Leading the Way

we.trade’s ‘Leading the Way’ series:

‘A Digital Trade Journey’ featuring we.trade’s newest member, Akbank, extending consortia reach

For our 3rd ‘Leading the Way’ edition we caught up with Akbank’s, Senior Vice President (SVP) of Cash Management and Trade Finance, Mehtap Yilmaz and Burcu Küçükünal, Strategy and Innovation Senior Vice President (SVP) to deep dive into Akbank’s ‘Digital Trade Journey’ and take a trip down memory lane as we talk about Akbank’s digital trade transformation journey, challenges and obstacles conquered along the way and why a strategic move to join we.trade’s consortia of European banks will help Akbank’s SME and Commercial companies grow their business in a digital era.

As reported by World Bank’s ‘The Digital Transformation of Trade Finance: An urgent present and a bright future’ there is a more intense movement towards innovative technologies and digitization. In addition, utilizing new fintech platforms to offer digital trade finance solutions empowers banks to accumulate a large volume of transactional information, in real-time, enabling better modelling and innovation with financing solutions in the same way that their customers are innovating products.

In terms of future-proofing a more streamlined banking trade operating model there are many internal and external considerations to consider when contemplating a move to digitalisation with offering new financing opportunities for clients.

Back in November 2021, Akbank announced a significant development in digitisation of trade finance by becoming the first Turkish bank to join the we.trade network accelerating Akbank’s trade expertise, vision and focus on innovation and investments in digitalisation. So, we invite you to ‘take 5’ as we welcome you to obtain key industry insights and gain first-hand experience on Akbank’s digital trade journey from Mehtap and Burcu. Enjoy!

Mehtap Yilmaz
Senior Vice President of Cash Management and Trade Finance
Burcu Küçükünal
Strategy and Innovation Senior Vice President

Q: Tell us about yourself Mehtap

I started my banking career 25 years ago and I am working at Akbank for 14 years. I am Senior Vice President of Cash Management and Trade Finance in Akbank.

My team is responsible for product development, marketing and sales of cash management and trade finance products. We are committed to serving all customer segments from retail to corporates with the ambition to provide the best solutions for their payments and collections activities by leveraging Akbank’s strong digital capabilities. We work closely with IT and Akbank Innovation Lab to provide new products and solutions to our clients.

Q: Burcu, tell us about yourself

First of all, after that huge effort bringing the Akbank – we.trade integration to life, I also now feel proud to be a part of the we.trade family ☺.

I started my career in financial services and management consultancy after my education in mathematics and financial engineering.

I have been a part of the Akbank family for more than 11 years working as Akbank’s Strategy and Innovation Senior Vice President. I am leading an internal consultancy team, responsible for designing strategic projects and running transformation projects. I am also working together with the innovation team of Akbank, Akbank LAB, responsible for managing the relationships and developing partnerships with startups and fintechs such as we.trade.

"Cash management and trade finance is the best area to implement these new technologies as we need new efficient tools to cope with the growing number of transactions and varying documentations"

Mehtap Yilmaz — SVP, Cash Management and Trade Finance Akbank

Q: Mehtap, digital transformation in the banking sector has seen increased adoption over the last couple of years. Could you give us an overview of Akbank’s digitisation plans in trade finance to date and what lies ahead for the future?

Innovation and digitalisation have always been one of our main concerns; both of them are part of our culture in Akbank. From that aspect, we continue our efforts to bring new technologies to the Turkish banking sector. As per our corporate digitalisation strategy, we are working on many different projects to improve our service quality through all digital channels and create the best customer experience.

Today, new tools such as Machine Learning, Artificial Intelligence (AI), blockchain-based Distributed-Ledger Technology (DLT) systems, Application Programming Interfaces (API), Robotic Process Automation - and Optical character recognition - technologies help to improve operational excellence. Cash management and trade finance is the best area to implement these new technologies as we need new efficient tools to cope with the growing number of transactions and varying documentations.

