Elevator Lab: Raiffeisenbank’s new approach to working more effectively with fintech startups
With recent pandemic related events, many businesses accelerated their digital transformation and innovation efforts and are reaching out to the flexible, disruptive, and more affordable startup ecosystem. Corporate acceleration and corporate innovation are terms that sound great on paper, yet from what we’ve heard already from startups being engaged in this it may sometimes be very challenging.
But what does this all look like from the side of the corporate partners, what they do to make it easier for startups to swim in the corporate procedure ocean? Raiffeisen Bank International has recently announced its Elevator Lab Partnership Program for fintechs with analytics and loyalty solution. The program has totally new design that features paid proof of concept in Bulgaria and Romania. As the application deadline is nearing (26th of June), we invited Istvan Kovacs, Senior Strategic Partnerships and Ecosystems Manager at Raiffeisen Bank International and Yoanna Genova, Innovation Manager at Raiffeisenbank Bulgaria, are explaining the structure of the program and the intentions of the banking group.
Trending Topics: So this year Elevator Lab comes with a new for the region design that guarantees 4-5 months of paid PoC for the two selected fintech startups. It almost sounds too good to be true. What’s the catch? What does a PoC process actually look like at Raiffeisen and what have been the major challenges so far that made you launch the program in this form?
Istvan Kovacs: Let me start with the thinking behind the program and what we’ve seen in the past. Although in many cases the business lines are very interested to run a proof of concept with a fintech they cannot commit their resources – both business and IT, on a short term, because they have their daily work and ongoing projects. So, this year we turned it around and agreed on the focus topics in advance and came up with individual timelines for the network banks. This gives everyone the necessary tie to prepare in advance so they can commit the resources.
The main goal of the program is to build up meaningful partnerships with fintech companies and the first major milestone is to do a pilot. The Elevator Lab gives all the necessary framework to do so – the applications, the selection phase, where mentors from both countries and the main office look at them and evaluate them, and then the acceleration phase when we run the PoC. And of course, if the pilot is successful, there is a scaleup opportunity.
In regards to the financing, we believe that it’s essential to commit to a funded PoC because fintechs put the necessary effort there and it should be appreciated. In our experience, also to assure the commitment on both sides, the PoC should be paid.
What about Bulgaria? What have been the major challenges/ blockers for you to work with startups and launch new solutions?
Yoanna Genova: So far, we’ve conducted two batches of Elevator Lab and we have accumulated some experience. One of the major challenges was mostly the legal frame. Banking and finances are two of the most heavily regulated sectors so this automatically causes a lot of restraints for us. The experience so far is incredibly important for us so that now we have the skillset and knowledge about the legal framework and know how to proceed when launching new products. This year we are going more agile and through digital transformation, which helps us update our systems, but also change the mindset within the organization, which turns out to be incredibly important. In a way, the Elevator Program endeavors, as our means and tools, to improve our organization and customer experience.
So far, we’ve collaborated with Evrotrust, which is at the core of two of our digital products – digital onboarding and e-loan, which is a significant improvement for our customers. We’ve successfully collaborated with Pisano, the global winner from Elevator Lab two years ago. Right now, we are testing with Phos. Last year we also launched RaiConnect, which is a consultancy and digital exchange of documents platform, which we’ve developed in collaboration with Moxtra, another startup from Elevator Lab.
Why pilots in these two domains – analytics and loyalty – with these two subsidiaries – Bulgaria and Romania?
I.K.: Both banks have been very active when it comes to fintech programs and fintech acceleration. They have not only run programs in the previous years but pretty much pioneered in coming up with new forms. As an example, last year, we came up with a program for earlier stage fintech and Raiffeisenbank Bulgaria was the only network bank that ran it alongside the main program for more mature startups. So these two banks are very experienced, which gave us the confidence to run the programs there and open it for startups from all over the world.
As of the two topics – analytics and loyalty, the reason is that the two hosts – Bulgaria and Romania, came up with the most burdening topics for them. As a second step, we checked up that the topics have relevance group-wide so we know that we can scale successful pilots because there will be enough interest.
Why would a startup want to do a pilot with one of the two subsidiaries instead of RBI. What makes the new design of Elevator Lab better and what are the USPs of Bulgaria and Romania?
Y.G.: It’s important to know that RBI in Austria doesn’t serve retail clients and micro customers, so every fintech that wants to work in the retail domain should inevitably go to the network banks. I think this year’s partnership between Bulgaria and Romania is a great proposition for fintechs, because combined we are giving an opportunity to enter into two major markets serving 1.8M customers. It’s also a great proof for the startups to see whether they have the capabilities to scale.
Also, we launch the pilots in these two countries, but the selection happens in the whole group, which gives startups visibility in the whole network. So this is a great entry to the group.
What are RBI’s expectations towards startups? What behavior/ preparation/ attitude is accepted well and what not?
I.K.: It’s collaboration, proactivity, learning, and responsibility. These are the values we share in the RBI Group, and also what we expect from partners.
Yoanna, what do you think, are there any specifics in this regard in SEE, will this year the Romanian and Bulgarian teams be more engaged in the selection and piloting?
Y.G.: This is a good question. Initially, we started out collaboration on very general terms and when we started exploring the needs deeper we found out that they actually coincide. It’s important to mention we’ll have two winners, which means at least one fintech per country. We’ve engaged mentors and colleagues from many different departments, which will guarantee objectivity and dedication. We learned something from the previous batches: even though sometimes we get very inspired and excited about certain solutions we have to face the reality and start calling the IT guys and the legal department, so it’s very important for everyone to be in the loop early on and fully prepared in October when we will start to test.
What do corporations and corporate managers and employees (outside the innovation teams) think about corporate innovation efforts and how is this perception changing in the past years, also most recently with the ‘new normality’?
I.K.: I’d say that the perception has definitely been changing since we started the program in 2017. In the beginning, for many colleagues, the fact that small innovative companies bring real tangible benefits for the banks and the customers looked like science fiction. But after the first success stories like Evrotrust, the colleagues started to grasp it. Also with solutions that made the daily working routine easier made it easier to internalize.
What makes me even more convinced it has changed is the pull-approach that I’ve observed recently. Some colleagues are already coming to us with ideas about particular fintech companies that may fit into the group agenda. More and more network banks come to us asking to participate in the Elevator Lab, and this year we have 12 out of the 13 network banks participating. Not least, the recent COVID-19 situation shed more light on the importance of digitization and remote accessibility and made the Elevator Lab program even more relevant.
