Name: Embedded banking, generative AI & distributed ledger: How is ABN AMRO Bank innovating financial services?
Uploaded: 2024-03-11T16:52:20.990Z
Duration: 480.36
Description: Edwin van Bommel, Chief Strategy & Innovation Officer at ABN AMRO Bank, talks to Finovate analyst David Penn about the digitalisation projects inside ABN AMRO Bank. Where’s ABN AMRO Bank in their digital transformation journey? Is distributed ledger technology going to make a splash this year?

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Edwin van Bommel.vtt

English

{{00:00:03}}
David Penn: Hi, I'm David Penn,
research analyst with Finovate.

{{00:00:05}}
We're here at FinovateEurope and
joining me is Edwin van Bommel.

{{00:00:08}}
He is the chief strategy and
innovation officer with ABN AMRO Bank.

{{00:00:12}}
Nice to have you with us.

{{00:00:14}}
Thanks for having me.

{{00:00:14}}
Yeah, fantastic.

{{00:00:15}}
Let's go ahead and jump right into it.

{{00:00:17}}
Can you tell us about the
exciting product developments that

{{00:00:19}}
you're working on at the bank?

{{00:00:20}}
Edwin van Bommel: Oh yeah, for sure.

{{00:00:20}}
So we innovate in a couple of areas.

{{00:00:23}}
One is actually embedded finance,
which you see here a lot.

{{00:00:26}}
The other one is more on the
digital asset side, but especially

{{00:00:28}}
on the embedded banking.

{{00:00:30}}
We're currently live with a
couple of very great products.

{{00:00:34}}
One is to enable  gig workers
that immediately after the gig,

{{00:00:37}}
they are being paid out and we
integrate that in gig work platforms.

{{00:00:40}}
One is to really help a B2B
companies to actually offer

{{00:00:44}}
factoring on their websites with us.

{{00:00:47}}
One is more related to
identification and payments as well.

{{00:00:50}}
So then we combine actually
identification verification of the

{{00:00:53}}
clients together with the payment.

{{00:00:55}}
So if you are a broker or a car rental
company, you actually can also check

{{00:01:00}}
with who you're doing business with.

{{00:01:02}}
And all integrated in
platforms of third parties.

{{00:01:04}}
And even like we, we
do it to API SDK base.

{{00:01:08}}
So even within the look and
feel of those companies.

{{00:01:10}}
David Penn: Yeah, very interesting.

{{00:01:11}}
So the more I hear about embedded
finance and you think that you've

{{00:01:14}}
heard it all, you think that you have
a certain grasp of it, but the more I

{{00:01:17}}
hear about it, the more transformational
it seems it's going to be.

{{00:01:19}}
And just the example you made with gig
workers, and you can think about how that

{{00:01:22}}
would have been 10- 15 years ago where.

{{00:01:24}}
You do this small job, you
should be able to get the quick

{{00:01:26}}
payment, but it's a small job.

{{00:01:27}}
It takes a long time to get the
payment, just imagining how that

{{00:01:31}}
changes the capacity for people to
do that kind of work, or even the

{{00:01:33}}
willingness to do that kind of work.

{{00:01:35}}
Edwin van Bommel: And it's fantastic.

{{00:01:36}}
We have numbers on this.

{{00:01:37}}
So on the platforms where
we actually offer it.

{{00:01:40}}
We see that people were 10 to 15 percent
more because of the instant gratification.

{{00:01:44}}
David Penn: Yeah, that
makes a lot of sense.

{{00:01:46}}
One of the other things that we're
talking about quite a bit here

{{00:01:48}}
at FinovateEurope is artificial
intelligence, as you might imagine.

{{00:01:50}}
So I'm curious in terms
of your own thoughts.

{{00:01:52}}
What do you see the future for AI,
generative AI in a banking context?

{{00:01:57}}
Edwin van Bommel: It will
be very transformational.

{{00:02:01}}
And the reason why it will be very
transformational is because it

{{00:02:04}}
has a very broad set of use cases.

{{00:02:05}}
And obviously.

{{00:02:07}}
Here and there, we need to
be able to understand a bit

{{00:02:09}}
more of its limitations still.

{{00:02:11}}
But honestly, I think AI now really has
the potential of becoming the new UI.

