How Alior Bank Excels in Product Design

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How Alior Bank excels in product design July 2019 A global non-profit organization, established in 1971 by banks and insurance companies, Efma facilitates networking between decision-makers. It provides quality insights to help banks and insurance companies make the right decisions to foster innovation and drive their transformation.

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2 How Alior Bank excels in product design FOREWORD

A true innovator

At Efma, we firmly believe that it is important to learn from the best practices across our industry. It is for this reason that we are delighted to share this new collection, compiled exclusively for our members.

Alior Bank is an Efma member that has always impressed us for its ability to innovate and create new products that fit well with customers’ needs. Many companies operating in the digital space like to consider themselves ‘disruptors’ – but in the case of Alior Bank, this description is an accurate one.

As the first start-up bank in Poland, Alior has been able to implement a range of 21st-century technologies, unhampered by legacy systems. This means that it is already seeing the benefits of solutions that use blockchain, roboadvisory, open banking and AI as well as biometry to serve its customer base.

Alior is also proof that newcomer status need not be a hindrance to ambition. The bank has built up assets valued at 71.4 billion PLN and has already taken seventh place in the country’s banking sector as of September 2018.

Fast growth brings many challenges when it comes to managing relationships with booming numbers of customers. In the interviews in this publication, several of the most senior figures in the bank describe how they are tackling the multifaceted demands of attracting and keeping the loyalty of its four million-plus customer base, including more than 180,000 small businesses. They trace the journey the bank has taken so far, covering aspects such as product management, fintech, retail banking and innovation, and give insights into the bank’s strategy for the future.

Since 2014 Alior Bank shares have been included in the WIG20 index, which comprises the largest companies listed on the Warsaw Stock Exchange. The bank has received nominations at the Efma Accenture DMI Awards almost every year since inception. In 2018, the bank won a gold award at the Efma Accenture DMI Awards 2018 with its Konto Jake Osobiste (Highly Personal Account) product in the ‘Offering Innovation’ category. For all these reasons, we consider the bank a champion. We hope you enjoy its remarkable story.

The bank has built up assets valued at 71.4 billion PLN and has already taken seventh Vincent Bastid place in the country’s CEO, Efma banking sector

3 Content

PRESENTATIONS 05 | Alior Bank: the digital disruptor from Poland 06 | Five innovative products that wowed us 08 | Highly Personal Account: a very personal strategy

4 How Alior Bank excels in product design PRESENTATIONS

Alior Bank: The digital disruptor from Poland

As the first start-up bank in Poland, RBL_LAB, which is one of the most advanced Alior Bank has a natural affinity for laboratories in Poland for working on innovation and trend-setting in digital solutions. online banking. In order to find the best solutions, the RBL_LAB involves the customer in its work. This focus on Alior Bank may be a relatively new player cooperative partnerships can also be seen in in the Polish financial services sector, but its the bank’s investment in many joint projects with ambitions are by no means small. With assets startups. With the VoicePin it has successfully valued at 71.4 billion PLN, it is one of the most introduced Dronn, an artificial intelligence that dynamically growing banks in Poland and was supports a range of fuctions such as monitoring ranked at seventh place in the country’s banking of risk processes, current account closing sector in September 2018. processes and sending of letters. Recently, the bank invested in PayPo, a startup that offers The bank has more than four million customers, deferred payments for online purchases. including more than 180,000 small businesses and companies. Since 2014 Alior Bank shares The energy and drive with which Alior Bank is have been included in the WIG20 index, which transforming the Polish banking sector has not comprises the largest companies listed on the gone unnoticed by the wider business world. In Warsaw Stock Exchange. 2018 the bank was awarded first place in the ‘Business Friendly Bank’ ranking by Forbes. It One of the core features of this young was also elected as Newsweek’s ‘Friendly Bank’ bank’s success in these demanding markets and as Global Finance’s ‘Best Bank in Poland’. is its strategy of combining the principles of In addition, it won a special award in the traditional banking with innovative solutions. ‘Innovative Banks’ category in a ranking of the This allows the bank to systematically strengthen 50 largest banks in Poland and was also its market position and set new directions for named ‘IT Leader’. the development of the Polish banking sector. The results of this strategy are powerful: it has introduced the first online bank (Alior Sync) and online currency exchange platform (Kantor Walutowy) and has also implemented video verification for the current account The bank already opening process. uses blockchain, Thanks to agile IT, new solutions are roboadvisory, open implemented quickly and efficiently. The bank already uses blockchain, roboadvisory, open banking and AI as well banking and AI as well as biometry. Recently, it provided new functionalities based on biometric as biometry identification for mobile applications, making activities such as logging in and payment authorization in the application even simpler and more convenient.

