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Think of Nationwide and you probably picture a network of high-street branches that are home to specialist advisers speaking with mortgage-seeking applicants. It’s a vision that’s not far from the truth: with its origins in the 1840s, Nationwide is the largest building society in the world, with more than 15 million members.
While the society’s services have broadened during the organisation’s long history, its high-street presence remains key. However, the branch is no longer the only channel to market. As Gary Delooze, CIO at Nationwide, identifies, digital is increasingly crucial to the society – and technology is helping to sponsor a broad business transformation programme.
“Most of our spend is on technology,” says Delooze. “If you look at what we spend on IT, all the people that we spend money on, and the third-party spend, actually the biggest cost centre of the organisation is technology. So are we really not a technology company that just happens to be in financial services now?
“Therefore, let’s put that focus where it needs to be: let’s really bring that up strategically to the forefront and say ‘technology is reshaping our business’. And if technology is really changing the way we work, it must be a board-level issue and we must be clear on how we invest and what we invest in.”
Formerly a consultant, latterly with EY, Delooze’s connection to Nationwide started with an eight-week period of consultancy work in 2016. He worked with the then CIO Debra Bailey and brought in a team from EY that completed a full diagnostic of the IT function.
Delooze and his colleagues produced a report that included 15 ways to make things better, such as using agile and getting closer to the business. The recommendations from that period of consultancy led to a number of projects the following year. Throughout 2017, Delooze established a close relationship with Nationwide.
“Are we really not a technology company that just happens to be in financial services?”
Gary Delooze, Nationwide
“It felt like there was just so much opportunity,” he says. “One of the challenges that I laid out was that the organisation had outsourced a lot of its IT. It didn’t really have a technology function and it didn’t have a chief technology officer [CTO] who sits across that function deciding what the strategy is, what the guardrails are, and how its partners should deliver for the organisation.”
The decision was made that Nationwide needed a CTO – and Bailey and Delooze then spent six months trying to hire one. They went through a first batch of about 30 interviews and didn’t find a suitable candidate. That was followed by a second batch of interviews, and the result was the same – no CTO.
Bailey confided that the key problem was that none of the candidates was as good a fit as Delooze himself. That caused him to take a step back and think about how a permanent shift from consultancy to a blue-chip enterprise might work.
“For me, that was a big decision,” he says. “Everything at EY was going well. But it just felt like a great opportunity to not just be part of an organisation, but also to be part of a transformation. We’d plotted and said we needed to introduce agile ways of working, DevOps thinking, rebalancing the internal and external sourcing mix, and move to the cloud.
“That all sounded really exciting and fascinating to lean into. But at the end of the day, as a consultant, there is only so much you can do. Whereas as CTO, this was my opportunity to get really involved and be part of that transformation. So I chose to join.”
The result of that decision was that Delooze spent what he refers to as two “very happy” years as CTO building a technology strategy for Nationwide. It was also a challenging gig.
Back in 2018, Nationwide didn’t have a technology strategy. The society was spending about £600m a year on technology, but without any clear direction of travel – Delooze says IT was often a wish list from different business teams. His aim was to give the broader organisation the IT systems it actually wanted.
When Delooze joined Nationwide, about 90% of its IT capability was outsourced to system integrators and technology providers. He has used his digital transformation programme to break the society’s reliance on outsourcing and build an in-house engineering function. IT capability is now almost 50% in-house.
“That was all about getting technology onto the board agenda,” he says. “And then I got to a place where I was pushing really hard on how do we bring the run and change organisations together. They were not part of my world as CTO, but actually – to do what we wanted to do – we needed to start moving forward [with further change].”
As Delooze was going through this thought process, Patrick Eltridge joined Nationwide from RBS as chief operating officer. Both men subsequently spent a great deal of time talking about agile ways of working and lean principles, and how the organisation could build a pipeline of business-focused work that would flow through to its IT teams.
The fact that both individuals were focused on achieving the same kind of transformation was critical. Eltridge knew the society would need a dedicated CIO to reach its destination – and he asked Delooze to step up and bring the run and change functions together. He became CIO in December 2019 and began thinking about digitally enabled business transformation.
“It was just too good an opportunity to pass up,” says Delooze. “So let’s go really hard at some of the things that we want to achieve. Let’s accelerate our move to the cloud and move as fast as we can. Let’s change the culture of the team and actually create an ability for us to experiment around new ways of working and doing things differently.”
Delooze’s role as CIO has been to bring together the different parts of what were previously separate IT functions for change, run and technology. He says the journey they’ve been on for the past 18 months is about breaking down the walls that separated those functions and bringing them together as one unified team, known as Nationwide Technology.
“Initially, it was about colocating people to sit together and actually work together,” he says. “For the past year, we’ve obviously been working virtually, so it’s been much more about how do we create collaborations that allow us to do our work better. It’s about getting people to talk to each other much more and that’s really starting to shift the needle.
“Now we’ve created cross-functional teams, the flow of work between those teams is orders of magnitude greater. We are now starting to see the benefits of that come through and we are seeing greater flow of work, but we are also getting better accuracy because people are talking to each other. So the quality of what we do is improving.”
Delooze is one of 20 digital leaders highlighted in a report by digital transformation consultancy Contino and Tech London Advocates, the UK’s largest independent tech network. The report suggests successful transformation requires three key elements – a clear vision, solid alignment of technology with business, and an effort to bring staff on the journey.
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These elements resonate strongly with Delooze, who also recognises that working through the coronavirus pandemic has been a significant challenge. Part of the key to overcoming these issues has been the society’s foresight regarding digital transformation.
Nationwide had already rolled out Microsoft’s collaboration technologies Office 365 and Teams the previous year. Proactive work continued through 2020 as the operational risk of the pandemic became clear. Before lockdown, the society asked 12,000 people to work from home for three days as part of a test scenario.
“We were confident at that point that we could use the technology,” says Delooze. “And therefore, the thing that was most surprising was how seamless it was for us to go from being on-site and working face-to-face to then working remotely.”
As the coronavirus spread and the organisation had to reduce operations in its branches and contact centres, Delooze and his colleagues came up with novel ways to keep serving members. That process included using branches as mini contact centres, where staff answered customer service enquiries from their desks.
It has been a successful project and it has kicked off some strategic work around the long-term role of the branch network. While Nationwide remains committed to its high-street network, Delooze recognises that the future might involve making those branches multi-purpose, which will also help to reduce the footprint of its contact centres.
Delooze paints a picture of the digitally enabled society of the future, which is smaller, leaner, and extremely focused on core business objectives and members’ demands. He expects Nationwide to become cloud-native, suggesting that it will eventually move most of its technology onto on-demand IT platforms.
“That will give us agility beyond where we are today,” he says. “We have a purpose, which is to help our members, and that drives everything we do. So that has to be at the core of our future, and we’re focused on how do we create better value for members through technology.”
Delooze says that value-creation process will involve developing new capabilities at an ever-quickening pace, pointing out that technology will only continue to play a bigger role in financial services during the next few years. What Nationwide’s IT team must do is to make sure it works really closely with the business to deliver great technology at speed.
“You will see business and technology teams intertwined as single teams, working hand-in-hand together to deliver value for our members,” he says. “That’s my vision – creating that strong interaction between those two elements, but doing it with tools and technologies that allow us to move really quickly.”