banking in all the countries in which we're active. So our main strategies, we open up our mobile as a as a platform on which we offer products of third party services, but only those that make sense from from a banking client

Koen Vanderhoydonk  6:38  
perspective. And that's where open banking became beyond banking. Indeed.

Sigrid De Wever  6:43  
So we call it in our strategy bank insurance plus,

Koen Vanderhoydonk  6:47  
to denote that and talk talking about open banking and PSD to not so long ago, I was also in a panel, and I got the following question. And I thought it was a tricky one, it was more in the direction. Where are we today in, in open banking? Are we in front of the hype cycle? are we exactly on the top? Or are we already at the bottom of it? What would you think?

Sigrid De Wever  7:11  
I think we're not there at all yet. I think if I look at open banking, it's sounds promising. And it is promising. But there are various factors that actually yeah. And the reason why it's not at the hype yet or at the top. So and one of the things is, is the trust, the trust of blind, several why on earth, all of a sudden is a bank doing different things, then then initially, just the banking activities, or the other way around, if neobanks come into play in the open banking, he has sometimes you read articles who maybe the compliance was not that good or data breaches. So again, it impacts the trust of clients. And another aspect is, there are many, many players in the open banking scene. And I think, because of these many players, the success of each of them is still rather low. So I think that there should be kind of consolidation or less players. So that it becomes scalable. It's not scalable for everybody involved yet. Now, that's

Koen Vanderhoydonk  8:23  
an interesting way of looking at it. While consolidation seem to be hype at the moment, not only in PSD to but I think if you look at KYC providers, for example, there are so many in the markets, I would plead for exactly the same story, as he just mentioned that there's there's some collaboration, some mutualization, some m&a Maybe, is could be very useful. Well, open data is a key ingredient, I guess, to build superior customer experience. And you mentioned customer experience a few times what what do you see as a bank are the biggest challenges that you need to overcome to deliver that promise to deliver that user experience to your clients?

Sigrid De Wever  9:09  
I think if we if we make the promise, we will give you relevant hyper personal services, we need to live up to that promise. And I think it's difficult to to implement those use cases that really have clear value for for our clients. So I will give an example. So we are developing our own digital assistant called gate, though indeed, doors are clients. And it's we don't want to bombard our clients with push notifications by cater to show that she is relevant as well. So we need to, we need to be sure that we are selective in that one in that one. So we also monitor the conversion of the Push Notifications we send via Kate. And one example we have is like we have the storm Ace. So this was a use case of Kate. And a year ago, when there were these big storms, Kate send out a rather generic message to the clients, I hope you're fine. If you have any damage, here is the link that you can file a claim. And we saw that push not the reaction to this push notification was rather limited. So we said we need to improve the hyper personalization. So what we did the next time we included in the dataset, the postal code where the storm took place. So the push notification was only sent to the people living in this region, I hope you'll find we have a claim. And then we saw that the pickup grade was extremely high. And this is actually what we learned. If you want to live up to the promise of customer experience, you need to make sure that you you are indeed relevant. So make sure if you think about the use case of hyper personalization that you have the correct data, the correct parameters and so on.

Koen Vanderhoydonk  10:59  
The secret to me It almost sounds that you trying to bring human elements emotional elements to a digital experience.

Sigrid De Wever  11:06  
Yeah. So our strategy is indeed digital first with human touch. And at first instance, this is our network we, we we deliberately opt for a network and not because digitalization is not able enough to replace them. No, not at all. And we have a deliberate choice of the human touch. But the other hand, we also want to humanize the technology. So that the know, I know you I know my customer is also included in the in the technology we have in order to increase also the usage and and to make it more personal. Yeah.

Koen Vanderhoydonk  11:41  
Well, I think it's a nice journey that you guys are on. Coming back a little bit more to the topic of data. While lately I'm seems to have a lot of conversations that that take a kind of new turn. And the turn that I hear often is that various datasets with competitors even are shared amongst each other. And somehow the new algorithms can get like common data or common understanding from that data. Is that something that you guys are exploring on as well? Or have you heard about it even?

Sigrid De Wever  12:13  
I indeed have heard about it. So I think it's it's, it's, it's a nice trend going forward, because but it has two aspects to it. So first of all, from the current perspective towards data is like who owns the data, it's like, oh, we don't want to share our data with telcos because then we give up some of our advantage. So from that perspective, it's a nice evolution. As a as companies, you put your, your your data in on a platform, but the data, you don't have access to the data of over the other, you only have access to the Insight generated based on the on the data. So that's indeed a relevant aspect going forward. But on the other hand, you also need the trend about who is actually the owner of the data. Because from that perspective, you you still assume it are the two companies who put the data of all their clients together in one database and insights are generated. But on the other hand, you have also the trend of the self sovereign identity. Yep, where the user is put back on in control, and this type of so it will be an interesting evolution to see how this will evolve from the perspective of self sovereign identity where you put the user back in control, it's my data, and I decide with whom I will share it for how long and under which conditions, and then the aspect of like, okay, we companies, it's a paradigm shift.

Koen Vanderhoydonk  13:38  
Exactly. The way you put it, for me also, it's a new insight if you want.

Sigrid De Wever  13:44  
Yeah, so from KBC, we also openly communicated about it, we would like also to be custodian of identity for our clients. So to develop a kind of Vault storage point where you put your data in, but it's not only a vault where you put all your data, but would also create connections to other other data fields. For instance, in Belgium, you have izmi as a folder, you put all housing relative related issues. And then you have your bank folder where you put your like your your salary and your wage and your credit worthiness. But if you buy a house, you need documents from both vaults. So this is what we're looking at to make sure that we make it even more convenient for clients that from these various vaults, access points are created to put it in the in the in the customer journey. So that that's one aspect we are also looking at, because we think user control is important and we would we would like to work because what we see today you have these various vaults, and you give the customer the impression that he has it under control. But these folders don't communicate with each other. No, no they don't. So technically, the highways need to be created. That's one aspect And then the other aspect is also Yeah, if you put the user in control, he can claim whatever you want. Who says it's true? You can. Unfortunately, you can do fraud on your degree of your university or on your EPC. So what about the authentication key the authority could be blockchain with verifiable credentials and the authentication. resile an intermediary could also have this role. So it's an interesting world going forward.

Koen Vanderhoydonk  15:28  
Yeah, it's a super interesting debate around the European sovereign identity.

Sigrid De Wever  15:33  
Yeah. And also the governance are working on it. The EU wallet, also the Flemish government, with data class, and so on. So it's a hot topic, then we're also looking at to see from from from the financial industry with the trust we currently regained a bit and still have, and we could play a role in that world. Yeah.

Koen Vanderhoydonk  15:55  
Well, I think it's trust and also the direct access to the client. Because you do have interactions with the client on a day to day basis. Correct. And that maybe is different than a governance for example. Yep. Sigrid, I really enjoyed this conversation, we do have that funny feeling that we probably could speak for the next 24 hours. But unfortunately, we don't have that. So I really like to thank you again, for your participation in this podcast. You're welcome to also thank you for our sponsor, FinTech, Belgium for inviting you and having this possibility to record a podcast. And last but not least, also our audience, the people that are listening. And as you know, there's much more podcasts in material to be found on our channel. So please come back, subscribe and get all the latest news. So thank you so much for joining.

Koen Vanderhoydonk  16:46  
Thanks for listening to another episode of the connected podcast to connect and keep up to date with all the latest head over to www dot join. They're connected.com Or hit subscribe via your podcast streaming platform.