Green Bytes & Banking: Przemysław Koch’s Innovative Fusion
Under Koch's guidance, VeloBank has also revolutionized the digital banking experience. The bank has streamlined banking transactions to a minimal number of smartphone interactions and launched Poland's first digital mortgage application process. This digital forefront allows customers to apply for mortgages from home, featuring a seamless online portal with video conferencing capabilities for consultations with credit analysts. These advancements underscore Koch's dedication to creating intuitive, accessible, and convenient banking solutions.
Przemysław Koch
VeloBank
Board Member, CTO, COO
Drawing inspiration from Winston Churchill, Przemysław Koch's leadership philosophy is anchored in perseverance and resilience. He recounts a pivotal career moment at the Ministry of Finance, highlighting the importance of adaptability, vision, and the ability to lead through change. Koch's narrative illustrates his journey through challenging environments to achieve significant milestones, such as the e-TOLL system and initiatives for tightening tax administration.
Could you share a bold initiative that VeloBank has recently undertaken which represents a significant departure from traditional banking practices?
In the realm of banking innovation, our recent standout initiative is the creation of VeloMarket (available at: www.velomarket.pl), a platform that veers from traditional banking by providing access to a selection of pro-health and environment friendly products. This initiative aligns with the growing emphasis on sustainability and social responsibility. It grants customers the opportunity to make purchases that align with their values, such as health, environment, with the added benefit of exclusive discounts for VeloBank clients.
Further diversifying our digital footprint, we have made significant strides in enhancing user experience by simplifying banking transactions to a minimal number of interactions on a smartphone. Additionally, we’re proud to have pioneered the first digital mortgage application in Poland. This service allows prospective homeowners to initiate and complete their mortgage application from the comfort and safety of their own home, facilitated through a dedicated online portal that supports video conferencing with credit analysts. This is part of our broader strategy to provide more intuitive, accessible, and convenient banking solutions.
Do you believe in the banking SuperApp concept?
As for the SuperApp our stance is more aligned with the ‘Beyond Banking’ philosophy, which incorporates elements of the MBD (Mobile Banking and Digital) and embedded payment system. This concept involves providing services and products, often in strategic partnerships with other entities, that are not traditionally associated with banking but are integrated with financial components, whether it’s payments or financing from the bank.
We do support the idea of offering our clients the products and services they are interested in, within a framework where the bank is in the background, providing financing, and ensuring the client is well taken care of. However, the success of a SuperApp in the banking sector is something I remain skeptical about, given the competition to create a dominant platform. Many entities are pulling in different directions, each looking to establish their own ‘SuperApp’ where the bank may end up being just a provider of funds or financial services.
On the other hand, banks are expanding their offerings with additional ‘value-added services’ or ‘beaded services,’ indicating a move towards creating their own comprehensive apps. There’s unlikely to be a quick consensus in the market, but I believe in developing complex products that reside at the frontier of Beyond Banking. In this space, the bank supports the client in the background, making it easier and faster for them to access important services or products at the exact moment they need them. This approach is particularly relevant in our fully digitized era, where consumers—bank clients and broader consumers alike—demand immediate, seamless transactions without the wait, a concept that translates into a very effective solution.
The reference to the ‘three-click rule’—which was highlighted by Steve Jobs many years ago—still holds true. It posits that any service designed for end-users should not require more than three clicks. This benchmark is essential when designing digital services for clients and is a testament to our commitment to simplicity and efficiency. In a previous role at the Ministry of Finance, I was involved in launching a service where you could submit a tax declaration with just two clicks, jokingly claiming we had outdone Steve Jobs’ standard. This level of user-friendliness is what we aim for, even when it comes to banking login processes, which are significantly simplified through the integration of the ‘mObywatel’ application, streamlining the entire experience for users who accept the pre-calculated tax declaration without needing to make any changes.
Will current legal regulations concerning banking and financial systems not block the three-click rule?
