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Banking

LOW-CODE TECHNOLOGY BOOSTS THE GROWTH OF SPECIALIST BANK

That’s where Netcall’s Liberty Create came in. Create is a new breed of low-code software solution, built for both business users and professional developers

Hampshire Trust Bank (HTB) is a digitally-focussed specialist bank staffed by experts that enable UK businesses to realise their ambitions. Primary operations include development finance, specialist mortgages and specialist business finance (including wholesale, block-discounting, structured asset finance and classic cars). HTB also provides award-winning savings accounts to individuals and businesses. With an ambitious growth target in mind, the bank targeted digital as key to its expansion.

 

A fresh approach to change

HTB was frustrated with relying on external resources for technical developments on tasks that they didn’t deem to be particularly challenging. Results were slower than expected, often failed to match business requirements, and the associated price tags were unreasonable. The team knew the job could be done better in house and began searching for a way to utilise the knowledge within the business without hiring an additional army of developers. Low-code clearly stood out as the solution.

That’s where Netcall’s Liberty Create came in. Create is a new breed of low-code software solution, built for both business users and professional developers. By using its drag-and-drop interface to configure, rather than code, it allows users to build a new app fast. And once the app exists, it can be tested, refined and improved on an ongoing basis.

The low-code platform has enabled HTB to form a small team that can now build the systems the bank needs and manage process improvements easily.

 

Modernising the front office to improve customer experiences

“Our journey with low-code development started because we needed to modernise the front-office application suite, across the business and across all of our products. We invested in Liberty Create initially for our specialist mortgage division, to replace manual processes, improve workflow to drive cost efficiencies, and increase consistency in process execution across the team,” explains David Patterson, Head of Solutions & Delivery at HTB.

The initial mortgage division project was successful and Liberty Create is now driving cost efficiencies and business improvements throughout the organisation. The platforms that have been built by using low-code have become core assets, assisting with vital areas such as linking the bank’s API infrastructure to data services, fraud prevention, credit risk, and Companies House data.

The use of Liberty Create has enabled HTB to focus on the time it takes to serve customers (and serve them well) and as a result, it has positioned the bank for exceptional growth.

HTB’s latest platform a property development finance system, has replaced a host of manual and spreadsheet-based processes that handle client customer and credit-rating data. Low-code lends itself to an agile improvement approach, so the system can be continually enhanced and added to.

“This project has come in at less than one-third of the anticipated cost. Plus, it will be delivered four months earlier than planned. These very short timeframes are enabling us to move towards weekly deliveries of capability enhancement, and with confidence in the quality of delivery,” adds Russ Fitzgerald, CIO at HTB.

 

Delivering – and delivering faster

The delivery model of Liberty Create matches HTB’s agile project approach. Without getting bogged down in the process, the development team utilises the elements of agile that work best in digital transformation in banking, especially for a small bank. Liberty Create lends itself perfectly to that capability.

During its low-code journey, HTB invested heavily in testing capabilities, providing value with an improved turnaround time for any defects. Previously, developers would publish a change, finishing in the evening, then the test team would arrive the next morning and start the test pack, which could run for 3-4 hours, ensuring everything worked correctly and highlighting any regressions. The developers wouldn’t get feedback until lunchtime, therefore losing half a day of development time.

Now, the developers publish an update and leave for the evening. Liberty Create takes 30 minutes to package the release and push it to the test environment, waking up the testing platform automatically once complete and running the series of tests. By 9 am, the test team starts the day with the results and the developers work on any fixes needed immediately. As a result, an extra half a day per developer is gained from every push. This acted as the first step for HTB on its journey to seamless integrated testing and DevOps.

 

Changing the relationship with off-the-shelf for good

Today, HTB’s confidence in front-end building capabilities now influences how the bank approaches new potential suppliers with a clear strategy that needs to work with low-code. By tailoring its own front-end capabilities and utilising API services, the bank can pick the best out of the industry suppliers and create USPs for its customers.

Low-code has also changed HTB’s attitude towards buying tech – with no more front-to-back services that are not delivering value, or slow releases and outdated legacy systems. The bank commoditises its back-end systems suppliers based on the ‘best-in-breed approach’ to build or buy. It has become the cornerstone of HBT’s technology strategy, increasing innovation, flexibility, and creativity.

 

Growing with a trusted vendor

With the introduction of low-code, HTB has moved from being a user of a legacy core banking platform into building out its own capabilities. It has honed its ability to develop systems efficiently, change direction when needed, and react to an industry position or an operational challenge quickly.

