Succeeding with digital transformation in business lending: Trade Ledger interview

How data can remove friction from the customer experience

95% of digital transformation projects fail. That’s what Trade Ledger CEO and co-founder Martin McCann tells Marcel Klimo of Vacuumlabs in this episode of the Banking on Air podcast.

And digital transformation isn’t the outcome that banks should be seeking anyway. While most banks focus on moving existing processes to the cloud to improve efficiencies and cut costs, they should also be leveraging data to remove friction from the customer experience. To back up his argument, Martin explains how Trade Ledger has reduced the time it takes for businesses to apply for a business loan to four minutes instead of 2-6 weeks, if their lender accesses their accounting and banking data through APIs. He says it’s the biggest disruption of the banking business model since the introduction of the ATM.

On the subject of the cloud, Martin says that outdated risk models and cautious regulators are the main barriers to adoption in the financial sector. There’s a broader range of information available today to build new models, but many banks worry that regulators see innovation as high risk. Martin says the UK’s Financial Conduct Authority shows how a progressive approach to regulation can lead to faster takeup of alternative financial services.

 

 

When asked about the first steps in a successful digital transformation process, Martin’s suggestions include focusing on the desired outcomes such as cost efficiencies and sales growth. However, the most common driver is a fear of disintermediation. If banks don’t create more value, they risk losing customers to big tech firms offering embedded financial services.

Marcel also asks Martin to distinguish between ‘cloud native’ and moving infrastructure to the cloud. He explains how cloud-native firms design their business models based on the data and capabilities that exist due to the technology, which allows them to enrich the services they provide to their customers.

Click here to listen to the podcast.

Or to talk with us directly about how Trade Ledger can reduce friction from your customer journey – and ensure your transformation project isn’t one of the 95% that fail – get in touch.

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