I believe that the entire trade ecosystem—banks, regulators, trade bodies, corporates, and other relevant bodies—must work together to apply innovation to trade finance digitisation. At this point, we consider our collaboration with we.trade as a valuable step to this approach. New platforms providing such ecosystems can drive intelligent models enabling banks to innovate working capital and financing solutions to their clients through smart contracts in a digital and secure environment.

Q: Burcu, from a strategic and innovation perspective why the move to partner with a Fintech distributed ledger technology platform, such as we.trade?

To thrive in digital ecosystems, banks should know and learn how to partner with fintechs and startups to adapt in the world of open banking and digital ecosystems. For Akbank, to stay relevant in this digital age, being innovative is at the core of our transformation journey and we are very familiar with partnerships. We defined a structured innovation management process starting in 2016. Akbank’s Innovation Center “Akbank LAB” was established in 2016 with a view towards to develop innovative projects and cultivate innovation to produce valuable outputs from the innovation process. This enabled us to build effective partnerships with fintechs which has proven to be a major success factor.

Fintechs have been forcing the banking industry to change. But the relationship has been very much mutual. To build differentiated customer experiences: personalization, quick response (speed), relevance, and seamless delivery – Banks and fintechs should work together. With this vision, we are always looking for partnership opportunities and made partnerships in more than 25 projects with fintechs and startups. While we are open to any partnership that will enable us to create value for our customers, this year we have focused mostly on innovative solutions such as different lending options and methods, innovative mobile payment solutions, remote banking services, blockchain based secure and fast solutions. With this focus, we have made our latest partnership with we.trade and we see this partnership as a big part of our Digital Transformation Program that aims to support the digitization of our corporate customers.

"Quick adaption to changing environments with revisions of services and value propositions is essential."

Burcu Küçükünal — SVP, Strategy and Innovation Akbank

Q: Mehtap, we understand that there are many challenges and obstacles to overcome when a bank is looking to ‘make the move’ away from traditional banking operations to digitalisation – can you share your experience in terms of conquering these hurdles along the way?

As I have been managing product development for quite a long time; I was prepared for resistance to change from our stakeholders in the bank as well as our clients.

Convincing yourself and your team, as well as your stakeholders about the value proposition of the new technology, is crucial to overcome the possible obstacles. These obstacles may come in various forms, such as budget allocation, IT priorities, operational risk averseness, cultural resistance to change.

First of all, innovation brings something new, which means there are no specific regulations and procedures in place. Therefore, new products are always questioned by regulatory bodies and internal auditors from operational risk perspective.

We were lucky that we had full cooperation from we.trade as well as our stakeholders and top management in the bank. Akbank Innovation LAB was very experienced and supportive whilst overcoming these hurdles.

Q: Burcu, how do you see the evolution of trade digitalisation for the industry over the next 3 years in terms of innovation?

I want to start with what we should understand from digital trade. Unfortunately, there is no single accepted definition of digital trade. According to OECD (The Organization for Economic Cooperation and Development), digital trade encompasses digitally enabled transactions of trade in goods and services that can either be digitally or physically delivered, and that involve consumers, firms, and governments. This means while all forms of digital trade are enabled by digital technologies, not all digital trade is digitally delivered.

By keeping in mind that definition let’s now focus on the benefits of digital trade. It increases the scale, scope and speed of trade whilst creating convenience for both customers and sellers.  Digital trade enables companies regardless of their size to enter global markets without even a physical existence in the market. Digitising trade has enabled Amazon and Alibaba to compete with local players all over the world and become global giants. We have all witnessed the rise of e-commerce in the past few years.

In addition, digitalisation increases the transparency for all parties involved in the trade. This increased transparency means reduced credit risk, enhanced cash flow forecasting, and better allocation of working capital. In return, as an inseparable part of trade and economy banks get the opportunity to support companies through better trade financing decisions.

We have witnessed these changes and developments I have mentioned thanks to trade digitalisation. If we focus on the future of trade digitalisation, I believe the underlying technologies will shape the future. In terms of connectivity, we will be mostly talking about APIs and DLT technologies for the next 3 years, in terms of data input the main topic will continue to be IoT. For the interpretation of data, we will rely on big data analytics and AI. We will see very different use cases and business models that make life for both customers, sellers and financial institutions much easier. We all need to be open-minded and searching for innovative business models and use cases.

