During SIBOS 2018 in Sydney, Joy Macknight, Deputy Editor of The Banker, spoke with Sophia Wikander, Head of Business Innovation at Nordea, to find out how the bank is working closely with its clients and bringing them together with innovative fintechs.
This article is taken from a video interview with Sophia Wikander made by Joy McKnight for The Banker. You can see the video here. The video was independently edited by The Banker and is reprinted here.
What has progressed in the real-time space over the past year?
Sophia Wikander: I think for the large corporates it hasn’t progressed that much to be honest. What they are still working with is how to adopt real-time to their systems, to their ecosystems and what that will mean for them in regards to how they will be able to not only serve the rest of the organisation in real-time, meaning securing funds in the relevant places in real-time, but also how that can bring them closer to the rest of the business and eventually also the customers.
I think there’s a lot of dialogue also going on with regards to what should be real-time or what is needed to be real-time and what is not. The ultimate payment ecosystem is about utilising the right payment settlement for the right course so not everything needs to be real-time, although I do think that the data component of real time is obviously super relevant in any area.
For the smaller SMEs, I think there’s been a real change in the Nordics, both because e-commerce has grown so much – more than 20% this year, but also because some of the real-time local schemes that we are having, have also really pushed out not only being a peer-to-peer but actually business-to-consumer solution. What the large corporates, at least some of them, are waiting for now is to get the functionality that you can actually make a real-time pay-out to you consumers, but that is not there yet.
What challenges have surfaced in the last year for your corporate clients?
I think the pace of digitalisation, the demand that they see from their customers. A lot of our customers are business-to-consumer customers and they see the pace of digitalisation and the requests from the customers. They also see the adoption of new technology and really understand that and planning the workforce so that it fits with the new era that we are entering into. And then obviously some of them are also heavily hit by regulation just as banks.
How does Nordea bring its clients with them on the digital transformation journey?
We are doing it from different angles. It’s obviously based on the customer need, but we have a lot of dialogues about digitalisation. We try to include them in the findings that we are having, so more like a consultancy or advisory role in that regard. We are also testing out ideas from a digital perspective in co-innovations. We are running co-innovation sprints together with our corporate customers. Its continuing to be super successful and really creating different kinds of dialogues with customers than we used to have before where we dare to share the challenges that we are seeing very much into digitalisation.
What kind of new opportunities are you seeing opening up in the Open Banking space?
A lot of focus has been on being compliant obviously but we early on decided that in addition to being compliant we need to learn from the developer community. That’s partly our new customer base and now we have 2600 developers and that could be a one-man band or a big corporate.
What we are looking at there is obviously certain areas where we have APIs (Application Programming Interface) which can be used by consumers now. It’s very much related to retail and the consumer. We are looking into now to really move that to the corporate side to become an aggregator of data for the corporates but also testing out specific things together with our larger corporates who are in our sandbox now and literally trying out new things and seeing how we can leverage from trying something together.
If I should say that one change that has happened this last year is that before it was very much a one-to-one interaction between the bank and one of our corporates. Now we are looking at several corporates joining together, we being one part of that ecosystem, and discussing benefits of doing things together. That could be in loyalty programmes or discussing how to get on top of KYC, those kinds of things.
For the third year in a row, Nordea has won The Banker’s Transaction Banking award for the Nordic region. What is the secret to your success?
Firstly, we are super happy to get the prize obviously. I think it’s a combination that we both really try to be out there with our customers to understand what it is that is burning for them. Then bringing that back to our organisation to constantly tweak our solutions or find new solutions through partners or on our own.
The second part is, as we are a Nordic player, we really try to benefit from the different countries and securing that something that works really well in one country can be adopted in another. Then obviously taking a holistic Nordic perspective and beyond Nordic in trying to convince the other banks to progress. That is sort of a sparring for us as well.
We are trying to be on top of new technologies and trying it out. That could be anything form how e-commerce is done today and in the future and how APIs will work for corporates today and in the future. I think it’s a combination of several things and we really want to try to be our best all of the time and it just seems to pay off.
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