Digital Transformation: "You have the capability to stop the business from overspecifying what they want"

In the run up to the Digital Transformation Roundtable that will take place on 13 November in Luxembourg, ITNation asked Wayne Peacock, IBM Executive Managing Partner, European Front Office Digital Leader Financial Services, to share his insights on interacting customer experience and what does it take for the banking and insurance sector to lead a successful Front Office Transformation.

  • On the base of your 17-year long experience in customer-centered Digital Delivery, what are the pillars of a forward-looking FOT?

The first and most important one is to think outside-in, think customer first, think across the multichannel. Many of the financial services organisations are very much inside-out driven, very much from a product-based and thinking in individual silo’s – that’s why putting your self in your customers shoes and using rich analytics is a crucial step to really understand your customers.
The second pillar is to create an organisation structure that allows you to become far more agile and responsive to the change in a structural manner. And the third pillar is entreprise mobility: consumers of financial services already have got an expectation of the sort of digital experience that they can get from their bank. While there is a significant amount of investments and change at stake, it is crucial for an organisation to enable their employees to become far more empowered, far more mobile, and far more transformational in terms of their conversations with their customers.

  • Every digital transformation is different, however, are there business aspects to which banks and insurance should pay close attention to when implementing their FOT strategy?

Obviously, the world of digital has become far more complicated than in 2008, back then it was only the Internet. The biggest problem facing all banks is that it has become much more complex. Multiple executives across all lines of business, all wanting to deliver Internet, Mobile, Tablet, Social and Multi-channel experiences. Therefore, how do you prioritise between the continued extention of Retail and driving new business models in the other lines of business?
The general insurance market, on the other hand, is waiting for everybody to make a move. Very many insurance organisations haven’t invested very significantly, only now are we starting to see some digital investments

  • In Luxembourg, how far are we in implementing FOT?

The Benelux region is in the same boat as everybody else in Europe. Organisations in mature markets will have adopted Internet and Mobile technologies early, they are also likely to have different platforms in their branch and call centres too! Multiple silo’s with high-cost delivery and low-speed of innovation. Emerging markets on the other hand have the advantage to adopt proven multi-channel architectures, allowing them to scale and rapidly deploy these capabilities, maximising reuse and sharing common capabilities across all lines of business and channels.

  • One top lesson that all Customer Experience Executives can learn from the retail sector?

Try not to build everything from scratch. Don’t think this is one single transaction when you build the team, the different services and then disband the team. Digital is going to continue to evolve rapidly. Think about how you build a digital centre of excellence: a team of people who understand the customer experience, who want to deliver cross-multichannel, understand the capability that exists within the organisation, both operational and technical, understand the assets of the architectures that you are building to accelerate that delivery in experiences, and that way, when the next idea comes, you can accelerate with a very dedicated team that will continue to improve its process.

  • If you were to name the best multichannel story that comes to mind?

We created for Nationwide a single platform that we could scale from Internet to mobile, to call centres, to branch, e.g. By no accident they are the number one bank in the UK for customer service. When we first started with them, they had 6MM current account customers. Now they’ve grown to 13MM C/A customers. We have transformed their delivery organisation from a slow ‘waterfall’ organisation into an accelerated and agile business, providing new code and functionality to front office channels every quarter. They can go faster, however they choose to release the code every Quarter to manage the change effect to their customers. Nationwide now has a very efficient and streamlined team within their Multi-Channel Development Centre and a very efficient Multi-Channel platform for every channel. By comparison with other banks, this enables Nationwide to deliver far more with but with fewer resources.

  • What would be a practical aspect of FOT that you are personally thrilled about?

Removing the friction from the experience! Let me give you an example. In Switzerland there’s a bank that requires you to put your full name and password and use an RCA to access the mobile banking platform. Its not a very mobile experience when you have to carry a device, get out your card and enter a pin! I can’t imagine they are getting strong customer growth within this mobile channel. However there are other banks that give you access to a range of services without having to sign in, where appropriate removing the customer friction. That’s an example of innovation which I think matters when you are on the go.

