Karen Rudich, Chief Operating Officer, Bank in the Box, tells IBS Journal about her passion for building things and challenging the status quo
IBS Journal: Tell us about yourself.
Karen Rudich: I had my first business when I was nine years old selling Garbage Pail Kids cards at school, which ended a few months later inside the Headmaster’s office. I love building things and came to the UK during the dotcom boom to help set up a company before moving into banking. I have never looked back since.
I was working at BNP Paribas when Thomas Soede (CEO of Bank in the Box) and I were introduced as “two bulls in a china shop who should get on well”. Never did I imagine at that moment that we’d end up where we are today!
IBS Journal: What’s your business model?
KR: In my opinion, the financial industry is at a tipping point, where within the next 10 years, we will see the majority of the players in today’s market either being consumed, disappearing, or if they still exist, looking very different.
Banks are overwhelmed with regulatory-driven change to the point where they are unable to think outside of the box enough to evolve their business models. Competition is coming from players they haven’t seen as a threat in the past, not other banks, but from cash-rich tech companies such as Alibaba, Google and Apple, and also players in FinTech.
But there are lots of things banks can change, particularly around “non-differentiating” shared services that every bank must do, which don’t face-off to the client but impact customer experience (think KYC). A lot of those services are cost- and capital-intensive and have been difficult to update due to the banks’ legacy internal systems.
This is where Bank in the Box sits: orchestrating the best-of-breed providers to replace these non-special processes within a shared economy model. Banks can reduce the costs of running them (vs their existing in-house solutions which are usually duplicated across internal arms), access the top providers (including FinTech) and move to a more variable cost model. Ultimately, this will allow banks to change their business model so they can innovate and focus on creating new opportunities in an ecosystem where they can combine services and products from a variety of participants. In short, Bank in the Box’s business model is one of a platform economy with an initial focus on shared services, but a vision where we have a marketplace of producers and consumers for the financial services sector.
IBS Journal: What sets you apart?
KR: Three things set us apart:
- Our passion and our experience – Thomas, our team and I are all seasoned bankers who have not only built platforms inside banks but executed change to the point where it reflects at the P&L level.
- Bank in the Box’s unique service proposition is one of majority ownership by banks so it can become a part of their DNA, giving them the ability to shape their future and evolve. The banks are currently very reactive with everything that is being imposed on them, Bank in the Box is giving them the opportunity to be proactive in shaping their destiny.
- Talk is cheap; our team is purely focused on execution. We set up in April 2016 and now have a team of 40 people working on Bank in the Box so we can action what we set out to do. We are fully immersed in development and expect to begin releasing the first set of shared services modules on track this coming year.
IBS Journal: Who or what inspired you to set the company up?
KR: My passion for the financial services industry is why I do this. I didn’t set it up to get rich quick – I want this industry to survive and continue to be at the top of its game. I love building and bringing things to life; when Thomas told me about his idea, I knew we had to take a leap of faith and make it happen as this could be the answer our industry was looking for.
IBS Journal: What has been your smartest move?
KR: As a business, our smartest move has been to remain flexible – staying true to what you want to do but staying open to change. Sometimes going with the flow and not sticking to your guns can work out for the best.
In our case, we understand that banks have certain requirements so we have to get the balance right between the want and the execution. Being flexible about how we bring this to life without sacrificing the core principles and ethos of our business has been key for us.
IBS Journal: What was your biggest challenge/setback?
KR: Communicating what is quite a challenging concept for banks outside of their comfort zone (build and manage change from the outside-in and share with other banks) to the point where they can manage their internal governance processes to support us has been tough. We’ve had to adjust our approach and make it quite clear what our initial consortium banks get for their money in the first three phases of our journey.
IBS Journal: Where do you want to be in five years?
KR: Much to my husband’s chagrin, not retired and living on a desert island. I want to be creating beautiful things that we haven’t even come to think of yet. I love working with intensely creative and smart people and hope I’m still involved in challenging the status quo.