Digitalisation is the word of the day and it means more than just moving client interactions to the online world. Digitalisation is searching for new solutions to existing issues, says Filip Tománek, CEO and founder of Trask, a tech company with 25 years’ history on the Czech market. What was the IT market development over the past 25 years? Is the current pace of innovations sustainable? And what about the impact of a financial crisis on innovations? Filip Tománek will answer these questions and more in the following interview.
Trask celebrated its 25th anniversary this year. It has been expanding to foreign markets, very recently to Austria. What challenges do you expect there?
After several years of growth, Austria’s economy is now experiencing a slowdown. This year’s GDP growth expectations are between 1.5% and 2%, in contrast to the 3% last year. Nonetheless, Austria has a highly developed banking sector, and that is one of our key targets. There are nearly 600 banks with about 3600 branches, ranking Austria among the densest markets in Europe, with one bank branch per 2400 inhabitants. What matters most to Trask is the steady growth trend and the implementation of new approaches and technologies in customer self-service, online banking and banking applications. This is where we are able to provide strong support to Austria’s banks, thanks to our extensive experience from the Czech market. Regulatory technologies are another important issue, I mean the technologies that help banks to manage regulatory processes, including monitoring, reporting and compliance.
What I personally found most surprising in Austria was their insistence on using cash. Cashless payments are not accepted at all at some places, such as paying for a ski pass at a slope, and some businesses are quite reluctant, to say the least. On one occasion, a cashier lady in a shop was genuinely astonished when I wanted to pay with my smart watch. Some people even call for a statutory right to pay in cash, exactly against the global trend for banking digitalisation.
Trask has a long history of working with financial institutions. Would you like to mention some of the key milestones?
When asked to pick up but a few milestones from our 25 years’ history, I would definitely start with the year 1996 when we successfully employed new technologies in a solution for Česká spořitelna, providing the personnel with access to the bank’s core system from PCs in the headquarters and in all branches, and eliminating the need for a complicated use of a special console. Two years later, we introduced a unique platform for batch exchange of information in all the core systems of Česká spořitelna.
At the end of the millennium, we worked with ČSOB on a comprehensive design and implementation of a brand new safe internal environment including a network infrastructure. In 2002, we implemented a universal frontend (UFO) and infrastructure project for GE Capital Bank. In the same year, we developed an online banking system, Oranžové konto (Orange Account), for ING Bank, we interconnected Česká spořitelna with the debt register and we delivered a compliant base to ČSOB.
In 2003, we were the first in the Czech Republic to implement, in ČSOB, an identity management system for more than 9000 users, 280 branches and nearly 100 running applications and systems. The system is operational to this day, after some minor updates. Three years later, we were among the first to implement a BMP system in the Czech Republic, for ING Insurance Company and ING Bank. In 2014, we successfully launched a pilot biometric signature solution for ČSOB, enabling the bank to implement its first fully digital processes.
Coming to the last years, one milestone that is certainly worth mentioning is the first truly online loan service – Paperless Loan – successfully launched on the Czech market by Česká spořitelna. We developed the service jointly with EY consulting company. And the very latest news is our online mortgage, Trask Digital Mortgage, launched recently. In any case, technological development is a never-ending story and we are not going to rest on our laurels.
Leaving aside the technological development, how did the behaviour of your clients change over the past 25 years?
What has definitely changed are the expectations. Technologies enable us to do almost anything we can think of, and our clients‘ customers have become used to that. Digitalisation is the word of the day and our clients push on us to implement the latest technologies very quickly.
But digitalisation can do more than just move client interactions into the online and mobile environment. Many of our clients are not yet internally prepared for digitalisation. We understand our mission as a constant search for innovations to help our clients address more customers, work better with their current customers, or to improve their internal environment and make employees‘ work more efficient. With technological development, in other words with digitalisation, some of the traditional processes can be replaced, making way for the development of wholly new products and business approaches.
Let me mention, for instance, the project implemented by us with EY in Česká spořitelna in 2016. The issue was how to establish clients online and how to grant loans to such clients without paperwork. We had to find ways to overcome many obstacles that seemed insuperable at the time, such as online identity, online signature, scoring based on online data alone, instant payments, online processing of personal ID documents, and much more. The project was unique even at Central European level.
