Lack of innovative banking and lending options for small and medium enterprises is impacting their potential business growth – major UK banks need to react to these changing market needs and adapt to the rise of challenger banks
Providing technology strategy, operating model and sourcing insights for a new digital platform
A major UK bank wanted to take advantage of new opportunities brought about by a more competitive market and new open banking standards. The bank was starting up an innovative digital platform for small and medium-sized enterprises (SMEs), providing flexible access to all their financial information and enabling them to make data-based decisions to grow and operate their business. Mason Advisory was asked to provide strategic technology advice during the discovery phase of the programme.
Discovery was initiated to explore a completely greenfield approach to developing the platform, evaluating the different partners and options for each of the potential components. Our strategy and sourcing specialists worked with the bank to co-ordinate all technology-related activities required to complete the discovery phase of the programme.
Open banking regulation allows personal customers and small businesses to share their banking data securely with other banks and with third parties. This enabled our client to create a digital platform, which would allow SMEs to manage their accounts with multiple providers through a single mobile app – giving them more control of their funds (for example to avoid overdraft charges and manage cashflow) and allowing them to compare products based on their own requirements.
We worked with the bank’s innovation team and fintech partners to develop the new platform proposition and align it with the overarching IT strategy for business banking. We brought technology strategy development and operating model expertise into the team which we organised to work as an Agile-based start-up organisation.
The delivery team worked to allow experimentation/innovation early in the life cycle of the new proposition to deliver customer-centric services, and understand how to maximise business value and minimise service risk. To support this further, the proposition was co-created with business owners with extensive customer involvement from day one.
The value proposition included definition of feature components for accounting, cashflow, banking and lending capabilities which were prioritised into a Minimum Viable Product (MVP).
We supported the client in evaluating the different partners and options for each of the potential MVP components. Looking at the sourcing strategy and operating model, we determined the risks, benefits and costs of sourcing ‘best of breed’ products from multiple vendors versus multi-product single suppliers and/or internal resources. To increase speed to market, this included helping the bank explore the possibility of using other fintech and third-party solutions where it made sense by connecting to the platform via APIs.
We also worked with the programme team to define the business and technology criteria against which we would judge proposed solutions and providers. It needed to adopt a ‘mobile first’ approach so it could operate on the devices that owners use every day; use open standards and be able to connect with third parties; be agile, allowing a fast route to market but with continuous improvement built in; and modular, so it could be deployed internationally after being embedded in the UK.
To support the management of the environment, we also looked at service integration and how to produce a seamless end-to-end business service.
It was also crucial to assess the level of risk to new business services provision, of implementation and integration of new-build technology and processes, as well as addressing adherence to regulatory and compliance requirements.
In a complex environment with many external dependencies we helped the bank understand its requirements (how to achieve MVP); established a suitable technical reference architecture which defined the key components of the digital platform; and reviewed/analysed and prioritised component solutions and providers, leading to a successful launch.