In September 2018, Alior Bank opened RBL, a unique place that supports the development of innovations. A crucial part of this space is

5 Five innovative products that wowed us

At Efma, we think that Alior Bank Alior Sync’s uncomplicated offer features excels in product design and the bank integration with Facebook and the first banking continues to impress us year after integration with Pay Pal. Its excellent customer support and additional functionalities have year. Here are the some of the bank’s attracted more than a quarter of a million innovations that have particularly customers already. attracted our attention Dronn Agent (2015) Alior Sync (2012) Taking advantage of the growing demand for Virtual bank Alior Sync was set up to offer virtual agents in the retail banking environment, an alternative to traditional ‘brick-and-mortar’ Dronn Agent, which was launched in 2015, is banking. Services are available online and via designed to respond quickly and consistently to mobile banking, with a fully virtual branch and customers and interactively guide them through a social media interactivity. personalized conversation.

Based on the concept, ‘Be where the banking Using a combination of artificial intelligence, clients are’, Alior Sync aims to redefine the natural language processing, automatic voice traditional meaning of banking for the virtual recognition, semantic analysis and speech world. In setting up the product, clients’ synthesis, Dronn Agent interacts with customers suggestions and Alior Bank employees’ in a natural conversational style. It is equipped observations were supported by external to understand customers’ answers, navigate the studies analyzing the financial needs of the conversation and respond appropriately. young generation. A crowdsourcing campaign attracted 920 ideas from internet users, the best The decision to launch Dronn was taken in of which gained more than 46,000 ‘likes’. response to a need to improve remote customer

6 How Alior Bank excels in product design service and the quality of several processes in Money is received in the account within the bank, while delivering cost optimization. 10 minutes – and that includes submitting In the Dronn system, contact center agents are the application, receipt of binding offers, replaced by a virtual advisor, enabling fully confirmation of identity and signing the contract. automated customer service and reducing the The entire process is 100% supported online cost of routine enquiries. with customer-oriented UX and process design. The customer chooses from real, binding offers The solution can be used simultaneously in onscreen which are tailored according to their multiple channels and it uses biometrical voice credit score. The agreement is signed via SMS authentication, allowing call center agents to and the money is transferred to focus on customer service without having to their account immediately. handle identification procedures. By the end of 2018, Bancovo had 15 loan Zafirmowani (2016) providers onboard. SME loans and online According to recent figures from the Polish mortgages will be added in 2019. Central Statistical Office, 90% of all Polish companies are small and medium-sized enterprises. To serve this market, Alior devised the Zafirmowani portal, which is a powerful web platform designed to provide Alior’s business customers with targeted tools, resources and Today’s millennials knowledge. The idea is to offer business owners don’t do banking in one neat package, enriched with an intuitive interface. The online portal is available anytime the same way as their and anywhere the customer needs it. parents did at their age. A comprehensive accounting application allows They want access to Alior’s business clients to automatically analyze revenues and expenses, manage and track state-of-the-art banking sales and purchases, prepare invoices and tax declarations, keep records of contractors and features and chat services offered and calculate financial results. options while on the go The portal offers useful community features, which enable users to promote their companies and products and connect with new business partners. It also contains a digital knowledge base of documents for quick preparation of contracts and agreements.

Bancovo (2018) Online consumer loans aggregator Bancovo.pl is the first financial marketplace in Poland where customers can ‘buy’ cash loans structured in a way that suits their needs.

The business idea for Bancovo arose in response to consumer insight regarding reluctance to visit several banks to get offers which are then difficult to compare. The solution offers one ‘truly digital’ place to access all available offers at once.

7 Highly Personal Account: A very personal strategy

In the competitive Polish current features and functionalities related to personal account market, banks have to accounts were verified and those identified as innovate to stand out. Alior Bank’s most attractive were selected. Highly Personal Account raises the bar with its flexible benefits.