“We can definitely say we’ve seen time and cost savings by using low-code to solve business challenges,” says Russ Fitzgerald, CIO at HTB.

Today, the bank sees itself as a five-year start-up. With investment, a new leadership team and many specialist hires, it has experienced exceptional growth and developed thriving specialist lending propositions for SMEs.

“Initially, we worked alongside the Netcall team, which started our delivery and then worked extremely well with us to hand over to our small but very talented internal team. We’ve had very strong engagement with Netcall, from the CTO all the way down – we value this support and attention greatly. For us, it is amongst the highest criteria we look for in a supplier – and there are only a handful of suppliers where we genuinely feel we get that top level of support, plus the ability to feedback, request and input on product road mapping,” adds David Patterson, Head of Solutions & Delivery at HTB.

The HTB Development Team is now building a portfolio for the year ahead. Like any innovative business, the team has more ideas than resources. Reflecting their confidence in using low-code as a front-end tool, the team is considering using it for internet-facing services and a number of digital services to improve internal workflow and processes. “This will become the blueprint for how we do it going forward,” comments Mike Beveridge, Business Analyst at HTB. A number of ‘microservices’ are also on the agenda.

“We’re looking forward to growing our technology capabilities using Netcall’s low-code, adding to our current technology estate and allowing the bank to move towards the next generation of banking technology,” adds Faizal Danga, Project Manager at HTB.

The team aims to utilise the workflow insights provided by Liberty Create in a wider element across the bank to improve back-office efficiency, data governance, data quality, and control, while also improving the operational efficiency of the bank.

 

Banking

HOW IDENTITY IS SECURELY UNLOCKING THE SME BANKING MARKET

By Mike Kiser, senior identity strategist at SailPoint

 

Have an identification card in your wallet? With a selfie and a few short minutes, you could have access to a business bank account.

Small and medium enterprises (SMEs) have long been the fuel that drives the global economy, representing around 90% of businesses and more than 50% of employment worldwide. Over the last few years, a range of financial services and platforms have arisen over the last few years to support the banking needs of these organisations. They are often digital natives and are innovating to meet the needs of their clientele.

This innovation provides great ease-of-use and rapid access to credit but also demands a careful consideration of their assumed security approach. The aforementioned scanning of an identity and a quick photo to establish a bank account demonstrates the rising importance of identity in both the consumer and enterprise arenas.

The blurring of the lines between personal and corporate identities (in this case, an individual acting on behalf of a small business) is still in its infancy. Combined with the ubiquity of mobile devices, individuals will tire of maintaining different accounts, different personas, different lives for each activity. Usability will demand that identity be reusable, portable, and secure.

This has massive implications for enterprises and the financial institutions that serve them if they seek to prevent cyber-attacks; thankfully, the same element that presents the security challenge also offers the solution: identity.

 

A New Vantagepoint 

Just as individuals desire a single identity to unify their interaction with disparate parts of the world, organisations can use identity to grant them a single, holistic view of an individual (attributes, access, and behaviour) rather than seeing only a fragment at a time. This is particularly important for these new financial institutions—much of their technology stack is cloud-based, which often leads to splintered security approaches. An identity-based approach must be cloud-aware, and able to distil these complex environments into simple and easily governed infrastructure.

This collectivisation also allows security to use identities in the aggregate: to see what groups of similar individuals exist, what access these groups have, and what their usage of this access typically is. All of this contributes to the establishment of what normal is, whether it’s attributes, access, or behaviour. Once the “normal” is established, then the outliers—the potential threats—may be quickly triaged.

 

Adaptability: The New Imperative 

The recent wave of change has demonstrated that financial institutions and organisations must be ready to adapt quickly to shifts in the environment. Portions of IT staff and services have been furloughed, and adjustments to new realities are essential. An identity approach that learns from the evolution of changes in the previously established areas of normality can grant enterprises the ability to see what is coming next and invest appropriately. Much like a view from an elevated position grants the ability to see beyond the normal horizon, basing a security strategy on identity makes it inherently adaptable.

 

Identity: Innovation and Security Intertwined 

Identity, then, is a foundational consideration for financial institutions seeking to provide services for the perennially important small and medium enterprise sector. By eradicating barriers to entry that have historically kept financial organisations and enterprises apart, it is driving rapid adoption and a growing market for innovative banking. At the same time, it shows the path forward to securing those new services in a pre-emptive, adaptable way.

