Is Bank/Aran: The Ecosystem is Essential for Transformation, Not Just Managing the Day
Foreks - The Association of Software Industrialists (TÜBİSAD) held a meeting on "The Future of the Information Sector and Ecosystem Economy" on November 18, where necessary actions to shape the future of technology and the responsibilities of stakeholders were evaluated. TÜBİSAD Chairman Mehmet Ali Tombalak emphasized that Turkey's future would be determined by the information sector. He highlighted that the sector's growth would rely on technology, ecosystem, and investment. Hakan Aran, General Manager of Türkiye İş Bankası, Mahmut Akten, General Manager of Garanti BBVA, and Erol Bilecik, Chairman of Index Group, discussed ways to enhance collaboration and global growth in the digital ecosystem in the same titled panel.
During the meeting held at İş Towers on November 18, TÜBİSAD announced the steps to be taken within the public, private sector, and technology ecosystem to make Turkey's technology ecosystem a significant force. In his opening speech, Chairman Mehmet Ali Tombalak stated that Cem Aracı, Leader of Digital Services at PwC Turkey, presented an analysis titled "Growing with Investment in Our Country"; Gökhan Mataracı, Partner and Leader of Innovation and Technology Consulting at KPMG, presented "Growing with Ecosystem in Our Country"; and Barış Yenidünya, Leader of Engineering Artificial Intelligence and Data at Deloitte, discussed "Growing with Technology in Our Country."
"The future of our industry will determine the future of our country" In his speech, TÜBİSAD Chairman Mehmet Ali Tombalak remarked: "Organizations and economies are ecosystems that are interacting with one another, which harbor a balance, and are focused on sustainability in light of developing technologies and their scope. We are conducting significant work to raise awareness of this concept concerning ecosystem economy and to shape our perspectives with this awareness. As we approach the end of the first quarter of the 21st century, all developments we have experienced indicate that the assurance of a country's future can be ensured by the strength of the technology ecosystem they possess and the share they gain from global markets. We aim to identify the necessary steps to convert this into value, based on our country being the safest, the most scalable, and the most developed in terms of competence in the region. It is critically important that we address growth in three areas: Growing with Technology, Growing with Ecosystem, and Growing with Investment."
"Growing the ecosystem is everyone's responsibility" Chairman Mehmet Ali Tombalak emphasized the need for everyone who produces technology, uses technology, supports the effective use of technology, and is a stakeholder in technology, regardless of its location, to be part of this mobilization. He stated: "This can be achieved by integrating sectoral solutions developed in-house by institutions into the ecosystem economy as products; transitioning the data centers of institutions into the ecosystem to transform them into value centers; converting data into economic value starting from the fastest-growing areas to gain shares in global markets; allowing our ecosystem companies to develop scalable service companies or transform into scalable service companies in the world's fastest-growing innovative service markets; improving the investment environment and incentive systems that will facilitate a reverse company migration focused on converting brain power into value rather than focusing on brain drain; developing an investment environment that will open the way for reverse acquisitions to transform invested companies into companies capable of making investments over time; stimulating the ecosystem with strategies defined specifically for these issues; by implementing effective incentive methods that will allow our companies to grow and scale through mergers, we can pave the way for them to become regional and global brand companies."
"Strengthening Collaboration and Global Growth in the Digital Ecosystem" panel The panel titled "Strengthening Collaboration and Global Growth in the Digital Ecosystem" was moderated by TÜBİSAD Chairman Mehmet Ali Tombalak, featuring speakers including Erol Bilecik, Chairman of Index Group and Former Chairman of TÜSİAD, Hakan Aran, General Manager of Türkiye İş Bankası, and Mahmut Akten, General Manager of Garanti BBVA.
"The ecosystem is important for transformation, not just for managing the day" Hakan Aran, General Manager of İş Bankası, noted that companies' in-house resources in information technology departments are insufficient for large-scale digital transformation programs, stating, "The ecosystem is very valuable not just for managing the day, but for transformation." He pointed out the importance of a lean architecture and simple systems to eliminate the risk of systems failure in complex situations where high intensities are experienced in digital transformation. Aran emphasized that the synergy in the ecosystem and the effective management of complexity are crucial, particularly for risk-managing institutions, to avoid additional risks. "The ecosystem must be managed in a way that adheres to architecture that will create added value," he remarked.
