With a new generation of customers seeking fresh ways to interact with their bank, G-Rock wanted to enter the market with a new, more personalized kind of banking service.
G-Rock partnered with IBM to create a “Bank in a Box” solution, enabling it to launch a full core banking platform with robust business process management and financial safeguards, fast.
6 monthsto launch a fully functional banking platform
Mobile-firstdesign empowers customers to do all their banking on a smartphone
Scalablesolution enables a seamless transition from boutique to large-scale banking
Business challenge story
Building the future of banking
The banking industry is facing a number of radical challenges. The ongoing fallout from the 2008 banking crisis has created an unprecedented level of regulatory scrutiny, while economic uncertainty has put operations under new pressures—particularly for traditional banks that need to maintain the cost of large branch networks.
Perhaps even more important, though, is the changing profile of banking customers. For Generation Y and Millennial account holders, mobile and internet banking have already replaced face-to-face and telephone banking as the primary channels of interaction. These users have become accustomed to managing many aspects of their lives using powerful, intuitive smartphone apps—and they expect their bank to offer a similar experience.
G-Rock, a fintech startup based in Gibraltar, is among a number of new companies looking to take advantage of this brave new world.
Sławomir Lachowski, CEO & Founder at G-Rock, explains: “We’re now at a point where there’s a real opportunity to build a new paradigm for banking services that will meet the needs of a new generation of customers.”
According to G-Rock’s market research, this new generation are better informed about their banking options than ever before. Their lifestyles are more changeable, and they are far less conservative than traditional banking customers. As a result, it may be easier for a banking startup to win them as a new customer—but if you take their loyalty for granted and don’t provide a consistently excellent service, they’re equally likely to take their business to a competitor.
“To win and retain these customers, you need to provide low-cost, high-quality, anytime, anywhere services, and create a relationship of mutual benefit based on transparency and honesty,” says Sławomir Lachowski.
Lacking the traditional baggage of branch networks, systems and processes, G-Rock is in a better position than most banks to define its business model around the lifestyles of these new customers, and potentially gain significant competitive advantage.
However, setting up a bank is a costly process, so G-Rock’s new venture needed to make the smartest possible use of its investors’ capital.
“To succeed, we needed to dramatically reduce the cost of setting up a new bank,” says Sławomir Lachowski. “Since the digital-only, mobile-first model of banking is heavily dependent on technology, we realized that if we could cut the amount we needed to invest in IT, we could significantly the reduce barriers to entry.”
Money in the bank
Working closely with a team from IBM Global Services, G-Rock helped to develop a new “Bank in a Box” solution, with the aim of creating an fast, easy, cost-effective way for new financial startups to set up banking IT systems.
“We needed a system that was robust, yet flexible,” says Sławomir Lachowski. “That’s why we chose IBM for this project. In my experience, IBM is like an elephant that can dance: it is able to keep pace with the rapid innovation of the fintech industry, while providing proven, enterprise-class solutions for common requirements such as security, cloud infrastructure, and banking-specific requirements such as anti-money-laundering safeguards.
“More importantly, as with all these projects, you’re not working with institutions, you’re working with people. IBM has great people with great finance industry experience who speak our language. They brought all the agility and cooperation needed for a project like this, and I knew we could count on their knowledge and experience.”
The IBM Bank in a Box solution provides all the core technologies a banking startup needs, in a package that is quick and easy to deploy and customize. The solution is built on standard components and services such as IBM Cloud Managed Services and IBM Managed Security Services. It includes a solid core banking system to handle all the back-end account management, a business process management layer to help design and deploy new products, services and workflows, and a multi-channel integration layer that prioritizes digital and mobile services, while still supporting more traditional channels.
“With IBM Bank in a Box, we estimate that startups will have all the IT support they need to bring a new service to market in just six months,” says Sławomir Lachowski. “That agility is very important in a market as dynamic as financial services, and having IBM technology on your side is a clear advantage.”
A boutique revolution
With IBM Bank in a Box, G-Rock was able to launch its services within a very tight timeframe, and develop a comprehensive mobile banking service with comparatively little startup capital.
“In the past, when building a new bank’s IT platform, it took around two and a half years to get IT systems into production,” says Sławomir Lachowski. “With Bank in a Box, we were up and running in six months. That was extremely important, both in terms of efficiency and in getting new clients on board quickly.
“The pricing of Bank in a Box is also a major enabler—it cost about a third as much as the IT systems of the first internet bank I set up, and maintenance costs are a fraction of what they were before.”
The design philosophy of Bank in a Box is equally important to the company. Built with mobile-first, digital-only banking in mind, it has enabled G-Rock to appeal to a new generation of customers. It allows consumers to do all their banking—from checking the balance of an account to managing complex investments—on a smartphone.
“Smartphone banking is a huge growth area among younger consumers,” says Sławomir Lachowski. “A well-designed mobile interface is even better than a PC or laptop, because you can use the phone’s biometric sensors (face, voice and fingerprints) to help secure logins and verify transactions. This helps customers access their accounts faster, without compromising on privacy or security.”
The fintech revolution—characterized by offerings like Bank in a Box from IBM—has empowered G-Rock to operate as a boutique banking service. With reduced costs, increased agility, and accelerated speed to market, the solution means that G-Rock does not need to scale to millions of customers before it can become profitable.
“Starting out as a boutique banking service is now a viable business plan,” says Sławomir Lachowski. “But you also need a platform that isn’t going to restrict you if you suddenly need to get bigger. For G-Rock, IBM Bank in a Box offers us that scalability: we can make a small bank profitable, but we can also scale quickly if the opportunity arises.”
Sławomir Lachowski concludes: “With the technology and support of IBM, I’m confident that G-Rock can continue to disrupt the banking industry, and reinforce its place as an industry game-changer.”
G-Rock is an innovative online wealth management startup based in Gibraltar. The company is working to obtain a banking license to set up a next-generation online bank that will provide account management and investment services via highly secure, mobile-first technology.
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