With this second episode of SME Banking Conversations with Olena Gryniuk, we are continuing the series of inspiring interviews on SME Banking, digital transformation, and people making the innovations happen in the industry! The recording of the second episode took place in April in Prague (The Czech Republic). Olena Grynuik – CEE Regional Director at SME Banking Club, interviewed Václav Mladěnka – Customer Identity Leader at Monet+, and the main ambassador of the mobile identity as a product in the CEE region. Olena Grynuik, together with Václav Mladěnka, discussed the usage of mobile channels, digital identity as a product, and Monet+ projects, and plans.
Listen to this conversation on our SoundCloud channel:
Olena Gryniuk: We are in your office in Prague, and I know you have several offices here in the Czech Republic. So please tell us more about Monet+, and how everything started. And also, what is your pass to Monet+?
Václav Mladěnka: Yeah. Monet+, we are a technology provider, located here in the Czech Republic, having operations in more than five cities in the Czech Republic with some other locations outside the Czech Republic, worldwide. But 90% of the people, the core team is located here. In terms of Monet+, we have two core domains that we’re focusing on: electronic payments and digital identity. These are core pillars that came with us now, for more than 20 years. So, we’re trying to focus on the core specialization that we have.
And I started working eight years ago, joining from KPMG local branch, which is a global consulting advisory firm, and also, I have some background in information technology and law. So that was my roots. So, information technologies are with me all my life.
OG: Okay. How big is the team at Monet+ now?
VM: The team itself, it’s probably about 250 professionals. Most of the team is around Research & Development, where we have a strong commitment on.
OG: How do you divide the responsibilities inside the team?
VM: Yeah. So apart from the Research & Development group, which is probably the core, we have some business roles and the back-office team. And we have quite a big team dedicated to operations and IT support, and services that we provide to our clients. So, this is the overall picture of Monet+. In terms of the organization of the work, we are organized around our products that we develop in-house and support the overall lifecycle, so, it’s more about some agile teams that work around it.
OG: So, Monet+ is specializing in customer digital identity, which is a hot solution as digital-first services became a new normal during and after the lockdowns, and customers expect online or mobile access to financial services. Have you seen a big increase in the demand from the banks’ side and, if, yes, to which extent?
VM: I think, covid overall has changed the way we work and interact, so I think that it has some, some impact especially in the companies, how they work internally. And in terms of client interaction, especially in banking, I think that was not so much because the banks already have been digitizing all their processes towards clients. So, what we’ve rather seen is, is that we are so much now in the online world! Mobile devices are with us every day and this is bringing something that we should think about because the customers are really 80% time being online on the mobile devices.
OG: Yes, we recently published an article about your implementation with Česká Spořitelna, with the data that the usage of the mobile channels by the customers really, is increasing year by year. What is your perspective on that?
VM: There is and from my perspective, there are two reasons for that. One is obviously that people are getting more and more used to the mobile channel and it’s so much easier and so much quicker. So that’s, that’s the first reason. And the second reason behind that is implementing additional functionalities and linking it out with the digital identity. We have the implementation that is enabling this solution to be open, also, with third parties. And we’ve seen that apart from financial transactions on the mobile, there is a significant level of non-financial transactions, and even just using the mobile app as a key to the third-party services like accessing insurance and government portals.
OG: Which challenges did banks face the most?
VM: It’s a tough question. I would say that from the bank perspective, it’s so much balancing between new things, innovation, new technologies, and new client expectations coming into and balancing it with some traditional approaches, with the regulatory and compliance they need to care of as well. So, leveraging this and usually being a robust organization, doing a change in terms of technology, it’s just a little piece. This is a whole bunch of things that they need to care of, which are their processes, their services, their clients. So, it’s not only about technology, I would say.
OG: Digital transformation is impossible without digital identity, right? And you are an ambassador of the mobile identity as the key to access to different digital processes. Can you tell us more about your approach to mobile identity as a product?
VM: Yeah, absolutely, I can. I mentioned that already. As we see more and more people interact using their mobile devices, so, we recognize that the mobile is a crucial part of today’s business. And we started with the mobile adoption seven years ago, it was being seen as a security token, which has less cost of the distribution to the clients and stuff like that. But what we see now, it’s as more and more applications are growing in the mobile world, they require a significant level of security. So, focusing more on mobile as a key, it’s important, but we have the solution really focusing on the flexible scenarios because each and every organization have different needs, probably most of them require securing the mobile application, but the scenarios and the use cases are somehow different. The approach is really to have the solution be flexible enough to support you as a customer with your specific needs.
OG: What is for you a winning digital customer experience, especially for business customers? Where is this balance between the smooth process and security? Because recently the strong customer authentication was implemented due to PSD2 requirements, and if previously you were entering login and password, now you’re entering login, password and code from SMS, which is becoming frustrating, it’s becoming more complicated than previously. So where is this balance between smoothness and security, which is important of course?
VM: Absolutely. Security is something that is a must because obviously there are threats that need to be reduced. But on the other hand, a very important thing is that we can, we need to make sure that we hide it as much as we can. We automate it, we hide it, make it invisible and make it work in the background. So, the banks and the clients have the feeling that they are safe and must be safe. But in the end, it’s not interrupting. And I think mobile devices have helped bring some big lessons to us on that.
OG: Do you have some examples of passwordless logins?
VM: Yeah. It’s something that I’m very happy about that we have some of the innovations and one of the examples, it’s enabling users to log into the internal banking application without typing a username or password, and having a QR code that you can simply scan, and using the mobile application with mobile token functionality, you can simply confirm it and it’s can be still done as PSD2 compliant solution with great user experience.
OG: How banks can monetize digital identity?
VM: I think, digital identity is very tight to security which is usually seen as a cost. But I think and from our experience, what makes a big difference is having a look at the identity and the digital identity as a product. Because first, you can change customer journeys which is bringing benefit to the client. Second, you can optimize the operations because having a digital identity as a dedicated product, you can take it out from the older business applications. So, on the business application level, you are focusing really on the business application, business logic, and value that you’re bringing, and the identity lives there as a standalone channel. And this opens new opportunities as well because once you have that split, you can even use digital identity with some third-party applications.
For example, you are a bank, and you have within the group your insurance company and you have some understanding, you have the client, so you can maybe enable the client simple click through to the insurance portal if they need some insurance or even enable strategic partnerships with other businesses. For example, there is a new business that requires digitally onboard clients. So, you can offer this as a service to the new businesses. And one of the greatest examples I’m very happy about is that you can also use the digital identity to log in to some governmental portals, which is so much helping in terms of e-government services.
OG: What does it take for a bank to implement digital identity?
VM: Well, digital identity, it’s not a straightforward task because one thing is technology. We have the solution ready that can be implemented very quickly. However, it’s changing the application. It’s about changing the applications; it’s about changing the processes. What we see very often is that banks do have the security layers very tight to the online channels. So that’s where some work needs to be done to have it really living its own life.
OG: What are your plans for this year?
VM: Well, the plans for this year? We have several areas where we continue to develop our products and the portfolio because we really see that the whole world is changing and that we need to make it flexible and future-proof. It needs to support past requirements, but we need to really have a look at the future, especially since some new regulations are coming like revised PSD2. There is ADAS with a second edition that will introduce some of the new opportunities and challenges for the organizations. So, these are things that we would like to focus on.
OG: Okay. Good luck with it, Václav! And thank you for this conversation!
VM: Thank you very much. A pleasure to have you here. Thank you.
Watch the conversation below: