Banking under transformation

11 November 2012

Future Banking talks to Anthony Watson, Barclays managing director and chief information officer of Europe retail and business banking, about improving the customer experience, handling risk and regulation, and how best to make use of IT and social networking.

Future Banking: How is technology spearheading the need for Barclays and the banking industry in general to be more customer-centric?

Anthony Watson: There is a strong argument that technology's role within traditional 'bricks and mortar' banks has been woefully stagnant for a long time. But this is changing. Barclays' vision is to become the 'go-to' bank in all our markets, which means we need to be totally focused on the customer by creating a seamless experience that's channel-independent and in real time.

To do this, we need to challenge our industry norms, practices and conventions, as well as 'assumptions' in order to become real innovators. True innovation only comes when one challenges industry-wide assumptions. Market-disrupting companies like Apple, Amazon and Google challenge assumptions. While these firms emerged from Silicon Valley in the form of start-ups, other organisations far removed from Silicon Valley can also create new futures when their leadership looks to innovate by challenging and disrupting the status quo.

"The key to the future competitiveness of the financial services industry is true customer centricity."

You might be thinking it's all well and good talking about challenging industry assumptions if you are a technology start-up in Silicon Valley, but what's that got to do with a 300-year-old bank like Barclays? Well, quite a lot, actually. We're working hard to transform our technology ecosystem by modelling our technology organisation on high-tech firms, especially in terms of true innovation and speed to market. It's a natural evolution - high-tech firms face unique challenges because of the fast-paced and ever-changing landscape of their industry.

Other industries are following suit. Intellectual capital, innovation and agility (people and processes) have become the key sources of competitive advantage in a wide range of industries, and the key to the future competitiveness of the financial services industry is true customer centricity, the ability to innovate at real-time speed and bring compelling new products to market swiftly, even if that means challenging industry convention.

How does Barclays use call centres to build a competitive advantage and enhance customer satisfaction?

We view a contact centre in the same way as we view a customer walking into the branch: regardless of the purpose of the customer's visit, they're looking for someone to understand their need, the context in which that need developed and then to address and resolve it immediately. This is not just about technology or processes: it's about pushing our cultural values in a transparent way to ensure our front-line colleagues (of which contact-centre agents are included) and our back-office teams are empowered.

"For a lot of people, contact centres are a hideous experience. To tackle this, we’ve begun using intelligent call-routing technology from SatMap."

Getting the customer mindset into our thinking is very much part of the equation. The other is not resting on our laurels, so we continue to find new partners and technologies that give us new capabilities that help us leapfrog our competitors.

For a lot of people, contact centres are a hideous experience. To tackle this, we've begun using intelligent call-routing technology from SatMap. It uses highly sophisticated analytics to profile both agent and customer data in order to enhance and evolve the call experience. Our customers now speak to people with whom they have an affinity, thus enjoy the conversation more and our agents feel the same.

Our agent-attrition rates have dropped, our training costs have gone down and our customer-engagement and satisfaction has gone up - everybody wins. This combination of mindset and innovation helps keep our contact centres fresh and relevant, focused on improving a customer's experience and translating into enhanced customer satisfaction.

What are the KPI/ROI considerations that prove your customer contact experience is actively fulfilling its role and providing a positive customer experience?

Measuring customer experience is one of those things that everyone does differently, and I don't think anyone's got it right. Net promoter score (NPS) continues to be a standard in customer satisfaction for many organisations, which is rather ridiculous because it doesn't cover a real customer's experience; for example, in sales, the customer could have had a great experience - regardless of making a purchase or not - so sales conversion doesn't necessarily do it as a KPI in this context, unless you only apply it to an incoming sales call, where the customer is left with a purchase.

A flexible combination of old and new KPIs that include NPS, incoming sales conversion, proactive problem resolution and social media is the best plan. That said, there's only one key measurement I look for: excellence in customer service, which is crucial to success. All other measurements are secondary.

What are the errors to avoid when developing a customer contact strategy?

Assumptions. Specifically, it's important to avoid the assumption that your customers want to hear from you at all, most don't - but what they do want is a real-time, seamless experience when they choose to engage with you. Once you work through that assumption and get the 'touch-point model' correct, frequency and balance of active compared with passive communications will be the next focus area to get right.

What's the future of retail banking? How is Barclays Technology poised to making its vision a reality?

Digital, mobility and true customisation. This is about a seamless omni-channel experience for prospective and existing customers, in addition to providing mass market retail customers with the flexibility and typical experience of high-net-worth customers in areas of product diversity and customisation. This is not to say that the branch, or face-to-face interaction, loses its relevance, but that the purpose and value of the branch and the relationship manager interaction will change.

