“We live in a PSDX by design era”


Nothing reshapes the finance industry like technology. But how should we navigate in an increasingly complex digital world, fueled by discussions around technology’s role in society and always with new legislation lurking around the corner? To sort this our we interviewed our very own security expert and PSD2 specialist, Ninos Gawrieh. And since we had so much to talk about, we decided to split the interview into two parts.

How do you see trust in finance today?
We have to view trust in light of today’s reality. It is all about putting the customer in the center of everything you do. To work with loyalty-programs, seamless customer experience, short response time in the customer center, smooth onboarding process etcetera. This may seem to be on a very basic level at first - but this is what matters today and also the answer to how we build and retain trust. Brand loyalty will be a key differentiator and increasingly more important as more players enter the market, mainly thanks to PSD2.

How is trust related to digitalisation?
In many ways. First, we are not getting any trust from today's customers if do not put them in the front seat. The customers have to decide how they want to handle their personal finances, on what device, at what time etcetera. This boils down to the fact that technology is the number one trusted partner. And to be able to handle that, companies need to build trust via personalised communication, fantastic products and cutting edge user experience.

Is this also true from a global perspective?
Sweden is still a country with a high degree of confidence in the financial system, in our decision-makers etcetera. Hence, in other countries with less confidence in the corresponding institutions, we will see an even more rapid development where technology serves as a trusted partner, enabling people to have control and handle their own personal finance in a way they choose and feel comfortable with. At Northmill we are constantly developing and challenging ourselves to find new ways to attract and retain customers. Our product Rebilla Reduce, where we help people save both money and time by lowering their cost of existing private loans, is one example of that.

What about one of the core pillars in finance, credit scoring - how do you see the future of assessing risk?
We think the future of credit scoring is full of opportunities and that is also why we are constantly exploring it. We keep close track of the development in this field in Sweden as well as internationally, and our own data science team is exploring opportunities in a sort of R&D friendly environment. We basically tell them to experiment with new machine learning-inspired technologies and test them against more traditional regression models and analysis. This is really exciting! I believe we will see more machine learning (ML) driven-driven credit scoring models in the future. ML must not be a black hole, we need traceability in ML-driven models and always make sure we are compliant with the new legislation.

Yes, new legislation is constantly around the corner as you mention, and among them, PSD2. How do you think that will change things?
It will, but rather than leading the existing development, PSD2 is fuelling it. In a sense, we are already living in a PSDX by design era. Nonetheless, it is turning up the heat on the traditional players. The initiative is great because the customers will benefit from it. And we support the general idea of levelling the playing field between traditional players and new challenging tech-driven companies. We strongly believe that all players on the financial markets have to become better in handling and processing data. It will not necessarily become more data to handle in total, but companies need competence and platforms that can handle and analyse the relevant data, in a responsible way. We will also most likely see that traditional players make a joint effort and set a common standard. This has happened in the UK, where nine of the largest banks have come together to set a common payment infrastructure. I know there have been some discussions among the larger banks in Sweden to do the same. PSD2 will demand everyone to have a more holistic approach because PSD2 will most certainly affect many other areas of banking in the near future.

Can trust really be a success factor in the financial industry today?
Yes, definitely! We believe that X technology in itself will be the trusted partner. Just as the traditional teller in your local bank office used to be. Back when we trusted our money and payments with a person, and we did not hand over the trust to technology directly. But, especially for the younger generation born with technology and devices, this is not the case. That means that a company's history and legacy isn’t that interesting anymore either. Customer experience and technology becomes important and PSD2 will fuel that development. But we believe it will happen, and already happening, anyway.