“As the bank of firsts, we take care to be at every point where we can touch the lives of our customers with our ‘Bank of the Future’ vision.”
“Digital channels account for 86 percent of banking transactions,” says Sabri Gökmenler, Executive Vice President in Head of Technology at İşbank. When we include our next generation banking application Nays, we have over 12.5 million consumers that use digital channels.”
Sabri Gökmenler, who was born in Ankara in 1968, received his bachelor’s degree in computer engineering from METU in 1991 and his master’s degree in the same area in 1995. Mr. Gökmenler began his career in 1991 as a Software Trainee Specialist in şbank’s IT Department, and he joined Softtech in 2004. He was named the bank’s Information Technologies Architecture and Security Management Manager in 2008, and he was promoted to Information Technologies Manager in October 2012. Gökmenler graduated from Harvard Business School’s Advanced Management Program (AMP) in 2018 and has been the Assistant General Manager in charge of Technology at şbank since January 2021.
Sabri Gökmenler, the current Chairman of the Boards of Directors of Softtech, ş-Net, and GullsEye, as well as a Board Member of şbank AG and MaxiDigital in Germany, also wears different shirts as an Advisory Board Member at KUIS Artificial Intelligence Center, which was established in collaboration with Koç University and şbank, and as an Executive Board Member at Blockchain Turkey Platform.
We discussed with Sabri Gökmenler the intermediate stops on the banking sector’s digitalization trip, how customer contact has developed on this path, and, of course, the banking sector’s technology agenda…
For many years, İşbank has been on a digitalization path. We were able to access İşbank from a variety of devices, including game consoles. We’re interested in hearing about your journey’s experiences and outcomes. What role do you believe banks should play in digitization, and how should they do so? Is there a limit and an end to customer communication?
As the bank of firsts, we strive to be present at every point where we can impact our customers’ lives in accordance with our “Bank of the Future” vision. Designing new experiences on various platforms excites us, therefore we are always honing our skills.
Using artificial intelligence technology and refining the customer experience, we want to create the banking business model of the future, in which each customer feels as special as if they were “the only customer of the bank.” We invest in technology to provide a quality and tailored banking service that satisfies clients’ expectations for practicality, speed, and convenience while providing a perfect digital experience.
Customers using digital channels exceeded 12.5 million, including Nays, our new generation banking application. İşbank has switched 86 percent of its banking transactions to digital platforms. İşCep, our flagship in digital banking, handles 72 percent of transactions done through non-branch channels. The number of clients that use şCep has surpassed 12 million. In 2022, we got the Global Finance Awards’ “Turkey’s Best Retail Digital Bank” title, as well as the Stevie International Business Awards’ gold prize in the İşCep “Financial Services and Applications” area. Euromoney, one of the world’s premier financial periodicals, also awarded us the best digital bank in Central and Eastern Europe.
Digitalization is not restricted to our current methods of client engagement. Through the collaborations we have established with an open banking approach, we continue to provide banking services to our customers with the best experience possible via 3rd party front-ends. In conclusion, we continue on our path with the goal of being anywhere and at any moment when consumer needs occur.
In recent years, we have focused mostly on customer convergence. The client profile is evolving as well. Where and how do you believe the Z generation and the Alpha generation will participate in the banking ecosystem? Where do you see banks going in the future?
Generation Z is more inquisitive, more interested in world affairs, more involved in digital, but more concerned about digital privacy, sensitive to sustainability issues, wants to be active citizens in order to create benefit, and prefers to have a more meaningful experience rather than more stuff. It is inevitable for each generation to have cultural and intellectual differences, but Generation Z is a generation that has grown up immersed in technology, the internet, and social media platforms. The way this generation, known as Generation Z, lives and is raised, as well as their demands and expectations, are influenced by technological, cultural, and social advances.
Understanding Generation Z, which is enterprising and innovative, is the first step in communicating with them. We are concerned about the demands of Generation Z, which has surpassed 21 million in Turkey. As a result, we started our Maximum Youth initiative in February 2020 to focus solely on their requirements and to provide them with special privileged banking products. We founded the Advisory Board of our young clients in 2020 to go beyond traditional understandings, to be closer to young people, and to be a bank that truly knows them through empathy. We continue to hold frequent meetings with the Advisory Board and eagerly listen to their suggestions by involving young people in product and service design from a “co-development” standpoint.
