What's next for EVRY?
CEO Björn Ivroth discusses the company's growth strategy for the financial services sector
PA knows that the market as a whole and its existing customers are excited to learn what they can expect from EVRY after their recent acquisition, and their plans ahead. We sat down with the CEO of EVRY, Björn Ivroth, to hear about their thoughts and future plans in a Financial Services perspective.
PA: What can we expect from you in the near future?
On a higher level, we can say that the existing strategy remains as before. The difference is that we now have new owners that want a quicker implementation of the existing strategy and provides increased opportunities to accomplish this. From a customer perspective, I expect the customers to experience us as more dynamic, faster and with shorter decision making processes when they are interacting with us.
Geographically, we will continue to focus on the Nordic countries as our primary market. In addition, we want to target niche areas in other markets, like our card enterprise in the UK where we currently experience huge progress. We will become a strong player in the Nordic countries – that is our focus, and I experience that we have the full support for this from both the board and the owners.
Looking forward, we will seek a continued organic growth, at the same time as we want to participate in the consolidation happening in the market. We perceive the Nordic market as fragmented and complex compared to other markets. We now have the full support for initiatives aimed at organic growth and potentially through M&A transactions based on good business cases. Common sense describes the tools we use for evaluation of the opportunities ahead.
PA: What is your vision for EVRY in a Financial Services perspective?
Financial Services is a key vertical for EVRY and an important part of our customer base in the Nordic countries. It accounts for about NOK 3.6 billion of our current revenue and we believe we have success with our current approach.
I think the reason for our success is that we have an incredible team in Financial Services. We have both breadth and width in our proficiency. This is a sector with high barriers to proficiency and you really have to understand areas such as Core banking and Payments digitization of banking services and the new competitive landscape to be relevant. Our business is of such a size that we have the opportunity to have this breadth and width in proficiency and that makes us a great business partner.
PA: What does EVRY have to do to continue the growth in the Financial Services sector – what are the challenges?
We must focus on the right things and continue to have a good dialogue with our customers. It is a very complex market situation, with several new entrants to financial services, and also with global players like Google and Facebook. In such a challenging competitive landscape, it is imperative to understand the customer’s needs.
We will understand the options the customer has and which business cases the customer faces. We can show the customer good business cases that gives clear decision support, therefore we make the choice easier for the customer. The challenge is to enable banks to increase cost efficiency in non-differentiation services and in meeting regulatory requirements. Innovation in business models, services and functionality is key for today's and tomorrow's players.
Moreover, we believe it is important that the customer can focus on their business and their customers. Digital interfaces and customer interaction are the areas we think would be most beneficial for our customers to devote their full attention to. EVRY can help them focus their energy and creativity on these challenges/fields by for example supporting them on the core banking area.
PA: Your new core banking system – which market segments is it aimed at? Tier 1, tier 2?
Our new core banking solution is based on ISO standards within payments and is heavily influenced by our participation in Banking Industry Architecture Network (BIAN) when addressing the need to standardise core banking systems. Given our deep knowledge of Nordic banking with high degree of self-service and straight-through processing, our solution enables Nordic banks to continue to stay in forefront in these areas. We believe that our experience with different delivery models makes our modularised solution attractive for both segments.
PA: Who are your main competitors?
I would say that we have different competitors depending on which area we look at. We have competitors at core banking solutions, and a broader range of competitors in digital banking and cards services.
I am personally much more focused on the customer than the competitor. If you can understand the customer’s situation and needs, you can deliver the best solutions. This will always make you win over your competitors. We want to be a business partner with our customer and share the risk with them. Our ambition is always to become the customer’s best business partner. In the end, it is always the customer who determines the outcome – therefore we focus on the customers rather than the competitors.
PA: What about the Indian companies?
We are at risk – it is a very tough competition in the Nordic market. At the same time, one should not be afraid of the companies. It is natural that the customer wants different options. The Indian companies are talented and you must respect them. Nonetheless, we believe that local understanding is vital for success. In my experience, one is not as comfortable with the major global players as with local ones. To be a true local player, you need a local footprint. This means that you have a local organization, resources and affiliation to the market in which you operate and serve the customer. You need to understand the local market, the conditions at work and the complete local picture. If you do not – you will not succeed.
It should be clear that we are competitive in cost compared with anyone. We can for example deliver the same offshoring opportunities as others, if that is what the customer wants. Usually this is about finding the right mix. What should be done offshore and what should be done locally? In our experience, this differs a lot among the individual customers – and we are able to have a flexible approach to all customers.
PA: In your opinion – what are the latest key developments in Financial Services?
Lately, several niche players have appeared from all across the world. In addition, there is a development on the customer side, where today’s bank customers are much more flexible. Personally, I selected a bank when I was 17 years old – and I still use the same today. My daughter, on the other hand, has a completely different approach to banking when she applies for mortgage.
We believe that banks should start to think differently. The investment in core banking and renewal of legacy systems should aim to renew banking with shorter time to market for exiting new services in the eye of the banking customer. This is also necessary in order to discourage new entrants. They have professional expertise in using technology to enter new markets and they also have very strong financial means to invest in new solutions. Now they just need to become equally good at digital customer interaction as they are on their own products. Our advice is therefore to focus on the needs of the banking customer and invest wisely in it both to obtain operational efficiency and to create services that have a unique component from the end customer perspective. We want to give the banks enough space to focus on digital customer contact points with our approach to core banking renewal.
PA: Financial Services is a market with strong governmental regulations – how does that impact you?
It is indeed strongly regulated – and we think this is for the best. The requirements from customers and society will only help us become better by adapting to these demands. Thus, our opinion is that these requirements improve the entire business environment and deliveries. Security and stability is imperative for Financial Services and keeps increasing. We experience this as solely positive.
Moreover, one can say that this is a good element in relation to competition with foreign competitors, as they also have to deal with the local requirements and adapt to these. We often experience that the Nordic financial players are met with stronger requirements and this increases our abilities to compete internationally. We often see that these requirements appear elsewhere at a later date and thus help us to be ahead of our international competitors.
PA: As you point out, there is a lot of innovation in the market today – what part should EVRY take in this?
We experience that the customer wants us to be innovative and creative and this is increasingly important in this market. In a sense, it is about daring to innovate in a traditionally conservative sector. In addition, I believe we play an important part in innovation in virtue of our size in the sector.
Therefore we wish to become a lot more assertive and creative in our approach towards our customers. Historically, we might have been too shy. We want to be even more present with exciting solutions and proposals that can surprise and thrill our customers. This is a key part of our value proposition and a key part of the customers experience with EVRY in the time to come. We must dare to think “outside the box” in dialogue with our customers. To ensure this in practice, we will make sure the senior organization in EVRY continuously promotes innovation throughout the company.
PA: Do you have any specific examples?
Absolutely – we have for example our Banking 2020 initiative. This is a research program where we systematically have examined how younger customer groups envision the future banking services in 2020. What are the needs, how do they want the interaction and other key questions? For instance we use big data to experiment with different uses of customer data to analyse usage patterns. What is the potential use of this?
The results are translated into prototypes we continuously develop and test with very short development time. Such an example is our concept and app called Spendific. Spendific is designed to make personal financial management simple and intuitive. It can be compared to fitness apps that help you keep track of your own training and development, just for personal finances instead.
PA: You speak of continued growth, how big will EVRY become?
We see that there are opportunities for growth in the Nordic countries – while we do not wish to become twice as big as we are today. There will not be growth just for the sake of growing, but we will have a reasonable and profitable growth.
These are very exciting times and I try to participate in as many customer meetings as possible. There are no second places in this business and we intend to be best!