EXCLUSIVE: “Design Your Thinking Before You Act” – Arun Jain, Intellect Design Arena in ‘Discover Money20/20’

Bolting new tech onto legacy has clearly been a costly experience for banks. Real progress won’t happen unless they create the headspace for radical change, says Arun Jain of Intellect Design Arena

‘How do you implement real and lasting change?’ is a question that many financial institutions continue to wrestle with. The Digital Age demands agility and innovation, but many financial services’ inherent rigidity, inefficiencies, lack of customer-centricity and ill-preparedness for future challenges are all represented by – and by-products of – legacy systems.

However, implementing significant transformation cannot merely be about ‘adopting digital’ or ‘bolting-on’ technology to infrastructures simply not fit for purpose. According to Arun Jain, Chairman and Managing Director of Intellect Design Arena, genuine progress requires a fundamental, seismic shift in attitude and culture within an organisation.

Intellect should know, as providing comprehensive banking technology is in its DNA. For more than 30 years, the tech company has provided composable and intelligent banking services. Today, it has more than 300 global financial institutions as clients in 57 countries. The four arms of its business now embrace: Intellect Global Consumer Banking (iGCB), Intellect Global Transaction Banking (iGTB), Intellect AI and Intellect Digital Technology for Commerce (iDTC).

Underpinning all of these is eMACH.ai, which Intellect calls ‘the most comprehensive, composable, and intelligent open finance platform in the world’, specifically tailored for the banking, financial services, and insurance sectors. This platform leverages its iTurmeric environment to develop customisable microservices, bespoke to the organisation using it. Low-code iTurmeric enables users to create applications with minimal coding, reducing development time and making the process more accessible to a wider range of professionals.

In August 2024, Intellect added to its offering by launching Purple Fabric, an agentic AI adoption platform. Purple Fabric creates a single knowledge bank from six sources: structured and unstructured enterprise data, policies, market data, regulatory information, and tacit knowledge, which allows companies to deliver actionable AI insights and solutions. The Fintech Magazine’s Editor-in-Chief, Ali Paterson, sat down with Jain to discuss how best to stir slumbering banks into action and bring the customer experience to the fore.

THE FINTECH MAGAZINE: What do you see as the major challenges in modernising the financial sector?

ARUN JAIN: There are two faces of the industry that are very distinct from each other. On one hand you have innovations like open APIs, open AI, open finance, embedded finance and the like. Then you have the 60-year-old technologies sitting in legacy financial services, which require transformation and cleanup of the layers and layers of monolithic and disparate architectures and legacy data structures. These really are broken systems, which require design thinking to simplify the entire transformational agenda.

And applying patches is not the solution, as they are inefficient and expensive. To me, technology costs for the financial institution should be coming down, not going up as they are now, with more streamlining and by bringing the customer into the centre.

“Innovation is a culture, not a process… It’s about creating the right thinking space that brings the customer front and centre. Many of the large banks in Europe failed in transformation because they never organised a thinking space”

TFM: So, how can these institutions implement the changes needed to bring them into the modern world?

AJ: Innovation is a culture, not a process. A lot of banks believe that by saying they are innovating, the job is done. I’ve heard the phrase ‘diseconomy of disorganisation’ to describe this. If I am paying lipservice to transformation, I am really justifying my presence. That doesn’t lead to the innovation fundamentally because I’m defending my stuff. I’m actually fearful of change and will be overtaken by new demands.

A culture is a set of people who come together and start believing in change, and then make it happen. It’s about creating the right thinking space that brings the customer front and centre. Many of the large banks in Europe failed in transformation because they never organised a thinking space.

Look at Revolut, for example. It created a new culture of belief, a new culture of can-do, a new culture of the right technology, a new culture of the customer being in the centre – this is the thinking space for that business. From those strong foundations, you can build something special. And you then move from thinking space to performance space by creating the right frameworks.

What is a business impact framework for the customer? What is a functional framework? What is a technology framework? What is my transformation framework? If I create this framework, it will help me succeed in transformation.

TFM: If you’re a CIO or CTO in a big retail bank, what can you actively do to change that culture, which brings about innovation?

AJ: I often point customers to our own very real experiences as a business. Twelve years ago, I set up a design thinking centre by creating 30,000 square feet of physical space. It was important to have a physical location to be able to show design thinking in action.

A lot of the time, when innovation is just being spoken about by CEOs, people don’t believe it because they are just words they’ve heard before. Words have to turn into reality and be supported by proper frameworks. The initial approach has to be not around solving problems but around the thinking of the business, changing attitudes and culture.

The problem-solving can come later, once you have those building blocks in place. If you create a hierarchical obedience environment, that’s not suitable for the design of the thinking culture. At Intellect, we help the client to first design the thinking, and once that is applied, then I can say ‘now you can build up a map to identify the opportunity’. And, finally, you should also celebrate conflicts when you are at this thinking stage. Conflicts and creativity are the two sides of the same coin.

Conflict means difference of opinion, difference of expectation, and difference of perspective – these are the three elements that are required for creativity.

TFM: So, with the all-important culture in place, how does eMACH.ai fit into the picture?

AJ: We identified that banks principally exist because of four financial events in the life of a customer: deposits, lending, investment and payments.

If these are defined, as we have, into 386 microservices, which are connected to each other with 2,015 APIs, and then put on the Cloud, it’s headless, so that when a customer needs three services of retail banking, five services of lending, three services of investment or two services of payment, they can compose a solution. This is what we call eMACH.ai. E for event, M for microservices, A for API, C for Cloud and H for headless. Together all these elements help the bank choose exactly what they need. We provide transformation certainty in delivery, time and quality.

This is a solution at half the time and half the cost, and the transformation can be certain because they know what they are putting into their box. They’re not taking all the junk of transformation along with them. Let’s look at another example of a large UK bank that we are currently helping with the internationalisation of its business, and it chose us because of eMACH.ai. The bank knows it can choose the pieces for one country if it’s going to Singapore, and another if it’s going to the UAE, effectively designing its own portfolio. It doesn’t have to buy three data sets, one for the core banking system, one for the lending system, one for the wealth system and one for the payment system.

What’s the point of being in a restaurant and wasting 80 per cent of the meal? With eMACH.ai, you pay for what you consume.

TFM: You mentioned putting the customer first. What does a customer-centric rather than product-centric approach look like?

AJ: This is a hangover from when, 40 years ago, institutions launched lots of products with only a very small IT infrastructure. Customer data sat within all these separate products. So, moving forward to today, a customer may need those four services, deposits, lending, investment and payments, as we discussed. Banks now need to design a process that encompasses all four services, rather than logging into four different systems and four different services being provided.

The bank has a rule set, but these rules are embedded within its different products. Customers shouldn’t get three statements for the same month from the same bank. Efficient data design means that we can have all the customer’s data sitting in one place, and our composable platform iTurmeric, for example, can connect all the dots.

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