Furthermore, our research indicates that there is a sizable population in our country that requires a lean and simple banking experience, wants to manage their budgets effectively and efficiently, and defines their daily transactions as shopping, sending and receiving money, simple investments, and loans. With its name, design, transaction set, communication language, and all of its infrastructure, Nays, which we created to satisfy this demand, is a digital application that covers everyone who wants to get “banking as much as they want” with an advantageous, unconditional, and pleasant experience. Our app, which was released in the app stores in June, drew a lot of attention. With 1 million users in a short period of time, I believe Nays will be one of the best examples of sustainable finance, providing a cashless society, digitalization of payments, and easing the inclusion of those without a regular income in the financial system. I believe that the features of our application will match Generation Z’s expectations of financial applications to a large extent.
While banking regulations govern many issues, fintechs have much greater leeway. Do you consider this a disadvantage? What will the partnership between banks and fintechs look like?
Banks and fintechs each have their own set of benefits and drawbacks. While banks distinguish themselves through their strong brand and trust perception, the ability to conduct large-scale transactions, adequate capital, and compliance knowledge, fintechs can create products and services with a high user experience due to their innovative mindset and agile operating structures. I believe that the long-running “friend or foe” discussion between fintechs and banks has ended, and that business models that build common values by combining the strengths of both sides have become today’s reality.
Many countries, particularly in Europe, have begun to base their banking strategies on providing advanced services and products to their customers through collaborations with fintechs. Through fintech collaborations, traditional banks with a large customer base hope to become a solution provider beyond traditional banking services by becoming a center.
Banks satisfy the financial function demands that fintechs will deliver to their end-users by connecting the APIs they have developed with fintechs, while also expanding the products and services offered through their own channels beyond their channels. We have begun to see such examples all over the world, and in the coming period, this relationship will evolve toward scenarios in which banks will review and improve their existing service experiences with the service model banking approach, create previously unseen service models, and reach end users through fintechs. As a result, the interaction between banks and fintechs will strengthen in the context of providing customers with innovative financial solutions.
In light of the above question, what kind of opportunity do you believe Open Banking will provide for banks?
Accessing banking products and services from within other applications will be available thanks to the open banking strategy. Open banking applications will usher in new innovations in the banking and finance sectors.
If we refer to all methods that allow third-party organizations to use the functions offered by banks through their own channels and allow third-party organizations to provide banking services from their own front ends as “Open Banking” in general, we anticipate that Open Banking will accelerate the realization of end-to-end digital experiences that touch the daily lives of consumers in the financial sector and offer additional added value and comfort alongside business. Regulations aimed at enhancing competition and service quality in the industry, such as CBRT open banking and BRSA service model banking, will help to enable the shift from traditional banking service models to innovative business models.
Banks with this ambition, who want to expand their products and services beyond their own channels and respond to the demands of individuals on many platforms in the digital world, will prefer to collaborate with startups. Thus, while banks will be able to expand the services they offer only through their channels, fintechs will be able to bring innovative products and services to the sector by combining their own capabilities with the financial functions that banks open to the outside world.
Banks that understand the vision of Open Banking and approach it as a new service model will benefit from revising and expanding their existing products and services, as well as launching new products and services that they previously did not have the opportunity to offer in their traditional ways of doing business, increasing the number of customers and market share.
Banks are currently undergoing a significant microservice architecture transition in their infrastructure. What is the current state of affairs at İşbank?
We began the Next Generation Banking Architecture (NGBA) study in 2020 as a team with broad participation from all disciplines. The main motivation for this work was to propose a fiction that would allow for rapid adaptation to developments in areas such as Open Banking, Service Model Banking, Web 3.0, and Decentralized Finance (DeFi), which we anticipate will have the potential to change the banking system, as we discussed in previous questions.
We call it a fiction because our goal is to develop a sustainable technological modernization methodology that will support our ability to adapt regardless of the change, rather than producing a single prescription for today, and that will be able to see the needs for change and quickly seize opportunities through continuous monitoring of our competencies and application portfolio, rather than major transformations, and thus always catch up with the competition. As a result, we developed deliverables outlining the “Next Generation Technology Architecture” and the “Application Transition Strategy and Architecture.”
Our “Next Generation Technology Architecture” was built on microservices to provide a simple, modular, autonomous, flexible, API-compliant core banking system that meets the “Banking of the Future” concept. Plateau, a new generation software development platform developed by our subsidiary Softtech on open source technologies and giving cloud-based, low-code development capabilities, was chosen as our architectural foundation in this area.
However, we believe that microservices are not the only option for transformation and adaptation. We emphasize the use of microservices in the suitable candidates and the use of alternative architectural designs in accordance with best practices in others by conducting multidimensional studies. In this regard, the “Application Transition Strategy and Architecture” sets our course.
Furthermore, we see another benefit from our new generation banking applications, which we are gradually implementing, as maintaining a more market-friendly ecosystem in terms of workforce and competencies, where costs can be managed more effectively through the modernization of our central structure.
