As the big banks jostle for leading positions in the digital age while fending off fintech and start-up companies, James Lawson speaks to Raymond Pettitt, managing director, community banking, Barclays, to find out how its Smartcall service and investment in new branches is helping it pull forward in the race for customer satisfaction supremacy.
Whether it's a mobile-banking app or web chat, digital channels are now the first choice for many consumers. To support them as well as reduce operating costs, increase engagement and compete with the latest online-only fintech start-ups, Barclays is devoting huge efforts to digital.
That investment is bearing fruit. Its mobile banking usage increased by 27% year on year in 2015; the average Barclays customer uses the mobile banking app 26 times each month and 42% of unsecured personal loans were processed via digital channels (online and mobile) in 2015.
"We are very happy with how our mobile and online banking service has developed and are over the moon with the usage numbers," says Raymond Pettitt, managing director, community banking, Barclays. "We know we need to be a digitally oriented bank, but we want to make sure we bring all our customers with us on that journey."
Catering for everyone means those new channels can't work in isolation. Pettitt emphasises that digital has to be part of an integrated omnichannel - not multichannel - journey.
For example, a loan application might involve online research followed by a branch or call-centre enquiry, with the final purchase, again, made online. To link together and support those different stages demands real and near-real-time integration between back-end channel systems and Barclays' core banking platforms to give a joined-up view of customer history and recent activity.
With that coherent view in the back office, the company can then focus on making the transition between key channels like web, mobile and voice calls to the call centre as seamless as possible. This is where the bank's recently introduced Smartcall service scores highly: online customers just click a button to talk to a contact centre agent.
"When you reach the call centre, you are already fully identified and verified so the agent can help you immediately," says Pettitt. "ID and 'V for voice' is the most difficult to do so if you can connect through Smartcall, we can sort out your problem straight away."
That means a faster, seamless service for the customer and potentially higher efficiency via reduced call times for Barclays. It's a great example of the win-win relationship building that Pettit's team aims to use technology to achieve.
"Our Net Promoter Score (NPS) for Smartcall is +60, so customers really do like it," says Pettitt. "A lot of those calls are new so, as it's increasing our overall call demand, it's not actually saving us any money, but what it does is give us relevant interaction with customers that they really value."
Secure online text chat is another popular and growing channel, with video calls next on the agenda. Those will work in a similar way to Smartcall: press the button while already securely logged in online and talk directly to an agent via high-definition video.
"It's about increasing choice and convenience," says Pettitt. "You can have one-way or two-way video, or choose to use another channel altogether. We're already seeing a transformed experience in how our customers deal with us and we're really excited about that."
At one with the customer
Supporting omnichannel banking means that, while backing digital to the hilt, Barclays has also spent over £700 million on new-branch investment in the past eight years. Combining human help with increased automation, its latest development - a flagship Newcastle city centre outlet that replaces three smaller branches - gives a taste of its strategy and the business case behind it.
"We've thought about how we can make branches more digitally oriented and automate essential banking," says Pettitt. "If we make it easier, we believe our cost of providing that essential banking will come down and that customers will also engage with us more."
Increased engagement in branch or elsewhere via slick self-service channels has the potential to generate more income. "This will deepen their relationship with Barclays, so we'll be able to help them with more financial products," states Pettitt, reflecting a view championed for decades by one-to-one marketing gurus like Peppers & Rogers, or Professor Merlin Stone.
To set engagement firmly as its goal, Barclays has also shifted the metrics it uses to judge success. So rather than setting targets to encourage staff to sell more products like loans, it employs its NPS as its key measure of loyalty and advocacy.
"Since 2012, we haven't had individual sales targets for colleagues because we don't want incentivisation that drives that behaviour," says Pettitt. "I'm more interested in the number of conversations our colleagues had about borrowing needs. Did they connect them with digital or did the customer do it themselves? Did they get their Blue Reward through? Have they become more engaged with Barclays as a result?"
As well as looking at NPS by channel, Barclays sees NPS for the whole journey as its most important metric. "If we get that right, then the other metrics will come along with it," says Pettitt.
Though, ideally, all their customers would switch to digital, all high-street banks are caught in an increasingly polarised market. On the one hand are those, often high value, consumers enthusiastically adopting digital channels, typically mobile and internet banking. On the other, there are the many, often older, "refuseniks" who eschew automation and queue resolutely to deal with a human being in branch.
"We have such a diverse mix of customers, demographically and behaviourally," says Pettitt. "Some customers will run towards something like an intelligent ATM for paying in cheques and love it while others still very much want to have someone take care of that for them. The same goes for digital."
Coming of age
Barclays reaches out into the community to help its staff and customers move forwards into the digital age. Non-banking initiatives here include the Digital Eagles online education programme and Code Playground, which teaches children to write computer programmes. In branch, staff talk proactively to queuing customers to find out if they need any assistance.
"If you stand back and let them get on with it themselves, it will take much longer and cause a lot more pain," says Pettitt. "We've found if we have the right colleagues in branch to help them build confidence, after about 12 weeks even those who didn't like automation at all to start with tend to be with us."
Fine-tuning automated services for maximum ease of use is another focus. Sometimes extra choices like note denominations or which account to withdraw from actually make a process more complicated and harder for customers. Pettitt describes that as "micro customer experience learning".
"My team have a responsibility for introducing customers to a new way to bank," he says. "Digital is a better way to do banking altogether - there are lots of benefits. For a start, those connected to digital get the best deals in the market."
Barclays' ability to show digital banking customers how much it could loan to them is a great example of that, using all the individual data available to craft fully personalised offers that include individually set lending rates. Based on this sophisticated back-end infrastructure, Pettitt's community banking team are now introducing pop-up remote banks that marry digital services with the physical realm.
Tested throughout 2015, remote community banks can support many traditional branch transactions using just an iPad and an internet connection. Based in a library or refectory, pop-up banks could open accounts for new student customers during the busy October-to-November period. They could also appear at workplaces, helping customers select relevant products like mortgages.
"We've set up digital functionality like online account opening, so we can then take that into the branch as a kiosk or, more flexibly, as a pop-up community banking branch," Pettitt says. "As long as the service and the timing are right for customers, we can pop up anywhere."
This kind of innovation will be the only way for Barclays to retain its leading UK position in the digital age. In the ongoing fintech revolution, it and the other big retail banks are firmly in the sights of start-ups like WePay, TransferWise and Lending Club.
Online outfits like these aim to cherrypick profitable customers in niche areas like money transfers by offering lower fees and better customer service. Even taking a small portion of the existing global market for payments is potentially worth billions.
"The biggest risk to retail banks is not so much a provider like Google or Facebook coming into the market but the fintech approach in slicing off parts of the customer journey," says Pettitt. He notes that Barclays has to, "get involved and learn how to be part of the solution for customers".
"What we need to do - and are doing - is to invest in new technologies like blockchain," says Pettitt. "Rather than running away from new technology, we are investing and partnering with different fintech entrepreneurs."
Continually reinventing its business, and participating in new online channels and markets while meeting regulatory demands and maintaining the trust of its customers - those are existential challenges that Barclays is meeting head on. Its new £15-million contact centre in Liverpool, which went live in January, exemplifies this determination, bringing together video banking, secure messaging and other omnichannel capabilities with traditional telephony.
"We continue to invest in digital, we continue to invest in branch and have made big investments in our virtual capabilities," says Pettitt. "It's all about developing the culture of supporting customers through omnichannel services and smarter human banking."