Today’s projects lack the revolutionary drive, they mostly just copy the market. However, our clients are undergoing other far-reaching changes, apart from the technological ones. I mean cultural changes, especially the implementation of agile methodologies, flattening of organisational structures, pulling down the barriers between isolated functional islands, etc. This is what we focus on now – how to set expectations correctly and how to best align the expectations with our clients‘ respective environments.
It is quite obvious that banks are doing their best to innovate. Is such a pace of innovation sustainable and to what extent does it depend on the economic situation?
Information and communication technologies are the strongest factor shaping human lives today, both at work and in private. Technical innovations generally contribute to the economic growth by increasing workforce productivity and by improving other production factors, so that that the same inputs can generate higher profits. This is our goal, too. This is why we come up with innovations that save our clients’ costs, increase revenues and make their lives easier in many ways. Innovations keep pace with the ever-increasing user expectations. Every innovation prompts more innovations. It is like a spiral, spinning faster every day. We once worried that maybe our parents and grandparents would not be able to learn how to use internet banking or mobile banking, but they proved us wrong. They cope with it just as well as anyone else and technologies have become part of their everyday lives. Kids start to learn about technologies very early and then they learn more at schools. Younger and younger inventors are coming up with interesting ideas and innovations. It makes me believe that innovations will continue regardless of the economic situation. The pace, of course, will depend on the amount of investments, but I would say that at the time of a crisis, innovations are one factor that can help relieve the burden.
Trask is a purely Czech company. You are its founder and you have led it since its establishment. Trask’s growth is quite impressive, the company boasts hundreds of successful projects and has more than 500 employees. Which were the key factors on your way to success? How did you build client confidence? Your biggest clients have been with you for over 15 years, Česká spořitelna for 25 years…
We build our client relationships on a long-term basis. Fulfilling the requirements as per tender specifications is not enough to us. We want to be real partners, advisors and guides. We assign a Trask business partner to each client, and we give proper care to each client. Such is our philosophy and we have lived up to it for a quarter of a century. When we win and successfully implement a project, we celebrate together with the client. When we lose a tender, we learn from it and we follow the project from a distance. On several occasions, a client contacted us at a later stage, when they had found that choosing another provider had been a mistake and decided that they wanted Trask to deliver the project after all – because they trust us and take for granted that we deliver in time and within the required budget.
Economists speak about an upcoming economic downturn. What is your view of the situation? How do you think Czech banks and insurance companies are standing – are they ready for a slowdown?
Czech economy is closely tied to European markets, especially to Germany, and every uncertainty in the neighbouring countries naturally reflects itself in our economy. European banks, the small and medium ones in particular, have a limited global outreach and their position depends on the economic development. Just a few biggest banks operate on a global scale, which provides them with a certain degree of immunity to regional turbulences. This issue has been voiced at board meetings of all the big banks in the Czech Republic. Banks as such are now undergoing a challenging transformation exactly to prepare themselves for any upcoming changes and to be able to face such changes successfully. I believe that Czech banks are strong enough to survive whatever unfavourable economic development may come.
The challenges facing the financial industry have been discussed in many articles on Bankovnictví websites. Can you give us your view of what challenges lie ahead of banks and insurance companies today?
The event of paramount importance will be the mortgaging deregulation, namely the Czech National Bank’s steps to make mortgage refinancing available at any time, even in the middle of a fixed-rate period. We have prepared a solution for online mortgage refinancing and we are already implementing the project with a client. We further develop our collaboration with banks and we are preparing more solutions to help them acquire as many new mortgages as they can in these challenging times, or at least to help them retain the largest possible share of their client base. This example reveals how we are shifting from the role of a tech provider to that of a business enabler who has much more to offer than just innovative IT solutions.
Distribution channels, too, are bound for major transformations. Digitalised banking products (accounts, loans, mortgages, corporate financing…) can suddenly be sold through new partners who previously did not fit into or were not able to grasp the paper-oriented processes. We witness the development of a new, broader ecosystem of companies involved in the selling of banking products. The whole ecosystem is driven by mutual integration of companies, by APIs and by open banking. And that is what we focus on, probably much more than most of the other Czech IT companies do.
