Tangerine Bank Tinkers with Apps in IBM's Garage
The Fintech Sandbox an accelerator of sorts for startups has attracted ten data providers and eight fintech startups in two months. But it's still missing what it needs most: bank members.
Fintech startups continue to captivate venture capital firms and angel investors, giving a boost to a program in which the operators of startups get advice from mentors and make presentations to hundreds of bankers at an annual event in New York.
Among big-bank accelerator programs, the British bank's effort is unique for its scope, size and depth.
Canada's Tangerine Bank is sending some of its developers to the garage.
Not a real garage, but a lab of sorts that channels the inventive spirit of many an entrepreneur's sacred space.
Tangerine's tech folks are being dispatched to a special facility established by IBM where representatives of corporations and startups can work together to create applications using IBM's Bluemix cloud-based development environment. IBM announced the arrangement this week, extending its existing partnership with the bank.
It is part of a trend in which banks collaborate with tech companies on fresh ideas as banks seek to stay competitive and relevant. The Fintech Sandbox and the Fintech Innovation Lab are two examples of efforts to bring tech startups and traditional banks together.
IBM has set up Bluemix Garages in major cities worldwide like San Francisco, London, Nice, Melbourne and Toronto with incubator partners such as Level39 and Galvanize. The Toronto garage being used by Tangerine is in an existing business incubator on the Ryerson University campus.
Bluemix is based on Cloud Foundry, an open source cloud-computing platform-as-a-service originally developed by VMware. It can be used to build, manage and run Web, mobile and traditional applications.
More than 40% of Bluemix Garage users are banks, according to IBM, though only Tangerine has gone public about its involvement.
Tangerine Chief Information Officer Charaka Kithulegoda describes his bank's use of the garage as a way of removing app developers from the daily grind.
"It's taking some of the context of an accelerator for startups and bringing in organizations like us that have a day-to-day business to run," Kithulegoda said. "It's an environment where you can test concepts in a constraint-free environment. So you don't have to worry about the connectivity, the network, the infrastructure [and] all those things."
"We combine startup ideas with testing," said Rachel Reinitz, founder and chief technology officer of Bluemix Garage. "And on the development side, we use a very disciplined, agile approach that's all about allowing project owners and designers to change their minds; we can adapt to all these changes on Bluemix."
Another benefit of the garage, Kithulegoda says, is the partners IBM brings in. "IBM doesn't have answers and solutions to everything, so if we're trying to do something that needs another partner, they can quickly engage their partner and bring them into that environment," said Kithulegoda, who was Bank Technology News' 2013 Mobile Banker of the Year.
The Bluemix environment acts as a leveler between startups and enterprises, Reinitz said. Because it is inexpensive for startups and large companies to use the Bluemix cloud, she maintained, "we can start enterprise clients in the public cloud really inexpensively in terms of [computing resources] and really rapidly."
Tangerine will place just a couple of developers in the garage at the start, with more to possibly follow.
The setup lends itself to short projects. For instance, the bank earlier sent developers to work in IBM's San Francisco garage for three days, to redesign an app to resolve an account-opening issue.
"Right now, I don't see us doing anything that goes over eight to 12 weeks," Kithulegoda said.
About 80% of the time the garage projects will have specific missions. But the other 20% of the time the developers will have freer rein to come up with something new -- for instance, to play with a new Apple operating system to see which features the bank might want to incorporate in its apps.
The garage environment will help programmers see if something works or "fail fast" if it does not, Kithulegoda said.
Tangerine already uses a Bluemix cloud service called Mobile Quality Assurance to address technical glitches in its mobile apps. When customers have a problem, they shake their phones. Tangerine gathers the feedback and metadata to quickly determine the cause of the problem, using the Bluemix cloud service.
"You shake the phone, and the service captures all the context information about that session, things like network strength, the version of the operating system, and the application," Kithulegoda explained. "So rather than having a very frustrating conversation -- were you on wifi? How good was your cell signal? What were you trying to do?"
So many poor reviews and complaints in the Apple and Google app stores are about something not working, often something the bank has no control over, like a weak network or an outdated phone.
"And there are scenarios that you absolutely cannot test for," Kithulegoda said. "There are so many parameters that might make your app behave differently or not do something."
The Bluemix Garage initiative is one of many things Tangerine is doing to keep its technology cutting edge and user-friendly.
"This is a piece of the puzzle," Kithulegoda said. "We won't have ... the answers to everything. So as new opportunities come up with our partners, or with startups, or with an infrastructure model, or a combination thereof, where we can improve our research and development, we'll take advantage of it, and the best way to do these things is to try them out."