Digital Banking

Raiffeisen’s MD Talks Fintech And The Future Of Digital Banking

If the hype is to be believed, the fintech revolution is reshaping the fabric of the financial services industry.

Indeed, fintech companies such as Monzo and Revolut have gained some traction in both the United Kingdom, mature European markets, and the United States. Their growing customer bases and loyal followings are testaments to their ability to anticipate customers’ needs.

What’s more is that these companies are raising the bar for the banking industry as a whole, according to Felix Wenger, head of channel and distribution at Swiss-based Raiffeisen Bank, a cooperative of banks that has been in business since 1899.

“Between a sexy front end and ultra-convenient experiences, digital-only players have changed what customers expect from established banks,” Wenger told CMO by Adobe. 

Yet many traditional banks are holding their own, with their physical branches remaining an important customer touch point. Instead of staging a complete takeover, Wenger said he believes fintech companies are more likely to complement full-scale services offered by traditional institutions, giving customers more choice and flexibility in how they manage their finances.

That doesn't mean banks can rest on their laurels. These longtime players must make every effort to evolve if they want to stay in the game, Wenger said. 

Putting IT Front Of Mind

As Deloitte points out, Europe’s financial sector has weathered disruption before, including the rise of Internet banks in the late 1990s. However, the same article also makes the valid point that Internet banking was a supplier-driven phenomenon, whereas today’s digital revolution is driven by customers.

Regardless, fintechs are causing established players to take a good, hard look at themselves. Sleek interfaces, one-click convenience, and customer-centric branding have combined to reshape what people expect from their financial partners.

For established institutions, the biggest hurdle to keeping up with disruption may be legacy technology infrastructure. Many are working on upgrading monolithic systems that are back-end-heavy and unable to support the slick user experience today’s customers expect.

“My best friend in the business is my IT architect,” Wenger said. “Our biggest disadvantage compared with fintechs is that we come from highly segregated IT worlds. Working together with my IT lead, we’ve been able to incrementally clean up our architecture and front-end experience with each new solution.”  

At the core of Raiffeisen’s strategy is a single interface that serves both its own client advisers and its customers. This requires a great deal of integration and transparency between systems, in addition to robust analytics capabilities.

For Wenger, this represents a reversal from the bank’s traditional approach to IT, which involved custom-building technology to meet specific needs.

“Because we have a central infrastructure in place, we can make improvements and adapt to customer behavior quickly, rather than patching and starting from scratch every time we want to roll out a new service,” he said.

Keeping Things Fresh

But it is not enough to digitize services and make them more convenient. The success of challenger banks is also due to clever branding and beautiful content, which has helped them appeal to younger generations and to demystify finance.

Raiffeisen understands that its branding and user experience are more important than ever, and the company has committed to changing the look and feel of its applications every 18 to 30 months to keep them fresh. Again, this would not be possible without a more flexible front-end architecture. 


Felix Wenger
“Banking products are neither tangible nor engaging. The user experience is where you get to be sexy.”
Felix Wenger

“It’s the little things,” Wenger explained. “Take coaxial scrolling on mobile. Is it relevant? No. Does it create revenue? No. Is it a nice to have that delights customers? Absolutely.”

The mobile experience has been a major focus for Raiffeisen, since mobile banking now delivers the company’s highest conversion rate, at 8% to 12%. Wenger attributed this to the blending of Raiffeisen’s transaction environment with its web environment.

“In the old days, online was for marketing and real-life was for real banking. This is no longer the case, especially if you want to reach people on mobile,” he said.

Is The Takeover Coming?

It is difficult to predict how the fintech revolution will play out.

“Like any disruptive movement, there is little precedent for us to draw from,” Wenger said. “But that doesn’t mean we can sit still and hope for the best. Fintechs have some distinct advantages over traditional banks that force us to grow our risk appetite.”

While brands such as Uber, Airbnb, and Spotify have disrupted major industries, one could argue that these companies launched entirely new business models. In contrast, fintechs have mostly repackaged traditional banking and payments services into more convenient, user-friendly experiences, making it difficult for any one company to overthrow established players.

The bigger challenge, according to Deloitte, is not that a single challenger will rise up and dominate the market. It is that a combination of new services will erode the traditional banking ecosystem on multiple fronts. Under these conditions, fintechs and established banks may want to partner to marry the best of both worlds.  

So while a complete takeover of the banking sector may be unlikely in Wenger’s eyes, fintechs certainly have kicked off a major transformation across the industry. Done right, he believes there is potential for everyone–banks, digital platforms, and customers–to benefit.

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