{{00:02:16}}
So the whole way you can interact with
customers, but also internally for your

{{00:02:20}}
own employees can completely change.

{{00:02:22}}
I think the other thing which it
will do is it will allow us to really

{{00:02:26}}
do automation at scale much more.

{{00:02:28}}
And this is not purely the Gen AI,
but it's actually combining the Gen

{{00:02:32}}
AI with other automation components.

{{00:02:36}}
Where Gen AI, often because of the
language interpretation, was in the past

{{00:02:39}}
a missing piece of the puzzle, and I think
the puzzle is now much more complete.

{{00:02:44}}
David Penn: It's really interesting the
idea of how automation has already been

{{00:02:47}}
a revolution in financial services.

{{00:02:49}}
And just thinking about the way that
AI is going to be able to really

{{00:02:51}}
turbocharge it is really interesting.

{{00:02:53}}
I think sometimes people hear
the AI and the automation What's

{{00:02:56}}
the automation with the AI?

{{00:02:58}}
That's old fashioned, but automation
combined with AI is really something else.

{{00:03:02}}
Yeah, that's that's next level.

{{00:03:03}}
Yeah, and I think that's
where the world is going.

{{00:03:05}}
Yeah interesting.

{{00:03:07}}
Another technology that hasn't gotten
as much talk about as late, certainly

{{00:03:10}}
compared to AI, is the distributed ledger.

{{00:03:12}}
Yeah, absolutely.

{{00:03:13}}
It's starting to get a little bit more
talk about now as bitcoin and the price

{{00:03:16}}
of these coins is starting to go up.

{{00:03:17}}
That always brings some
of the interest back.

{{00:03:19}}
What is your thought about distributed
ledger and how it might work into

{{00:03:21}}
financial services going forward?

{{00:03:23}}
Edwin van Bommel: Actually, we work
a lot with digital assets and we were

{{00:03:26}}
actually one of the first, but I think
even the first bank who did a tokenized

{{00:03:31}}
bond on the public blockchain last year.

{{00:03:34}}
And we strongly believe that,
especially in the area of capital

{{00:03:38}}
markets, it will have tremendous
change, payments might be as well.

{{00:03:43}}
But I think if you would be able to
tokenize many of those assets, which

{{00:03:46}}
are currently still a bit more the
old fashioned ones, we can make the

{{00:03:49}}
world much more efficient place.

{{00:03:51}}
That's the first one.

{{00:03:52}}
But also we can open up these type of
assets, for instance, for financing

{{00:03:57}}
to smaller companies as well,
because it becomes more efficient,

{{00:04:00}}
becomes also more affordable.

{{00:04:02}}
And actually you can open up new
opportunities for mid sized corporates

{{00:04:06}}
to actually get different types of
funding than what they can do now.

{{00:04:09}}
So we're, actually very
enthusiastic about it.

{{00:04:11}}
David Penn: Yeah, it's really, I
suspect to some degree, again, the

{{00:04:13}}
attractiveness of the ethereum and
the bitcoin notwithstanding, I do

{{00:04:16}}
sense that the maturation of that
whole space is going to come from

{{00:04:19}}
that end, the distributed ledger,
and more than the coin end, probably.

{{00:04:21}}
Edwin van Bommel: Yeah, and
that's honestly where also we are

{{00:04:24}}
focusing where we are focusing on.

{{00:04:26}}
I think what they're still need
to make, obviously it's a market

{{00:04:29}}
which is very much integrated.

{{00:04:31}}
So it requires changes at quite a
few players in the ecosystem, right?

{{00:04:35}}
So that it's not only about to hold
these assets to maturity, but that

{{00:04:39}}
there's actually secondary markets with
market making, et cetera, et cetera.

{{00:04:43}}
But I see enough people and enough large
institutions, especially now, really

{{00:04:47}}
putting a lot of dedication into it.

{{00:04:50}}
I'm quite positive that it will happen.

{{00:04:51}}
David Penn: Yeah, I've heard some
really interesting applications.

{{00:04:53}}
It was actually a book that came out
not too long ago that was talking about

{{00:04:56}}
the idea of being able to use blockchain
technology to help with the issues

{{00:04:59}}
of deepfakes and things like that.

{{00:05:01}}
So really an interesting area.

