Christoffer Malmer, SEB, on breaking out of legacy thinking and embracing innovation

Great to be here. Thank you.

Absolutely. So my name is Chris Malmer. I'm responsible for a business that we call SCBX. We've been around for 160 years and are facing increasing disruption. We set up SCBX as an organization at the fringe to make faster decisions, try new technologies, explore new product developments, and accelerate digital transformation within the bank and the industry.

Yeah. We started a bit more than three years ago with a clear dual purpose: build new products and drive digital transformation. The first product we launched is called Unquo, dedicated to self-employed individuals in Sweden. We want to broaden that product and geographically. It went live beginning of last year, and we are iterating. Underneath Unquo sits a technology platform built from the ground up, cloud native, with technology partners. This platform is now used more broadly by the bank. The third leg of SCBX is offering this platform as a service - banking as a service. We are signing our first external customer, a Nordic company that will build their value proposition on top of our platform without being a bank.

Well, it's a brilliant group of people on that panel, so I'm really looking forward to sharing our experience and learning from them. I think it's easy to pit incumbents against fintech, but our experience is that there's so much value in the intersection. We are investing in fintech companies and working with fintech partners within SCBX, both in core banking processing and AI functionalities. We're excited about working together and leveraging the capabilities of other corporations.

Yeah, a bit more than that actually. 1856 we were formed.

Yeah, you're spot-on. It's not just technology, it's the way of working. It's a combination. When we started SCBX more than three years ago, we said if we only get to work with cloud, AI, ML, that would send us into the new digital era, but it's so much more about the way we're setting up teams, recruiting talent, and redesigning processes. For us, driving that agenda broadly across the bank, but within SCBX we can have a higher pace, try more things quickly because we are an autonomous unit, then frequently sharing our learnings back to the mothership.

I think when we set this out from the very beginning, we didn't really know which direction it would take. It was an important part of the venture to say we're not going to do a traditional project with clear milestones. We said very broadly we're going to explore new technology and build new products. Those two things will have to find their ways. The only prerequisite is that dual strategy to ensure we are driving digital transformation for the broader bank and not just being a laboratory. So those two in balance are critical.

I completely agree. Back in 2015 at SEB, we changed our venture capital arm from investing in everything except financial services to investing exclusively in finance. Complete reversal. This was to embrace a new breed we want to work with. The first investment we did was with Tink, which just recently announced the completion of their sale to Visa. That's been a fantastic journey as an investor and a partner. They are now powering the consumer app within SEB. We've learned a lot from working with them. Now we have a handful of investments, including Thought Machine in the UK, which is a core banking partner within SCBX. So working with fintech, using their technologies, investing, learning, and growing together has been a very positive experience.

There's so much going on. For us, one critical difference between building technology today and over the last 160 years is that tools are available now that weren't when legacy systems were pieced together in the 70s, 80s, and early 90s. What we're trying to do is keep more flexibility and modularity, so we can put new products and partners into the stack and also take them out. Not building a platform that cannot be changed, but keeping flexibility as part of the DNA. It's not easy, but it's different. There's an opportunity to decide where our relative competitive advantage is. We don't think we should do cloud better than anyone, so we work with a cloud provider. We don't think we do core banking processing better, so we work with Thought Machine. We find technology partners across the stack, but certain parts we have an edge, especially close to the user interface. When we offer this as a service, a lot sits in the banking know-how.

Absolutely, thank you.