Digital Transformation and technological advancements in a NEO Bank
Digital Transformation and technological advancements in a žNeo Bank sounds like a contradiction? Isnt the DNA of a disruptive fintech startup per definition digital? How can a mobile bank not be always on the top of technological development?
Let me try to answer this questions that immediately came in to my mind when thinking about accounting and digital transformation.
Getting a banking license and starting business with the own bank subsidiary N26 Bank GmbH in 2016 marks only the starting point of continuous improvement.
Offering a full digital and easy to use banking app with full paperless onboarding and KYC clearly shows our digital DNA and with offering Apple Pay and Google Pay as on of the first banks in Europe underlines being on top of the technical development. But same as traditional banks, we are organized in front office and back office (based on banking regulation), with a strong digital supply chain when it comes to the customer facing products and back then a more traditional way of working in the Backoffice. The accounting was outsourced to a tax accounting till 2016 and since then we are continuously improving our systems and processes.
In the beginning our AP, AR and reimbursement process was handled with paper (or pdf) invoices and reimbursement spreadsheets with all receipts attached, also payments and bank statement reconciliation was done manually. The first part of digital transformation was to automate payments and bank statement reconciliation directly in our book keeping system. In a phase of hypergrowth the need to get rid of paper reimbursement was unveiled so we implemented a cloud solution and successfully onboarded all our European employees to that tool. Interfaces from that tool to our on premise book keeping system, which was running on a virtual machine, were developed inhouse together with the vendor by the accounting team. As a next step we moved to digital invoice only with OCR text recognition and automated posting rules pasted on vendors and invoice numbers in our book keeping systems.
“The achievements in automation of the posting processes enabled us to make high quality financial data available at any point in time”
The next big step towards a full digital and efficient finance function was the groupwide implementation of new cloudbased ERP, which started with an HR module and soon the Financials module followed. So not only the banking business is completely hosted in the cloud but also the Backoffice / finance function.
The achievements in automatization of the posting processes enables us to make high quality financial data available at any point in time. So the next steps to make the most of the data and technology are clearly focus towards financial reporting. With more and more (also non-financial) reporting obligations like ESG or the Pillar3 reporting for banks, its crucial to have a reporting framework in place that ensures timely preparation of consistent reports across multiple function. Automatization is key to success not only to reduce the production time of reports but also to comply with reporting standards like ESEF.
Overall digital Transformation and technological advancements in a žNeo Bank is not a contradiction, it’s from my point of view more the naturel development of a finance function in a startup from a make it happen mentality to a best in class and above industry standards function.