Industry sign banking alabama lease template mobile
[Music] so I apologize I think the Aegean agendas that you have in front doesn't quite have the description of what we're going to be covering today because what we're going to be talking about is how you can accelerate digital transformation not just drive it how you can accelerate I'm going to talk about and share some lessons with you from leading banks around the world and what they're doing to overcome some of the common barriers that I know many of you face as you embark upon this particular journey for those of you that don't know first adjust quickly we work with business and technology leaders to develop customer obsessed strategies that drive growth and part of what we do is we actually collect data on 80% of the world's GDP consumers as an awful lot of data which means we have an awful lot of insight into what actually happens what they are they interact particularly with banks and other firms what their behaviors and attitudes are around technology and financial services firms and the interesting thing is when we look at this and we look at some of the trends that have been happening in this data over the last three years we're seeing a number of things the first thing is we're seeing an increasing appetite by consumers in the willingness to experiment so their willingness to experiment with new technologies and and new devices and things like that we're also seeing an increasing use and increase in an uptick this is globally by the way in device usage which of course won't surprise you either I mean the Internet of Things is here for everyone in that's in denial it is literally going to change the world in the next five years and anyone who's already struggling with how to get your head around the data you you have on the customers your minds just going to explode with the volume of data that's going to be coming down the pipe because of all these different devices the third thing we're seeing is a huge uptick in digital in consumers wanting a digital and physical integration which is really interesting particularly in financial services firms with all those lovely emphasis with my Australian accent on lovely silos because I mean non lovely silos where mmm this is digital and this is branch and this is you know call center the point is customers don't think like that in fact the word channel should be written on a piece of paper through scrunched up in a ball and thrown into the pit of the fiery hell why because customers don't think in channels they just like I want to get stuff done right and they walk into a branch and they've got their mobile phone with them so experiences that use both works really well for them or as we know they can now go to an ATM and get some cash out with their phone cuz that's with them like these channels as we used to call them which it should be in past tense is no longer siloed because people are interacting with them both and they expect that integration the other thing we're seeing with with the data is an increase in information savviness and an appetite for information so your customers are not just looking and absorbing more information expecting more information from from from you they're also looking at it from other angles as well and so they're coming to you much more knowledgeable and much more potentially qualified when they're looking to purchase products and then the last trend that we're seeing and these trends by the way across all industries I'm trying to translate them into a kind of banking for you here as I talk through but the last one is self efficacy what do I mean by that well self efficacy as well what's in it for me and now it's not just Millennials it's all generations it's what's in it for me because they're kind of sick to death of brands where it's all take take take and all you're trying to do is flog me a product so in terms of financial services the what's in it for me well how are you adding value to me above and beyond your product what are you doing to help me with what's important to me which is growing my wealth or getting out of debt or whatever those those goals are the goal isn't to get a mortgage the goal isn't to get a credit card this is not how customers think and many many many consumers have all sorts of financial problems that they have all sorts of emotions related to be it shame or whatever and very few firms actually go out of their way to help customers and show them what's in it for them above and beyond just trying to flog them another product so we've got these changes happening with customers we all know that expectations are changing but of course you know simple mathematics as expectations rise perceived value Falls unless experiences improve and in fact we just finished it Forrester our recent round of our customer experience index where we do this globally in the US we look at around I think it's about 286 287 brands in banking we look at around 28 brands and in the banking industry the customer experience so we actually go out and survey consumers on a number of different variables and the experience is actually falling and part of the reason we believe it's falling those expectations are rising and firms just aren't keeping up the other thing that we're seeing is a huge cluster of firms in the middle so we've got some great breakaway firms like USAA and Navy Federal Credit Union but take those out of the equation and everyone's clustered in the middle because it's a huge huge lack of differentiation so these new expectations that are happening many firms and institutions aren't ready to meet those expectations in fact what's happening is in fact this used this slide used to say incumbents are at risk of being disintermediated you are being disinter mediated and the danger here is and I will point out every single one of you in this room whether you realize it or not is actually going out of business it's very very slow but it's happening and the reason why it's happening is other firms are coming in and sure they might not be able to come at let's take Amazon Amazon doesn't need to become a bank it's not going to become a bank instead it's gonna come in the middle of this and drive a wedge between you and your customers what happens in your business if you lose that connection with customers all you are is a product manufacturer you're a commodity you're basically the dumb pipes the customer doesn't see you they don't see your brand impact banking is becoming invisible