Does banking have the allure of a new Apple product? Barclays Bank thinks it does.
Barclays is attempting to redefine banking as it tries to mimic the success of companies like Apple, Amazon and Google.
PingIt, the bank's real-time (person to person, person to business and business to business) payment application, is one of the first examples of how Barclays is shifting the way people think about banking.
Speaking at the Gartner Symposium in Barcelona Anthony Watson, CIO Europe, Barclays, said: “Look at the past five years, It's been a very traumatic in our industry. The legacy products and services banks have traditionally offered customers are no longer valid.”
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Watson said banking will fundamentally transform in the next three years and this will substantially affect our industry and customers, for the positive .
Barclays Bank is changing its image through innovative IT In spite of the ever challenging regulatory framework governing banking.
Barclays has been rethinking its product portfolio and positioning to change people's perception of banking.
Addressing delegates at the Gartner Symposium in Barcelona, Watson said: “We want to become the 'go to' bank.”
Other businesses, like Apple, Amazon and Google, have exploited niches. For instance, he pointed to Apple's iTunes as an example of how a business can move into a new area.
Barclays plans to do something similar in banking, by developing products unassociated with traditional banking.
Watson said: “The only way to be the 'go to' bank is to innovate.”
According to Watson, two years ago Barclays would have struggled to have built a product like PingIt. But now, £58 million+ has been pinged, there have been 1.25 million downloads, 500,000 activations and the PingIt app has 4.5 stars in Apple's AppStore.
Watson said: “When we launched PingIt, it was the second most popular tweet on Twitter. Only porn stars get that type of traffic!”
Barclays is encouraging staff to collaborate on ideas and IT governance is changing to support innovative projects, he said.
“It is okay to fail. Scar tissue is a good thing. It is okay to do 10 things, and be really great at 8 things and not so great on two. My CIOs in Europe have skunkworks budgets,” said Watson.
Watson said Barclays had made a quantum leap from where it was previously, by moving from multiyear project deliveries to deliveries that take six to eight months, because it forced people to try new ideas.
However, he admitted: “Some projects demand a long life span, but we have changed our mindset. If we can force through a short lifecycle, we will try to. We will challenge opinion and change our thinking. Everyone needs to have an opinion.”
This means Barclays looks at existing processes and asks whether they are still valid. But as banking is a regulated industry, some rules need to remain intact.
Watson said: “Data compliance is not easy. Rather than a steering committee [to determine how to achieve data compliance on PingIt] we got everyone in project together, so that they could bring solutions to the table at the same time.”
As a result, rather than having to confirm customers' identities using a photo ID for example, PingIt is simply linked to the customer's mobile number.
The bank is trying to emulate a Silicon Valley way of thinking and working, with open plan spaces to stimulate collaboration. This recently helped Barclays work out a faster way of opening new bank accounts, which it now uses in Portugal.
“We looked to differentiate ourselves and we realised our account opening time was ridiculously long, so we changed it from 45 minutes to less than 6 minutes” he said.
“We got decision makers into a room with a whiteboard and looked at all the data we were collecting. It was a robust conversation.”
Account openings used to take 40 minutes. “We can now achieve this using iPads in Portugal in 12 minutes.” The new account form now has four questions, compared to 40 in the old model.
The third project is PayTag, a stick-on NFC tag, which Watson said has been very popular with Barclays' credit card customers. PayTag is a typical skunkworks project developed by Barclaycard. We did it to prove we could innovate and do NFC,” he added.
Watson believes the psyche of Barclays has changed since 2010. As a consequence, the role of CIO has changed.
“Every conversation we have involves IT. This is a change compared to how it used to be,” he said.
But while there will always be a need for long-term strategic projects, Watson believes that, to succeed in the new economic climate, Barclays must embrace faster software development, such as with the PingIt project.
In IT, faster project development is the default position Barclays now takes.
“Historically banks are risk-adverse as an organisations. There are lots of regulatory complexities, but we want to turn dynamic,” he said.