  • Which guiding principles do you always stick to?

In the work we deliver for our clients we define ‘guiding principles’ for the Customer Experience, Operating Model and the Technical Architecture. The principles make statements about who you see, say the Customer Experience, in the future. The guiding principles can then be used when innovating, prototyping and looking at the future direction of your business. You need to always question back to those principles and ask how is that idea delivering the experiences we have agreed are important to our business. Anchoring your vision enables you to drive a consistency across your channels and ideas.
Think about this…your Digital Channels and therefore your content you show is your brand: if you can’t manage it quickly and effectively, change it or make it relevant, then you’re letting down your brand. So how you manage content has to be crucial.
Another principle is to move away from lengthy specifications from the business. Adopt a new way of working that takes a very loose idea and uses prototyping and iterative feedback with the business to understand what is required. Imagine the pace of delivering the idea when you place that in a dedicated team that can rapidly deliver them by understanding the digital platforms, the data, the services, the experience and really understands the current levels of performance to architect a solution that accelerates front office experiences whilst protecting your back end systems of record.

  • What skills and talents Luxembourg-based companies should look for when hiring new people?

Design-thinking skills. Get people thinking about design first. Those who really understand how to create those rich experiences and how mobile can transform business processes. Skills such as rapid-prototyping or developing on multiple platforms are absolutely crucial. The age group matters as well, seeing how you get a lot of inspiration and ideas from the generation of people that have only ever grown-up with digital technology. This will come naturally, in time, through the organisation but you should really look to empower younger generation and give them an opportunity to influence your strategy and future direction.

  • What’s the most likely impact of FOT on the financial landscape in the next five years?

Imagine a world where a bank or insurance company isn’t somewhere you go to to deposit your money of to simply cover your risk, but becomes embedded into your everyday life. A Bank or Insurance company that is on your side, showing you what others are doing, guiding you to better deals, providing you with offers or dynamically pricing based on your loyalty or perhaps your active participation within the Bank / Insurance community. When I am saving for the future, a holiday, a car, may retirement? Imagine your Bank or Insurer proactively helping you to achieve your goals faster, showing you what others are doing proposing new and better product than the ones you have already. Doing this based on insight about ‘Me’, what I like, what I want, what I have been doing, where I am or what I am interested in. Banks and Insurance companies feeling more like a club, the more you are doing and interacting with the other people around you, the more you share your information widely, the more the bank/Insurance company reward you. Organisations creating an ecosystem of engagement.

  • When banks are asked to be much more risk-adaptating, with their costs and incomes under pressure, what can motivate them to invest to know their customers better?

The business cases of a number of our digital deliveries would typically have around 2/3 allocated to growth and 1/3 for cost reduction. What gives you growth comes through a really engaging experience. You want your customers to feel safe, to get the value and feel although they can spend more time exploring their bank, their account, their community, their data. The more they share, the more they see, the more they engage with you. We have seen an increases of about 30% in click through rates for new products for a well-designed experience, with business case being paid-back within 12 months of their solutions going live.
In a similar way for costs, digital and mobile in the enterprise will transform processes fundamentally: as organisations try and reduce the branch network costs, drive more self service and communicate more digitally reducing paper. Enabling branch staff to be more efficient, transforming processes and allowing them to engage in deeper richer conversations, powered by customer insight will both drive growth and improve efficiency. Imagine having your best advisor in a room, understand what makes them the best, what external insight they use, internal data and create solutions that can be placed in every advisors hands, making every advisor as good as your best! Mobile and analytics in the Enterprise is significantly underinvested, yet has the ability to transform your customers experiences for growth.
Wayne Peacock will be the top speaker of the Digital Transformation roundtable, an event co-hosted by IBM and ITNation. Get more insights from Wayne Peacock and join your executive peers in discussing your transformation issues, tradeoffs and lessons learned when adopting new mobile and omnichannel strategies.
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