In Poland, banking services are highly Winning with choice developed, routinely offering customers low Holders of the Highly Personal Account can choose prices and new payment methods. To compete from a menu of benefits, including: successfully in this market, banks need to be very creative, while at the same time keeping • free withdrawals from ATMs in Poland commission as low as possible. • a package of free instant transfers • a higher interest rate on a savings account This is the context for Alior Bank’s decision to • an interest-free overdraft for 10 days introduce its Highly Personal Account, which is • refunds for contactless payments via telephone kickstarting a new trend of customization (using Android Pay, Apple Pay, HCE technology in finances. and BLIK services) • participation in the Mastercard Priceless Specials The Highly Personal Account is a unique loyalty program, allowing customers to collect product with the ability to match benefits and points and exchange them for prizes, as well as functionalities to customers’ current needs in travel insurance abroad and emergency assistance any channel and at any time. Benefits can be package covering car, medical and freely changed through the new online banking home insurance. platform and mobile application or at any Alior • a package of free SMS notifications (this benefit Bank branch. Speed is of the essence in this was introduced at customers’ request). process, with most benefits available The implementation of the account perfectly within 24 hours. matches the new customer-oriented strategy of Alior Bank, which is based on behavioural Flexibility is key to the appeal of the account, segmentation. The bank continues to develop with benefits tailored to the needs and personalized products, starting with an account for expectations of customers so that they can use business customers. them whenever the need arises, choosing the number and configuration that best fits their specific requirements, including travel abroad, quick access to money, low costs, the potential to win prizes, and enhanced security.

The Highly Personal Account was created based on behavioral segmentation and extensive opinion polls, which showed what customers expect from the bank in relation to their personal account. The list of benefits was developed jointly with customers during quantitative and qualitative research, within which 30 different

8 How Alior Bank excels in product design INTERVIEWS

A winning formula

That sounds like quite a journey already. Could you describe the key elements characterizing the innovation development process, in terms of time-to-market, process steps and timeline? We started conducting multilevel research (opinion polls, focus groups, quantity surveys) in February 2017. Simultaneously, we were constantly conducting feasibility studies of developing ideas. By the beginning of April the concept was finalized and we could move to the development phase, which took us three and a half months.

While the IT team was working, we were Launching any new banking product preparing legislation, marketing materials and carries risks along with rewards, workshops for our sales and call center. A especially one that breaks with month-long testing phase started in August and convention. Ewelina Gulbinowicz, we launched the Highly Personal Account in Brand Manager, and Marek Meluch, the beginning of September 2017. The test went Product Manager in Daily Banking well, so we decided not to conduct a pilot and instead go live straightaway. Division, explain how the Highly Personal Account was born and how What were the main challenges you faced the Alior Bank team overcame diverse in the go-live phase – and were there any challenges to bring it to market. unexpected issues that arose from the accelerated development timeline? How was the Highly Personal Account born When the Highly Personal Account project was – what were the key innovation drivers, launched, Alior Bank was in a breakthrough in terms of the needs addressed by the moment – just after a big merger, with a new initiative and the reasons for its launch? strategy announced and on the threshold of a Given that Alior Bank started 10 years ago new online banking implementation. Therefore in as a market disruptor with a very innovative addition to the typical challenges experienced current account, we wanted to continue this while launching a new product, such as very tradition. We had recently finished preparing big and complicated IT development and a very complex behavioral segmentation, strict deadlines, we had to face more peculiar which became a foundation of the new Alior challenges. These included merging teams from Bank strategy. We decided to focus on five two different organizations and implementing a prospective profitable groups of customers and benefit platform into an online banking system to create a new current account tailored for their which had not been launched yet. needs. The problem was that the requirements of these groups were quite different, and we wanted to simplify our offer at the same time. Therefore, we decided to make one account that would fit the needs of every customer.