{{00:05:03}}
Yeah, definitely.

{{00:05:04}}
Yeah, absolutely.

{{00:05:05}}
One of the things that I think is
important, and it's funny, it's not

{{00:05:08}}
is is hot, so to speak in a lot of
people's minds, but it's still a major

{{00:05:12}}
issue is the problem of legacy systems.

{{00:05:14}}
I know a lot of times when we're talking
about what are some of the big trends

{{00:05:17}}
and sometimes someone will offer digital
transformation, people start to yawn.

{{00:05:20}}
It's yeah, but you look at the
field, there's still a lot of

{{00:05:22}}
transformation left to happen.

{{00:05:24}}
Can you tell us about the experience
that your bank has had with legacy

{{00:05:27}}
systems, how it's managed to
innovate and deal with that issue?

{{00:05:30}}
Edwin van Bommel: Yeah, honestly,
it's for us, like for any other bank,

{{00:05:33}}
a very important priority, right?

{{00:05:35}}
We're migrating away from
some of the legacy systems.

{{00:05:37}}
Others are good enough to
keep, to maintain them.

{{00:05:41}}
But then we put wrappers around it
and make sure that the IT architecture

{{00:05:45}}
is getting less integrated.

{{00:05:46}}
And it's actually all of the above.

{{00:05:47}}
In some areas, we're already
more than state of art as well.

{{00:05:50}}
So it's a bit of a hybrid model where I
think most of the banks are currently.

{{00:05:55}}
I think we should not underestimate
that these transitions

{{00:05:59}}
are very strategic, right?

{{00:06:01}}
So when I was in the panel, I
actually, someone asked a question

{{00:06:03}}
around it, but framed it really as
a tactical thing, but honestly, it's

{{00:06:08}}
not tactical because it's our daily
lifeline for the services we provide.

{{00:06:13}}
And if we make mistakes in those
types of migrations, like people

{{00:06:16}}
cannot access their money for
it, which would be disastrous.

{{00:06:18}}
So for us, it's very strategic and
we take it step by step where we have

{{00:06:22}}
roadmaps for these things to do and
in the end we need to get there and

{{00:06:28}}
honestly, if you look at where we need
to be, then, legacy systems will also

{{00:06:35}}
play an important role in the future.

{{00:06:37}}
It's not that we can just get rid of it
as such, because it's way too complex.

{{00:06:41}}
David Penn: That's a really good point.

{{00:06:42}}
I think that there was probably a period a
while back where there was almost this rip

{{00:06:45}}
and replace thing where it's like, Oh no,
we've just got to get rid of everything.

{{00:06:48}}
And I think that probably turned
off a lot of institutions with

{{00:06:50}}
that was the suggestion of the
advice that they were being given.

{{00:06:53}}
It's maybe we need to transition,
but if it's going to mean

{{00:06:55}}
something that significant we're
going to have to put this off.

{{00:06:58}}
We're going to go maybe
slower than we want to.

{{00:07:00}}
And hearing you talk about it as something
that companies and financial institutions

{{00:07:03}}
need to approach very strategically
and very carefully because they might

{{00:07:07}}
have systems that really are doing
perfectly fine with a wrapper, with a

{{00:07:09}}
little bit of technology, as opposed to
thinking that everything's got to go.

{{00:07:13}}
I think it's a really
important way of looking at it.

{{00:07:15}}
Thank you.

{{00:07:17}}
I just wanted to ask maybe
a way of wrapping up.

{{00:07:19}}
What are some of the things that maybe
we can expect to hear from the bank?

{{00:07:21}}
We have you back here,
say, in a year or two.

{{00:07:23}}
What are some of the things you can
say here's some of the things we were

{{00:07:25}}
working on in 2024 that now we're
ready to roll out for the public?

{{00:07:29}}
Edwin van Bommel: Yeah,  I think you
will see us engaging even more in

{{00:07:34}}
an intimate way with our clients.

{{00:07:35}}
I think that's right.

{{00:07:36}}
So even more, much more friction
free, much more focusing

{{00:07:39}}
on the individual needs.

{{00:07:40}}
I think on the retail side
that is very critical.

{{00:07:43}}
I think more on the B2B to C side,
really having even more embedded banking.

{{00:07:48}}
I think those are the two things which
I would love to talk about next year.

