TV PANEL SUMMARY
Futureproofing digital strategies for banks: towards optimal agility
As the banking landscape settles into the new normal, it is a critical time to take agile transformation strategies to the next level and prepare for a digital-only future. Panellists on the recent MoneyLIVE webinar, Futureproofing digital strategies for banks: towards optimal agility, agreed that banks have been on a transformation journey for a number of years now – and still have a fair way to go – but that the speed of change has been accelerated by the COVID-19 crisis.
“Digital transformation…is now no longer a choice, it’s imperative”
“Digital transformation in banking has been underway for a while but it’s now no longer a choice, it’s imperative,” said Jeeban Panigrahi, Director of Architecture, Applied Research and Development & Ventures CTO at Barclays Bank. “Customer behaviours are changing and it will now be a no-touch or low-touch economy, which means we have to think about how to deliver customer journeys.”
Paul Jones, Head of Technology UK&I at SAS, said banks are having to rapidly configure entirely new ways to meet customer needs during this period of unprecedented demand. “There has been a massive transformation in how customers are interacting with the bank,” said Jones. “Banks have had to focus on short transformation projects to respond to that, deploying quick projects for immediate wins. It’s very much a dynamic environment at the moment.”
“[The pandemic] has fundamentally changed how we work and been better for our customers as a consequence”
For banks with traditional branch networks, the pandemic was a catalyst for a sudden gear change in the digitisation journey. Vincent O’Dwyer, Head of IT Infrastructure Delivery at Bank of Ireland, pointed out that necessity had accelerated a change that had been on the agenda anyway. “We had to organise our teams around very specific customer challenges and focus on delivering those outcomes in very short bursts rather than the traditional way. Things that would typically take six to nine months were done in three or four days.”
Bank of Ireland embraced collaborative tools to achieve this. “We were going to do this anyway but we were not in any rush,” said O’Dwyer. “It’s fundamentally changed how we work and been better for our customers as a consequence.”
Changing customer expectations
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.”
“We see ourselves as partners and facilitators to help banks meet customer expectations”
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
“Cloud has been a game-changer for us”
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.”
“Cloud allows you to concentrate on differentiation…Putting in servers and infrastructure, these are none differentiators. But data and the expertise of your people, those are the things that add value”
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 fundamental to cloud and cloud services…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”
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.”
“We talk about infinite scaleability in the cloud but there is a cap at the end of the day”
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?”
Next steps: the backend processes
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.”
Breaking down silos
52% of poll respondents said breaking down silos in team structures needs most improvement if banks are to become truly agile
Cloud and automation are clearly essential to digital transformation but when viewers were polled on what they thought needs most improvement in order for banks to become truly agile, it was cultural and organisational issues that came out top. Over half, 52 per cent, said breaking down silos in team structures would be essential while 16 per cent cited the need to delegate more to give people more autonomy.
“Now we are all based remotely all over the place but we are collaborating more, being more productive and coming up with more innovative solutions”
“Before we used to say that to work agilely, we needed to bring people together and have everyone working together in teams,” said Jeeban Panigrahi of Barclays Bank. “Now, with the pandemic, we are all based remotely all over the place but we are collaborating more, being more productive and coming up with more innovative solutions.”
“Rather than multiple hand-offs and the sequential nature of getting solutions approved and delivered, we now have everyone involved in that conversation from the beginning…This has to be the way we do things going forward”
Vincent O’Dwyer of Bank of Ireland agreed the human element was really important to delivering the transformation agenda. “Rather than multiple hand-offs and the sequential nature of getting solutions approved and delivered, we now have everyone involved in that conversation from the beginning,” he said. “Before you’d have someone saying ‘we need to get risk’s perspective on this’, but now risk is in the room from the beginning and we get that input there and then. That has helped break down a lot of these silos that we traditionally had in place and it’s a model we must not let get consigned to history when we have moved on from COVID-19. This has to be the way we do things going forward.”
“The democratisation of analytics…will enable you to use your business experts rather than data scientists. It will become a core skill like being computer literate is now and will be embedded within organisations”
Paul Jones of SAS agreed, highlighting it has been amazing what has been achieved in a short period of time. He sees even greater gains ahead as AI comes into its own, particularly with the “democratisation of analytics” as AI becomes easier to use. “It will enable you to use your business experts rather than data scientists,” he said. “It will become a core skill like being computer literate is now and will be embedded within organisations,” he said.
The future, it seems, will be smarter, faster and more customer-centric as cloud, AI and human beings work together to deliver for customers.
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