9 How is the project organized in terms of What’s coming next for the Highly Personal the number of people and capabilities Account? Are you planning involved, the supporting partners further developments? and vendors? The Highly Personal Account changed our Implementing the Highly Personal Account approach and we have already launched a new involved bank resources in various areas such account for business. We also constantly monitor as IT, product, marketing and online banking the performance of the Highly Personal Account, departments. The introduction of a completely especially when it comes to benefits. We already new functionality of benefits management launched an additional benefit (a free SMS required constant cooperation with suppliers notifications package) as a response to customer of Alior Bank’s mobile and internet banking. requests, bringing the total number of benefits The design of the product and the availability offered to 10. The account is very flexible and of external services, such as insurance and gives us a great space for development. We do loyalty programs, required the implementation of have some new projects in the pipeline and will appropriate processes with our partners. announce the details in due course.

Please tell us about the results you have achieved so far in terms of qualitative and quantitative success metrics. The Highly Personal Most importantly, Alior Bank is on track in terms Account represents almost of sales and profitability of current accounts. An interesting aspect is the product’s share in sales. 70% of the bank’s current Our bank also offers a current account without account sales with a much a monthly fee. However, despite the common belief that customers are guided only by price, higher primary banking the Highly Personal Account represents almost 70% of the bank’s current account sales with a ratio and customer much higher primary banking ratio and customer activation levels activation levels.

10 How Alior Bank excels in product design Bringing a new account to life

Project managers Jolanta Marciniec Another challenge was to organize the and Małgorzata Pioskowik explain the work and lead the project throughout each challenges involved in implementing development phase. Following a merger, we had to deal with two different project management and launching the Highly methodologies – part of the team was Personal Account. accustomed to working in a classic way, while the other preferred to work in an agile manner. The main challenge in this process was to meet In order to efficiently coordinate the project, we the business requirements. The Highly Personal had to implement totally new procedures and to Account structure allows customers to change find a lot of innovative solutions. their products easily. This in turn required the implementation of flexible mechanisms to prepare for further development in the future.

We wanted to keep the possibility of changing the product in future by adding or modifying benefits if necessary. As a result, we had to build a new platform and implement not one, but ten products.

11 Finding the right words

We chose the contrast between cash withdrawals at home and abroad as the theme of the campaign. It was a simple, popular and desired account feature and at the same time the most extreme way to present the change in the customer’s financial needs. It also showed the bank as taking care of the customer, even in the most remote parts of the world.

The campaign’s backbone was based on building a prospective interest in the account and an innovative offer was communicated in a simple and clear way. The multichannel approach explored all the other features without burning out the budget. The digital follow-up to Alior Bank’s marketing department the campaign was delivered through messages was spoilt for choice when picking a in short formats and was adjusted to the context of financial needs, while at the same time focus to communicating the benefits presenting all the benefits of the account. of the Highly Personal Account to customers, says head of Marketing, Michał Wójcik The campaign’s What were the main challenges you faced in the promotion of the Highly backbone was based on Personal Account? building a prospective The key challenge was to explain the new functionality of the account, its multiple benefits interest in the account and possibilities – for example, the fact that in just one day it can be adjusted to the actual and an innovative offer needs of the customer. On the one hand, simply was communicated in a talking about the adjustment was too generic and there was a risk of overusing marketing simple and clear way jargon. On the other hand, talking about all the features of the account, especially from the deeper insight perspective, was too complex, missing the one, spot-on idea and impossible to handle in a single campaign budget.

What was your marketing strategy for the account? Having started off with a long, highly differentiated list of the potential benefits, we decided to put one feature to the forefront of the campaign. It was the key ‘reason to believe’ and a tangible proof that made the universal message about the account’s elasticity and adjustability more ‘juicy’ and unique.

12 How Alior Bank excels in product design Changing minds, one innovation at a time

our innovation toolkit and to do this, we must demonstrate all the benefits in action.

On the one hand, it is a continuous education program to equip teams with the innovation toolkit, while keeping the organization up-to- date on trends in designing products. On the other hand, we build robust programs to identify, engage and develop talented people, to play an ‘innovation black belt’ role and create islands of innovation across geographically and functionally dispersed units.

