Hands on Dexia

As branch transformation hits the top of the agenda, Barry Mansfield talks to Dirk Hoebeeck, CIO of Dexia, about the reinvention of the retail bank.

Future Banking Barry Mansfield: You have said that branch transformation is central to Dexia’s plans for the coming years. What will this transformation involve?
Dirk Hoebeeck We know we want to be recognised as the sustainable bank. We have that very high up on the agenda in various action plans, and we have a lot of support from the management board in our drive to make this a reality. Since its launch in 2004 our Direct Net platform has ensured that personal finance and retail customers are able to access all their Dexia statements at home. We don’t force them to have multiple versions of their statement. They now have a choice – there are different ways of handling your affairs when you bank with Dexia. One feature allows customers to move away from the notion of having a printout of their statements every two or three days – they can choose to collect everything in bulk over longer periods.

We are also working to greatly reduce the amount of printing at enterprise level and at headquarter level. We have a project called Papyrus that gives Dexia’s customers the ability to have all the information they could possibly need available online, so they can print only the items they need. That helps us to reduce waste with regards to the volume of printing undertaken at our headquarters here in Belgium. Any initiatives aimed at diminishing the consumption of paper, we are glad to support.

FB Does the thin branch play a part in your thinking? Will you be moving your servers from within the branch to remote data centres?
DH Yes, and we are actually leaders in that area. Years ago we decided to work with Citrix. I’d say around four or five years ago we had a number of servers in our branches and agencies, over 1,000 of them, and we were already saving on servers at that time by using the Citrix methodology. At our headquarters we are now using blade servers and also VMWare for the virtualisation of our service. All of this reduces the number of decentralised and centralised servers. It’s a big project, but not that difficult, because Citrix is such an effective tool. VMWare is also a very powerful tool for us because it’s deployable in almost every computer centre - even in the smaller centres, for example in Slovakia, we are using the technology.

FB What about the green blade servers we often hear about?
DH That’s a timely question, because we are studying the possibility of bringing in the green blade servers and trying to measure the potential benefits to be gained there, it’s early days though. In 2008, we will carry out some studies looking at how to reduce energy consumption, including electricity, which relates to the cooling of our computer centres. Nobody has a huge amount of experience of this area in the IT world. Dexia will, in fact, be the first adopters. We are talking to IBM and HP right now about it. And the impressive thing is that we should be able to realise a double benefit by doing things in this way. We won’t need all those square metres for our computer centres. So we save on space and the costs associated with that. And, secondly, energy consumption is addressed by the fact that our cooling requirements are reduced with the addition of the new technology.

FB So when did your adoption of VMWare begin?
DH We began in the last quarter of 2006, but we have stepped up to a higher concentration throughout this year. It will take us until the end of 2008 to have most of our servers with VMWare. It’s a project across the organisation but Dexia is not alone in that respect, it’s happening in pretty much all banks. I know other banks in Belgium and France that are working very hard on this right now. The green blade servers will be a hot topic industry-wide over the next two years.

FB What about Web 2.0 and its implications for retail banking?
DH We have a really big project underway, but we can’t speak about it just yet. We can only mention the name, which is Dexia 2 Client. It’s a project we started just after summer this year, and it will take until at least 2008/9 to reach fruition. It will enable us to use some of those new approaches in our retail banking operation.

Almost all of the activities you might carry out in your regular visits to a local Dexia branch will, in the end, be possible to enact using an Internet connection or 3G or WiFi-enabled mobile phone. Of course, when you need specialist advice you will still need to be connected to that expertise, to speak to somebody in the customer contact centre. This is all covered by the Dexia 2 Client project. In fact, it’s not a project any more, because we’ve decided that we are going to go ahead and do it!

FB Will this mean a significant shift away from so-called bricks and mortar banking in the long-term?
DH The objective of Dexia is to be very close to our customers, and we are prepared to use all necessary means to achieve our aspirations. So we are not against the notion of bricks-and-mortar establishments per se. They are part of the overall approach, and will continue to be. But electronic banking is increasingly important to us. We want to excel in that area, so it’s a matter of formulating the right balance.

FB But such a shift will certainly help the retail institutions with aspirations of environmentally responsible banking?
DH Yes, and I think for Dexia the most obvious connection is the drive to reduce our use of paper to a realistic minimum. That means much more than customers’ bank statements though. I’m referring as well to internal working practices, which involve a range of technologies – why limit the discussion to the extension of Web 2.0 for our customers? We need to become more comfortable with the potential of technology within the company. Remember that most of today’s professionals were educated in the paper world. I think it’s only the latest generation, the one growing up now, that is used to conducting their affairs via this new electronic medium. Most of us still need to take a pen and pad of paper when we go to negotiate in a meeting, for example. I think this situation will inevitably change with time.

FB So can you give examples to demonstrate how else Dexia is using technology to this end?
DH Dexia has a wireless connection at our headquarters, and facilities like this can make a positive difference, but it will really take a gradual step-by-step improvement in how we work. The technology may be there, but employees have to become at ease with it. It’s been said that people in their 20s and older have learned to work using a horizontal method of reading and writing. It’s only the next generation who will work in a vertical way – that is, with the document right before their eyes, on the screen of a PC, PDA or smart phone. It’s a big change for the human being, and a real transformation for the business world. People have been talking about the paperless office for decades now, and still we aren’t quite there yet. But, I assure you, it will eventually happen.

FB What about the role of the contact centre? Can you see that changing, perhaps becoming less significant, with the shift towards electronic banking?
DH Actually I disagree - the call centre will continue to play an important role in future. The physical office, e-banking and the contact centre are the three different elements that must be brought together for the whole to work. It’s a question of how you achieve harmony between the working parts of the structure. In an e-banking situation the customer will always have some questions to ask. If somebody needs a mortgage then they will have no problem visiting a physical branch for an in-depth discussion with a financial specialist. Considering it’s such a big and potentially life-changing decision, you would expect no less. But for smaller product questions, it is both possible and desirable to include the contact centre in an e-banking environment. The only burning question for us at Dexia is how to provide the ultimate in convenience to our customers, and naturally the contact centre is at the very heart of that. The manner in which it is done may change slightly, but the guiding principles will remain the same – accessibility for the end user, wherever they are, and whatever their chosen tool of communication.

Dirk Hoebeeck

Dirk Hoebeeck was appointed as CIO of Dexia Group in 2006, bringing to the post over 32 years of experience in the IT industry and 22 years of broad industry experience in the financial services sector. He began his career as a divisional manager at Siemens, before moving to Gemeentekrediet van België in 1984, which became part of Dexia in 1996. He has also worked as ICT manager for Anhyp, which was acquired by AXA in 2000, and served as CIO for Informatica J Van Breda & Co for the eight years leading up to 2003. He then joined Dexia as director for IT development, before being appointed to his current position.