Rabobank was established in response to an agricultural revolution in the Netherlands. Now it’s focussed on meeting a financial one, says its Chief Digital Transformation Officer, Bart Leurs.
‘Fortune favours the brave‘ must be a mantra close to the heart of Bart Leurs. The man responsible for digital transformation at Dutch banking giant Rabobank knows only too well that courageous calls have to be made to stay ahead of an ever-more competitive industry.
Because, while Rabobank is committed to its roots as an agricultural co-operative founded in the late 1890s – it remains a global leader in financing the food and agriculture sectors as well as sustainable development – it is also determined to bring continual technical innovation to its near 9.5 million customers across 40 countries.
That means branching out beyond traditional banking operations and firmly grasping the nettle of opportunities offered by open banking. Only then, argues Leurs, will it be able to go toe-to-toe with challengers, including big tech.
In fact, rather than wilt under the pressure of technology companies now storming the market, he implores banks to hearten up. They have a distinct advantage, he says: the sheer scale of their incumbent customer base. Third-party services offered on their platforms have the immediate potential to be used by millions of people already accessing a bank‘s app for their transactional business. And the more tools a bank assimilates, the more traffic it drives over its app, making it ever-more attractive for further third-party providers to forge partnerships with the bank.
Rabobank has not only partnered with fintechs but has also created an omnibanking service for customers of other leading banks in the Netherlands, including ABN AMRO and ING. There is safety in those numbers.
“We have become an omnibank app in the Netherlands, but as Rabobank,” says Leurs. Neither is it just concerned with providing financial services over its app.
“There is a lot of interest from other players because we have around two million visitors per day. It is a great platform for others to use,” says Leurs. “For example, we are running the first test with Green Home, which is an organisation that helps you to make your home more sustainable, and we give it space in our app to help our customers do this.
“So, it doesn’t have anything to do with finance, it’s not banking, but it’s another service that is helping you as a customer. We see huge potential interest in this area because the bank’s app is just so popular.”
The bank is not solely relying on third-party providers to widen the gamut of services available over its app, though. Its in-house Moonshot accelerator development programme has a proven track record of successes, such as Tellow, an automated bookkeeping app for the self-employed, and account verification service SurePay.
After 15,000 of its own customers in the Netherlands signed up to Tellow, Rabobank spun off the service in 2018 to make it available to other banks. Meanwhile, SurePay has proved so successful in the Netherlands that it has also been spun out and is now being made available in the UK and other parts of Europe.
Another recent innovation has seen Rabobank’s digital development team working with Google on Google Assist, which has allowed customers to carry out basic banking through voice command, such as balance requests and alerts for spending limits. And last year, Rabobank was among a consortium of shareholders to invest €20million in Luxembourg-based mobile payment platform Payconiq, which provides an app for instore and online payments as well as P2P (person-to-person) payments using QR codes – a payment system that’s seen widespread adoption in Asia but which has, hitherto, been far less popular in Europe. With the might of the big banks behind it, that might change.
With an increasing number of Rabobank customers opting to do their banking digitally, which, even pre-pandemic was in excess of 75 per cent of them, Leurs says there is a real need for better solutions and, vitally, more consumer choice for mobile payments. It’s agnostic about who it works with, so long as that objective is met.
Explaining Rabobank’s approach, he says: “We have launched Apple Pay and we have stepped into Payconiq, an initiative started by ING to create P2P payments in the Dutch market as a competitor to Apple Pay and Google Pay, etc. That’s good, because it creates more opportunities for our clients.
“P2P is still a space that is not, I think, fleshed out. There are still many providers that want to play in this area and we, as banks, want to make sure clients are not only relying on the tech players for payments, P2P, online or in-app.”
Being a first mover, also means being brave enough to call a halt on projects if the market isn’t yet ready for the innovation it promises. One such example was the bank’s shelving of its cryptocurrency service Rabobit, developed by its Moonshot team, amid concern about the lack of a unified global legislative approach to cryptocurrencies. The bank nevertheless says valuable lessons were learned about designing blockchain and crypto applications, and it is keeping a weather eye on any regulatory changes that indicate the time is now right for such a solution.
For its business customers, which number around 800,000, Rabobank is investing in specific services to complement its existing Rabo eBusiness platform, which was developed in partnership with Norwegian digital trust provider Signicat.
“Tellow, the solution for small and medium-sized enterprises (SMEs) in the Netherlands, that came out of our own Moonshot campaign, is currently still standalone. But I see that also, in the end, being integrated into the app, so that an SME/self-employed person can do their bookkeeping from the banking app very simply. That again creates new interaction between clients and the bank,” says Leurs. “This is a major shift for our organisation. In the past, and it’s not so very long ago, most client interactions were in branches. Now, almost all the interaction is in the app, except for mortgages. We have two million visitors and about 100 million transactions per month, and we see an opportunity to build the app as a platform for different services for our clients, even if they’re not banking related.”
He is conscious that the world has changed dramatically in the past few months. “Our main priority now, during the COVID-19 crisis, is to support our customers in times of financial stress – technology and innovation prove to be very helpful in that respect. In a very short period of time, for instance, we transformed our digital SME lending platform Fundr to fully serve as a platform for bridging loans, enabling us to extend credit faster to businesses who needed it.”
Going forward, there are big questions for banks around open banking: about legacy banks’ business models and the consequences of brand sharing. Rabobank doesn’t pretend to have all the answers. “But we do see it creates opportunities,” says Leurs. “We’ve really looked at the challenges for clients, what we have that could fix them, and shaped all the innovation projects around them, connecting all that we do to the mission of the company, which is ‘Growing a Better World Together’.”