We run the seven-week RBL_SPARKS program to teach our talented people how to use design In his role as Chief Innovation Officer thinking and research tools in products design at Alior Bank, Andrzej Dominiak leads and to practise them in individually driven projects, allowing them to use mentors from a team that pushes the boundaries of our Innovation Center and attend project-led what banking can do for customers. innovation teams. We’ve created the RBL_BRAIN He tells us about the challenges and crowdsourcing platform, where all employees rewards of his job. can submit their ideas for defined challenges. RBL_BRAIN is a perfect way to engage a group What is your role at Alior Bank? to collaborate around generating ideas and I lead a great team in Innovation Center at Alior create new value propositions for projects of Bank – it’s an entirely new concept, established all sizes. It is a made-to-measure platform that in January 2018 to support and encompass can be navigated in line with the end-to-end all innovative projects in the bank, putting the innovation process, by professionals from the customer at the center of explorations of ideas. Innovation Center. Our role is to ensure that designed solutions will meet established customer expectations We hear a lot about customer-centricity. on usability, precisely meeting their needs. How do you integrate your customers into In parallel, we keep an eye on the value the innovation process? proposition and efficiency of the business case. Banking is all about service – and service is all about the customer. Positive changes are What are the biggest challenges you face recognized by customers. We aim to release in your innovation process? products and services that meet customers’ The challenge right now is to apply tools and needs and make daily banking more natural capabilities at scale, to all projects where and comfortable, creating a real difference. they can be used to bring real benefits for To make this happen, we need a genuine the business. It is human nature that people understanding of the customer, beyond just an are used to their ways of getting things done. empirical analysis. In practice we accomplish Our day-to-day task is to convince them to use it through an application of methods and tools

13 that enable the designer to slip into customers’ What do you believe will be the most shoes, understand their needs, quickly prototype, critical innovation in banking in the verify the usability of a new concept by customer next five years? insight and evaluate it for UX/UI. Concerning technologies, the most significant impacts will come from Open APIs, AI, cloud, To follow the ‘think before you act’ rule, we mobility, and advanced data analytics, but we use design thinking methodology as part of our believe it is not the technology that will make innovation management process. By means of the real difference. workshops and interviews, our experts create prototypes which are later validated with Think about two banks right next to each other, customers and refined regarding both the value each selling precisely the same checking proposition and the UX/UI, if necessary. account at the same price. Each has modern internet and mobile banking with fancy features. We also have the very modern RBL_LAB, The most essential innovations will be those which is equipped with high-end tools that that will make a customer walk into one of support the research team to explore new them and not the other. It doesn’t have to be a opportunities, hand-in-hand with customers. modern technology – even the most advanced Verification with users provides us with practical technology sooner or later will be implemented recommendations on how to build services. across the market. It has to be the best-in-class user experience backed by the technology. In Q4 2018, we completed ten complex UX research projects in which more than 100 I’ll give you an example. There are clients customers were invited to participate. Our who are used to interacting with their bank findings and recommendations have already via traditional branches because they have been included in products and services a banker whom they have known for years; used by customers. someone they trust, someone to whom they don’t need to explain their needs. What if we

14 How Alior Bank excels in product design move this kind of service to the digital space, so whenever customers log into their internet banking they feel like we know them and have served them for years? To make this happen, we need to present contextualized offers and send tailored messages by using advanced analytics and AI/machine learning. The technology is a secondary thing – the most important aspect is a well-executed idea on how to ensure a positive banking experience.

What is the biggest impediment to innovation in your working life and what are you doing to try to reduce the impact of this barrier? The most significant barrier we are facing now is that at the current scale of operation it’s hard to maintain the pace and quality of new projects. Alior is currently pursuing a very ambitious strategy which assumes the bank will be at the forefront of a digital revolution. We plan to invest We aim to release PLN 100 M each year in IT and innovation in key development areas, to be a market products and services leader for change. To make it happen, we are that meet customers’ implementing an IT development methodology as well as an innovation management model. needs and make daily

However, even the best strategy, well-defined banking more natural goals, modern methods of working, and and comfortable, availability of all the required resources cannot lead to success without a culture of innovation. creating a real difference We want to create and nurture a culture that fights traditional thinking, goes beyond silos and challenges existing products, services and processes. This requires engagement from the whole bank. Building an innovative culture is a long-term process that involves much effort because we have to change people’s mindsets, and this is not an easy thing to do.

