An exclusive interview with KPMG on the thriving RegTech scene

An interview conducted by KPMG with Alyne's own KMPG alumni, Felix and Max.

Alyne is proud to announce that we have been invited to an exclusive interview with KPMG.

In the interview, Alyne representative Felix Schock, Head of Customer Success and Maximilian Millitzer, Senior Consultant of Customer Success shared the building blocks which makes RegTech so appealing to organisations today. In addition, they also shared how their past experience as KPMG alumni has shaped their current work ethics and style.  

Alyne would like to express our thanks and appreciation to KPMG for facilitating and organising the interview.

 

Continue reading for the interview transcript between Felix, Maximilian and KPMG interviewer, Jonas Probst

In the first segment of the interview, you will learn a bit more about Felix and Maximilian who are both Alyne representatives and KPMG Alumni. 

Jonas (KPMG): Let's start at the beginning. How did you come to KPMG back then?

Felix: I started working for a smaller consulting firm in Frankfurt in 2013 after my studies. In 2014 I moved to KPMG because of the breadth of clients and topics they offer.

Max: I was a working student at Siemens and did an internship at EY, before I got to know Felix through the KPMG international case competition. He brought me to KPMG as an intern in 2017. During the internship I worked on a project in Munich. After the internship I got the opportunity to stay with KPMG as a working student in Nuremberg. In 2019, I became a permanent employee of KPMG and was most recently part of Felix's former team at FS Regulatory & Compliance.

Jonas (KPMG): Short and concise: Please describe yourself in three words!

Max: Let me begin: honest, ambitious and curious.

Felix: I would say I am engaging, open and relaxed.

Jonas (KPMG): That sounds very even-tempered. What do you do in your spare time? What exciting hobbies do you have?

Felix: Well, I am a passionate racing cyclist and must also inspire Max, because this is relatively common in our company. I am also enthusiastic about golf, so Max has to catch up a bit, because we do that with the company quite often. I also enjoy a glass of red wine and skiing.

Max: It's not quite as exciting for me. I am a footballer and hobby bartender. At home I have a small but well equipped bar. Without wine though (laughs).

Jonas (KPMG): What is your personal relationship with KPMG today?

Felix: We are still connected both professionally and privately. There is a cooperation between Alyne and KPMG. We are then partly with the same clients. And because I was with KPMG for a relatively long time, friendly relationships still exist.

Max: I can only agree with that, I still meet regularly with old colleagues. That means friendships and professional connections.

Jonas (KPMG): How did the change from KPMG to Alyne come about in your company?

Felix: Max and I helped build up the RegTech offering at KPMG. We noticed Alyne relatively early on. Not least because the company’s headquarters in Munich is diagonally opposite the KPMG branch office. We then concluded a cooperation agreement between the two companies. And it was this cooperation that led to my transfer. And then later the change from Max.

Jonas (KPMG): What exactly are your topics with Alyne?

Felix: I no longer have a real focus on a specific topic. As Head of Customer Success, I'm responsible for the team that handles all topics related to customer training, onboarding and for professional services, i.e. answering technical questions about our tools. In contrast to KPMG, Alyne's focus is also more on selective specialist support rather than on holistic support. The Customer Success Team also works in Sales Support, which means that we guide newly acquired clients through our tool.

Max: I'm on Felix's customer success team. I work together with him on the tasks he describes.

In the second part of the interview, Felix and Max shared more about Regulatory Technologies and the potential they see in the topic.

Jonas (KPMG): For someone who hasn't heard of RegTech: what's the deal with that?

Max: The term "RegTech" is a fusion of the terms "regulatory" and "technology". At KPMG, we have always defined the topic in such a way that it helps financial institutions to meet regulatory requirements more efficiently and effectively. For example, the digitalisation and automation of back-office processes. From this we have also derived the distinction to FinTechs, which tend to focus on the client business – i.e. the front office – whereas RegTech is more likely to be found in the back office and ensures that the front office can work well. In short, RegTech aims to use modern technology to comply with regulations and to improve, automate and accelerate processes.

Jonas (KPMG): And what has Alyne got to do with it?

Felix: At Alyne, we develop technologies to help our customers meet these challenges. We do not limit ourselves to financial services. Rather, our customer base consists of half corporates and half insurance companies and banks. Our solutions are purely cloud-based, i.e. designed as Software-as-a-Service. All of our customers work on the same code, the same program, and only the data is strictly separated from each other. As a result, and this is what makes RegTech so important, the costs for implementing, maintaining and operating the software are only a fraction of what a company has to spend if it purchases software on premise. This also means that you buy a license and can use the product immediately. In addition, we also deliver the content directly. In doing so, we address risk management, compliance and cybersecurity issues. This is of course very abstract, but so our platform is not an empty shell, because for some topics certain controls are already integrated in the software, such as questionnaires or process definitions.

Jonas (KPMG): How can you imagine such a solution then?

Felix: It is important to note that all the legacy products that have been on the road for the last 20 - 30 years are now costly due to countless customizations. A platform like ours is something that everyone knows from social media interaction, not least in terms of look and feel. A modern user interface can no longer be compared with software that was in the market until today.

Jonas (KPMG): You just mentioned that your solution is Software-as-a-Service. Is that common in the marketplace? What is the general market for RegTech?