Rather than seeing legal regulations as a barrier to the three-click rule in service design, we approach this from the opposite direction. When we begin to design an innovative service that can be accessed with a maximum of three clicks, we do not start with regulatory constraints. If we did, considering regulations and legal requirements from the outset, consulting with lawyers and compliance departments, it’s likely nothing would ever be launched.
We design services with the end goal in mind—to achieve that desired level of efficiency and user-friendliness. Of course, we keep in mind the regulations we are subject to and ensure that we remain compliant. However, it’s often the case that we find a way to develop the service so that it aligns with existing regulations while still innovating, especially for products that are on the edge of what’s traditionally offered.
What is one of the most counterintuitive challenges VeloBank has faced in its pursuit of innovation, and how was it turned into an opportunity?
One might expect that VeloBank, as an entity that emerged from a European Union resolution procedure designed to save banks on the brink of failure, would have been bogged down by its initial crisis. Rather than simply managing the bank and waiting for an investor to come and provide the necessary capital injection, we chose a less conventional path. We embraced what I would call a ‘forward escape’ or ‘leapfrog’ refusing to just sit back and lament the need for an investor. We asked ourselves how we could revive the bank, attract new customers, generate profits, and rebuild the capital base.
This proactive approach led us to consider how we could transform ourselves. How could we create a new brand in the Polish market, rebrand, and come up with offers that would attract both existing and potential clients?
In the midst of the crisis, we saw an opportunity similar to the Chinese concept of ‘crisis,’ which comprises two strokes: one for danger and the other for opportunity. Facing our own crisis after the resolution, we recognized both the immense risk and the opportunity it presented. We saw a chance for the bank to demonstrate transformation, to prepare an offering for clients that was attractive, digital, and accessible with just three clicks on a smartphone screen.
This forward-thinking mindset, the vision that we shared as a team, allowed us to undergo a transformation that was virtually unprecedented, not only in the Polish market but also on a global scale. We executed the rebranding to VeloBank in just five weeks following the resolution. Within six weeks from that starting point, we had launched a new product offering and completed the name change.
I believe it’s showing that it’s possible to find and seize opportunities in a crisis situation.
In what innovative ways is VeloBank personalizing the banking experience to cater to the diverse needs of your customers?
At VeloBank, we’re integrating the concept of ‘Beyond Banking’ with hyper-personalization to tailor our offerings to individual customer needs, which is very much in line with current trends and client expectations. Studies have shown that when an offer is personalized for a specific client, the chances of attracting client’s attention and action significantly increase. For instance, one study I encountered indicated that simply using a client’s name when presenting an offer can increase the likelihood of getting an action from a client by 26%.
We anticipate the future of banking to provide offers crafted specifically based on our customers’ immediate needs that are shaped by the context of the moment and location. Hyper-personalization is crucial for us, not just in the realm of online innovation and real-time responsiveness, but also to ensure that offers aren’t based on data collected over months.
Our approach is to have the capability to understand the issues our clients face in real-time and provide them with a product or service that addresses their current life challenges. How do we do this? Through technology. At VeloBank, we’ve implemented a central CRM system with a real-time marketing module that collects and profiles client data, enabling us to prepare offers and information that could assist them as situations arise.
Additionally, we use push notification mechanisms to immediately communicate with clients, showing them, right on their smartphone screens, that we understand their needs and may have the exact product they require. Whether it’s a savings product, a personal loan, a line of credit, or perhaps travel insurance because we notice they might be traveling abroad, we aim to use this information to serve our clients better. And this is something we’re already doing, leveraging our CRM system and the real-time marketing module to enhance our customer service.
Can you describe a recent instance where an ambitious project at VeloBank didn’t go as expected, and what were the key takeaways?
It’s not that every project we boast about was seamless; every project comes with its own set of challenges and problems that need to be effectively addressed to bring it to fruition. Problems are inherent in every project.