In a heavily regulated sector like banking, it is critical that companies supporting financial institutions meet the necessary criteria for sustainability. Aran mentioned that around 80% of activities in information technology remain in-house due to stringent regulations in this area. He underscored that the Turkish banking sector is at a good point concerning technology use globally, stressing that it is essential for regulations to keep pace with current developments in technology, artificial intelligence, and cloud computing to maintain competitiveness.
"If the chain consisting of universities, entrepreneurship, and the real sector works well, success will follow" Regarding expanding the talent pool in Turkey, Hakan Aran mentioned that universities should be viewed as centers producing science and technology, while technoparks are seen as nests for companies that utilize them. He continued his words: "In the Artificial Intelligence R&D Center we established with Koç University, postgraduate, doctoral, and post-doctoral students conduct scientific research. The expectation here is for the knowledge to be transformed into products and services by companies in technoparks. Through the initiative called the Artificial Intelligence Factory, investments are being made in ventures that have emerged from universities and have transformed into high value-added products and services. We connect these companies with our bank’s corporate, commercial, SME, and business segment customers in terms of digital and green transformation. We also provide affordable financing to customers investing in these products. This is an important chain in establishing connections between universities, entrepreneurship, and the real sector. I believe the process will succeed if it operates correctly."
"As banks, we are not benefiting enough from this ecosystem" Evaluating the scale of Turkey's information sector and the investments of banks in this area, Mahmut Akten, General Manager of Garanti BBVA, stated: "Since the 1990s, banks in Turkey have made significant investments in technology. In this regard, we are in a leading position in Europe and globally. This sectoral leadership quickly enhances our capacity to develop content and products with local resources. Our banks invest heavily in human resources and engineering organizations within their own structure. However, when we look at the technology and fintech ecosystem, we find ourselves trailing behind developed countries in scale. Therefore, especially as banks, we are not benefiting enough from this ecosystem, as we conduct 80% of our operations in-house. We also seek financially strong, regulation-compliant partners that will provide cost advantages, thus pursuing collaborations in this regard," he said.
Commenting on Garanti BBVA's approach to fintechs, Mahmut Akten said, "Turkey still has a significant young population, and this population uses technology intensively. On the other hand, there are over 800 fintechs in our country, and this number continues to grow. The point I want to emphasize is the position of the banking sector in this ecosystem. Having a strong banking sector in Turkey is crucial for the growth and development of the fintech ecosystem. Developments in areas supported by recent legal regulations, such as digital banking, open banking, service banking, and embedded finance, present important opportunities. Collaboration between banks and fintech companies creates a win-win model. It pushes us to be more customer-centric in our traditional banking activities and to provide a much better experience. For a fintech, it enables the potential to offer faster, safer, and more flexible products to its customers. Fintechs also play an important role in increasing financial inclusion," he stated.
Speaking about the development and future of the fintech investment environment, Akten remarked, "Turkey has a solid potential to write an important success story in its entrepreneurial ecosystem. Initially, we need to strengthen our local initiatives targeting the global market; for this, we must first make the entrepreneurial environment more appealing to investors."
"If we don't want to miss the big fish, we must take steps for a strong ecosystem" Erol Bilecik, Chairman of Index Group and Former Chairman of TÜSİAD, stated in his remarks during the panel, "Throughout human history, significant leaps have always occurred through the driving force of technology, and today this power lies in artificial intelligence, 5G, cloud computing, the Internet of Things, machine learning, and robotic technologies. In our second century, besides speed, reaching distant goals is of great importance. I am honored to see many stakeholders competing in the sector come together to pursue these goals collectively. It is imperative that we take steps together for a strong ecosystem. Achieving this will not only enhance the global competitiveness of our information sector but also trigger the digital transformation of other sectors, thereby increasing overall efficiency and competitiveness. In a future shaped by technology, if we do not want to "miss the big fish," we must establish an all-encompassing strategy that includes rules and institutions and take action. TÜBİSAD is making tremendous preparations for the future of our ecosystem with its 45 years of experience and is working diligently, with the same excitement as the first day, to grow our technology ecosystem. Today, we have laid significant foundations with the leaders of the finance and banking sector, which has become a pioneer in technology investment in our country, for future investments in the sector to be made together with the ecosystem. We hope these strong foundations resonate in other sectors as well."
