Sebastian Green, CIO of Resurs Bank reveals his tech priorities to compete in a fierce market.
Nordic nations are close to making cash a thing of the past. Around 90% of the population in the region uses cashless transactions, and they account for 4 out of the 10 most cashless countries in Europe. Sweden is leading the way to cashless adoption, with reports predicting it will be fully digital in the next few months.
Resurs Bank is one such leading Nordic niche bank, having over six million customers across Sweden, Norway, Denmark, and Finland. The bank has established itself as a leading partner for sales-driven payment and loyalty solutions in retail and e-commerce, offering payment solutions, consumer loans, and niche insurance products.
It has been one of the pioneers of Buy Now Pay Later (BNPL) model. In 1985, Resurs launched the concept of “interest-free” to provide retail customers interest-free financing for the TVs that it sold.
Sebastian Green joined Resurs Bank as CIO in 2018, and since then has been spearheading the bank’s digital transformation journey. In this conversation with ET Insights, he shares how the bank is reinventing itself, the growth opportunity that BNPL offers and how a data-driven strategy is helping it to create an exceptional user experience. Edited Excerpts:
Banks across have been reinventing themselves and have been focusing on areas where they can achieve and extend market leadership in the new digital world. How have you been looking to reinvent the bank? What has been your digital transformation journey?
Over the last couple of years, we have been in the process of modernising our infrastructure and processes. We were using legacy platforms that were complex in nature. This meant creating layers or batches of tech to accommodate new products and functions. Having an infrastructure backbone based on batch-oriented technology was not the ideal solution.
Around a couple of years back, we started to create a vision and strategy to build a future-ready infrastructure. The first step was to replace old systems with Software-as-a-Service (SaaS) platforms and carry out a reconfiguration of our backbone.
In essence, we desire to be in the consumers’ wallet, and that can only be achieved if we place the consumer at the centre of all that we do. We started to focus on the customer journey and what kind of products they would like to use.
So your partnership with Intellect Design Arena where you have invested in an entirely cloud-based banking platform is a step in this direction? What are the results that you expect from this tie-up?
Absolutely, when the fire of the pandemic was at its worst, which is when we decided to go together with Intellect. We chose Intellect as we believed and saw value in the type of architecture that they have.
We have been able to accelerate our processes for innovation, product development and go-to-market strategies. What we want to achieve is providing exceptional customer experience in real time. For example, in subscription solutions and other circular financing solutions that we see are becoming more important.
Post completion we will have a modern and tech-oriented bank in terms of our core systems. This will help us to create a banking infrastructure with data at the core and move to, what I call as ‘on stage’, where the real action happens when we meet customers. While the back end needs to be as optimised as possible, no player will win customers at the back end.
What is high on your agenda/priorities over the next few months?
Providing our users with the ease of use will continue to be our topmost priority. One click-away strategy is what we want to achieve for our customers. We are still not there in all our offerings, but we will achieve it soon.
We are digitalising a lot of our products. So, the other focus is around scalability that will help us to add more products over time.
The third priority is to focus around sustainable and green banking. We want to create products that are as sustainable as possible. We are speaking with Intellect in this area.
Buy Now Pay Later (BNPL) has been making news all over the globe. The way BNPL is packaged, (interest-free credit, zero documentation and seamless check-out process) makes it irresistible for users. What has been Resur’s BNPL story and is there a big opportunity for growth?
BNPL certainly allows banks to create a stronger competitive positioning. Due to COVID-19, online retail sales skyrocketed in 2020. While offline retail stores have opened doors today, the growth seen in online e-commerce will stay. This can be attributed to the change in the consumer behaviour and the digital trust factor. The increase in digital spending will surely fuel BNPL market growth.
We have been working with BNPL ever since the first transaction we made when we sold a TV with our interest free card in the eighties. We have set limitations on basket value and provide personalised credit limits based on the consumers’ credit worthiness, determined by their data.
I think BNPL solution of the future will not be a product connected to a partner. It will be intelligent, and consumer driven where users can create their own BNPL versions. For example, if a user has recently purchased a television, then having a sound system could be an obvious choice. So, we will see more connected BNPL products that offer flexibility in payments. For example, our customer can split payments into six interest-free instalments. Apart from retail, this can be applicable to travel, health, and education areas.
BNPL as a model has also been a cause of worry for regulators across. What are some of the best practices that one should follow to launch a comprehensive BNPL proposition and at the same time adhere to the regulatory frameworks of their respective regions?
Following regulations and being compliant is basic hygiene. We have always adhered to the regulation standards in the regions where we operate.
Having said this, we also need to start thinking from the perspective of consumers. It is not only about money lending but making long-lasting relationship with them. Our approach to BNPL has been to first understand the customers and what are their needs and then create a product that meets the regulatory demands.
What has been your data strategy?
Data excellence is an extremely important piece for us. We use it for credit scoring of our customers, learn about their spending habits, preference and how our products are used in the market.
Data is an important piece of the puzzle when it comes to BNPL as it allows us to create a 360-degree perspective around our customers. Even internally, this data will guide us on how we need to evolve our products. It is a two-way learning mechanism.
For instance, we partnered with Nordic API Gateway for open banking that access to financial data and account-to-account payments. This will help us simplify the process for a loan application and create fair credit assessment of our customers. We are now heading to a stage where we can predict consumer needs or preferences.