It’s always crucial to confront these issues and find ways to navigate through troublesome situations, which can be pivotal to achieving success. Every project encounters such critical moments. For example, a product we thought was well-defined during the project planning stage might turn out to require a complete overhaul. Similarly, the chosen technology might seem optimal at first but can become a bottleneck, necessitating a significant change mid-project—even to the extent of switching technologies.
Sometimes, even if a project is completed and celebrated, it might emerge that it doesn’t meet customer needs or demands as anticipated. We might end up with a great product that customers do not adopt, perhaps because it’s too complex or not timely. Such problems are frequent and present in every initiative.
The key is to address these crises effectively, with timely problem recognition, creating exit strategies, and conclusive action. Without decisiveness, venturing further into a dead-end can lead to disaster. Fortunately, most challenging situations at VeloBank implementations have been navigated successfully, with products delivered into the hands of our clients for their use.
If someone claims a project was smooth from start to finish without any issues, I would be skeptical. Managing crises and turning projects around is part of the process, and any project that hasn’t navigated these challenges successfully could end in failure or even termination.
The takeaway is that agility and adaptability are essential in today’s fast-changing world. Projects should be managed with a flexible methodology, ready to pivot when necessary. At VeloBank, we’ve adopted such an approach. We endeavor to undertake all projects with agile methodology, delivering products in biweekly sprints and forming interdisciplinary teams responsible for delivering outcomes. These teams have all the necessary skills to make decisions, choose technologies, shape the product, and when necessary, make significant course corrections.
We even defined our own original version of such agile methodology, called at Velo-Bank ‘eXtreme Agile’ methodology. This work model is integral to our project management, focusing on the end result with a dedicated interdisciplinary team working within a short, extremely ambitious time frame to achieve the desired outcome. The concept behind this work model is that the team is highly motivated, fully committed to reach the end goal, not accepting explanations that something is impossible or undoable. Such attitude proved that there always is a solution and a way to reach the desired outcome in the demanded ‘crazy’ timeframe.
What unique market dynamics has VeloBank navigated recently, and how have these influenced your strategic decisions?
VeloBank has been operating as a bridge bank, a status arising from the resolution process that comes with certain restrictions defined by the European Commission. These constraints mean that we’ve had to work harder to succeed in an unfavorable macroeconomic environment while also being constrained in our operational scope.
The European Commission mandated that our product offerings should not be aggressively competitive. Therefore, any product we developed in 2023 had to be crafted such that at least three other banks in the Polish market offered a better or equal product. Whether it was a cash loan, mortgage, or savings account, we had to ensure that our offerings were not superior to those of at least three competitors, as not to be perceived as excessively aggressive by the Commission.
Despite these tough conditions, VeloBank managed to perform exceptionally well. We were able to market our products and win over customers, both existing and new, who placed their trust in the VeloBank brand, opened savings accounts, and initiated credit products with us. This trust translated into the achievement of the business indicators we had set for 2023, and in fact, these indicators were exceeded by the year’s end.
For instance, we had set a goal to acquire 150,000 new customers for 2023, but reality surpassed our expectations, with over 200,000 new clients opening accounts with us during the year. Therefore, despite the not entirely favorable conditions, we were able to meet and exceed our business goals, affirming our ability to navigate and thrive in unique market dynamics.
In your view, what is an often-overlooked trend in banking that has the potential to reshape the industry?
Referencing Steve Jobs, who once predicted a future where tasks performed by humans would be entrusted to computers and machines, I believe we are on the cusp of such a transformation. This shift will be profound, especially in the coming months, not just years. This entire movement will be propelled by artificial intelligence, particularly through sophisticated language models.
The direction is clear: institutions, including banks, will start offering individual virtual assistants to clients, accessible through devices like smartphones. Such assistants will manage not just finances but also lifestyle needs. They’ll provide help, advice, and even perform tasks agreed upon with the user, such as initiating banking products, optimal savings placements, or obtaining loans when additional funding is needed.