You have mentioned API. Trask has launched, quite recently, an API portal where one can find perhaps all the available APIs of Czech financial institutions. How do you evaluate the project and what feedback are you receiving?
The evaluation is definitely positive. In Trask, we believe that open banking is the future. We thought that there should be a place where one could find all the opportunities offered by the Czech open banking sector, so we created the single source of information about banking APIs in the Czech Republic. We welcome contributions from across the community, to build the tool further. It provides invaluable data to us and useful services to financial institutions. Already 35% of financial institutions have implemented PSD2 in our database, seven banks are fully integrated on the BAAPI platform and 89% of banks use the COBS (Czech Open Banking Standard) format.
Financial institutions massively invest into a variety of projects, and there are new concepts such as Zonky, Mutumutu, Cincink, Care Driver, Cubiq and others. How does Trask react to the financial sector development? Does it change itself? Does it want to be a SW house, a company builder, an advisor, or something in-between?
Due to the 25 years of experience, we will always be the one who delivers functional and innovative solutions. We advise some newly established companies on how to grow, and we work directly with others. Trask’s job will always be to help clients to innovate and to recommend to their customers the products and services that they want. Thus, our role is that of a partner.
Another thing that cannot pass unnoticed is your active approach to HR. Trask invested 26 million Czech Crowns to personnel development in last year alone. What is your personnel policy, both in the context of the current labour market situation and generally?
Trask has always relied on the people who are part of it. Our great competitive advantage on the labour market consists in the fact that we maintain a procedural lightness and speed and still we are able to see each person as an individual. At a company of our size, this would not be feasible without a strong middle management, and we focused on building it in recent years. Recruitment and onboarding is targeted according to the needs of each team and staff development is tailored to the needs of each individual. Trask has always viewed the key HR role both from the perspective of recruitment and from that of retention, development and care for our people. It is a huge responsibility in the context of today’s labour market.
I believe that we have a lot to offer to our people even outside their jobs. Combining work and entertainment is part of our corporate culture. We take advantage of every occasion throughout the year to meet together, we support free-time activities of our people, and each team organises its own teambuilding events. We want our people to enjoy being part of our company and we want them to know that we really care for them and that we wish to give them a long-term prospect at work. This is one of the reasons why our employees stay with us for nine years on average. And I appreciate that, especially in the highly competitive IT environment.
What do you think of the collaboration between banks and fintechs? Do you work with fintechs on your new projects and do you create some?
We closely watch the interactions between banks and fintechs. A fintech is in fact nothing but a technology in the hands of a startup company. Trask too was such a startup once. Fintechs often inspire us to deliver the same technology in a tried-and-trusted, reliable manner, to traditional players. I view the fintech segment as a living organism where everyone has a role to play: fintechs are incessantly attempting to undermine the traditional order, and Trask is the one to deliver the technologies in a safe and reliable manner. This is one reason why we like to work with fintechs, and the other one is that it gives us the opportunity to teach big business to young enthusiasts.
Looking back at the times 25 years ago and at the development you have been part of ever since, how is the Czech financial sector positioned now and where is it heading to?
The Czech Republic can now be seen as a “digital challenger” – one of the most innovative banking markets in Europe. Our country has become a “digital island in the middle of Europe” and Czech users are not so conservative as they may seem at first sight. Eurostat, for example, reported that Czechs were ahead of Germans, Austrians and Spaniards in internet banking utilisation rate in 2017. We expect the digital innovative trend to continue, but the development is shaped by many different factors such as legislation, standardization, openness, single market for payment services, the fight against money laundering, additional reporting requirements, etc.
So what will be Trask’s role for the future?
Trask will always be where its clients are. We will open more branches across the world. We will grow because of the new tech solutions that we will launch on the market and safely deliver to our clients. This is a fresh start, in a sense. We are experiencing a mental revival of the pioneer era when target and speed were everything and the rest we resolved as we went. Today, we use this seemingly unfettered approach in a much more sophisticated manner and we have given it a posh name: agile methodology. The 25 years of our existence were not short of great adventures, great challenges and great successes. I believe that it will remain the same in the years to come.