Case Study: Bank North

Summary

Bank North’s vision was to disrupt the Small / Medium Enterprise (SME) Lending market by shortening the ‘borrowing application to decision’ time from six months down to two weeks. They planned to achieve this USP by integrating an established online banking platform with a CRM (customer record management), exploiting available API links to systems of record (such as the Land Registry) and by supporting in-person customer support through a network of high street premises branded as ‘Bank North Pods’.

Launch was planned for 2021 with the first Bank North Pod being secured, staffed and opening that year in Manchester.

Background

In October 2019 Answer joined a small team of Bank North founders. The founding team had extensive experience in established banking practice and strategy. The very first engagement was a Discovery task around customer journey definition, bringing the proposition 'to life' and understanding how value would be delivered to customers. Following on from Discovery, Answer were then engaged in carrying out operational procedural analysis, consulting on agile delivery and providing technical architecture and data integration expertise.

Key Challenges and Delivery Outcomes

The Bank North founding team had an ambition to ‘be agile’. They wanted to establish the Bank and its processes and practise by putting the customer experience first and despite operating in a highly regulated environment, they hoped to build the Bank iteratively - deliver, measure, refine.

The Answer team were engaged to:

• Map the customer journey and model the unique ‘speed to market’ capability
• Work alongside the Bank North Business Analyst to create processes and collateral for customer authentication, core lending services, decisioning and governance
• Support the Bank North CTO to progress platform integration, develop systems of record and regulatory reporting

Key Deliverables

Key deliverables included:

• Documenting the customer journey - both in terms of online interaction and physical customer service in the Bank North Pods
• Creating data flows and data coverage designs
• Creating customer journey maps, shaping and visualising the customer facing proposition from first contact to full authentication, loan underwriting and loan disbursement
• Lead capability modelling, defining operational delivery roadmap
• Creating architectural topology, representing Bank North in core banking and CRM platform RFI process
• Design and implementing platform integration in collaboration with platform providers
• Developing data strategy, implementing data warehousing solution
• Supporting operational analysis of regulatory reporting processes
• Documenting operational processes for the teams to follow when KPIs generated alerts
• Training and handover sessions to ensure knowledge was transferred and ownership of key collateral sat with the right team or individual

Our Approach

Answer established a specialist team consisting of a principal consultant and a senior business analyst both with extensive experience of working within a finance regulatory environment and a senior technical architect. The Answer team worked closely with the founding team, co-locating with them in Manchester.

Kanban Delivery Management

Delivery was managed via a Kanban model in order to maintain a continuous workflow, mitigate risks associated with the many external dependencies we had to consider, and support re-prioritisation with key stakeholders.

The architectural components and integration requirements to construct the banking systems and reporting infrastructure were identified and documented before being prioritised by the client. Following this, individual discovery sessions were scheduled and run with involved stakeholders to identify the fine-grained requirements for each component and de-risk any ‘known unknowns’. Options papers were then researched and drafted by Answer and presented back to the client for approval.

Following the selection of a technology / approach, components were designed, built and documented with suites of tests written where appropriate to demonstrate functionality and integration contracts. Demonstrations were regularly scheduled throughout the build process to present back the completed work and ensure that solutions were fit for purpose.

Concurrent Work Streams

The drive to start lending in 2021 meant working at pace. Consequently, and in order to complete multiple activities in parallel each Answer consultant led on a discrete workstream for expediency.

Delivery

• Inform ways of working for operational delivery
• Run Agile ceremonies for the hybrid team
• Manage and report on progress to stakeholders

Business analysis

• Shape and visualise the customer journey - from authentication to loan fulfilment
• Develop a capability for regulatory reporting

Data Architecture

• Create the architectural topography required for successful platform integration
• Develop the data strategy

Delivery cohesion was assured through initiating a daily whole-team stand-up, not only to ensure thinking and approach was joined-up but to also keep stakeholders updated each day.

Key Technologies and Digital Skills

Loan application and servicing is a tightly regulated environment with all processes and technologies requiring approval from industry regulators. As Bank North were keen to begin loan provision in 2021, the software and solutions they could use had to be selected from a pre-approved list of banking software providers.

For loan application and CRM, the Ncino solution was selected, built on Salesforce with custom code implemented for the high-speed loan approval workflows. The actual loan accounts were maintained in Mambu, a banking framework with an open API to allow for simple integration with accounting, chart of accounts and general ledger systems. Accounts were maintained in Xero.

A key element of the work performed by Answer Digital following the selection of the banking components was the integration of these discrete systems into a loan approval and disbursement pipeline, along with an up-to-date data warehousing solution to be able to provide the large quantity of regulatory reporting required by the financial regulators.

To integrate the individual systems, MPO (Mambu Process Orchestrator) software was used, which implements a simple graphical interface overlay over a complex DSL to allow the querying of databases or API endpoints to be simply displayed and understood.

The data warehouse was hosted in Snowflake, providing guaranteed uptime on AWS hardware along with simple web API access and a fine-grained permissions framework. Stitch was used as the ELT solution to extract data from the source systems against a schedule and copy it into a data lake before custom SQL generated bespoke datamarts for each of the reporting sectors (loan provision, accounting, regulatory).

Once these datamarts were created, various charts and targets were constructed and maintained in Power BI which would then be refreshed on demand and embedded in board reports to simplify the reporting of KPIs.

Outcome

Andrea Dalton, operations director at Bank North, said: “Working with the team at Answer was an important part of the evolution of our offer. It was exciting to start with a blank piece of paper and deliver a roadmap to provide an unmatched experience to our customers.

“When you work with Answer, it quickly becomes clear that they have a unique culture that shapes everything they do. From their Academy to the commitment of the team, it’s an inspiring working culture.”

With the support of Answer, Bank North took a progressive approach to its technology strategy. Building a foundational, cloud-first architecture based on nCino and Mambu. Bank North established itself as a customer-centric institution keen on delivering exceptional new services to SMEs quickly and without the constraints of inflexible systems. This operating model provided a true competitive advantage, Bank North's technology will be able to better meet regulatory demands for greater transparency and address evolving standards for customer service and delivery.

Bank North's Banking Licence was Authorised with Restrictions, with a 12 month mobilisation period to enable the bank to complete the build-out of their business. Sadly Bank North was unable to raise the required capital during the period due to the falling activity in the capital markets. As a result, LHV UK made an offer to acquire the entire SME lending business and crucially the technology systems for managing the loans.

Bank North with the support of Answer had built a technology platform which enables the bank to streamline the lending process and approve loans to local businesses as much as ten times faster than the competitors. LHV UK will now look to enhance this technology and plans to integrate it with its core banking platform.