Julien Eichinger - stock.adobe.c
With traditional banks facing disruption from fintech firms and a customer base with a low tolerance for subpar digital experiences, the need to deliver a good customer experience has almost become an existential requirement for many banks.
At the Commonwealth Bank of Australia (CommBank), a relentless focus on customer experience means not only investing in a technology stack geared to use data to deliver the value and experience that customers expect, but also empowering its engineering teams to solve customer problems.
But being customer obsessed wasn’t always the case for banks in the first few decades of the internet, said Fredrik Lindstrom, CommBank’s chief digital officer, in a recorded address at the Forrester Technology & Innovation APAC conference in Sydney.
“Banks didn’t really have to pay any attention to how traditional products were being surfaced, since customers could only access them through banks,” Lindstrom said.
“Today, this is very different, and we have to be extremely aware of how and when we can best respond to customer needs. We have to be relevant and accurate in presenting our offerings and it has to be easy and intuitive to interact with.”
To do that well, Lindstrom urged banks to leverage data and insights, beyond updating ledgers of customer transactions which they have been good at.
“Banks used to be in a situation where we only used as much information as required to be able to update the ledger. So, if you spent $50, the most important thing was to get that to your balance.
“We did not care about the kind of purchase you made, where it was made and what similar things you may have done previously. However, to provide an outstanding customer experience, this kind of data is crucial. Today, especially outside of traditional banking, this is the differentiator and the reason why many care about banking at all.”
Lindstrom said CommBank has been investing in such capabilities over the years to get to “what is probably widely considered a global tier-one capability”, but “we still have a tremendous amount of work ahead of us and technology opportunities keep coming up”.
Historically, banks have focused on surfacing their own products in their own channels, Lindstrom said, but with more financial institutions teaming up with other service providers like telcos and energy companies, a new set of technology requirements has emerged.
Fredrik Lindstrom, CommBank
To connect securely and easily with its partners, CommBank relies heavily on cloud computing, application programming interfaces (APIs) and microservices – though Lindstrom sounded a word of caution about those technologies.
“All of those terms are easy to throw around. You can call any API, microservice, then forklift it to the cloud and quite possibly be worse off than where you came from, so it’s difficult to get right,” he said.
Lindstrom said CommBank was moving towards an architecture with reusable APIs while driving coherence and consistency in its microservices by having clear patterns and capabilities, such as recoverability and discoverability. “This is a huge transformation in itself and clearly not something you can complete overnight,” he added.
The people factor
CommBank’s engineering teams are at the heart of its digital customer experience. Lindstrom said the bank had invested a lot in attracting the best people in the industry, and that some employees had even moved from a customer-facing role to leading the charge in data and analytics.
“We’ve also gone very hard on elevating our engineers and developing their capabilities. We’ve added huge numbers of engineers to our workforce, both in Australia and India, over the past couple of years. And we’re continuously putting a lot of focus on training and development on all things engineering, even up to the senior leadership level,” he added.
More importantly, CommBank’s engineering teams are empowered to work on solving complex customer problems, as opposed to being order takers and implementing defined solutions. Lindstrom said that has generated a higher sense of purpose among engineers, as reflected in the bank’s employee engagement surveys.
“It also exposes a number of areas where we have a lot of work ahead of us, so we can unleash the full potential of people and technology that we may not have understood the full magnitude of,” he added.
Sam McCraig, CommBank’s general manager for digital banking, said the bank has also fundamentally tackled how it funds engineering teams so that all they have to worry about is achieving customer outcomes.
CommBank’s digital customer experience efforts are paying off dividends. McCraig said the bank has seen a 23% growth in customers interacting with its digital channels over the past three years, with 100 customers logging on to a digital channel every second.
“We’re still seeing growth off that base, but you’ve got the changing landscape as well, where we’ve got non-traditional competitors in the market. Everyone’s gunning for that single point of interface with customers and vying for the same space,” he added.
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