We are fortunate in that we have undertaken many initiatives already that will enable us to achieve this goal. For example, RBL_SPARKS creates new leaders of innovations, changes the way people think and inspires people to start new projects from a different angle to execute effective solutions. As mentioned before, we’ve also launched a crowdsourcing portal where all employees can submit their ideas, to promote a self-challenging attitude and involve as many people as possible. All of these projects and activities have their part to play in reaching our long-term goals.

15 Building the fintech startup ecosystem

We are working towards this goal with several initiatives, most recently our comprehensive acceleration program, RBL_START. We also act as an investor for chosen startups using our CVC vehicle, RBL_VC; we’ve built an API sandbox, a dedicated Open Banking test environment for partners; and we build fintechs and independent companies ourselves.

What does the fintech team look like? We have more than 20 experts divided into four separate streams responsible for different areas of cooperation with external partners. In addition, we have a New Financial Technologies Development of a fintech partner Competence Center, which explores technology environment is one of the pillars trends such as blockchain and AI. In all of of Alior Bank’s ‘Digital Disruptor’ the department’s activities, we ensure that the strategy. Head of fintech Daniel solutions we are finding and working on support the current business needs of the bank and Daszkiewicz outlines the bank’s its customers. ambition to become a patron for startups and an active participant in How are you scouting for startups? the fintech startup ecosystem. Alior has been actively involved in the creation of the startup ecosystem for many years. We What role do startups play in Alior Bank’s have established many partnerships in Poland digital transformation? and abroad that allow us to look globally Efma’s latest Innovation in Retail Banking Report for potential partners. Apart from that, we states that in the next four years, nearly 50% of are present at important conferences, where customer interactions will move beyond bank- we talk directly to startups. In addition to our owned channels to channels managed by third accelerator, RBL_START, we partner with parties. We see several benefits that we can hackathons, university projects and foundations achieve in this process thanks to cooperation. developing future entrepreneurs and are present Startups are now the change engines of the in media targeted at startups. world and we believe that partnerships will allow us to create value for our clients. How do you chose the startups you work with? What is the role of the bank’s To ensure that a new concept or idea will help us fintech department? to achieve this purpose, we precisely determine By tapping into the external ecosystem, the the scale of potential benefits for both the bank fintech department is leading the bank’s digital and the startup. The selection process involves transformation. This involves searching for a series of meetings with Alior’s representatives, fintechs and startups to cooperate with and who assess the startups, taking into account initiating partnerships with those that best suit the current business needs of their units. We the bank’s strategy. The objective is to establish also pay particular attention to the founders’ cooperation with 20 companies by 2020 and to experience and readiness to work with the bank. make the bank the partner of choice for fintechs in Europe.

16 How Alior Bank excels in product design Can you tell us about a product or service international market and established valuable you created with a startup? business contacts. They also participated in The most successful project that Alior Bank has a Demo Day where each startup had the implemented with a startup so far is Dronn, opportunity to showcase their solutions in front of which is an AI agent that is designed to invited guests and potential investors. consistently respond to customers and guide them through personalized conversations. It What type of benefits can third party was implemented in 2015 with VoicePIN, a partners realize by working with young, innovative company from Krakow. Dronn Alior Bank? allows the bank to reduce the cost of serving Alior launched its operations 10 years ago and individual cases versus campaigns conducted by already, we are ranked seventh as a bank in contact center agents. The solution won several terms of assets and sixth in terms of our client international awards for innovative projects, base. Despite dynamically growing the size of including the EfmaDMI Awards in 2016. the company, we maintain the startup spirit and ability to move faster than the rest of the market. How do your acceleration programs fit into Partnership with us enables startups to quickly your fintech strategy? develop and scale their products. Our acceleration program, RBL_START, is a platform for cooperation between the bank The first edition of RBL_START gave participants and startups. The first edition of the 15-week a comprehensive set of tools aimed at program, which ended in December 2018, growing their business. During dedicated was addressed to startups all over the world to workshop sessions, startups had a chance to identify innovative projects, mainly in the open meet representatives of all program partners. banking area. Eight startups from over 100 Additionally, the bank provided participants companies registered and received support from with access to API Sandbox, a special test experienced mentors at the bank and program environment to display services related to the partners, including major insurance company PSD2 directive. We analyzed selected projects PZU, Warsaw Stock Exchange, well-known from a regulatory perspective and validated Polish accelerator Huge Thing, Mastercard, IBM, selected ideas with Alior’s clients. We can also Google Cloud, AWS and Microsoft. act as an investor in selected companies.