These assistants will be able to quickly sift through product options to find the one that is right for us at the moment. They can also help with daily challenges, like planning a ski trip, finding the best-priced airline tickets for the family, choosing a resort that matches our expectations, and suggesting travel dates. All we would need to do is confirm the selection for the assistant to proceed with the booking, effectively outsourcing the task to a robot.
This AI-driven service is set to extend beyond finance to lifestyle management, allowing us to have more time for ourselves by handling time-consuming tasks like finding accommodation or theater tickets for a Friday night. Such assistants could alert us when it’s time to leave for an event and where to park, thus embedding themselves into every facet of our lives, whether it’s financial decisions or lifestyle choices.
The race is on to harness this technology effectively and develop services that are immediately available and tailored to our preferences. The organizations that quickly implement these solutions and extract the inherent value for their business are the ones that will triumph in this competitive race. It’s a race that’s already underway, with companies vying to deploy these technologies and tap into the added value they hold for the organization.
How is VeloBank integrating sustainable and ethical practices into its core operations and what impact do you foresee from these efforts?
VeloMarket is a platform that allows both our customers and the general public to purchase products that have been for their health and environment credentials. We leverage technology to ensure the integrity of these products; our marketplace is a venue for various merchants to present their offerings.
With the help of artificial intelligence, specifically native to our platform, we can vet approximately 150,000 products to ensure they meet our health and environment friendliness criteria. This AI-powered bot examines each product, assessing whether it’s environmentally friendly and suitable for our platform. Products that fail this automated verification are set aside for further review by our staff.
Beyond the marketplace, we’re helping our customers and potential clients transition through the energy transformation. We’ve entered strategic partnerships with companies that provide renewable energy solutions like photovoltaic installations or heat pumps. These partners can offer turnkey solutions, with installation by the partner and financing by VeloBank, repayable by the client in attractive installments.
We’ve signed several such strategic partnerships. These companies can also offer their services through our VeloMarket platform, where leads can be left and calculators used to determine the necessary installation size and feasibility based on roof orientation for photovoltaic installations, for example.
We’re also aiding in financing installations for clients with direct online access to our systems for instant loan application processing. Thus, we have a product that supports our clients in the energy transformation to greener energy sources. Moreover, we offer the ECO Loan, primarily used by housing communities for building insulation projects, which are offered under favorable terms to support environmental sustainability.
In line with our sustainable initiatives, we have a Green Mortgage that provides better loan conditions for purchasing buildings or apartments that meet high environmental standards set by the European Union. This Green Mortgage offers significantly better terms than standard mortgage loans.
We’re committed to fostering sustainability and social responsibility. We believe this is the future – supporting our clients who make conscious decisions about ecology and social responsibility.
How have the demands of the digital era shaped your personal leadership style and philosophy at VeloBank?
The transition to remote teams has profoundly impacted my leadership approach and the philosophy of work within my team. The pandemic forced us to rapidly shift to remote work, locking ourselves away from day to day office interactions and into our homes. Business had to continue despite the sudden change. This change hit us during a time when I was managing a significant project at the Ministry of Finance – the implementation of a new system for collecting road tolls, replacing the outdated viaToll system.
With about 800 people involved in various aspects of the program across different projects, the challenge was immense. Suddenly, we had to reorganize and manage this vast program remotely, involving several suppliers and technologies that had to interoperate seamlessly. The experience showed us that technology could help us not just survive but thrive. Interestingly, we noticed an initial increase in efficiency when we switched to remote work compared to the traditional office setting. Although this boost in productivity wasn’t permanent, the early stage showed significant gains.
This complex project, which we managed to complete within an ambitious timeframe, replaced an old toll collection system with a new and efficient one that ensures expected revenues for the state budget at a much lower cost than before. This achievement demonstrated the potential savings for the Polish state from an operational perspective.
In terms of leadership, I have always valued working closely with people and believe in their ability to rise to complex challenges given the right opportunities and motivation. Providing support and a safety net when necessary is part of an effective management style that achieves desired outcomes. I trust in the power of a motivated team working cohesively towards a common goal, ensuring project objectives are met within the planned timeframe.