Analytical studies on growing with the ecosystem were shared At the event, which focused on the role of the ecosystem economy in increasing Turkey's share in the global information technology market, analytical studies on the current state of Turkey's growth with the ecosystem and the steps that need to be taken were shared with the public, prepared by leading global tax, audit, and consulting firms Deloitte Turkey, KPMG Turkey, and PwC Turkey.
PwC Turkey: "Turkey must secure the transition to a technology ecosystem economy by becoming an attractive center for foreign investments and increasing competitiveness and integration internationally" Turkey has a very limited share in the global information technology economy. The IT sector constitutes a small part of all direct investments but has secured a permanent place within the Turkish economy. According to the 2023 activity report of the Norwegian Sovereign Wealth Fund, the largest share of the Fund's international equity investments is made in the technology sector at 22.3%, while 51.9% of the total return on investments also comes from this sector. Technology and Telecommunications account for only 4.3% of the Turkey Sovereign Wealth Fund's portfolio. The scaling of the high value-added IT sector in the economy can trigger the digital transformation of other sectors, leading to an increase in overall productivity and competitiveness. Strategic incentives for the IT sector not only increase high value-added production but also support the sustainable growth of the economy. Incentive and support mechanisms should be restructured, taking into account the current dynamics of the IT sector not only to be manufacturing and innovation-focused but also to cover services and service exports.
Deloitte Turkey: "Cloud computing and artificial intelligence emerge as two important components of the ecosystem economy; developing these elements requires a robust connectivity infrastructure" The share of the digital economy in Turkey's economy is below potential. Ecosystem inadequacies are one of the main reasons for Turkey falling behind in the digital economy. In the USA, Germany, and the UK, the digital economy accounts for over 65% of the country’s economy. In Turkey, the digital economy constitutes 6% of the national economy, with the traditional economy's share being 0.85%. In Turkey, digital economy, cloud computing, and artificial intelligence are two essential elements of the ecosystem economy, and developing these requires robust connectivity infrastructure. To spread equal opportunities to every corner of the country, it is necessary to increase digital accessibility. Long-term, low-interest loans can be provided for large infrastructure investments that are costly and have long payback periods. In conjunction with government incentives, attractive financing options can be offered for projects meeting certain criteria, thereby reducing investor risks and enabling swift project implementation. Banks can make direct investments in technology and infrastructure ecosystems by financing large infrastructure projects or establishing strategic partnerships.
KPMG Turkey: "Organizations can successfully productize the solutions they develop in-house, achieve a strong position in the sector, and contribute to the ecosystem" Opening their solutions, developed for their own needs, to the sector supports innovations, broadens competition, and promotes innovation. For Turkey's information ecosystem to become a global player, a strong governance structure must be established, synergy must be created among stakeholders, and unique solutions should be developed by taking inspiration from global examples.
Ecosystem Management and Coordination: Organizations managing the ecosystem can coordinate firms' projects and play an active role to prevent similar solutions from being developed. Roadmap Development: Ecosystem managers can create an innovation roadmap across the sector. This map shows where gaps exist and which areas require more collaboration to avoid competition. Collaboration Platforms: Platforms can be created to encourage communication and collaboration among firms within the ecosystem. In these platforms, firms can share their projects, existing solutions, and future plans, preventing them from working on the same product. Incentive Programs: Incentive programs can be created for the development of different and innovative products. Innovation Competitions: Innovation competitions held among firms in the ecosystem can encourage them to excel in various fields and reduce competition over the same products. Specialization Incentives: Firms in the ecosystem can be encouraged to specialize in certain areas. Cluster Approach: Firms working on similar products can come together in specific clusters, creating a unity environment for a common product or service. Patenting and Intellectual Property Rights: Firms can patent their innovative solutions. Joint Development and Licensing Models: Joint development and licensing models can be established among firms for specific technologies or solutions.