Dirk Hermans, Innovation Manager, Blockchain Lead at KBC Bank & Verzekering

Welcome to SettleMint’s newsletter, Chief Digital Heroes.?

Every week, we interview an expert leading the charge on all things digital transformation at the world’s most innovative banks and financial institutions, then write up a summary of the top actionable lessons you can learn from them.?

We recently spoke with Dirk Hermans, Innovation Manager, Blockchain Lead at KBC Bank & Verzekering. Here are the top takeaways from the interview.

1. Focus on finding the unknown unknowns.

"Look for the unknown unknowns, because the solutions that are in place today, everything that is Internet-related — it was difficult to predict that what exists today, to predict that 20 years ago.

“Sometimes I think you have to expect the silver bullet or the breakthrough in areas which you did not imagine. That's the interesting thing, that it can come from a corner where you did not expect it coming from. Keep your eyes and mind open for everything that's happening. ...?

“Look through the technology and look at also societal environments, things that are changing, how can it contribute? How will it contribute? And where's the ignition in something that is bigger than we thought?"

Actionable Takeaway: Digital leaders need to continuously look through the technology to find its value beyond the surface. Investigate the unknown unknowns about the technology, and take a wider view of that technology's greater impact on today and tomorrow.?

2. Creating a coin that brings value to customers and merchants.

"Kate Coin is a reward for our customers. ... You have to look at how rewards or vouchers are used today. Today a voucher is a promise that you will get money or a product for it. And if you go to a store, you give the voucher to the store, which is a promise you will have to claim to a brand, which takes time. That's a long process because it takes a lot of time.

“If you make a coin which carries value, you can give the coin to the merchant, you buy a product, and the merchant on reconciliation immediately has its money.

“So the benefits are maybe not that directly visible, but in the backend plumbing of all the reconciliation between different parties, it will solve a lot of problems — also from the liquidity part, because the merchant will have its money much quicker than it has today."

Actionable Takeaway: Kate Coin is an initiative that solves speed and liquidity challenges for customers. Are there products or services you can create that can streamline transactions, solve problems, and provide value to your customers??

3. Understanding the drivers behind blockchain initiatives.

"Bolero crowdfunding emerged from two exercises that we did. … Bolero crowdfunding is an area that is quite — compared to all the other types of bonds — is quite small. There is clear regulation in place. It's up to 5 million. Regulation was changing. So there was a new regulation coming in where the requirements for the Bolero crowdfunding platforms increased. And we noticed that the Bolero platform that we have was insufficient.?

“So we had to make a choice. We need to rebuild or heavily rebuild or create a new platform. And then we made the decision. This might be a good case to set the first steps into the tokenization so that we would tokenize the bond and then also have the cash lag where we can do this dream that we all have as a banker. That's a delivery versus payment that is in real time without any settlement risk or delivery risk. So that was the initial start of the project."

Actionable Takeaway: Evaluate where regulatory changes, customer demand, or new opportunities for business models — like the tokenization of bonds — can drive innovation. Always be open-minded to change to keep up with the pace of innovation as well.

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