payments are invisible so much of what we do in the banking industry is becoming invisible to consumers so what is your brand anymore there's no differentiation in what you offer it's kind of the same it's all the same products so all that leaves you if you're losing the connection with customers all you're left to do is competing on price all you've left to compete on you want to come join me we do that on is on on price and features and if all your business is is about price and features goodbye I mean even Amazon whoever Amazon chooses to partner with which could very well be chase because they've got a number of partnerships with them already but if they go and offer a checking account which we believe that's what they're trying to do now they'll partner with someone they're just squeeze them out they'll be the commodity in the background and if they don't keep up with the price and everything that's going on boom will just replace them and it won't matter to the consumer and put your hands up if you would open a checking account with Amazon that gives you free Amazon Prime exactly I'm actually signing up for that as long as the mobile banking stuff is kind of okay you know that's fine why because I'm getting value above and beyond the product and that's what's missing in this industry everything's product driven and features driven and pricing and that is important and get me wrong that's so that's that's tale sakes that's a right to play if you want to win customer loyalty and you don't want to lose this connection with your customers to people like Amazon and Google and other platforms in fact PayPal is probably the biggest threat if you don't want to lose that connection then you need to get closer to your customers and you need to add value to them above and beyond the product so digital disruptors they actually have a different mindset and we can learn a lot from them when we think about digital transformation so when it comes to digital there's two sides well I'm actually gonna go to four different-sized in a minute but the two key ones digital customer experience and digital operational excellence so disruptors think about they have sess about meeting customer needs and by the way this obsession this is not and I hear this from a lot of banks every time I hear a bank say we put the customer at the center of everything we do I'm literally just want to roll my eyes because they actually do but you know what it is the customers are Center and they're surrounded by the bank and all the bank's doing is you want this product you want this product you want this product you want this product the poor customer feels suffocated and that's the cubicle customer experience so instead they obsess about meeting customer needs and I'll talk a bit about Kuster obsession and what that really means in a moment they delight customers with superior customer support is experiences they capture and analyze data to offer better products and services and they rely on low-cost referral marketing disruptors also innovate at speed they use software to automate end-to-end processes by the way my Australian accent I say processes I noticed in the US that many of you say processes which I always have to laugh at in my head because most of the processes are not to process with ease they're not easy they're hard so I don't get why it's called processes sorry little play on words there and the accents but they actually do make it easy these these disruptors they partner through digital ecosystems so they don't go it alone and they don't just partner in the delivery of stuffs a partner in things above and beyond the product and they experiment with new business models and so all of this is why they're getting close to the customer and you're going out of business so you need to become a digital business I'm going to talk about what that means in fact Nigel spoke about this earlier today and I know when he did he talked enough about a number of things and I'm going to touch on some of those themes and make it more relevant for you in financial services and banking and talk about what some of the leading firms are doing so a digital business is a firm that continuously exploits digital technologies to do two things to create new sources of value and secondly to increase operational agility so there's two sides of that coin right there's the how do we add new value to the customers and add you value to the business but also how do we set ourselves up behind the screen and with everything else that goes on behind that so that we've got the agility to move because these customer expectations are changing and they're changing at a rapid rate and technology is changing at a rapid rate and if you don't have the agility in your operations to keep up with that again you're gonna go out of business at first till we look at digital maturity and we you know this is a really simple way of putting it into three phases we have a lot of firms taking we have a digital maturity assessment and you know most firms end up in one of these three buckets at the early stage it's about bolt-on so this is about having a mobile app it's about having a website and a digital experience and in fact in a lot of cases it's also about a chatbot because most chat bots are bolt-on they are not integrated into the experience they stand alone a lot of times they cause inferior experiences because they're not integrated into the experience that the customer wants with you instead they're often built why well then they don't have to call the call center and that saves its money right so it's this bolt-on phase is where we see the very very very early stages of disruption and we'll be honest most firms particularly in financial services are still down there we do have some moving up into the next phase which is transform this is where you can start disrupting other businesses why because you're transforming your back office and your operations and the things behind the screen and you're integrating it into the way you do business and that's allowing you to deliver customer experiences that are far greater than just what you're doing on the screen and then you move to disrupt which of course disruptors have gone straight to but there are some outlying firms that have moved into this strut phase by because of what they're doing because of the speed at which they're doing it they're actually disrupting banking themselves so what's in the way why why firms still stuck down this bolt-on phase so many