The cloud provides an infrastructure that greatly accelerates and flexible businesses. What would your thoughts be if there were no legislative constraints, particularly in the use of public cloud? Would the cloud and the applications that go with it bring about a banking revolution?
When we consider the fundamental characteristics of cloud computing, we have defined that we are motivated to use the cloud by the benefits of enabling agile software development, increasing resilience, generating cost savings, and fostering innovation. With this motive, we evaluate candidates for cloud use primarily in terms of security and regulatory compliance, followed by performance, usability, and architecture. We are now able to discover and run applications that can run in the public cloud as a result of our study. There are numerous instances of such applications.
I’d also like to discuss our cloud utilization in our London branch. We must comply with UK legislation in our London branch. We choose to leverage public cloud infrastructure to meet this requirement. This experience has been quite beneficial because it involves both public and hybrid cloud structures.
We believe that we are prepared to use public cloud because of the expertise of our teams. On the other hand, we believe that the future will see the use of hybrid clouds, as well as distributed clouds, in addition to private or public clouds. To that end, we will continue to broaden our experience in various public cloud providers in accordance with flexibility and responsibility sharing, while also ensuring the security and privacy needs in our private cloud.
You are attempting to develop the future while addressing today’s requirements. Which one is heavier? Can CIOs miss the future by focusing on today’s security, speed, and customer satisfaction requirements?
While responding to today’s needs, we should also prepare for important technological developments that will shape our future by approaching them with a culture of experimentation and being an early adopter of advanced technologies in a two-winged organizational structure. Only in this way will we be able to make new technology adoption less of a debate and succeed in internalizing it in the short term.
The banking sector, both internationally and in our country, is one of the few that can respond to the dizzying changes in new technologies in recent years and fast apply emerging technology to the way they do business. With a focus on disruptive innovation, we seek to develop digital goods and services that will set us apart from the competition. As we approach new technologies, we strive to develop and strengthen our competencies through proof-of-concept studies so that we can explore the ecosystem early on and become a strong stakeholder in the future. In our innovative experiments, we aim to begin with a simple approach and progress to a more advanced level.
Our clients’ everyday routines and expectations are changing as a result of technological advancements and digitization. These advancements have a direct impact on the banking and financial sectors. The shift from the “Traditional Banking” model, in which services and products are only available through bank channels, to the “Open Innovation” model, in which innovative ideas are realized in collaboration with various initiatives, particularly fintechs, and the “Open Banking” model, which is based on the integration of banking capabilities with third-party applications and platforms, as well as the ecosystem creation approach, has become critical. It is critical for our ‘Bank of the Future’ goal to be prepared for the optimal interaction to fulfill end-to-end client needs in many ecosystems that are, and will continue to be, linked in the coming period. While working in accordance with this vision, we also have the ability to adapt early to new business models that emerge in tandem with consumer needs, allowing us to rapidly scale and create business volume in these areas. As a result, I can state that we take a balanced approach to solving today’s demands and constructing the future, and that we value each of them separately.
To effectively apply the “Open Innovation” concept, which we regard as strategically crucial, we extend our technology and digitalization activities outside the borders of Turkey. We launched Maxitech in Silicon Valley in 2016 through our technology company Softtech. In 2019, we built an innovation center in China using the same strategy. Our centers in Silicon Valley and China, which serve as global catalysts for our Open Innovation strategy, provide collaboration opportunities for the Bank and our group companies to bring technologies and new business models that will strengthen our sector leadership. Our innovation centers enable us to correctly construct the scenarios that we can implement in these areas, as well as to include the necessary stakeholders in multi-stakeholder cooperation fictions, in addition to closely monitoring crucial technology trends. These measures, I believe, lessen the dangers of missing out on the future of emerging technology.
Turkey is experiencing a significant migration of brains. Banks used to hire the top workers in the sector. What is the current state of affairs? Is it difficult to find qualified human resources?
I don’t believe there is a corporation that does not have issues in this area. The problem has numerous dimensions: The next generation has a different outlook on business. Because they want to have new experiences and learn new things, it is more appealing for them to diversify their experiences by developing their technical skills in different sectors and/or countries rather than staying in the same company for years. Opportunities for remote employment, as well as infrastructure, support and encourage this. In other words, because of market opportunities, it is simpler for today’s young people to live the kind of working life they desire, particularly in the sector of technology. As a result, this is a problem that all businesses face around the world.
When looking locally, aspects such as the country’s economic status and future expectations enter the picture and influence the decisions taken by young people. Taking all of this into account, to answer your question, yes, we are having a little more difficulty acquiring quality human resources than in the past. However, we emphasize that our bank, known as the “School of Banking,” is also the “School of Technology,” and we will continue to employ new graduates and train our managers from within. Not content with this, we strive to provide our young employees with diverse experiences by leveraging our technological diversity, and we continue to provide our employees with continuous training. We find a position in their agenda regarding work options by conducting events in places where young people’s interests are concentrated, and by expressing why we consider ourselves as a “Technology School” on numerous platforms.
