Start small, for the sake of the many - Ikano Bank delivers agility

Conditions for a better everyday life

Ikano Bank currently has banking operations in eight countries and partners in many more; "For a relatively long time, Ikano Bank has been expanding, quite classically by acquiring other banks. But this means that we have many different solutions. Somewhat jokingly, you could say that we have had a bank in every country, in terms of our solutions", says Mikael Andersson, Head of Digital Delivery at Ikano Bank.

Ikano Bank's vision is to create conditions for a better everyday life by giving "the many" a fair alternative in everyday life for financial services such as personal loans, mortgages, and savings accounts. They are 49 % owned by the Ingka group (IKEA), a strong partner and enabler in providing decent everyday alternatives for the many. At the beginning of 2021, they were given a new challenge to solve, in record time: "Just over 3 years ago, our team was given a challenge; to launch a new financing service that enables IKEA customers in the UK to shop on credit, where the whole process can take around 1 minute. We had a new cloud-based platform and the introduction to the end consumer was completely digital. The product had to be launched within a year, and I don't think you need to have worked in banking and finance to understand that this is a tight timeframe. Tight, but not impossible."
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"We needed to solve what no one else had solved before..."

Giving IKEA's customers a financing option that can be chosen directly in the store is undoubtedly a nice and easy everyday option. However, new markets present new challenges - customer identification, credit check, and payment solutions could not be replicated from other solutions. Michael's team simply had to rethink and rethink again. "We needed to solve what no one else had solved before, as digital identification is not as widely accepted in the UK as it is in Sweden and the rest of the Nordic region. The product would involve a fully digital introduction, including credit checks, customer identification, and payment of the credit. In short, we didn't just need a new platform - we also knew that we would never get this off the ground if we continued to work in the same way as before. So we had to change ourselves and our ways of working.

From waterfall to agile

There are many studies that exemplify how organizations, large and small, should succeed in their transition from classic waterfall organizations to agile organizations. Often the aim of the agile transition is to become faster, more flexible, and less vulnerable. But an agile transformation does not happen overnight, and it is less about technology and organizational affiliation than about the attitude, willingness, and commitment of employees and management.

The transition can be jarring, but it's a small price to pay for the benefits of working in an agile way. As with any transformation, communication is key; "The 'pain' in the team in the agile transition usually comes when you suddenly can't call your manager and get a reprioritization. Agile works when everyone follows the same way of working and has bought into the same process, and then the classic phone line to the manager is suddenly of a different nature. As a Change Leader, you need to be transparent - communicate why you want to work agile, be clear about expectations, and how you plan to work together. Transparency is just as important when talking to management as it is when talking to the team, you need to get a consensus. Avoid starting with too big a plan and with too many groups; start small and with a team that wants to work in an agile way, and then invite more and more people gradually. That way you'll get more advocates for the agile methodology," says Mikael.

The Tech Stack:

• AWS
• Confluent Cloud (streaming)
• App (iOS / Android)
• Sitecore (web)
• Curity (token management)
• GitHub, Jenkins etc. (dev environment)

Tougher requirements for IT skills in business

In industries around the world, IT is slowly but surely moving into the rest of the organization. The purpose of IT is more than just secure operation; understanding IT has a completely different business value today than it did 10 years ago. Mikael sees the same shift: "IT is being moved into the business of many large companies, not just at Ikano Bank. When IT moves out into the business, stricter demands are made on management regarding knowledge of how sustainable and secure IT should be conducted, which has a ripple effect in the business itself. Data is a core resource that requires understanding, not least in the financial sector, where in addition to the possibilities of data, you also have completely different requirements when it comes to regulatory compliance."

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"We're not technology-driven - we're customer-driven"

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At Ikano Bank, Mikael's Digital Delivery department works closely with Product, Security and Customer Experience. The close proximity of these groups gives developers a deeper understanding of the product, and the product owner a deeper understanding of the technology and the customer experience. For Ikano Bank, and many start-ups, the adoption of agile working methods is about one thing - customers. "We're not technology-driven - we're customer-driven. Technology is an enabler, but the focus is on customer needs and problem-solving. If we are to become 'a bank for the many', we must be customer-driven," explains Mikael.

Results from the app in February 2023

• Number of downloads since launch: more than 130,000
• Conversion rate: more than 30
• Customers contacting customer service has been reduced by more than 90%.
• Average time to go from start to approved credit 11 seconds.

Agility beyond organizational boundaries

Creating strong partnerships is often seen as part of an agile transformation, provided you get a partnership exchange that not only delivers, but also challenges: "We want to expand in a variety of markets. For us at Ikano Bank, there is no 'one size fits all' solution; it's about seeing the opportunities that each individual market has to offer. We do this by making as few adjustments as possible in the beginning and working iteratively with development. In the end, this gives us an extremely flexible architecture. And being flexible ultimately means we can also be stable in the new market. We can replicate and scale solutions in markets we are stable in and that is when we can start creating real value for our customers. Our purpose, "to create the conditions for a better everyday life for the many people", is inspired by IKEA and that formulation helps us in the development phase as well. If you look at a solution that should be accessible and suitable for everyone, it is basically impossible. But if you look at something that should fit about 80 percent, it's suddenly easier," says Mikael.
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Technical developments to meet customer needs

• From on-prem to cloud-based platform for the entire IT architecture
• Composable and microservice-based architecture
• Automated build and deploy
• AI based security monitoring
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We at Forefront are proud of our close partnerships and agree wholeheartedly when Mikael emphasizes the importance of developing partnerships over time: "Partnerships are built over time, not by contract. We need partners who challenge us and help us identify problems or opportunities that we don't see ourselves. But as I’ve said many times before, time is needed to build a partnership. In this project, we keep the grouping together, despite having many different partners. It's all about creating the right conditions to become more agile, whether you work with external partners or just within a team. But you have to be able to keep two thoughts in your head at the same time, because these conditions, or structures, must not become waterfall thinking."

Want to be more agile?

Here are Michael's top three tips:
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• Think 3-5 weeks, not 3-5 years.
• Build trust with the team and management, for example by doing smaller pilot projects and showing the results.
• Put effort and time into the planning phase, it will make the transition easier.

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