Developing a truly digital bank for private banking
Innovation at the edge of the bank
Being truly innovative and digital is a struggle, even in banking – which is an industry that has always been quick to recognize the value of new technologies. So far, no bank had digitalized its private banking services. Until ABN AMRO joined forces with Deloitte and the European Fintech Ecosystem and created Prospery in record time.
From private banking to digital banking
Private banking has always been a traditional banking segment, requiring high costs to serve clients. Typically private banking clients have their own private banker and investment advisor. They meet face-to-face during office hours, on appointment. However, more and more private banking clients belong to younger generations who expect and are used to digital banking services which are available 24/7, real-time and accessible from all around the world – and especially from their homes. While customer expectations are changing, banks are also facing strong pressure on their cost levels and technology is emerging fast. Complex financial models are no longer only available for institutional investors, but also for individual clients. Three excellent reasons for developing an exciting innovation: a digital wealth manager.
Innovation at the edge of the bank
ABN AMRO has been very active experimenting with new technologies such as blockchain, robotics and AI, as well as defining “edge plays”: new initiatives at the edge of their traditional business. Based on ABN AMRO’s strategy and high level ideas to grow their private banking business internationally, they approached Deloitte to help in this edge play. This gave rise to the idea of Prospery, a digital wealth manager that focuses on the German private banking market.
Approach: Agile in practice
About 1.5 years ago a small team consisting of ABN AMRO, Deloitte and other key partners kicked off the Prospery journey at the edge of the bank’s business, literally using an office location outside the traditional ABN AMRO offices. The team was given the mandate by ABN AMRO’s board to create and build a new market proposition that clients will hugely appreciate.
In an agile working environment the team further detailed the proposition and business case, using the three lenses in parallel: desirability, viability and feasibility. As Prospery started from scratch all aspects were defined, such as client proposition, validation, marketing, compliance, risk management, on-boarding processes, IT & application, location strategy, and Bafin license.
Following the first period and blessing from the investor, the team was further expanded in order to actually start building the digital wealth manager.
In order for the platform to fulfil all client needs, the proposition was discussed with potential clients from the very beginning – in interviews, online validation and one-on-one test sessions. What do clients need, should the proposition be “green” or more inclusive? At the same time, the look-and-feel of the platform was tested by clients from day 1 for user-friendliness. The team set up the entire process, designed the proposition, and selected and directed the parties that built the platform.
As the team was setting up a new Financial Institution in Germany, Bafin had to provide a licence to Prospery. A new digital venture requires an adjusted dialogue with the regulator early on in the process. The ABN AMRO and Deloitte team members ensured a smooth and successful licence application process, which fit within the short timelines.
Collaborating in the Fintech ecosystem
To select the best partners to help create Prospery, the team approached 180 tech providers and Fintechs with a description of what needed to be done and asked them how their tooling or solution would fit into the solution. In the words of René Theunissen, Deloitte Partner for Prospery: ‘When your ambition is to build a new wealth manager within a short timeframe of one year and with a limited budget, you need to collaborate with the Fintech ecosystem and beyond, mostly start-ups, which bring specific content into the proposition.’ With the help of Deloitte, ABN AMRO carefully selected 12 Fintechs and made them all part of one team, collaborating in a cross-border, agile, and innovative environment.
The future of banking
Prospery is a great example of digital banking and “the future of banking”. It demonstrates how banks can fully embrace digital, how they should reimagine the client (what new and different services are needed to help clients maintain their grip on their financial well-being) and how banks can engage in an increasingly more open ecosystem consisting of e.g. Fintech, social and third party providers. This is why Jean-Pierre Boelen (senior partner, Banking & Capital Markets Leader in Deloitte North-West Europe) is proud of this achievement with ABN AMRO to create a new digital and scalable start-up.
'All partners involved have shown strong collaboration to realise ABN AMRO’s ambition to create a digital wealth manager. ABN AMRO has shown courage to develop a potential competitor at the edge of its own organisation. I trust we will – and should – see much more of this in the near future.’
How to win these edge-plays
In fact, this is already happening. ABN AMRO is now looking into opportunities in other countries and other banks have approached Deloitte to start up their own digital banking challenge. The Fintech ecosystem is growing and maturing rapidly. It will be critical for banks to find a way to effectively collaborate and leverage the use of this rich ecosystem and to ensure their own position within it. The banks that are most successful in combining evolutionary technologies and the broader ecosystem, will be the winners in these edge-plays.
More information on the digital bank?
Do you want to know more on the digital bank? Please contact Rene Theunissen or David Ruis via the contact details you’ll find below.
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