of them and it's not just in financial services in other industries well our data tells us that it's not technology in just a lack of skills its lack of investment and a lack of agility and these are the key reasons why they're the biggest barriers to success in digital transformation and creating great experiences so how are the leading banks overcoming some of these barriers like what are they doing how are they actually speeding up digital transformation you know almost everyone's on the journey now which is great few years ago we were like I was up here telling people gosh you've got to get on this journey I think everyone's on the journey right is there anyone who's not on the journey yeah everyone's on the journey but the challenge is it's just not going fast enough right it's just not happening quick enough there's a couple of things that they do the very first thing that they do there's ones that are transforming fast is they address culture because driving a culture that is digital and customer obsessed is so important but time and time again when I talk to firms and they tell me what's stopping them getting things done when you dig underneath it its culture and they're not addressing culture in fact they're changing everything they can to in the you know the hope of trying to speed things up when the one thing that's in their way and the one thing that can move them forward is culture why because culture is hard right it takes a long time to change it's really difficult to identify because all culture is is a set of behaviors and values so how do you change people's behavior it's not just kpi's by the way you know there's a lot in that but if we look at the firms that we've surveyed around the world and these are firms that are the customers not at the center of what they do these are customer obsessed businesses they have a number of traits in common my slides are in the wrong order so let me talk through this first a digital culture is critical to digital transformation because of the four rules of business you may recall this morning Nigel talking about the four rules of business I'm going to talk a bit about each of those in a moment too after I try discuss culture but every single one of those rules has a culture related element that's critical so if you want to deliver easy effective and emotional customer experiences you need a culture that fosters come first empathy and that value is a deep understanding of customers needs and ecosystems and what I mean ecosystems it's what goes on in their world above and beyond the product so if somebody's taking out a mortgage what else is going on around that they're buying a house they're moving they're looking at Realtors they've got lawyers there's a whole bunch of things happening that's their ecosystem digital operations if you want to focus operations on the things that customers value then you need a culture that recognizes and rewards digital experimentation and collaboration you need a culture that embeds customer metrics into the scorecard of every employee and you need to foster a customer empathy and customer led decision-making in a digital ecosystem so if you want to want which is the third rule of business you need to you know if you want to build build platforms and partnerships tha
accelerate its scale then you need to promote internal and external collaboration so if your organization is not very good at collaborating internally you've got probably no hope of collaborating externally and this is what you need for the digital ecosystems the fourth one is digital innovation so if you want to innovate at the intersection of experiences and operations you need a culture that encourages speed instead of perfection that has a tolerance for risk you need to be willing to fail fast and learn from your failures failures and you need to promote collaboration between customers and partners so every one of these you will struggle with if you don't have the right cultural attributes if you're not starting to address those I mean I need to wait to get them the point is you need to keep chipping away at culture now don't wait because it takes so long to change and in fact whose responsibility is culture everyone's exactly who can change culture anyone and everyone I work with a lot of organizations and a lot of a lot of firms that kind of say yeah we get it but the CEO doesn't get it you know we're never going to get this done that's just an excuse every one of you in this room can do something tomorrow if you're back up we are not back the Oscar on Monday with your teams that can start to drive culture change there's something you can do next week with your peers there's something you can do next quarter there's always things that can be done to nudge that culture along and drive some of these things about customer empathy and collaboration and so on and firms need to fix their culture gaps to become more digital I realized this is a big slide you might not get a chance to to read all of this but I'm sure you'll probably get a copy of these slides after the presentation but what we there's a report that I wrote around fixing culture gaps and I identify what I'm calling an analog culture and then what a digital culture looks like and it's very very different a digital culture is a little bit more aggressive it's not defensive so going after things not defending it and not sitting there going well we can't do it because of regulation in fact if you're saying you can't do something because of regulation you've got a culture problem because it's just an excuse because there are many other firms for the same regulations or even heavier regulations that are doing this stuff and they are transforming and innovating and creating amazing experiences they're collaborative so they have a customer focus they're empathetic their insight and customer driven decisions they have rapid decision making you know I hear a lot of things going that's just too slow people can't make a decision that's because the governance is wrong you need a different type of governance still governance but it's needs governance that enables and enables things to move at speed not the governance that most firms have in the organization the accountability autonomy and empowerment you need an attitude to risk which is about succeeding fast and learning from failures in fact the leading some of the leading firms do you know what they do they hold failure parties yep where they get up and they give an award to