The magic of banking startup

The magic of banking startup

Olga Melnyk

The magic of a startup is to create an architecture without legacy systems, build processes without contradictions, recruit a motivated and energetic team, manage without formalism … Fantasy? No,
just RGS Bank. Its Director of Information Technology, Igor Mushaka, shares his experience in building an environment that is flexible in every way and managing IT staff who are interested in business tasks.

Despite the fact that RGS Bank is 25 years old, the company is undergoing major changes and is being updated. What is your difference from many other financial institutions?

Indeed, our bank is now entering a new position in the market and adopting a new business model. Now our bank is part of the group of the bank “Opening”. with
Rosgosstrakh insurance company we maintain good partnerships, the company remains our shareholder with the bank “Opening”. The current RGS Bank! is a bank for motorists. we
we want to fully meet the needs of our customers in all areas related to cars directly or indirectly, offering both financial and related services for private
customers, legal entities, including automakers and car dealers. Our retail client is relatively young, mobile, does not necessarily own a car, but has interests in using it
or related services.

We are currently implementing a 4-year business development strategy for which a relevant IT strategy has been developed and approved. It implies virtually the key involvement of the bank’s IT function
both in the implementation of business projects and in the process of complex technological upgrading of the bank needed to become digital.

By 2022, we plan to carry out more than half of the transactions through digital channels. Over the next three years, many corporate and retail solutions will need to be implemented.
We need to take this path in a very short time, unlike other players in this market that have evolved organically. This is why our main priorities for choosing partners and
staff: speed, flexibility, willingness to seek custom solutions for business problems with us.

We have over 15 major projects in the pipeline. The most significant of these are upgrading of DBO systems, introduction of credit conveyors in short terms, expansion of functionality.
contact center, modernization of the card product line, implementation of CRM projects and warehouse financing.

The main emphasis in the project activity the bank makes on the development of omnicanal front platform, which should ensure the integrity of customer service perception of the bank, outside
Depending on which channel the customer interacts with. Accordingly, at the end of our project path, the client, both in terms of receiving bank proposals and financial
transactions, should be able to start an operation in one channel and end in another. Most banks, having developed Legacy, have separate technological solutions and processes for
branches, contact center, DBOs and CPMs, self-service devices, and trying to integrate them without replacement, remain unable to provide a truly “holistic” customer path between
different channels.

In our case, due to the change of concept and architecture of the whole set of business processes, we have the chance from the very beginning to form a complete client experience and a single platform of processes and technologies for
single logic and no need to replace the old solutions. In this regard, we are now actively looking for the right paths, partners and internal competencies to create this set of solutions.

Today there are no company offers on the market that would fully meet our needs, so we strive to build a solution architecture that allows us to evolve in stages, but at the same time
At the same time, it is organic, adding the “bricks” of our new business processes to the future platform.

Here we are trying to look at solutions available on the market, built on a “component” principle, and use microservice architecture. This is a key selection criterion that should help
we provide the necessary flexibility and speed of launch.

As the cycles of implementation in today’s environment become short and are measured in months or even weeks or days, so-called companies – “good sellers of” boxes are gradually leaving
past. Mutual come from those who are not in words, but in fact prove their effectiveness, competence, efficiency and willingness to cooperate in the framework of joint “flexible” teams, as well as to lead
joint development and alienation of the solutions created therein for further self-development by banks.

Most of our work model projects, if not completely Agile, are close in terms of business results to those.

Due to the importance of time and team flexibility, we are ready to apply decisions that are not decided by big banks.

A good example is a retail loan pipeline solution from a Russian manufacturer in which we did not buy software, but a business process as a service (BaaS, for example). the provider
provides a service for entering and verifying customer applications for credit and bringing the process to agreement. When the application reaches the issue stage, it enters our banking systems. Despite the presence
Risks depending on the providers of such services, to start a business from scratch in the short term is almost the only solution. But further steps depend on the development of relations with a partner
precisely in dealing with such risks, from reliability and quality of service. By the way, from the moment of making a decision to start working with a partner on a full-fledged industrial loan
the bank moved in three months, which would not be possible with the classic approach to the introduction of a loan pipeline.

How is your IT department organized?

Under the new business model, we are also recruiting a new team focused on flexible approaches. We have units that deal with infrastructure and services (network, equipment, bases)
data), service desk (customer support) and IT management functions required for the day-to-day operation of the structure and maintenance of the dealerships’ network of offices and agents, as well as
the centralized function of corporate architecture remained.

We have transformed the business application development and support units into horizontal structures, closely linked, if not mirrored, by the respective business structures. We have them
we build models of flexible management and DevOps. Now there is a selection and implementation of a technological stack of DevOps automation, debugging of work processes.

In fact, business units already have a retail business technology factory and a corporate business technology factory. Inside each of these “factories” are analysts, developers,
project managers, testers, support. Dedicated product managers work directly with IT on the part of the business customer. All the work is centered around both the product and the customer,
when it comes to channels of interaction with him and the specific results associated with the introduction of business products for the customer in the industrial circuit. We struggle with trying every feature in IT
“Fence off” within the limits of their functions and attach people’s motivation to business plans. We, not to mention me personally, even the heads of laboratories (this is CIO-2 level) have
KPIs are essential business plan indicators. It helps to remind people what their main task is and to create a business-oriented environment.

How would you describe your approaches to flexible management?

The fact is that the word Agile in the market has become too commonly used to be real. It’s all conditional. You can live on a flexible model and not be able to adapt to change as well
you can work on a waterfall with some adjustments and be flexible.