Felix: Only two years ago, such a SaaS solution was rather exotic. However, the current situation with the corona crisis in particular means that digital solutions are being developed much more quickly and demand is growing. Discussions with customers as to whether cloud-based solutions should be used have also become much shorter. But this is not least because the cost advantages are so evident. For example, we used to build Monte Carlo simulations for risk modeling on a project. The customer then bought a computer with a lot of computing power. We fed the computer with data and after three days you had your value at risk and the distribution curve. At Alyne we have now built a similar concept, but our computing operations are running over Amazon's cloud services (AWS). Processing power is now available on demand and a calculation takes about three seconds.

Jonas (KPMG): I would be interested to know what the whole thing looks like under data protection law?

Felix: AWS has a lot of certificates for such questions, among others the ISO27000. All this is also contractually clarified. I would also argue that an Amazon-operated data center in Europe is more secure than a data center operated by a company itself.

Jonas (KPMG): What potential does the market have? How would you estimate the development?

Felix: In the banking industry alone, a large number of papers on eBanking have been published recently. These often deal with risk management and the reduction of individual data processing, e.g. with Office programs. However, we still see such solutions very often with customers. Especially when it comes to the digitalization of operational risks or compliance processes, the potential for a solution like ours is enormous. So I think the potential is huge.

In the last segment of the interview, Felix and Max talk about the differences in everyday working life at KPMG and Alyne.

Jonas (KPMG): What differences between working at KPMG and working for Alyne have you noticed so far? For example, with regard to processes and the like?

Max: I had my first day with Alyne in early March. I noticed the different onboarding processes and the organisation around them. At Alyne, the process is much leaner. This means that there is no big welcome day, but you are introduced to the whole team in a very informal way. Here I have a total of about 30 colleagues, which sit in Munich. In contrast, I had considerably more colleagues in my team at KPMG and they were spread all over Germany. On the other hand, our corporate processes are not as clearly structured as at KPMG.

Felix: Coming from an organisation where many processes and responsibilities are very clearly structured, I can of course already see something that Alyne can benefit from. Especially now, as the company grows, a minimum level of processes and documentation is required. One difference between KPMG and Alyne is the use of PowerPoint. I now produce far fewer slides than I did during my time at KPMG. Before joining Alyne, all colleagues in our team worked as consultants in various consulting firms. They all agreed that far too many PowerPoint slides are produced there every day. That's why we decided that we didn't want to do it on this scale. 

What I always found very good at KPMG was the customer focus. That was something I could take away with me. 

Something that I'm torn between is meetings. I'm not a fan of always planning a meeting for everything. Instead, you should try to clear your calendar and then work on call. This way you can work together much more directly without having to walk from meeting to meeting, and without having to break up the day's work into many meetings.

Max: In general, I find that communication at Alyne is different from communication at KPMG. There is hardly any email traffic. We use slack channels for this purpose, in which information is collected on a topic-related basis. This makes communication absolutely transparent. You can always see who is talking to whom about what. This of course saves a lot of bilateral discussions, where you often have to tell the same thing over and over again. I first had to get used to that, because I have never done it like that before.

Felix: At this point I would like to mention something else that I appreciated very much at KPMG. At KPMG, you have the employee development concept, where you give employees a clear line for personal development. You explain to employees in a very transparent manner where they need to train and which further training is optional. I would also like to build something along these lines at Alyne, because I think it's right that the employer should try to align itself with the reality of the employees. Nowhere else have I perceived this as much as at KPMG.

Jonas (KPMG): The point with the PowerPoint slides is interesting. Do you then use an alternative or how do you solve it?

Felix: We solve this by presenting our product. This is not a consulting service, but a tool. We then always show the tool directly to the customer as a visual support. But even in our team it is not so important that we have many nice status slides. An Excel list will do the trick, too.

Jonas (KPMG): What was the motivation to change jobs?

Max: I haven't had to make that decision that long ago. There were two things that were pretty important to me. First, I wanted to work with people I could get along with. Colleagues I could trust, people I could meet for dinner. That was also given at KPMG! The other point was that we at KPMG had a lot of fun building up the RegTech topic. With Alyne, I saw the opportunity to build something new again. As Felix had already said, we don't have these strict processes here yet that you have to adhere to. This gives you more freedom and more flexibility in the way you work.

Felix: I can only agree with Max. I too had no real motivation to leave KPMG. I could have continued to work for KPMG for the next 20 years. But in my experience, these are exactly the moments when you should change jobs. This was the case with me. I was and I am convinced of Alyne's product. I also came into the company at a time when we already had an MVP and now the product had to be brought to market and the company had to be built. And that's where I wanted to be, after a long struggle with myself.

Jonas (KPMG): Let's look five years into the future. What will have changed for you and your company?

Felix: We are currently in the process of building a more mature structure from the start-up structure. I expect growth on the customer side, but also on the employee side. That is our premise for the next five years. And of course product growth. Our product is not a finished product, it is a living thing. I find it exciting to find out in which direction our product will develop.  

Max: I can only agree with Felix.

Jonas (KPMG): Felix, you've been with Alyne a little longer now. How do you evaluate the job change retroactively? How does it feel to work in a start-up?

Felix: I had a lot more hands-on work to do at the beginning of my time with Alyne. I knew this a bit from my time at KPMG, but I came out of a management position and then had to do work at Alyne that I would have given up to Associates. But that is part of the job. If you're more involved in the development of a product yourself, it really helps enormously when talking to clients.

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Eunice Cheah

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