whoever's had the biggest failure for the year and throughout the organization talking to their teams talking to their peers they're constantly talking about failures why because a failure is a lesson learn you know it's the old quote which gosh who knows if it's true you hear these quotes from inventors and you think we'll did this ever happen but it's the old quote from Thomas Edison you know I learned 2,000 ways not to make a light bulb before actually may one failure gets you closer to where you need to be because you've learned something you know it's very rare people can go from zero to knocking it out of the park straightaway so failure is actually a good thing in fact if you don't like the word failure you use the learn you use the the word what are the lessons we learn how do we get closer to our goal from what happened a couple of other things I'll just point out here so accountability is a big thing right that often slows things down decisions by hierarchy and and and kind of committee and so firms that are doing this stuff fast they have a devolved accountability and they have autonomy they trust their people and decisions are pushed down as far as they can not pushed up so there's a couple of different things there and you know please if you do get a chance when you look at the slides later do encourage you to look through this and maybe have a look at this and go my gosh where are our culture gaps because it's going to give you a good place to start to think about what do we need to move what do we need to change but what I want to focus on for a moment is some of this customer stuff around you know being customer SEPs obsessed and empathetic being insight and and making customer driven decisions so you need to develop a custom sis DNA and out of all the firms that we survey around the world there's a number of traits that they have that is common the first is they've actually moved from being customer aware to being customer led and that shift is really important there's a term in Japanese service culture called I'm Natasha and I'm not annachi think of it like a chess game but it's thinking two or three steps ahead so they have such a deep empathy for their customers that on their trainer she is not just having empathy for the customer and having empathy to think two or three steps ahead so cabin crew on Japan Airlines when they're trained if you are sitting down and you have your laptop open and you order a drink they are trained to give you a lid on that drink why because they're thinking two three steps ahead what happens if there's turbulence what happens if their drink spills there goes your laptop right in fact I had experience personally where I checked into a hotel in Amsterdam which was run by a Japanese company and I was on an overnight flight from New York which is where I'm based now despite the very thick clearly like New York Jersey accent just kidding and I landed I was going knew I was gonna land it like six o'clock in the morning and so I said to the hotel I called them ahead I said I'm gonna be checking in really early is that possible great because I'm coming on an overnight flight just wanted to make sure that was the case awesome I not only turn up on the hotel and they almost identify me when I walk in and I've never been to this hotel before clearly the only one with an Australian accent give me my dick give me my cart my cards for the door I go up to the room the room has been turned down the blinds have been drawn the lights are dimmed in the bathroom in the bedroom I've got the map for my slippers by the bed everything's ready as if it would have been turned down the night before when I went to bed because they knew that I was getting in overnight flight what do you want to do you want to go and sleep so you know that's what it's about and it's about thinking and having great empathy for the customers so that you're building your building experiences to where they're going to be rather than just reacting to what's going on now and that's what keeps you ahead of the game an example of this is we have at USAA they actually have a team organized around helping a customer find a home how many of you have a mortgage division or a mortgage team yeah having a team that about mortgages or a product mortgage time that doesn't evoke the same even thought pattern does it as wow this is a team about helping a customer find a home even that language stuff to change things to think more broadly about what's going on with the customer yeah the mortgage is part of it but there's so much else going on and so it changes the game I mean no customer in the universe ever woke up in the morning going exciting guess what I got to check my computer I've got to check my computer quick quick quick quick why cuz I really want to know what mortgage rate my banks can offer me today no one does that right seriously instead it's okay the baby's due in three months and we've really got to move or it's oh my god that house we saw yesterday I love it I love it I love it we've really got to get a mortgage we've got to get this we can't let even one girls get it right that's what goes on in people's minds not I want a mortgage and so this sort of stuff changes the game and in fact I'll talk about this a bit later but leading firms are starting to organize around the customer in this way the second thing is moving from being data rich to insights driven big data is dead probably one of the few people that will say that to you the reason why it's dead is because it's useless if you don't know what to do with it and that's what I find with a lot of firms they're like we've got a state which don't know what to do with it and so the leading firms are actually insights driven they use data to drive insights and they use those insights to drive decisions across the organization not just on the front line but everywhere in the organization and they do that by giving their employees a real-time 360-degree view of the customer not just the frontline people in the branch in the contact center but everybody because no matter whether you're building an offer document you're building a product you are in sales distribution or sales training or whatever it is every single person in the organization should be making data-driven decisions and if you have a 360-degree view of your customer it's not well here's what's products they have here's what they earn his their age and demographic well that's not really going to help you because it's