Here’s an example of flexibility: they took a short “waterfall”, agreed with the customer that he is always there, shares the values ​​of this short “waterfall”, is part of the creation team
Product mentality, changed the team, allowed the team to make mistakes and analyze what needs improvement – and here you are, Agile.

On the other hand, you will not be flexible, even if you work in sprints, hold StandUp, retrospectively, you have all the roles, including a dedicated expensive scrum master, but punish people for
mistakes. In this case, the desire to make, experiment and find the right product for the customer disappears. Then, in order not to punish, they will prepare you a detailed plan and will be clear to him
go. This is the problem with many large companies. On the one hand, declaring that “we want to agile”, on the other – there is no willingness to accept mistakes from the team that
unstructured something deals. Everyone wants flexibility, but at the same time, it is unmistakable, on time and within a fixed budget, since someone from above requires time and unconditional commitments,
for non-compliance with which there should be more severe punishment.

We are variant and apply the method that best suits the purpose. It all depends on the nature of the work. There are areas of development, types of applications where the more experiments, the better the result,
for example, the front-end application interface that the user works with. There flexible approaches are very helpful. But accounting and reporting is better implemented by a “waterfall” – it’s better not there
be wrong. The cost of the error may be too high.

We have until the small IT team, only about 150 people, has not been formed hard processes, it is relatively easy for us to involve the customer in the joint work. People are all very
constructive. As I said, in our bank all units have certain KPIs for business: both I and all specialists in the IT block, up to the ordinary developers, in different
degree, of course. Everyone here understands that the disruption of business plans threatens the existence of our project, as in any startup. So the result above all.

In my entire IT career at RGS Bank, I have encountered the most adaptive hike. This was one of the important reasons why I accepted the offer to go to a bank startup. We have the opportunity ourselves
start to build all the necessary processes, systems, architecture in the best way and not to look back at the established rules that so much hinder business in large companies.

How do you plan your work?

We have implemented a quarterly planning methodology: a multi-level Backlog portfolio. We refine our ABS together with the manufacturer on the basis of strategic agreements with him. by
this area is also backlog for three months. The work and necessary resources are evaluated. If a top manager wants to change priorities, he can replace one of his tasks with another of his own
task, without the loss of complexity. If there is a possibility of such replacement, we promptly carry it out. If not, we either create it with additional budgets from third-party resources,
or we help our customers negotiate with each other to share tasks with each other.

So we built a system of prioritizing small tasks and learned how to count our capabilities in terms of bandwidth: how many man-days we can give out in a day, a week,
quarter. So at any moment we know what we can take on this quarter and what we can’t. So within the framework of business processes there is both quarterly planning and sufficient
a margin of flexibility for switching tasks on and off.

There are large projects running concurrently that are subtracted from the resource pool in advance, so current tasks and large projects are virtually intersectional. I created this system in
Alfa-Bank, then introduced in Uralsib, followed it for the last three years of my work at the Vietnamese VP-bank. The system is absolutely working, and if you do not approach it formally, but to explain
Employees prioritize and anticipate the result and nurture this culture from the start, it gives excellent results and transparency to all management, regardless of the country of application.

How do you choose and attract people?

The team is growing and will continue to grow. In order to attract non-standard people, it is necessary to create a proper culture and, most importantly, a proper atmosphere within the company. In a formal setting, creative
people usually refuse to work. As a motivation in choosing an employer can be completely different things.

While working in Vietnam, I was faced with the need to choose an outsourcing company. In the office of one of the potential contractors, he saw all the developers chic Apple devices on the tables. When
asked the director of the company why such expenses, he was surprised by his response. “It was our deliberate choice: this is how we attract the best people for the same salary as our competitors by creating
people feeling their “features”. After all, when apportioning Apple service life, with the exception of staff turnover, there is a very small allowance for developer costs. ”

Our main advantage is the prudence and priority of the result over the process, as in any startup project. We are not yet overgrown with complex internal bureaucratic processes and procedures. if
we do something, we have a completely specific business driver, why we should do it: either it is a business task, or some specific results that are obvious to any sensible

I have worked for many companies, mostly large and very large, and I know that it is very often necessary to do something not because it is really necessary for a specific final result –
for a client or business, but because it is “so established” or because “such is the opinion of a certain person”. We do not have such.

Mindfulness of the activities of all staff is our key advantage. All together, IT staff and business are working on business tasks. It is clear that not all “techies” with this
they agree with the state of affairs, often they do not like it. Some believe that they are just “nuts” and they are paid for it, and already think why they need it, they should not. Such people are coming from us.
In their place come those who are interested in being involved in the result of the organization, and those who are willing to do business in the most direct way, even in their place in IT.

Is the business ready to listen to us? Yes, especially when it comes to how to implement certain functions, products, capabilities faster. That is why I try to develop such a culture to the task
The IT department was not designed to extend the wire from point A to point B, but to understand why it was necessary in the context of a business process. And then we ourselves
let’s see if we need to pull the wire. Maybe we will even offer a completely different approach, but with the business result you really need.

I would very much like this to be preserved even when the bank grows. To keep us thinking about business, not functions. Because the worst thing is when organizations are building a new office,
all are locked in the offices, begin to live only in their functional area, and quickly something is already becoming almost impossible.

And finally, I would like to say that those who are interested in our bank and our tasks, I will be glad to see among our partners and our employees.

CIO, Russian banks

Business in number

IT-Manager Magazine [№ 12/2019],

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