Trust, coupled with regular progress checks and offering assistance when hurdles arise, forms the cornerstone of my leadership style. It’s all about empowering the team to succeed and stepping in with help when they encounter obstacles.
What steps is VeloBank taking to cultivate a culture of innovation and how does this reflect in your organizational structure and employee engagement?
To foster innovation at VeloBank, our first step is to inspire our employees by showcasing trends and giving them the opportunity to voice their ideas. We encourage them to come forward with their suggestions and to collaborate on shaping the final form of the products we’re developing, ensuring these have innovative elements.
This encouragement is important and effective because employees want to participate in ventures that allow them to expand their horizons and become familiar with new and innovative technologies. They take pride in being part of something significant and groundbreaking.
Creating a dialogue with employees, inspiring them to step out of their comfort zones, and searching for new solutions is crucial. It allows us to define the end product as one that will be a true innovation, possibly even blurring the lines between traditional and next-generation offerings. Employees want to be part of initiatives that lead to products that surprise the market.
This approach has proven effective; I observe that employees become more open, seek solutions, and contribute to much better end products than if we had proceeded in a more conventional manner. Engagement leads to superior final products compared to a process conducted without dialogue, without the opportunity for employees to contribute to project discussions or the final shape of the product.
Could you share who or what has been the most significant influence on your leadership style, and how has this impacted your approach at VeloBank?
Winston Churchill has been a profound inspiration for my leadership approach. One of his speeches, delivered during World War II in 1941, made a lasting impression on me. He spoke at Harrow School in London, where he was educated. The speech was surprisingly brief, lasting less than a minute, but its message was powerful.
When asked how to approach challenges and shape oneself, Churchill simply said to remember never to give up, repeating “never” several times for emphasis, in both small and significant matters. I believe this approach is excellent when striving to achieve goals. As I’ve mentioned before, reaching a goal is not without turbulence or crises. The critical part is to persevere through these challenges and not give up on the journey to achieving the objective.
Even when it’s tough, the key is to never give in, never in small matters, and certainly never in the big ones. This philosophy of relentless perseverance has shaped my leadership at
VeloBank, emphasizing the importance of resilience and determination in the face of challenges, both minor and major.
Leading a bank like VeloBank requires adaptability and vision. Can you describe a pivotal moment in your career that defined your approach to leading through change?
A defining moment in my career that shaped my approach to leadership through change was when I joined the team at the Ministry of Finance. This was not a role I sought out; I was approached and asked to help lead IT organization at the Ministry.
I was plunged into the public sector’s bureaucratic realities, which were unfamiliar to me. In this rigid environment, failure to apply contractual penalties could lead to personal liability, and every aspect of a project had to conform to the rigid specifications detailed in the public procurement law. That period taught me that success could be achieved in every circumstances. The path to success sometimes felt like hacking through the jungle with a machete to reach the end goal. But I can assure you it’s worth to follow such path and give your best to reach the end goal, not concentrating on the emerging obstacles or problems.
This experience was transformative; it thrust me out of my comfort zone and into situations I had never encountered before. It required me to carve out a path through uncharted territory to realize ambitious objectives successfully. Many of the projects I managed are now visible in the Polish market, like the electronic toll collection system e-TOLL and systems aimed at tightening tax administration, such as Split Payment and STIR. These projects, realized while I was far from my comfort zone, shaped me as a manager who can navigate through challenging situations and find a way to achieve the goal. I have come to realize that the heart of any institution lies in its people. What you have to do as a manager responsible for the digital transformation is to find the right people, motivate them, engage them, make them aware that they are a team dedicated to introduce a change in the organization and last but to least inspire them to do big things that others define as ‘mission impossible’. You should not limit yourself because otherwise you will not achieve big things and you will close yourself opportunities to introduce ‘game changers’. Remember not to give up. Never, never, never!
