Case study: Hellenic Bank – building a bank through strategic partnerships

Natasha Kyprianides, Hellenic Bank: a practical problem does much to focus the mind

Natasha Kyprianides, group head of digital banking and innovation at Hellenic Bank, gives the lowdown on how to apply the partnership strategy in practice and achieve real results.

Hellenic Bank has utilised building partnership relationships with fintech start-ups to deliver innovation at pace. Additionally, the strategy was then further evolved to move towards an API-first approach. The business opportunity identified in Open Banking aims to create an ecosystem of partnerships through which we can accelerate transformation and grow the bank.

To get there, we’ve embraced the idea that we can’t do it all ourselves – and that there are significant advantages to partnerships with others. In this way, we’ve been able to benefit from the agile expertise of third parties, while contributing our resources and experience. In two years, we’ve managed to transform ourselves from a traditional, systemic legacy bank to a bank with a leading position in innovation. We’re proof that the banks that will lead as disruptors are those that adopt a new “ecosystem” approach to banking services and technology development, rather than going it alone.

According to Capgemini’s World Retail Banking Report 2017, 91.3% of banks and 75.3% of FinTechs expect to partner with each other in the future. Open Banking, as its name suggests, is a great way to start. APIs can be a key enabler to ensure frictionless partner integration. They facilitate innovation by allowing third parties to build entirely new apps that can be combined with the bank’s products, services, data and processes. And that means that the bank will be able to expand its customer-facing touchpoints in a really efficient way.

Small fish, big pond: the case for outsourcing

Just now, I mentioned how we’d decided not to go it alone when we developed our Open Banking capability.

Larger banks can act as a one-stop shop for all financial services. It’s likely they’ll have the funds, staff, expertise, and transformation strategies to be able to pull off big digital transformations themselves.

Smaller banks must rely on their agility to be competitive against their larger, but slower-moving, rivals when it comes to implementing digital measures and rolling out new products. From being a one-stop shop for all financial service needs, these banks are consolidating their profitable ventures and partnering with third parties in areas of non-core competence.  Partnership allows banks to share risks across the new venture – often in places where their capacity is unproven – as well as achieving higher cost efficiencies. Of course, the key is always excellent execution and doing things right – but strategic partnerships are often the way to achieve this. And there are many advantages:

• Partnering can make for a much more agile development process
• In our case, we were able to start right away
• We could draw from a more skilled, better-incentivised market than we might have attracted with any local hiring initiative
• We’ve achieved faster time to market
• Partnering meant that in-house staff were able to focus on what they do best
• Digital and fintech partners are often those that are most up to date, having the edge and the drive for success.
• Outsourcing doesn’t mean you can never hire to create an in-house capability. It just means you can start sooner. Then, you can work out some aspects of your new capability, and bring it back in house if it looks like something you are going to want to have for the longer term.

For Hellenic Bank, the primary change has been the need to acknowledge that some of the best ideas can come from outside. Open Banking has allowed us to rethink what a bank should look like. That means we can also reimagine how it should work.

Having said that, it was the determination that followed to execute the digital strategy in a nimbler manner that led the bank down the Open Banking path. So instead of a general conversation about “should we?” regarding Open Banking, our conversation was the more constructive “how can we?”. A practical problem does much to focus the mind.

Now, as a troop of firm believers that the future of banking is ecosystem-based, Hellenic Bank is working to deliver true lifestyle banking to our customers – using the recently-launched live environment and integrated marketplace as a powerful tool to do it.