Futureproofing digital strategies for banks: towards optimal agility

52% said customer expectations are the main driving force of digital transformation

Digital transformation was underway before COVID-19 hit. An interactive poll run during the webinar asked viewers about the forces driving digital transformation in their banks and the top answer, at 52 per cent, was customer expectations. “Everyone is more comfortable dealing with technology now and we want our banks to be as easy to deal with as the other consumer companies we use in day to day life,” said Vincent O’Dwyer of Bank of Ireland. “That’s been a big shove and kick to us to behave differently and in how we deliver our services.”

Indeed, the expectations of customers was seen as more of a driver than the looming threat from neobanks or Big Tech. This didn’t surprise Anil Saboo, Head of Financial Services Partnerships at Google Cloud, who said the technology giant saw itself as a partner rather than competitor. “Fundamentally we think about “how can we help” with that number one driving force, which is customer expectations,” he said. “We see ourselves as partners and facilitators to help banks meet customer expectations.”

Into the cloud

Panellists were clear that, for banks, cloud technology is proving a key enabler for digital transformation.  “It’s been a game changer for us trying to rapidly prototype new applications and understand the impacts of what look like small changes would be,” said Vincent O’Dwyer of Bank of Ireland. “It’s allowed us to incrementally increase the complexity of our testing cycles so that when we get to production deployment it’s much more straightforward. A lot of the work is in the background that most people will not see but it allows us to get the production and customer proposition right at the end.”

Increasingly cloud and as-a-service models will allow banks to focus on what matters. “Cloud allows you to concentrate on differentiation activities,” said Paul Jones of SAS. “Putting in servers and infrastructure, these are none differentiators. But data and the expertise of your people, those are the things that add value.”

It also allows banks to tap into best-of-breed solutions rather than being distracted trying to reinvent the wheel. “As a cloud computing provider, there are certain things we enable because we do infrastructure, data and platform really well so there’s tonnes of investment that can be leveraged by our banking clients,” said Anil Saboo of Google Cloud.

Security is, of course, a priority for banks. “It’s fundamental to cloud and cloud services,” agreed Saboo. “There’s been huge investments to make these secure and address things like user data privacy. The infrastructure was always there but making sure that trust layer is established with all the stakeholders – with the banks, the regulatory agencies and finally and most importantly with the customers – is absolutely critical.”

He highlighted that some regulators now request banks have a multi-cloud approach to minimise risk. Jeeban Panigrahi of Barclays pointed out that the proprietary technology of different providers can make it difficult for banks to pursue a multi-cloud approach, which Anil Saboo said was an excellent point that was now being addressed using technologies such as Kubernetes. And, given the massive surge in cloud computing requirements, Saboo suggested that banks act soon to secure capacity. “We talk about infinite scaleability in the cloud but there is a cap at the end of the day,” he cautioned. “How do we manage that?”

The majority of digital transformation effort to date has focused on presenting a slick front end to the customer. Now, however, with the world so disrupted and margins tighter than ever, banks are increasingly seeking to deploy digital and automation to the backend.

“Because people can’t interact with the bank in the normal way, we’re seeing more focus on the core processes behind the scenes,” explained Paul Jones of SAS. “How can people use their camera to scan mortgage documents so they can still process the mortgage? How can we simplify customer complaints by email so that rather than 60 people sitting there dealing with them we can automate this and get the complaint to the right department straight away? That then frees up those people to work on the frontline while customers get quicker responses and better interactions.”

Much of the work is focused on what Anil Saboo of Google Cloud called “extracting signal from data”. “There’s lots of unstructured data in documents and some of it is really relevant to processes,” he said. He used the example of rapidly rolling out the Government’s COVID-19 financial support programmes. “There’s a lot of information related to those loans and a huge number of applicants, so how do you process all of that effectively? Are there processes of that value chain you can automate using AI and machine learning, using those document-understanding techniques that we have already developed and become really good at? That’s just one example of how we can extract signals from all those data and make it useable and actionable and do it quickly.”