I am very pleased to have Jasper in our Open Banking Interview series. Jasper works at de Volksbank. The ones who attended The Banking Scene conference in Brussels got to know the bank by Esther Stegman, with her presentation on Banking with a Human Touch.

Even the ones that didn’t see her on stage, could read the speech on Chris Skinners’ blog. She also talked about one particular this that I really wanted to discuss again in the Open Banking Interviews: “Because our clients must first opt for a main switch before they start sharing payment data with a third party in payments.”.

This and a lot more can be read in this interview.

Note: the interview was taken right before September 14th.

Part XIII of The Open Banking Interviews (see part XII, with Wajeeha H. Awadh, Al Baraka Banking Group).

For the ones that are not familiar with de Volksbank, could you please describe your different brands in The Netherlands?

de Volksbank is a multi-brand organization with one mission: banking with a human touch. We have brands in the Netherlands and together we represent the fourth largest bank in the market.

ASN bank is built around sustainability. Their role in society is banking in a socially responsible way, they take the lead in sustainable and ecological investment. All of ASN Bank’s loans and investments are to be net climate positive by 2030.

BLG Wonen is de Volksbanks’ mortgage-only brand. Their main social responsibility is helping people to own a home. They were founded around 1950 to give miners the chance to buy a house in the southern part of The Netherlands (which was a thriving coal-mining region at the time).

Regiobanks’ ambition is the quality of life in local communities and to have a local representation throughout the Netherlands. Regiobank has more than 500 intermediaries, all independent advisors in villages and small towns in the Netherlands, who provide the complete range of banking services, from current accounts, savings accounts to mortgages.

SNS is the oldest brand, founded in 1817 a no-nonsense, all services bank that focuses on financial resilience.

I saw you have a sandbox live since May 8th this year. Can we assume that de Volksbank is ready for PSD2?

Yes, we are ready, we are able to offer our API’s in September this year.

Ester Stegman’s presented earlier this year in May at the Banking Scene in the track Banking for Humanity, where she mentioned that privacy and social responsibility are very high on the PSD2 agenda as well. How did that translate into concrete propositions in the end? I remember the switch that you were planning to have, did that finally take off?

Yes, we built that switch for our current account customers. In this new world of PSD2, we want to make sure that each customer is aware of the consequences of sharing data. And moreover, we want to provide the peace of mind that our customer can simply and immediately switch off data sharing.

We’ve provided an opt-in with which people can share their current account data. After that opt-in, you go to a TPP where you agree via our bank on sharing data.

Suppose you’ve allowed 4 third parties to access your account and you want to withdraw your permission. In that case, you can simply push one button and all the access to your account will be blocked. This is an example of how we empower our customers to be more data resilient.

That is very interesting. I think it is really unique in Europe as well because I can imagine that most regulators are not so much in favor of it, but it does make sense.

Let us look a bit further in the future now. I see PSD2 more as a starting point for a whole new journey, the one of Open Banking which goes far beyond PSD2 and also beyond payments. I call it the journey to everywhere banking. How do you look at this and are we moving to a completely different way of banking?

Yeah, I agree on that, PSD2 is just the starting point. I think more products will follow, whether that is pushed by the regulator or by the market. Customers will be getting used to new (non-banking) features that are created by the rules and regulations of PSD2. That will likely create a similar demand with savings accounts etcetera.

If it is not the market, the European regulator may be developing and extending its rules on access to different accounts and services. So yes, PSD2 will be the start for a real market shift and a driver for revolution in the banking industry.

In this changing industry, our mission “banking with a human touch” and the 4 different social themes within each brand are very important. We see these 4 social themes as the fundament for future proof platforms, arranged around customer insights regarding products, services, features. These platforms are important drivers and input for “banking with a human touch”.

We want to sit in the driver’s seat and keep the relation with the client to allow us to strengthen our position in supporting financial resilience for example. We will keep creating features and functionalities on how to have all the insights around your daily financial life. The earlier mentioned switch is an example of that. It is also a USP if you compare it with our competitors.

Yes, I think that is very interesting and a relevant way of looking at it. We are living in a world of payments that is getting more and more invisible. As more solutions enter the market to take away the pain of paying I think banks have a big opportunity there to focus a bit more on the financial wellbeing of their customers. Providing tools to keep these customers in control of their consumption is one of the ways to do so. So I think these financial resilience projects make perfect sense.

Yes, absolutely.

