It is more than 3 years since I first met Karin Van Hoecke, as one of the speakers at the first edition of The Banking Scene Conference in Belgium. At that time she was responsible for the Mobile First strategy within KBC Bank. In the meantime, her responsibilities changed, in line with the overall digital evolution in banking.

Today she is General Manager Digital Transformation, still at KBC Bank & Insurance in Belgium. With Open Banking having a huge impact on this digital transformation, it is great to have her in the Open Banking Interviews.

Part IV of The Open Banking Interviews (see part III, with Koen Adolfs, Product Owner & API Evangelist, ABN AMRO Bank).

KBC is one of the big financial institutions in Belgium and a front runner when it comes to digital experiences. Concerning PSD2, we see that KBC has been testing the opportunities on three fronts already: the developer portal is live, you provide account aggregation and you have a few dedicated partners already for whom you allow payments initiation.

Could you tell us a bit more about that journey please?

Please allow me to first explain how KBC looks at Open Banking and Beyond Banking. It all starts with what we call the “omnichannel model”: our clients can contact us through our traditional bank branches, KBC Live (our remote contact center), KBC Touch (online/pc banking) or KBC Mobile. All these channels are currently working very well.

Open Banking and PSD2 present new threats but at the same time also opportunities. We invested a lot in our digital channels since 2014. In the digital world, all that matters is the relation you have with your customers. Perhaps it doesn’t feel like a relation because there is a digital screen in between, but it is. Of course our ambition is not to have our clients to love banking. We need to look further than that.

Aggregating accounts and providing additional third party services were the next steps in the implementation of Beyond Banking, it is part of a whole process.

Today we notice that a lot of third parties would like to team up with us and like to have their piece of the cake: Big Tech, Fintech,… But our priority today is to make our entry points for customers stronger. We already have +1.000.000 mobile users that connect with us one time a day. Our ambition is to make sure that we can make their life better and more comfortable.

And how do you make someone’s life better and more comfortable? Think of the ultimate laziness.

Let me give you an example: take our collaboration with Q-Park. We made life easier for those customers that need to park in a Q-park public parking. Once a customer has registered for the service in our mobile app, he no longer has to queue at the payment terminal: the cameras simply recognise the licence plate, and the customer can leave the parking. The payment is automatically debited from the account.

What was the key to success here? As a trusted partner we helped our customer with a better parking experience and he gained time that can now be spent in a more useful way.

The same is true with other partnerships like with De Lijn, NMBS in public transport, or Monizze in managing meal vouchers, Sodexo in managing service cheques.

The other point is the reflexion on how to make life easier for multibank customers. If you have a strong mobile app, the logical next step is to add additional account data from other banks. I suggest to come back in 2 months for a follow-up, when we have the right tools in place that show we want to go to all-in-one app with the ambition to simplify the life of consumers and to increase traffic. Interaction with our customers is an essential part in that strategy.

We are of course already looking at the future. For some customers, using a great app, with all the accounts from other banks integrated, will not be enough to interact with their bank. For these customers we need to look at how we can meet their needs and expectations.

Let’s take our example of personal loans. At certain bike stores we are now offering a QR code that customers and non-customers can scan and which immediately gives them access to a loan to buy the bike of their choice, right in the store.

Another example is our collaboration with Xerius, a Employers’ Social-Accounting Secretariat. This is where very often startups kick off their new professional journey. The ones that do not have an account yet can easily open a KBC current account there, as part of the whole process of setting up a new company.

So aside from having a great app for the ones that are convinced of our services already, we also go where (potential) customers are. We don’t work in a ‘fun’ sector where consumers like to come just to spend a good time. After all I never met someone who came to me asking for a day off because he/she likes to go for a day of banking or insurance.

I see PSD2 in fact as a starting point towards a whole new journey, the one of Open Banking, which goes far beyond PSD2 and even payments. I call it the journey to ‘everywhere banking’. You already referred to this a few times, but could you give perhaps a bit more insights on this long-term vision?

You are right. Today it is still difficult to implement because you have to plug in on someone else’s model and solution.

The challenge is to map 2 roadmaps. Even before answering that question, you need to find whether there is a clear win-win, and even a win-win-win:

• one for the customer,
• one for the merchant, platform or competitor,
• one for the bank.

This means you need to find those cases where there is an opportunity with a certain volume and a willingness of the partner to look at this kind of projects with an open mindset. That is not always easy to find.

Finding the first partner in a certain domain is the hardest. Once you have a live offering, people start to look at it differently and they become more willing to collaborate.

So for successful co-creation, it is crucial to detect the right opportunity with the right partner in the right domain. That is when you can start building on the common roadmap.

This is a completely different game than organising an internal workshop where you can decide yourself what to do.