Now if you’ll pardon me, I must go open a bank account for my next start-up—from my mobile.

 

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Banking

OPEN BANKING: ARE CONSUMERS KEEPING AN OPEN MIND?

Last September, the European Union’s regulatory requirement for banks to open up their payment accounts via application programming interfaces (APIs) came into effect. Since then, open banking has taken centre stage within European retail banking and payments. In this blog, Elina Mattila, Executive Director at Mobey Forum, shares insight into how emerging consumer attitudes may impact open banking services in the coming months.

It has been over six months since the revised Payment Services Directive (PSD2) came into full effect and with it, required banks to allow third party providers to access payment initiation and account information. While the regulation was designed to facilitate open banking, the market demand was uncertain. Would we, as consumers, choose to embrace the new services enabled by open banking? And if so, under which conditions?

To understand consumer attitudes, Mobey Forum and Aite Group partnered on a pan-European study to determine the appetite for open banking services amongst 1000 consumers in Finland, France, Germany, Spain, and the United Kingdom. The study, launched in November 2019, revealed many important consumer trends and attitudes, including key priorities and potential barriers for adoption.

 

Consumer appetite for change

The consumer benefits of open banking are largely perceived to be compelling, yet this counts for little if the providers of those services are not deemed trustworthy. This is an observation reflected in the study, which highlighted consumer confidence in service providers as critical to open banking adoption. People want clear visibility of who is managing their finances, and the overwhelming majority (88%) would prefer their primary source of open banking services to be their main bank, as opposed to other banks or third-party providers (TPPs).

Consumers also indicated high levels of trust in their current bank of choice, reflected by 77% preferring to use a financial product comparison service offered by their main bank. By enabling customers to compare the pricing and conditions of a range of financial products on the market, they feel more comfortable that banks have their best interests at heart. This is a welcome trend, and one which should be celebrated in the aftermath of the 2008 financial crisis. For the banking industry to have rebuilt trust levels in this way bodes well for consumer adoption of future innovations.

With a trusted provider, one third of consumers were then either ‘very interested’ or ‘extremely interested’ in integrating open banking services into their financial routine. This applied to specific use cases: account information services (32%), pay by bank (33%), purchase financing (25%), product comparison (35%) and identity check services (35%). Unsurprisingly, consumer willingness to adopt these services relies heavily on providers continuing to prove that they can be trustworthy stewards of personal data.

 

Consumer concerns

For those unwilling to adopt open banking, concerns largely focused on reservations around security and privacy. As open banking becomes more sophisticated, it will be interesting to analyse the nuances around how consumers engage with third parties. Established brands are perhaps more likely to be trusted by consumers than lesser-known online retailers. For this reason, consumers may hesitate to engage newer companies than brands they are already familiar with. In an industry as varied as finance, this creates additional intrigue in the ongoing battle for market share between the newer ‘challenger’ banks and the older, more established European banks.

Consumers might, however, be willing to deprioritise trust and, instead, favour convenience and usability. When questioned over their willingness to adopt a new payment method, for example, 91% of respondents indicated that they could be tempted to switch either by financial incentives or the promise of greater convenience.

 

The path forward

While open banking is still in the relatively early stages of development, it has made significant progress in a very short period of time. Not only is it allowing consumers to share financial data with authorised providers as they wish, but it is set to spark more competition and innovation within the market.

From a business perspective, open banking is expected to create lucrative new revenue streams, particularly for companies which are able to innovate quickly and react to consumer demand. It is prompting consumers to reconsider how they manage their finances and – most excitingly – it’s not even close to reaching its full potential. It should bring a whole new era of service partnerships between banks and TPPs, which will enable a new generation of innovative financial services.

For the industry to truly fulfil its potential, it is vital that stakeholders are able to explore new business models, innovations and changing customer expectations for open banking in a commercially neutral environment. Mobey Forum’s open banking expert group provides exactly this, and we look forward to supporting our members as they shape the future of digital financial services.

 

Where to find out more

The opportunity for open banking is explored in more detail in a report by Mobey Forum and Aite Group, entitled Open Banking: Open Minds? Consumer Appetites for New Banking Services. It provides banks and other financial services stakeholders with a market view on consumer appetites toward new open banking services and explores the possible roadblocks to consumer adoption. It is also discussed in a podcast featuring key representatives from Interac, Erste Group Bank and Strands Finance.

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