IBS Journal November 2015
First Niagara Bank in enterprise-wide digital transformation; core system under review
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of this product in the US, if that were indeed the case with First Niagara. The project is still ongoing, but a
number of significant milestones have already been reached, such as the intro- duction of new mobile banking capabil- ities. ‘A customer can open an account with us on a mobile device in minutes,’ says Hlivko. In a few months since the launch, account opening via mobiles has grown to 50%. ‘This exceeded our expec- tations,’ he adds. ‘Instant interaction and engagement
with existing and new clients is crucial,’ he states. ‘There is always a lot of friction with-
in an organisation,’ Hlivko comments, so it is important to ensure that everyone understands the project and is working
towards the same goal.
Next on the agenda: the core As mentioned earlier, FIS’s Miser is the bank’s core processing system. It was in- stalled at First Niagara back in 1978. The platform has served the bank well over the years, Hlivko says. Despite its age the platform is real-time, he emphasises. ‘It is a hidden gem.’ However, changes might be on the
horizon soon. The bank is evaluating the future of its legacy core and has gone to market to see what is available. It is understood that four vendors – a mix of domestic and international – are being considered as a possible replacement for Miser.
Tanya Andreasyan Key takeaways
• Know your priorities: First Niagara was clear in its focus on digital.
• Know your opportunities: First Niagara saw an opportunity to diversify from being a retail banking player into commercial banking space.
• Deliver your message clearly: First Niagara placed a lot of emphasis on delivering a comprehensive message on its transformation plans to its customers, employers, man- agement and shareholders.
Lending platform Kabbage raises $135m from major banking backers
Kabbage, a US lending company based in Atlanta, has raised £135 million in equity from a group of investors that include ING, Santander and Scotiabank. Other backers include China’s Yuan
Capital and Japanese firm Recruit Strate- gic Partners, as well as existing investors from earlier funding rounds. The fresh investment, led by Rever-
ence Capital Partners, will give Kabbage, which deals mainly with SMEs, the chance to collaborate with the major banking investors. According to chief executive Rob
Frohwein, Kabbage can provide the banks 26
with ‘an elegant technical solution’ for consumer and small business lending. The company, he says, is expected to reach $1 billion in originated loans this year.
Kabbage’s patch Kabbage delivers a verdict on its loans in six minutes, granting up to $100,000 in credit lines to new businesses. The firm is supported by investment company Guggenheim Securities. Mariano Belinky, managing partner
at Santander InnoVentures, told IBS Intel- ligence: ‘Kabbage is one of the leading companies in the lending space. The plat-
© IBS Intelligence 2015
www.ibsintelligence.com
form is critical for scaling and powerful lending.’ Commercial collaborations are a
distant thought, however. At the stage, Belinky says, the two companies are not discussing the future. With its new funding Kabbage intends
to licence its technology to banks and oth- er financial institutions, as well as expand internationally. Its main target in 2016 will be Latin America. The lending company has raised over $240 million in equity funding so far, plus an extra $360 million in debt financing. Alex Hamilton
us round-up
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