So far the program has resulted in Alior’s All these activities are aimed at providing cooperation with one of the participants, PayPo, startups with the necessary knowledge and offering a deferred payment service which enabling verification of their concepts in enables clients to shop online and pay later. practice. The idea is to help them to establish The bank has invested PLN 4M (EUR 1M) in the valuable business relationships and develop startup for further growth, expansion and joint projects in line with the bank’s strategy. projects. Alior Bank and PZU are also analyzing pilot projects with selected participants. What events are you organizing around During dedicated innovation and startups? We support, participate in and organize events workshop sessions, for fintechs and startup and attend many events both in Poland and abroad. In cooperation startups had a chance with Warsaw Stock Exchange, we organized to meet representatives an Investment Day, designed to connect entrepreneurial startups with potential investors. of all program partners

Participants in our acceleration program enjoyed dedicated events like London Bootcamp, which introduced them to the specifics of the

17 Driving retail banking success

Product design excellence Alior’s status as a digital start-up means it is able to implement truly disruptive solutions without the difficulties faced by banks using legacy systems. This has allowed it to pioneer new retail banking products using blockchain, roboadvisory, open banking and AI as well as biometry.

Digitalization and automation are major areas of investment for the bank and there are encouraging developments in both of these areas of activity. “The bank has made good progress with the implementation of its Fabryka Robotów (Robot Factory) digitalization project, with 70 robotized processes already Alior Bank’s expertise in innovation implemented,” says Bachta. “In addition, and product design is at the heart of preliminary credit verification for external its retail banking strategy that puts the channels has been automated. In telephone sales, this has enabled the remote signing of customer first. 96% of loan agreements with individual customers.” In 2018 Alior Bank marked a significant milestone as it celebrated its tenth anniversary In 2018 the bank provided its customers with as the first start-up bank in Poland and a leader biometric identification and also developed a in banking innovation. With a record net profit blockchain-based platform which was launched of PLN 713 M and total assets of over PLN 73 in June 2019. It enables customers to verify billion, the bank is among the ten largest in the authenticity of official documents they Poland and is continuing to implement its ‘Digital receive using the public Ethereum blockchain Disruptor’ strategy that has proved so platform. “We were among the first banks in successful to date. Poland to perceive the potential of applying the technology,” explains Bachta. “Right from The development of long-term relationships the beginning we joined the Blockchain and with its more than four million customers is New Technology Chamber and we have been crucial to the bank’s success. “We acquired actively supporting initiatives in the area.” almost 250,000 customers just in 2018,” says Krzysztof Bachta, President of the Management Board of Alior Bank. “This proves that we respond precisely to our customers’ needs in our core segments. The Konto Jakze Osobiste The challenge right now (Highly Personal Account) attracted almost 35,000 customers in the fourth quarter alone, is to apply tools and representing a satisfactory eight per cent growth capabilities at scale, to in the sale of a key product for us.” all projects where they can be used to bring real benefits for the business

18 How Alior Bank excels in product design Thanks to the bank’s agile IT infrastructure, it is customers to change their products easily. The able to implement new solutions quickly and result of extensive multilevel research into various efficiently. This has given rise to products such customer groups, it is designed to meet the as virtual bank Alior Sync (2012), which offered needs of all modern customers. services online and via mobile banking, with a fully virtual branch and social media interactivity. Future developments in the retail banking The bank partnered with T-Mobile on the Usługi segment at Alior Bank will benefit from RBL_, the Bankowe dostarczane przez Alior Bank initiative bank’s innovation lab, which was established in May 2014. The strategic alliance between the in 2018 to ensure that designed solutions meet two companies continues, with T-Mobile offering established customer expectations on usability, products based on Alior Sync solutions. precisely meeting their needs.