What according to you is the biggest challenge in getting the organization to move to this new way of thinking about potential opportunities with third parties?

The new way of working started in fact in our Marketing and Sales department. We are in touch with customers, get the customers’ insights and describe what is needed to support our customers nowadays and in de future. With that, we go to our value streams within our organization for development.

All product and service lines are in a value stream to make all the functionalities around payments, savings accounts, mortgages etcetera … it is a generic habit to create and build all products and services ourselves. In an Open Banking environment, it is getting easier to decide whether to make or buy the required technology as an aggregator. As well as to determine on which part we add value on making product/services, or choose to buy and create more focus on CX and UX.

So we have to create that ‘marketplace’ in our omnichannel environment where you have a plug and play for every service you like to aggregate. In a multi-brand organization, you can differ on the degree of aggregation per brand, while taking into account our principle of ‘multi-brand single platform’ development to do it in an efficient manner. We are still in the process of changing the people’s minds in the organization to act as an aggregator.

Yes absolutely, especially given your regional oriented brands I can imagine that shifting from proper channels to providing access to third party channels from time to time is a completely different way of thinking and API management is completely new for new banks.

Yes, although one advantage that we have is that one of our brands, SNS, already experimented as a pure distributor of financial products. More than 10 years ago we started not only selling SNS mortgages but from our competitors as well.

Already for quite some time, we have the philosophy that good advice is not only product-related. At SNS, we start with good advice and based on that we choose the right mortgage for the customer. As a result, this can be also a mortgage of a competitor.

Well before PSD2, we already got a bit familiar with the concept of collaborating with third parties for core banking products. But of course, we have more brands and a whole organization that needs to get this philosophy engrained in their DNA.

Very interesting! Do I understand correctly that when you are not able to provide the most competitive prices for the production of mortgages, you switch to another provider to have competitive prices again?

To some extent yes. It is more than just pricing though, product features can make decisive choices too. During the appointment, we look at what is the real need of the customer. Does he want to move in 4 or 5 years? Do you expect to get a lot of money in the next couple of years? How easy is it to redeem your mortgage, … so what kind of product does the best fit?

All these questions give us a complete picture of the customer’s situation and based on that we go together with the customer for the best offer. That can be an SNS mortgage but that can be also other brands, in which we are the distributor and the intermediary asset bank for other mortgage products. That was quite innovative at the time and we’re still doing that today.

Step by step you see that as a bank we evolve more and more in becoming an aggregator and a distributor, PSD2 accelerates this movement. It is a part of the roadmap we already have.

In terms of next-level Open Banking, what do you see as key trends for 2020 and beyond when you look at consumers?

I think the number of competitors will grow. In the Netherlands, we have an oligopoly market. You will see NEW banking coming to the market and today not all those new entrants substantial differ from what incumbents provide.

At least a lot less different than what I expected it would be today. New entrants in Europe try to differentiate on price. But in the Netherlands, we have one of the lowest costs per current account in Europe (accounts at de Volksbank brands are between 1,65€-2,70€/month), so their pricing proposition does create much more value for the customer.

I expect real competition probably from companies like Bigtechs. That could really shake up the market, when they start creating new features and functionalities are combined from their own core competencies. They already know how to integrate banking services and how to make excellent UX.

By bringing together all the upcoming technologies that are currently trying to get more mature, a lot can happen. Think of cryptocurrencies for instance, as a new way of doing your transactions, 24/7 always, for free, open-source, really low cost for FX etcetera. I think when a combination of those kinds of technologies and parties come to the market we may experience a real shift of the way we bank.

In terms of next-level Open Banking, what do you see as key trends for 2020 and beyond when you look at SMEs? Do you see any differences compared to the situation for consumers?

I think the possibilities will be roughly the same. From an Open Banking perspective, it is easier to combine services. What we already see today is that banks more and more integrating with accounting applications, or with POS terminals, etc…

SME’s still pay very often per transaction. This will likely increase the number of competitors because of the business model and also new services through innovation, maybe at an even faster pace as well.

Also, keep in mind the consumer behavior always follows technology. It lags behind innovations. We do a lot of customer research on what they are looking for in terms of functionalities, what kind of parties to integrate with… We should not underestimate that there is a large part that is really traditional and skeptical to new parties entering the market.

Privacy is another important concern for these consumers. It is a hot topic in Europe and also in The Netherlands, always in a negative context. I think that the biggest challenge for Open Banking and the speed of the introduction of a successful Open Banking roll-out is determined by privacy topics.

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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