Koen Vanderhoydonk:
welcome to another episode of the connector podcast and still streaming from the nice and sunny Venice. And I have to go all the way to Italy to speak to good friends of mine from KBC in Belgium, so I have in front of me, Maarten, and Karl, who are you guys?

Maarten De Clerck:
I’m Maarten De Clerck. I am Head of Product Development at KBC Security Services and I’m joined by my colleague Karl.

Karl De Borger:
Hello, I’m Karl De Borger and I’m in charge of Sales and Relationship Management at KBC Security Services. Let me take this opportunity to explain what KBC Security Services is. In fact, we are a department, within KBC Bank, and it is the Competence Center for all the securities handling and of course, we do that primarily for the entire KBC group for our own private banking, retail banking. corporate banking and CBC Banque. More and more we are acting also as a service provider towards third parties, external financial institutions, banks, wealth managers, brokerage houses, in Western and Central Europe, based on the knowledge that we have in security services. Well, we can also present to the external world. And that’s exactly what we are doing today.

Koen Vanderhoydonk:
Excellent. Is that also one of the reasons why you’re here at this event?

Maarten De Clerck:
Absolutely. Tomorrow one of the themes that is going to be touched will be business re-configuration. So, how do financial institutions look at their operational structure and their business model to boost their results.That’s where we come into the picture very often, because one of our propositions is to insource what other financial institutions outsource, so my story tomorrow is going to be about that.

Koen Vanderhoydonk:
So they if you don’t mind, maybe you could share a little bit about what you’re going to tell tomorrow?

Maarten De Clerck:
Well, it’s a nice story to tell! Six or seven years ago, many banks were looking at our back office for investment processing and we were looking at how make this stuff more efficient and how to maximize the impact that we have for the money that we spend. One of the obvious options would have been outsource.

When we started to list the requirements: what we need and how to be comfortable when we are going to outsource the business. We wanted to make sure that we had a robust platform. We wanted to make sure that the transactions of our clients were safe. This was a must have. Secondly, we have a lot of expertise in-house and we didn’t want to lose that expertise because we knew that when that phone call comes with the angry client, what do you do? Who do you call? We want that expertise close by us we want it on hand so we can solve the problems that are unavoidably going to pop up one time to be solved efficiently quickly with the right expertise.

Then you also want to be a bit more flexible, more flexible enough, I should say, to adapt, because you don’t want to lock in your way of working in such a way that you have no flexibility towards the future because that’s going to drive the customer experience as well. So, you want to make sure that you can still tweak your business a bit. We started looking around and we came to the conclusion that we already had that expertise we have in house, why would we outsource it?

We looked at our platform. It’s actually quite a robust platform and it offers both the brokerage and the custody so there’s no problems of reconciling between the two. It was also conceived to be able to function with multiple entities within our group and as such, also easy to connect outside with some extra tweaking and some web services, APIs. It would be very easy to connect it to the outside world. And then lastly, the customer experience, we are not comfortable enough that we would be able to set up something that was flexible enough for us to keep managing that.

So, rather than going to the outsource route, we started looking at the insourcing route. So, one of the other things that you can do to boost your cost and your effectiveness is scale and, with the good weather, you record the requirements ticked off before. We were fairly confident that we could scaling grow on that platform by taking in additional volume and this gave us more power with our suppliers, meaning that we can make investments on IT side more easily to bring some return. And we started to go in that route and then we started noticing that there was demand for this.

Karl De Borger:
Martin you are fully right because we are not offering only the yardie business process outsourcing towards banks. I’m always proud to say that most of wealth managers in Belgium are KBC Security Services’ clients. And, of course, now that we decided to offer our services to that segment, we also need to continue on improving our services. And one of the things is regarding digital onboarding. For instance, the end clients of wealth managers need to be onboarded. And that’s always a tough thing. And we can’t continue handling that in manual ways. So, we developed with Objectway, a very nice digital onboarding platform. It’s not yet state of the art, but it’s helping a lot. And we already took steps to further improve it. So that is one example where we collaborate with Objectway and why we wanted to be present here at this event in Venice.

Koen Vanderhoydonk:
One thing that struck my mind is what you said, both of you said there’s a lot of in terms of innovation. But there’s also a lot of words that sound like operational excellence. So, which one of the two? Are you guys the specialist in innovation? Or operational excellence?

Maarten De Clerck:
If we do our right, I think we bring both. That’s a good answer. A commercial answer.

Karl De Borger:
No, I fully agree on that point. Absolutely.

Maarten De Clerck:
But I think it would be fair for us to say as well, at the same time, we looked at the analysis that I described from before, but our main strength that came out of that was the operational side, the expertise that we have those hundreds of people that know the investment business inside and out with a network that spans many countries and continents. That was our starting point. And by acknowledging that strength and working with it, you can become innovative, don’t get those two concepts that you mentioned as contradictory at all.

Karl De Borger:
I fully agree on the operational excellence and innovation, I think we want to bring operational excellence to our customers, that it means also that we need to look internally within our organization, also to be excellent in our performances. And those things go hand in hand. And we heard this morning, a lot talking about ecosystem. And I think that is key. You can’t stand on your own and you need to work you need to collaborate, you need to partner with your customers, you can’t call them customers anymore. It’s in fact, a partnership. And that is very obvious here at this conference.

Maarten De Clerck:
And also, sometimes behind the presentation and the buzzwords, it is easy to get lost at how uncomfortable it can get sometimes or you get out of your familiar terrain and you have to be a little bit vulnerable towards your client because you’re actually opening up the way you work to external parties, who will undoubtedly have an opinion about that. But that’s a challenge that you’ll have to be willing to take when doing such partnerships. And you have to take it in stride know that you will face things that you’ll have to work on.

Koen Vanderhoydonk:
Well, we’re almost to the end of this podcast talking about that further ability. So which are the elements for a client to go the other way around? Because you’re convincing them to start outsourcing with you. So which are the main drivers for the companies that you work with in terms of BPO, business process outsourcing?

Maarten De Clerck:
The classic one will be the same that drove us, so costs. You don’t want to get into an adventure that is going to cost you more in the long run. But that’s just not going to make any business sense. Secondly, it’s all about recognizing your strengths. If your strengths are being close to your client, knowing what they need to invest in, what kind of lives they live with their aspirations, or how they see their future in 20 years, how do you see the future of their children: these are the kind of questions that we asked at KBC Security Services, we have no added value on that, but we can support the business. The only person or the only organization that is best placed and entitled are our clients below working with us.

Karl De Borger:
I would like to add that the key message that we give to our customers and potential customers is: do take care of your front office, take care of your commercial activity in private banking and wealth management, we will take care of your back office activities. Don’t be worried about that.

Koen Vanderhoydonk:
Yeah, it’s often mentioned as the core versus the non-core business. Guys, any last comments that you want to bring to the audience? Anything they definitely need to know about KBC securities before we close this podcast?

Karl De Borger:
Well, we are very happy to be here. And we were able to connect already today. We’ll probably do also tomorrow with quite a lot of customers from Belgium being present here. And it’s good to see that there is a very good understanding between Objectway, our customers and ourselves. It’s nice to see that we make a lot of progress in in good partnerships.

Koen Vanderhoydonk:
Well, excellent on that happy notes. I’d like to thank you both for participating to this podcast. And thank you also to the audience for again, tuning in and stay tuned. Thank you so much.