What do you see as a main driver today when it comes to Open Banking: is it data or APIs? Or are there two elements in balance and need they be combined in order to truly benefit the advantages of Open Banking?

It depends on the case I would say. At KBC Bank I think the focus today is more on APIs, and screens. In terms of data there are still many opportunities remaining for future developments. As far as data is concerned, I think the challenge is not so much to mine more data, but rather to use the data we already have in a way that it provides added value for the customer.

I can imagine that once we have taken up the challenge, there will be a shift in relevant data. Of course data is important for banks/financial institutions. In the case of a mortgage loan, the most crucial element is the probability that you will pay back the loan. All that is data driven.

So to answer your question: it is both, and the priority will depend from case to case. Today we mainly look at APIs and screens and a bit less at data.

What according to you was the main challenge in getting the organisation move towards this new way of thinking, the reflexion of thinking about new opportunities with third parties?

The challenge is still there. The all-in-one app works very well. We started small, like always, with 2 projects: street parking with 4411 (SMS payments for parking) and Monizze (meal vouchers). The success formula is the following : start small, test it with customers, feel there is appreciation in the market and work on next steps. If you really feel that it is taking off, you can start boosting it.

At the beginning there was a lot of confusion and doubt about this new approach. Also customers asked us: “please focus on your core business”. They didn’t understand why we started offering bus tickets for example. The good user experience quickly resulted in high adoption by our staff. That is when the word of mouth starts to spread, and the project can really take off.

Today it is much easier to find partners for similar projects. They saw the concrete results and now they want to be part of it. So sometimes it just starts with providing a few colleagues the freedom to work out a few concepts.

It sounds very familiar, and it confirms my blog as well, where I make the point that Open Banking is not so much about technology, but a lot more about the people.

It is indeed a matter of giving a few people the freedom to turn some great ideas into success stories. Once you feel that everyone claims the success, you know it is the right direction and you can go full force.

Banking is often perceived as being complex, requiring quite an intellect, while parking your car is a no-brain activity, just like managing your household through Sodexo for example. This kind of services bring the bank closer to our consumers.

Next level Open Banking: what do you see as the key trends for 2020 and beyond for consumers?

One of the key trends will be the shift towards the ultimate laziness. It is about having the effect of a personal assistant, without having to spend money for this assistance. Steven Van Belleghem gave the example of a trip to Asia, for which you book a hotel and they scan your face. This is enough to avoid check-in, the elevator knows automatically what floor you need, the room is opening automatically, etc…

The more you can create this ultimate laziness for the customer, without the need to really be there, the more they will appreciate you. In creating this kind of experience you also achieve the new loyalty. That is certainly a big trend.

Another one is the trend towards more transparency. With PSD2 and aggregation of information we will see more new players starting comparing services. That may put pressure on prices, unless you can really outperform your competition.

I wish I could time travel 5 year in the future and see how trust in Big Tech will have evolved. Today everybody says they don’t trust it. But when you think again about the ultimate laziness, there is a risk consumers get seduced by the convenience of sharing personal data with these players. It will be very interesting to see how this privacy topic will evolve in the coming years.

You also see it in the latest buzz around Libra: what concerns can we expect in terms of privacy and use of data? What about safety and security? And how much are we as a consumer willing to give up in exchange for convenience?

My last question is pretty similar: next level Open Banking: what do you see as the key trends for 2020 and beyond for SMEs and business customers.

I think there is a difference between the big and smaller ones. For smaller ones it is clear the trends are quite similar compared to the ones for consumers. Imagine Rik as someone who has a company, or who is self-employed. The way you behave in a professional way is pretty similar to the way you behave as a consumer, in terms of financial services at least. After all: you are the same person.

If we as a bank can simplify the process of parking, or paying at a gas station, account opening, then customers will come back. For small companies, the ‘all-in-one app’ strategy still makes sense. Of course you need to tweak it every once and a while.

My husband for example is a freelancer, and he just loves our service with Q-park to facilitate the parking payments process.

What he is missing though is the invoice for his accountant. But even this kind of detail fits perfectly in the ‘all-in-one app’.

For the bigger companies I think other platforms are emerging. Interconnectivity has already been there for a long time in fact. In Belgium we already have Isabel, there are already Forex platforms available, and all kind of other services.

But here as well, a good front-end with easy back-end integration possibilities will drive the success in the future.

I am very curious to see whether in one year the possibilities of PSD2 will result in more companies in Belgium focusing on SME and businesses, or rather on retail.

My guess would be that perhaps the business side is more attractive for new initiatives because they have special needs where added value can be found. On top of that, these customers are less price sensitive, which makes it a more lucrative segment.

This story is part of a series of interviews with executives of the financial services industry.

The complete list of Open Banking Interviews can be found here.

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