Meanwhile, Dronn Agent (2015) leverages the “The challenge right now is to apply tools growing demand for virtual agents in the retail and capabilities at scale, to all projects where banking environment, with the aim of responding they can be used to bring real benefits for quickly and consistently to customers and the business,” says Daniel Daszkiewicz, Chief interactively guide them through a Innovation Officer at Alior Bank. “On the one personalized conversation. hand we build long term relationships with FinTechs and InsurTechs through accelerator Online consumer loans aggregator Bancovo programmes, scouting and our venture capital (2018) made headlines by becoming the first fund, which invests into high-performing start-ups. financial marketplace in Poland where customers On the other hand, there is also a continuous can ‘buy’ cash loans structured in a way that education programme to equip teams with suits their needs. The solution offers a single the innovation toolkit, while keeping the place from which customers can access all organization up-to-date on trends in designing available offers without having to shop around. products.” The bank has numerous tools available to enable this transformative thinking Alior’s Highly Personal Account, which now that leads to innovative products, including represents almost 70% of the bank’s current crowdsourcing platforms or account sales, is another example of its mentoring programmes. leadership in the consumer banking field. The account is personalized and flexible, allowing

19 #EfmaInno19

Transforming ideas into turnover Speakers from these leadings banks, among We have asked the winners of the world’s best others, will join Innovation Summit: innovations in banking to come on stage to present not only the innovation itself, but also how they implement it, how it has been integrated into their business lines and platforms, what difficulties they have encountered and how they track performance, including the real impact on the bank’s business. Innovation is here to stay: it’s not only about marketing and perception. Innovation has a great impact on profit, driving business growth. The summit brings together bankers who are interested in leveraging technology and innovation for growth. Key transformation themes to be addressed What are the latest innovation trends and which technologies are the most used by banks and for what purpose? What are banks’ strategies for using innovation to grow business and what are their key achievements in this area? How can artificial intelligence (AI), robotics, machine learning, big data and blockchain contribute to profit? The summit will focus on a range of hot topics with real- world examples of innovation success. The Gold winners of the Efma – Accenture Distribution & Marketing Innovation in Banking Awards 2018 will discuss how their projects have evolved since they won, and share insights on their plans for the future. See the full agenda at www.efma.com/innovation19

INNOVATION SUMMIT IS PART OF THE ‘BEST EFMA WEEK’ IN PARIS: 14 –15 October 2019 16 October 2019 17–18 October 2019

th Innovation Summit: Enjoy Paris like a local 47 Efma Congress: Innovation for Growth Banking Transformation www.efma.com/innovation19 www.efma.com/congress19 How Alior Bank Excels #EfmaInno19 in product design July 2019

Transforming ideas into turnover Speakers from these leadings banks, among We have asked the winners of the world’s best others, will join Innovation Summit: innovations in banking to come on stage to present not only the innovation itself, but also how they implement it, how it has been integrated into their business lines and platforms, what difficulties they have encountered and how they track performance, including the real impact on the bank’s business. Innovation is here to stay: it’s not only about marketing and perception. Innovation has a great impact on profit, driving business growth. The summit brings together bankers who are interested in leveraging technology and innovation for growth. Key transformation themes to be addressed What are the latest innovation trends and which technologies are the most used by banks and for what purpose? A global non-profit organisation, established in 1971 by banks and insurance companies, What are banks’ strategies for using innovation to grow Efma facilitates networking between decision- business and what are their key achievements in this area? makers. It provides quality insights to help How can artificial intelligence (AI), robotics, machine banks and insurance companies make the right decisions to foster innovation and drive their learning, big data and blockchain contribute to profit? transformation. Over 3,300 brands in 130 The summit will focus on a range of hot topics with real- countries are Efma members. world examples of innovation success. The Gold winners of the Efma – Accenture Distribution & Marketing Headquarters in Paris. Offices in London, Brussels, Andorra, Stockholm, Bratislava, Innovation in Banking Awards 2018 will discuss how Dubai, Milan, Montreal, Istanbul, Beijing and their projects have evolved since they won, and share Singapore. Learn more www.efma.com. insights on their plans for the future. See the full agenda at www.efma.com/innovation19

INNOVATION SUMMIT IS PART OF THE ‘BEST EFMA WEEK’ IN PARIS: 14 –15 October 2019 16 October 2019 17–18 October 2019

th Innovation Summit: Enjoy Paris like a local 47 Efma Congress: Innovation for Growth Banking Transformation www.efma.com/innovation19 www.efma.com/congress19