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Digital Business Building in an international retail bank

Challenge:

Traditional business models of European retail banks are under pressure. Since the financial crisis of 2008 most banks in Europe are struggling to regain growth. Changing customer behavior and needs, legacy technology, increasing regulatory requirements and low interest rates create a challenging environment. 
At the same time, FinTech start-ups challenge the incumbent banks in all areas of their business models – from payments to lending, savings and investments. Besides specialized startups like Adyen, Auxmoney, Raisin or Scalable Capital various neobanks such as N26, ATOM, Monzo, Bunq, Starling and others are rapidly increasing their customer base. Those banks rely upon a mobile first approach with focus on customer experience to acquire a young, attractive target group, define themselves as platforms rather than closed businesses and gain advantage through a massively lower cost base than incumbent banks. In that environment dgroup and Accenture were asked by a large European bank to help them shape the idea to build a new pan-European mobile first bank from scratch. 


 
Approach:

We helped the client end-to-end over the course of 1.5 years from the first description and validation of the idea, to the board descision, the blueprinting of the IT architecture and operating model, the formulation of the banking license to finally the setup of the company and the start of the MVP delivery. 

During the description and validation of the business model we focused on understanding the fundamental changes in the European retail banking market as well as the changing customer behaviors and needs in order to formulate a differentiating value proposition which solves real consumer pain points and quantifying the untapped value pools for the business case. Additionally, we supported the client in drafting the first IT architecture and evaluating different cloud-based core banking systems and front-end solutions. Finally, we helped the client to summarize all results in a board proposal that helped the program to get a go-decision to enter the following blueprinting phase.  
During the blueprinting we defined an internationally scalable IT architecture and implementation roadmap for the new bank including the integration into the risk, finance and compliance systems of the mother company. In parallel, we outlined a lean target operating model to run the new bank in the launch country. At the end of the blueprint phase we helped the client in the team ramp-up to start the MVP development. For the delivery we set up a nearshore delivery center with resources from product management and UX to development, testing and enterprise architecture. 
Throughout the whole program we were responsible for the overall program management.  

Key results:

Key to success of this project was an agile and lean approach that helped the client to iterate fast and take key decisions based on data-driven analyses to achieve the necessary confidence level.  With our support the client was able to get from first idea to a full blueprint of a new pan-European bank and the ramp-up of the company and building team within less than 12 months. 

Uly Wolters

Managing Director at dgroup

„The only way forward is to think for yourself. If something is best practice today, it will not help you build the business of tomorrow.“

Special Focus: Business Modelling, Company Building, Digitization of Business Processes

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