not gonna help you make an insight driven decision what's going to help you is understanding that but also behaviors and sentiment and attitudes and context that's what's going to help you the third thing that's leading firms do they've gone from perfect to fast which is very hard for financial service firms I get it I've spent most of my career inside large banks and large both money management firms so you know I completely understand this is not necessarily easy but we are seeing this even a big bank boy look like Lloyd's has cut the time from idea to production from 10 to 18 months they're currently at about four to six months and soon they're trying to get towards one month from idea to production and we're seeing this increasingly even the large firms are starting to do this this is all about speed and they're doing it with a new design delivery process so they start typically for this four to eight weeks where they start by an understanding of the journey from the customer's perspective the second then is they incubate the idea which is about reimagining this experience and defining the plan of how they're gonna get there then takes about 2 to 6 months to potentially industrialize the solution and continue to evolve and improve it and then finally at the end it's about four months to kind of prove the value to customers and optimize solutions they can actually you know on a small scale and then of course it's about rolling it out at big go and they've also embraced a new way of working so idear generation validation and incubation which happens in six weeks comes from defining what's going on what the service will be not just the front end but the back end and how employers will be affected and all of that sort of stuff and the process is see I can speak American and Australian hackathons testing ideas and building and validating the business case then they move to development and delivery you know 16 months of two-week Sprint's validating the design with customers and the agile development and continuous integration so this is what they're doing and it's enabled them to start moving a lot faster and the fourth one here is moving from siloed to connected we really talked about being siloed and I talked about the example of USAA moving towards being aligned around customer goals well so as Lloyds in fact what Louis did is they identified a whole bunch of customer journeys that are really important and aligned with their business goals because remember digitization and a digital strategy it's not something different to your firm strategy you're just digitizing the business strategy right it's not something separate what are you trying to achieve as a business then how you digitize it that's how you become a digital business so what laws does identify these they whittled it down to ten but they're only starting with two and what they've done is this form to these cross-functional teams you can see some of the elements of those cross-functional teams here to start bringing these journeys to life and start figuring out how can they add value to the customer or add value to the business or how can they solve a customer problem Scotiabank are doing the same in fact a lot of firms are with their with their digital factories and labs in fact Scotiabank have this they started with rethinking mortgage onboarding that was where they started they just won one problem mortgage onboarding let's fix this and they have a couple of different things they have a full-time core which they call the family they have a mix of subject matter experts who kind of come in part-time or full-time depending what's needed and they're called friends and then there's other stakeholders that come in on an ad-hoc basis that they call neighbors so there's people across the organization that constantly coming in and out of this digital lab which not only creates great experiences out of the lab but the learnings particularly around Design Thinking some of those other innovation techniques and co-creating with customers some of those learnings could take them back into the organization so it's got a cultural benefit as well in fact collaborative methods are becoming mainstream what we see in our data is that about 72% say there are already temporarily assembling cross-functional teams for individual projects I guess what I challenge you to do because many of you probably already do that is those projects should be around a customer goal because that's what brings everyone together from the IT through to the front of house or wherever you are in the organization that is the common thread here what is the customer goal how can we add value to that customer or how can we solve a problem for that customer and in fact if you can't answer that question what is the value you're trying to add to the customer or what is the problem you're trying to solve for the customer then you should be doing it embrace design thinking and design thinking is a great way to start culture change by the way there are firms like IBM training everyone across the organization including developers in design thinking why because it starts with customer empathy so it changes the game instead of thinking technology first gee what can I do with it or thinking only is this process what do we how do we fix it or how do we take the you know how do we make it more efficient it starts with deep empathy of the custom what's going on and so firms are doing this and they're also using this kind of framework can blending it with agile development and this is across the organization in fact this design thinking agile framework should not just live in the technology area or in the Innovation Lab leading firms this is embedded throughout the organization they keep bringing people in I mean I sometimes hear from firms oh my gosh risk legal we can't get anything done we build this stuff and then it just never gets out well because you built it and then you went hey here look at this isn't this cool can't even we like get it out now instead of saying hey hey come in coming in come into the shed come in under our wing wear day zero right now and we're currently trying to understand the customer a bit more so we can empathize with them and figure out what to do and by getting the involved early and often through a process like design thinking it helps them because everybody wants to do great things for a customer hand on heart unless they're probably an evil person but most people do like generally this is what they want to do and so g
