An epic title to an epic achievement in the shortest possible time span. This is the story in the most condensed format. What we achieved is quite remarkable. In my 20+ years in the industry, I’ve never seen things handled so fast (or quite so stylish). What I will tell you has happened in less than 12 weeks and has transformed the reality for all the employees working with tech and product development every day, but also for more than 200 000 customers. In this real-life deep dive, I will investigate how a leading Nordic neobank managed to adopt Snowflake’s Data Cloud along with other cloud-based solutions in record-breaking time. And most importantly, what this means for the user in their everyday financial life.
65 000 bank branches in Europe have disappeared between 2008 and 2019. That is a decline by 27 percent. At the same time, we were hit by a pandemic which has driven the shift towards digital banking even further. The number of people using internet banking has increased by 54% last year from just 29% in 2006, according to the European Banking Federation. Something is happening in the finance industry – for real this time! But is it disrupted yet? Perhaps not, but we’re moving there fast. In the absolute center of this paradigm shift stands two things that are tightly connected – customer’s changing behavior and new technology.
Before you can start challenging the status quo in a plus hundred-year-old industry, you need to create the prerequisites to do just that. Northmill is a tech and product organization with product teams, working more or less self-sufficient. At the core of this fast-growing neobank – a unique customer focus. A lot of work is put into the discovery phase of a product development process where bringing back the customer feedback into the product development is key – whether it’s from surveys, comments, insights from the customer center, or speaking directly to the customer. But to be successful with all that, while scaling the business at the same time, Northmill needed a data lake capable and built for a reality in constant change and disruption. That was my mission and Snowflake’s platform was a perfect match. It also allowed Northmill to have a pricing model that can be described as instant scaling on-demand. Everything to only a fraction of the cost for having the same performance in a traditional environment.
"At this point in their journey, it was the perfect data-toolbox for the neobank."
How do you best combine constantly being 100% compliant while having a very strong focus on constant exploration and being innovative? And how do you scale but make sure you always measure the result? These kinds of questions remain a challenge for many tech-driven companies. They might not be solved yet, but using Snowflake, Fivetran and Matillion made it possible for Northmill to achieve very high scalability and quick delivery of data in a heavily regulated market. In return, it meant getting one step closer to having a Business Intelligence-driven culture. No more building on different production systems, but instead having one platform basically providing insights and Business Intelligence on tap. With Fivetran, you configure which sources you want data from and point to the target, in our case, Snowflake. The source can be your own built systems or any of the 100+ predefined connectors to established systems. With a slider, you set how often you want new data to be transferred. We could even set up transfers of semi-structured data (for example JSON) and have it available for analytics out of Snowflake, without any additional manual tasks, which makes the combination of the tools extremely powerful.
Northmill’s quest for low operational cost with high automation and modern tooling really enables innovation and lays the foundation for growth. At this point in their journey, it was the perfect data-toolbox for the neobank.
Why does everyone think security is boring or just something that needs to be there? People keep telling me: “it is a hygiene factor”. Of course it is (!), but “security” is also so much more. Operating as a bank, security is everything. It becomes an integrated part of Analytics and Business Intelligence. That means that it rapidly becomes a question about handling the data in a secure way. The setup we created is making sure that sharing the data internally, as well as externally, can happen in a very secure and efficient way. But this also includes making sure that not everyone in the organization has access to all the data. One needs to create a tailored structure, based upon legal, compliance, and risk frameworks, to make sure that access to data is secured. The right people should have the right data at the right time. With Snowflake’s platform in place, there is no need for a complex ever-changing setup, data onboardings, or similar. All of this is handled in the Data Cloud and you control it yourself. When for example expanding the business, new people coming on board, or new products are developed (and it was a lot of that at Northmill) you can constantly be agile and adapt access to data.
"Now, Northmill is a tech-company with over 50 percent working with tech, so engineering is always at the heart of the business, but the perspective is business, meaning customer-centric."
It means out of many, one. Allow me to borrow Barack Obama’s famous quote from the 2008 election and put it in the context of Analytics and Business Intelligence. Because what we achieved at Northmill is that we managed to put every piece of available data together, modeling it and made it comprehensible. Using Matillion, a tool that can be described as drag and drop data transformation, we worked with existing components instead of writing 10s of thousands of rows of code. (Not using Excel. The same people who say security is just a hygiene factor, it is the same people still working with Excel sheets. Just saying.) Anyway, this makes it all very scalable and we get traceability in everything we do. To do it the traditional way would have resulted in over 3 000 hours of coding, not exactly what a tech- and product organization is looking for that is planning to be present in ten countries by 2023.
In this project, the business sat at the front seat of the decision-making. Now, Northmill is a tech-company with over 50 percent working with tech, so engineering is always at the heart of the business, but the perspective is business, meaning customer-centric. I am an engineer myself so I completely understand that very technical point of view, but trust me, when deciding on these types of business-critical decisions - it has to be anchored in the vision and the core purpose of the business. In Northmill’s case - answering the question of how does this enable them to improve people’s financial life using technology.
"When everyone in an organization is allowed to investigate, experiment and analyze the data, that’s when an organization can truly become data-driven and insights can be applied to processes and solutions."
What we achieved at the fast-growing neobank is basically unlimited scalability for faster, concurrent data analysis. We managed to offload historical data and make sure that the focus is on results and insights. One of the first things Northmill asked about when deciding on entering into a partnership with Snowflake, Fivetran and Matillion and moving over to their cloudplatforms or not, was how fast the employees actually can see a change in the data. The answer? Down to 15 minutes. This means that Northmill can follow the business in a very agile way, constantly knowing what is going on and thereby constantly improve.
When everyone in an organization is allowed to investigate, experiment and analyze the data, that’s when an organization can truly become data-driven and insights can be applied to processes and solutions. It is beautiful. So it is not as much bringing new tools for the analytics department as bringing the tools out of just one department and making them useful for everyone. Again, based on their needs and clearance.
And when we are talking about scalability. As widely announced just the previous week, Northmill is entering Norway as its third country with many more to come. In just three days the new country was fully implemented in our platform with Analytics and Business Intelligence in place. So I guess we did something right!
"Knowing what I know about Northmill’s setup, believe me when I say that the sky is the limit from here."
Yes I did. I found it all. The prerequisites to have a fail-fast approach, a business model based on customer insights and technology that enables feedback loops, security, efficiency, scalability, product teams, innovation, drive, data, more data, a vault, a warehouse, 150 out of 150 employees becoming an Analyst et cetera - all of that I found at Northmill. And when I left, I looked back at a neobank having a cloud-based tech and data structure that is among the top 1% within financial companies today. Knowing what I know about Northmill’s setup, believe me when I say that the sky is the limit from here.
// Xerxes Almqvist
CEO AnalyTech AB
Business and solution oriented consultant with 20 years experience in building solutions for BI & Analytical purposes and 13 years as line manager amongst other roles. Always up to date with the latest technology as well as legacy tech to find the best solution for any given challenge.