{{00:07:51}}
David Penn: Yeah, fantastic.

{{00:07:51}}
We'll have to have you back then.

{{00:07:52}}
Yeah, perfect.

{{00:07:53}}
Thank you.

{{00:07:54}}
Thank you very much for the conversation.

{{00:07:55}}
Yeah.

{{00:07:55}}
Thank you.

{{00:07:55}}
Great.

{{00:07:56}}
And thank you too

David Penn: Hi, I'm David Penn,
research analyst with Finovate.

We're here at FinovateEurope and
joining me is Edwin van Bommel.

He is the chief strategy and
innovation officer with ABN AMRO Bank.

Can you tell us about the
exciting product developments that

One is actually embedded finance,
which you see here a lot.

The other one is more on the
digital asset side, but especially

We're currently live with a
couple of very great products.

One is to enable  gig workers
that immediately after the gig,

they are being paid out and we
integrate that in gig work platforms.

One is to really help a B2B
companies to actually offer

One is more related to
identification and payments as well.

So then we combine actually
identification verification of the

So if you are a broker or a car rental
company, you actually can also check

And all integrated in
platforms of third parties.

And even like we, we
do it to API SDK base.

So even within the look and
feel of those companies.

So the more I hear about embedded
finance and you think that you've

heard it all, you think that you have
a certain grasp of it, but the more I

hear about it, the more transformational
it seems it's going to be.

And just the example you made with gig
workers, and you can think about how that

You do this small job, you
should be able to get the quick

It takes a long time to get the
payment, just imagining how that

changes the capacity for people to
do that kind of work, or even the

So on the platforms where
we actually offer it.

We see that people were 10 to 15 percent
more because of the instant gratification.

David Penn: Yeah, that
makes a lot of sense.

One of the other things that we're
talking about quite a bit here

at FinovateEurope is artificial
intelligence, as you might imagine.

So I'm curious in terms
of your own thoughts.

What do you see the future for AI,
generative AI in a banking context?

Edwin van Bommel: It will
be very transformational.

And the reason why it will be very
transformational is because it

Here and there, we need to
be able to understand a bit

But honestly, I think AI now really has
the potential of becoming the new UI.

So the whole way you can interact with
customers, but also internally for your

I think the other thing which it
will do is it will allow us to really

And this is not purely the Gen AI,
but it's actually combining the Gen

Where Gen AI, often because of the
language interpretation, was in the past

a missing piece of the puzzle, and I think
the puzzle is now much more complete.

David Penn: It's really interesting the
idea of how automation has already been

And just thinking about the way that
AI is going to be able to really

I think sometimes people hear
the AI and the automation What's

That's old fashioned, but automation
combined with AI is really something else.

Yeah, and I think that's
where the world is going.

Another technology that hasn't gotten
as much talk about as late, certainly

compared to AI, is the distributed ledger.

It's starting to get a little bit more
talk about now as bitcoin and the price

That always brings some
of the interest back.

What is your thought about distributed
ledger and how it might work into

Edwin van Bommel: Actually, we work
a lot with digital assets and we were

actually one of the first, but I think
even the first bank who did a tokenized

And we strongly believe that,
especially in the area of capital

markets, it will have tremendous
change, payments might be as well.

But I think if you would be able to
tokenize many of those assets, which

are currently still a bit more the
old fashioned ones, we can make the

But also we can open up these type of
assets, for instance, for financing

to smaller companies as well,
because it becomes more efficient,

And actually you can open up new
opportunities for mid sized corporates

to actually get different types of
funding than what they can do now.

So we're, actually very
enthusiastic about it.

David Penn: Yeah, it's really, I
suspect to some degree, again, the

attractiveness of the ethereum and
the bitcoin notwithstanding, I do

sense that the maturation of that
whole space is going to come from

that end, the distributed ledger,
and more than the coin end, probably.

Edwin van Bommel: Yeah, and
that's honestly where also we are

FinovateEurope

Case Study

Expert Insight

Edwin van Bommel, Chief Strategy & Innovation Officer at ABN AMRO Bank, talks to Finovate analyst David Penn about the digitalisation projects inside ABN AMRO Bank. Where’s ABN AMRO Bank in their digital transformation journey? Is distributed ledger technology going to make a splash this year?