tting them aligned around this can really help move obstacles in the organization and of course I'll let you have a read of this but these are some of the techniques across that design thinking you know qualitative quantitative research personas journey mapping ethnographic research voice the customer innovation management all the way through to you know you know multivariate testing and things like that so again I'll leave this for you to have a look at when you go through just looking at the clock where oh it's okay so the first thing you can do to speed up your transformation is start looking at culture even though it might seem really really hard there are things that you can do the second thing is focus on the four rules of business right because a lot of people kind of go oh my gosh where do we start or they start with something like our will would be really good if we just digitize these processes the process is but of course often that ends up being just automating the way things have already already been done and have been done for however long they've been done which doesn't help anybody it just codes in potentially a bad process so you know instead focus on these four rules of business and start chipping away at each of them in fact that's the firm's that actually the firm's that are bolt-on really just focus on this first one as they move up the maturity curve they're focusing on all four which is why you want to start working on all four so let's have a look at this quickly I know you've seen them already from Nigel but I want to show what some firms are doing in the context of banking to make it a little bit more hopefully relevant for you so digital experience this is about easy effective emotional experiences and again I mentioned our customer experience index that we recently released what we find with banks surprise surprise they do really well it is an effectiveness so things are easy and yes I can get stuff done I can move my money I can pay my bills great but are they emotional no they're not in fact I had an interesting conversation with the journalist from Forbes yesterday cos how does the therm make a deal to experience emotional very very easily very really going to show you some of that so here's an example of an experience that actually is easy and effective and emotional in a sense because what it's doing is it's helping a customer towards a savings goal so nationwide in the UK they let customers transfer money into their savings account without even logging in so this is pre login screen it's very similar to something here in the US you may have seen it and if it still exists called push the pig and go Bank from Ohio or Idaho or somewhere was doing it so they've got the little piggy there and the idea is that you log in and it can instantly just click to go impulsive and it's really interesting right because people have this whole psychological thing about sailing and all that kind of stuffs like what if I have in a cash flow and there's all this guilt around it but at that one moment you like oh my god should be saving when you just open it go done it's done it's just done right so it kind of gets that out of the way whereas by the time you log in and then you look at all the other things going on your account you might forget to do the saving which is the important bit it's kind of like culture left to last perhaps was saving for some people as well but we can do better than this actually we can automate it and this is what disruptors are doing in fact there are many disruptors out there doing this like move in and digit but this is knowmy which is a feature or Royal Bank of Canada in Canada their mobile app so they've got this feature called Nomi where they reduce the cognitive load and decision stress about saving and moving money by automating it so what it does is it uses algorithms to kind of figure out what you're spending typically is like on what sort of things are coming up and your behaviour and also how you've interacted with this tool in the past to figure out when it can just kind of Whittle a little you know Whittle some money away from you without you even noticing that it's happening it's just kind of saving on the sly I guess so we're seeing a lot more of this and so this is a great way to create great experiences talking about experiences and even thinking about emotional experiences and this is one that doesn't necessarily require a whole bunch of digital transformation necessarily either in the back hand it's interesting if I come to you as a customer and say alright I need something to do my day-to-day banking with plus I'm also trying to save for a car and I'm also trying to save for a holiday what would you offer me probably a checking or a savings account right or both one checking one savings that's what we kind of have right that's checking or savings well the problem with this is that is not how consumers to think about their money now in other regulations to you that's what the products got to look like and all the rules but this happens in every country in the world and consumers do not think about their money that way they think about it in buckets I've got a bucket for this in a bucket for that they think about it like this right this is their piggy bank they think about I've got college fees I've got to pay off the mortgage there's a nip-tuck there I don't know why that's there maybe it's because of those desserts it's got saving for a sabbatical it's got a trip around the world you know people think of things in terms of here's a bucket of like things I need to spend money on like you know rent or mortgage or whatever and here's a bucket of things I'm saving for to spend on later that's how consumers think about it they don't think it of in terms of checking or savings so if I come to you and I'm saving for two goals and I want to separate them because I think of money in buckets I could open a whole nother savings account don't I can we fill out a whole form all that sort of stuff really frustrating so this is an example from New Zealand in fact two banks in New Zealand do this and they have been doing this gosh I saw this first five years ago so I don't know how long it's been going on probably longer they're the same rules and regulations that you do here but what they do is they let the customer choose what these buckets are called and they don't put any barriers in the way now I know it says add an account there but literally as soon