"This is about a seamless omni-channel experience for prospective and existing customers."

Early on, we realised that, to provide the right capabilities, we'd need more than just identifying and building solutions. Most importantly, in addition to typical roadmaps and planning sessions, we knew it would require a change in the pace and methods we use to build solutions.

We made changes to our organisational design - aligning technology teams to customer experience, lines of business and operational processes teams. We also established business and customer design teams within technology, so that we can have deep and broad conversations immediately and in real time.

How much are social networking systems being adopted by Barclays?

Over the last year, we've taken a deeper interest in understanding the true value of social networking tools - a balance of commercial value to the bank and, most importantly, customer-experience. So, while we aim to optimise social network interactions as part of our broader channel and customer contact strategy, we don't want to arbitrarily offer something that could be seen as just another Facebook page; we need to ensure that what we offer is customised to local customer needs and deeply integrated into how they operate, how we operate and that it's in the context of our technology platforms.

"We need to ensure that what we offer is customised to local customer needs and deeply integrated into how they operate."

This is still a new area for us and decisions about what and how to deploy will not necessarily be common across all of our operations because, as we know, different countries and geographies use and view social media in different ways. But we're looking at social network monitoring and scoring to target influencers and offer new products and services; for example, customer query requests through Twitter.

Also, there's space for a bank in crowdsourcing and peer-to-peer lending models, all of which will need to be supported by technology.

What are the key IT challenges facing financial institutions and other large corporations?

The biggest challenge all companies face today is how to move at speed. The days of traditional client/server projects that last years are over. We need to be able to go from conception to production in six months or less.

"Barclays understood early on that 85–90% of the leading causes of downtime are usually preventable."

The challenge facing IT organisations is how to embrace, integrate and provide new capabilities that require updated and/or innovative technology in a way that is timely and fulfilling to customers, while maintaining current and stable platforms already serving those customers.

In short, we need to find the right proportion of change compared with run investment to successfully support and enable a transformative journey - which is seamless and real-time - while ensuring zero impact on systems currently in production.

What are the leading causes of downtime, data loss and hardware damage, and how does Barclays guard against them?

We understood early on that 85-90% of the leading causes (such as environmental, human error for data centres, hardware/software malfunctions and human error for data loss) of downtime are usually preventable. We deploy a hybrid strategy of best practice management and monitoring processes, coupled with the appropriate operational technology to support the efficiency of executing those processes.

In addition, there are internal audit and compliance teams that aren't associated with technology, and who constantly review and assure that our processes, people and technology fulfil their purpose and reduce risk to the bank.

What are the key IT/operational challenges facing financial institutions in the area of regulatory reporting?

Data - its granularity, its location and the ability to aggregate across silos to fulfil regulatory requirements and customer needs, and reduce the cost of manual intervention to create the required output. It's a combination of people and tools; for example, we use a highly sophisticated data analytics and augmentation engine from Blazent.

"There is only one key measurement I look for: customer service. All other measurements are secondary."

It enables us to view our entire technology ecosystem (including all our separate data silos from disparate sources and business units) in one consolidated place. That then allows us to fully audit and interrogate the data for governance, risk, regulatory, compliance and a cost take-out perspective.

At Barclays, do C-Level officers become involved in setting strategies to mitigate risk and improve regulatory reporting?

Yes. There are direct lines of accountability throughout the organisation, right into the C-suite for all things related to risk, compliance and audit actions, from internally and externally led initiatives.

Dodd-Frank requires that all European institutions should report in US Gaap at a time when, across Europe, institutions report in IFRS. How is Barclays coping with this?

First, Barclays is not just a European institution; it's a global company operating in a global context. We have a presence in over 55 countries; we just happen to be headquartered in London. Barclays takes all its regulatory and reporting requirements very seriously.

Through the appropriate internal reporting lines, and with the support of external partners, we engage all of the relevant parts of our business (such as technology, compliance, legal and risk) to create a cross-disciplinary team. This team is empowered to understand new or changing requirements, their impact across the organisation and on our customers, and then propose an effective and compliant solution that allows us to meet, and in a lot of cases exceed, any requests within the provided timescales from the particular regulator. Dodd-Frank is treated no differently. ?


The banking industry is changing. Banks can achieve success through improving the customer experience, and making use of IT and social networking.
Anthony Watson joined Barclays Bank in 2009 and is managing director and chief information officer of Europe retail and business banking. Previously, he was senior vice-president and global head of technology services at Wells Fargo & Co, responsible for non-domestic US technology infrastructure and services.