Dutch software company Backbase supports banks on a global scale in enabling digital banking. Backbase offers banks a platform that in turn allows them to serve their own clients in a contemporary way. Leonore van Waaij is CFO at Backbase and a recent guest on the podcast series Leaders in Finance. In it she talks about Backbase's proposition, the biggest sub-trend within digitalization and about the future of the company.
The name Backbase already hints at where the company is positioning itself. At the back end, out of sight of consumers but at the same time fully in the foreground. Indeed, many of the services that allow bank customers today to easily do the work themselves are largely the work of Backbase.
Around 120 financial institutions worldwide use Backbase's services. These include some of the world's largest and best-known parties such as BNP Paribas, Goldman Sachs, Deutsche Bank and from the Netherlands ABN AMRO. By the way, these are not just well-known names; the client base also includes such parties as the Capital Bank of Jordan and the National Bank of Iraq.
Backbase's slogan reads "We help financials become loved by their customers. In this day and age, that boils down to providing excellence in digital accessibility. "In short, the business model comes down to selling licenses," says Leonore van Waaij, CFO of Backbase. "We do that as multi-year contracts to our customers. With that, we are building a customer portfolio in which there is more and more value for very many years and that also gives us the opportunity to use all those funds for our further growth."
Van Waaij explains that Backbase is a true software company. The company's core activities therefore involve everything to do with research and development. "More than half of our people are involved in that. We do much of that here, from Amsterdam. But there is also a large development center in Cardiff. And we use near shoring partners in Eastern Europe. All those teams work agile. So we have small squads in which each team works on a certain functionality or certain technology."
What Backbase is actually doing is creating a platform that allows Backbase's customers - the banks, that is - to serve their own customers digitally as well as possible again. A kind of droste effect. That platform lies like a blanket over the banks' core systems, making it possible, in their own words, to serve customers through all the banks' channels throughout the entire life cycle, from opening a bank account to taking out financial products.
Host Jeroen Broekema asks van Waaij if it is complicated to use such a platform in conjunction with the bank's IT systems, ranging from old to new. "IT is basically a solution to complicated problems. So with our platform, you can build integrations across all these different core systems - because a bank usually has not just one but a whole range of them - in order to ultimately be able to make sure on the front-end side, i.e. what the customer sees, that there is one and the same experience for the customer. So yes, it's complex, but our platform actually simplifies that for our customer, the bank."
After an implementation, Backbase remains involved in the operation. The product Backbase delivers is a standard product, but with the possibility of 'enhancements'. "Every customer, of course, has their own house style, certain functionalities that they find very important in their own distinctiveness. We can help them with the implementation, we can also train the people. A lot of big banks also have System Integrators in their suite of service providers and we help them too."
"We try to be there during that whole period so that in the end, of course, the customer wants to stay with us for the longer term, because such an investment is a very big budget, even for a bank. Throughout the life cycle, we have a Customer Success team that serves the customer in the best possible way."
Digitalization has now become so generalized that it can hardly be called a trend, rather commonplace. Within that development of digitalization, however, there are again sub-currents that are currently receiving extra attention from banks. "Everything is mobile-first at the moment. So is our product. Of course, you see that the Web is still necessary as well, but the mobile applications are leading. We also provide digital sales, which are all kinds of traditional processes that used to go through a form but now you want to digitize. In that, of course, all banks are also looking at, on the one hand, convenience for the customer, but also optimizing their own costs."
It has become customary in the episodes of Leaders in Finance for Broekema to present his guest with a teaser - and, incidentally, a pleaser - at the end of the episode. In this case, the teaser comes from Broekema himself. Would it be an idea for Backbase to set up a small bank of its own? Not to get in the way of its own customers, but simply to understand how banking customers think.
"Nice question! We have a mission to get 10% of the world's population on a Backbase-powered app and we do that through our customers, the banks. We do have mechanisms in place to collect a lot of feedback from our current customers, so that we can ultimately innovate it better."
That retrieval of information happens on the one hand through the sales side, where banks indicate what their needs are. On the other hand, a lot of data comes in from the implementation side. In addition, there are research and consulting firms that regularly publish what is 'hot' and what is 'not'. "I think the feedback we pick up there is relevant enough for us to keep innovating our product continuously. In addition, I think we also help precisely the smaller banks that do not have that knowledge themselves by showing what is possible on a wider range. So I don't think we need to play the bank itself in order to improve," Van Waaij concludes.