as I go click it just is what you want to call it great do you want to add a photo sure and I'm done what's actually happening in the background the way they've kind of done the operational thing to kind of thuds it is when you open an account with them you're opening 25 accounts so as long as you've only got twenty five buckets you're fine I mean there's no fees on these accounts so there's nothing kind of dodgy or or horrible happening but as soon as the customer clicks add the account it's activating it and they can call that bucket whatever they like so here I'm got my house stuff I'm saving for a ski trip in Whistler you know I've got some I've got is that a farm I can't even read that I think it's a fun bucket so the point is this is I can make this how I think about money not how the legislative product world makes me think about money and that makes things are easy effective and emotional because it's about the things I as a customer care about ok the second the second rule of business is digital operations so reconceiving products and capabilities in order to deliver better outcomes so we honor the quick and loan story and they certainly might have reinvented the mortgage you know fast digital paperless they've certainly put a rocket up all of the banks I talked to who are literally trying to build and copy this right now and many of them have launched it traditional firms are fast catching up Bank of America launch there's a couple of weeks ago and of course you need to do delete transform the back office to make this possible I mean you're able to open an account within minutes because the underwriting is the underwriting is digitized the experience is digitized and the front-end by the way at Bank of America does not look like your typical form with all these form fields in fact those form fields and I've got to go away it's just brochure we're just taking what was printed on a form and put it on a screen which is not customer friendly at all what they've done is the approach it's not conversational as in AI chat but it takes a conversational approach the way it asks you questions and you're able to answer them with one button to move through the application process so it's very customer friendly in fact in the future most account applications are probably going to be done by conversational banking as in verbal or text with free form just like I'm having a conversation with someone hey what's your name hey how much what would you like to do oh you need a day there right how about it same as got how much pink [Laughter] [Music] so I know I've lost my train of thought with the Munsters okay so the point is that you know they're recreating this and going forward you know we won't be renting in form fields and our tiny phones because we'll be it's just like we're texting a friend or we'll whispy you know talking to our phone or talking our device come off Bank has used data to completely reimagine products experiences so all the data that they have on businesses they're feeding this back out to businesses as a product so they're giving merchants insights that's helping merchants with their marketing campaigns and things like that so they might know that hmm my street is really busy on the second Thursday of every month but my sales are quiet Wow what's going on and when they look into of course it's payday for the consumers that are in that area so they might then start putting offers in the window or doing offers to consumers at that particular time and Bank of America they've recently just launched this as well so it's early days but they're a I bought erica is proactively helping customers make smarter decisions so again what they're doing is they're reconfiguring their operations to turn this into new products that add value to a customer and I was given the five-minute warning about one minute ago so it's why I'm spitting up I apologize digital ecosystems is the third area so you know this really is a bit of a game changer in fact I would probably argue that moving from that you know if you in that transform phase through to disrupt phase you got to have these ecosystem plays or it just doesn't work right and this is about partnerships and platforms to create scale and this requires you to think differently you've got to thinking processes and adjacencies to create value so what I mean by that is you've got to think about your customers context who influences your customer what are their interests what's the community what are their goals what's going on who do they interact with what other firms do they interact with what are the products and then you've got to figure out where you fit in all of that because you're part of it so what's your role what comes before your part what comes after your part so back to my mortgage example in USAA the mortgages the bit in the middle in the green that's their part but what comes before it is actually finding the house so they've partnered with Realtors that specialize in helping military personnel and they help people find homes and real estate agents and lawyers and all that kind of stuff that they need for that process what comes after it well moving house or renovating and so again they they partner for those sorts of things as well and so that's what's important to think of because once you have that then need to figure out alright those bits you don't do are you gonna start doing them or should you partner with someone or how do you how do you deliver that because that's going to embed you deeper into your customers ecosystem and deepen your relationship and loyalty with them and there are many banks that do this this is an example from a bank in Italy called fight or bank they the whole Bank is an ecosystem bank they don't own anything right they have just partner with the best of the best of startups across a whole bunch of different areas and there's some here for you payments social lending crowdfunding social investing crystal currencies and they bring those services as a customer I think it's fighter Bank and that is my experience but here's what's going on they've got this ecosystem where they're bringing it all together for the customer BBVA in Spain were probably one of the first to do this they did this quite a while ago so they've created their own ecosystem and a lot of this ecosystem with partners and consumers and employers but a lot of them are you know very new startups and so on so it's not your typical supply suppliers and vendors and things but they