Q: Mehtap, 2022 is forecasted to be an extremely busy year in terms of a significant re-bound for domestic and international trade. Can you share Akbank’s commercialisation, sales or marketing ambitions for the year ahead?

Let me give you some figures from Turkey’s trade firstly.

2021 November year-to-date export volumes reached $203 billion with 34% increase compared to the same period last year. Turkey wants to reach 250 billion USD export volume for 2022.

Our trade to Europe and open account trade have always been crucial for us.  The proportion of open account trade volume to Turkey’s total export and import volume is about 60%. Turkey’s export volume to European Union countries constitutes 40% of Turkey’s total export volume, and this ratio is 31 % on imports. The need for payment guarantees is also rising because of new trade deals and new exporters. Therefore, guaranteeing and financing products that are provided by reputable European banks through the we.trade platform is the best fit for Turkish traders.

One of our missions is to support Turkish exporters; with we.trade we will enable our clients to start their international trade transactions via digital channels.  We believe that our collaboration with we.trade will support our vision and digital strategy in 2022. We plan to increase our commercialization efforts to onboard our multinational, corporate and SME clients operating in various sectors from oil to textile into we.trade platform.

In November, we jointly published our press release with we.trade. Social and digital media advertisements and posts, website contents were our other activities. Recently we are also working on cooperation with chambers of commerce and exporters’ unions etc. On the other hand, we continue our efforts for some events with blockchain or fintech organizations initiatives in Turkey.

We also arranged webinars and an Exporter’s Event for our corporate, commercial and SME clients. Gilbert Cordier, we.trade’s Head of Sales, also joined this event as a panellist and answered all our client’s questions. These webinars attracted great attention from our clients. We have received lots of questions following these events. On our branch side, we also arrange webinars with our corporate, commercial and SME branches to make them ready for this new solution.

Q: Open question – For any banks considering a digital transformation journey can you exchange any knowledge or insights that might enable more banks to start their digital transformation journey?

I want to mention two important aspects for transformation that banks should consider in their own journey.

Firstly, change is always difficult and you should be prepared to meet with some resistance inside the organization. Although it is an exaggeration, “Culture eats strategy as breakfast”. It is important that the whole organization from top to bottom should be prepared for your transformation journey as well as every single part of the organization should embrace the vision as well as digitalization initiatives.

Secondly, the key driver of change in this era is creating relevant digital experiences for customers. As Akbank, we underline the word “relevant” here, more than the word “digital”. Everyone should keep in mind that there is more to digital transformation than just transferring existing processes to digital platforms. It is essential to design customer experiences from scratch according to what customers need and want. We should meet the demand of customers for digital-first interaction models. At the same time, we should not miss out on their different needs of interaction, providing them similar and complementary experiences across all channels. Customers need empathy and advisory now more than ever. They value “human touch” on top of having digital access to all services.

To be successful in these two aspects, quick adaption to changing environments with revisions of services and value propositions is essential.  Digitalisation facilitates the acceleration in the speed of business competition. To match that speed, embedding innovation in company culture, ways of working, organization design, and leadership model is an absolute must.

I believe a bank’s strategy to digital transformation and innovation is the key milestone. If you have top management’s support, you can move fast and stable.

Since the beginning, we coordinated this innovation project with our innovation team. So, their support and contribution were also very important for us during this journey. The involvement of relevant teams such as operations, IT, IT risk, compliance departments plays one of the key roles in these types of projects.

Of course, you may encounter lots of obstacles and challenges, but you should never give up. Communication within your organization and with other parties like legal authorities, peers etc. should always continue.

In summary, digital transformation in the banking sector is a necessity if banks don’t want to be left behind by the evolution of digital technology. During our digital transformation journey, we always need to discover opportunities to provide better services for customer satisfaction and trust.