One of the most serious issues is cyber security. Threats are increasing in our country; what do you believe is the best course of action?
We see cyber security as a never-ending story: we see it as a structure that is always on duty, always racing in a world where the area to be defended is constantly expanding while threats are constantly increasing and diversifying, and that must be constantly renewed and developed with constantly developing and changing technology. With this approach, we update both our organization and our technology tools by taking best practices into account.
Even when security technologies are properly deployed in the infrastructure, vulnerabilities induced by the human aspect are exploited through social engineering in many security events. In addition to our technological safeguards, we place a high value on developing security awareness, with the guiding premise that security is everyone’s responsibility.
Banks can occasionally face a crisis. How do you plan scenarios for a crisis caused by technical issues?
Even if you do an excellent job, you must recognize that technical difficulties inherent in the hardware and software you employ, as well as the interruptions that these problems may cause, are a reality of information systems, and that any system can fail at any time. In this context, we built a very firm foundation for the future by completing all three phases of the world-class TIER-4 certification and launching our ATLAS data center, Turkey’s first with an active-active data center topology and all of its components. We then opened the Pasifik data center in Ankara, which we call “reinforced-passive” since it can take strain off our existing “active-active” topology in situations other than disasters. We also refreshed our software architecture by simplifying and simplifying our banking software; we are always renewing, but is it sufficient? Certainly not!
Based on our previous experience, I believe that the most important thing is to identify the problem in its simplest form as soon as possible, to quickly implement one of the alternative solution scenarios you have prepared in advance to fix it, and, most importantly, to identify the root causes and make the necessary improvements without wasting time so that the problem does not recur after it has been fixed.
To be prepared, we practice scheduled drills. On the other hand, in various conditions, we can activate our disaster recovery center and benefit from our capacity there.
What are the most important issues on your 2023 agenda? Where will şbank place its emphasis on infrastructure, security, and transformation?
With our Ant, Atlas, and Pacific projects in recent years, we have realized the infrastructure revolution demanded by the digital age. With the self-assurance obtained from this transition, which we carried out in preparation for the next 20 years, we can establish our objective openly.
We need to concentrate on future business models now, since we are in an era of rapid change and development in customer expectations, technology, and competition. Taking swift action on issues that can provide a competitive edge in the digital world, as well as delivering services that benefit our consumers and make their lives easier with creative solutions, will remain crucial components of our strategy in the future. In this era of digitization and collaboration with third parties, the method of developing an ecosystem with new business alliances where creative ideas are executed represents a growth opportunity. With this approach, we will continue to concentrate on service model banking and super app development. Simultaneously, with a focus on disruptive innovation, we intend to develop digital products and services beyond banking that will elevate the competition to a new level. In this regard, we see all innovative technologies, particularly the recently prominent Web 3.0 formations, as very important lanes that we must adapt to as soon as possible because they will have a multidimensional impact on our future in finance and non-finance areas while also promising high potential in terms of new cooperation opportunities. We intend to participate in the crypto asset ecosystem with our group firms within the context of the crypto asset law that is likely to be implemented in our nation.
He wrote it himself. Gökmenler, Sabri
Do you have a regular pastime?
I enjoy swimming whenever possible, rowing at the gym, squash if I can find a partner, and hiking in the woods.
What novels have you recently read and would recommend?
I can say that since I started listening to audiobooks, the quantity of books I’ve read has increased significantly. “On the Tiger’s Back” by Zülfü Livaneli provided me with a new viewpoint on Abdülhamid II’s reign. I also recommend Chris Lewis’ “Leadership Lab – 21st Century Leadership” and Kevin Werbach’s “Blockchain and the New Architecture of Trust.”
What kinds of movies do you like to watch?
Because of the high cerebral activities and stress of the day, I prefer to watch action, sci-fi, and western movies and series whenever possible. I recommend the latest documentary-style film “The Alpinist” about mountaineer Marc-André Leclerc’s life, “WeCrashed” about the incredible story of the WeWork startup, and the TV series “1883” about an intriguing road story in the untamed west. In addition, I’ve been wearing a smartwatch for a long time and keep a careful eye on all the metrics of athletic activities that are required for a healthy existence.
Which technological equipment do you enjoy using?
Although I prefer Android-based devices because I like to test all of the technical capabilities of the devices I use, I have recently expanded my comfort zone by switching to iOS-based devices (iPad and iPhone) for ease of use.