actually are true partners and they they have you know they were one of the first with an open API platform and going out there and allowing other firms to actually innovate off that as well as enabling to them to bring in partners very quickly as well I mean a cliff it's just another example and small banging I do want to stop on this for a sec so digital businesses are open businesses they're open they innovate with others they don't just collaborate internally they play well with others and they collaborate externally and they let others innovate forward why don't all the work when I let someone else do it right so what that means though is you have to reframe your business strategy so traditional businesses go okay well what's the business we're in who are our customers what channels do we reach them through what partners can help us get get reach through those channels and then how can we kind of integrate to get efficiency and that's a typical way firms think instead you've got to you've got to change this around you've got to start thinking about competencies what are you unique what do we were uniquely good at what are our unique assets ecosystems you have to think about what ecosystems can benefit from what we do really well and our capabilities relationships what relationships will allow us to enter those ecosystems and connections which capabilities do we connect to which relationships right what can they do for us but what can they do with with them remember that's a partnership partnership is a two-way street right what value can you add to them and what value can they add to you and then leverage how do you continually optimize connections to win serve and retain your customers so it's a very different way of thinking about your business okay I know I'm over time on the last 100 go back back back digital innovation so this is about continuously improving and breaking through the digital frontier and this is how disruptors is how disruption happens right you'll get so far with innovation it will help you do some of the other things but if you're not doing all of these together you will not be a disruptor right you might be a solid transformer you probably need all of them to be a transformer to transform your business but you definitely need all of them to be a disruptor so let's talk about innovation for a second so you know there are a lot of firms doing this sort of thing like AXA who are working with startups worldwide as a part of its partnership for digital transformation right so they're creating labs and helping support the growth of these new businesses why so that they can then perhaps buy the ideas and bring them into their firms or learn from them or whatever so there's kind of this ecosystem and then there's the the play like BBVA where they're partnering with some of these players as well BBVA there you go 2014 was when they opened their arms with external collaboration with an open API so one of the first banks to do that but with innovation you have to take a distant build upon our to have time to spend a whole 45 minutes on innovation but so there don't so you're going to get like a one-minute on innovation you need to have a disciplined approach to innovation and when we surveyed all sorts of innovator
around the world in every industry whether they were startups and and new disruptors or whether they were existing firms doing it well we found that they all had an innovation funnel and it looked something like this I mean they're different variants of it but had these common components the first was idea generation where they were generating collecting ideas for employees from customers and from partners using social collaborator tools in fact there are technologies that can help you do these as well there's actually collaboration technologies they evaluate the ideas so they evaluate them based on a predetermined criteria so they already have a criteria of what's going to get through the gate and they determine what ideas are then going to get through the gate to be pursued incubation this is the third stage though once they identify what's through the gate they then try and turn it that idea into real innovation this is where things like design thinking come into play so they'll figure out you know how to nurture develop and refine that over time it's they'll continue to iterate that as well and then all the way through to implementation so it's bringing the idea from incubation to fruition and building a portfolio of innovations that drives value and what do I mean by portfolio leading firms have a balanced innovation portfolio and they manage it as a portfolio so you know there'll be a team or a team of executives that look at the portfolio and there might be a certain amount of money that's set aside for this every year so you're not going through the same budget process or having to wait a whole year but there's a pool of money for innovation and for a particular innovation portfolio and the leading firms have a balance of innovations that will get them quick wins and incremental change because that gets you momentum going and your culture change there'll be sustained innovation so things that you have to do and these might be things a little deeper that take a little longer to do so for example if you're trying to do personalization or things like that you might need to have better data capabilities and data platforms and things like that's they take a little bit longer and then they'll also make sure they have some radical changes and radical things in there so this is about testing and learning at the frontier of new technologies so that you know they're testing it and the idea about having a balanced portfolio is just why when you invest you have a balanced portfolio it minimizes your risk so at the end of the day I apologize for rushing through this but at the end of the day and we talk about digital transformation don't think of this as something separate like this far too many silos already in financial services firms and banks your digital strategy is not separate to your business strategy if you're a bolt-on firm it is because it's probably your mobile strategy and whatever your digital strategy and how you do lis transform is your business so your digital strategy is your business strategy you take your business show you go how do i digitize it and at the end of the day digital transformation is business transformation it's not something separate it's the same thing thank you [Music]
