Banking

When culture kills innovation

When culture kills innovation

Let me retell a story I recently heard about innovation in a retail bank.

Processing standing orders at the bank was an administrative burden. There was no ‘straight through processing’.  Whilst it was acknowledged as a problem, it was not one that was of sufficiently high priority to justify a new project on the IT roadmap.  This didn’t stop an entrepreneurial project manager and a couple of developers take on the challenge as a ‘side of desk’ project. They managed to fit it in between their core work and in six weeks delivered a solution that almost immediately delivered value to the bank in efficiencies and cost saving.  Job (quietly) well done. Until a bank holiday Monday, a scenario that the solution hadn’t been designed for and on the Tuesday it failed. A backlog of standing orders was created, but no more than what would have occurred prior to the solution being implemented. Senior management got wind of the ‘failure’ and demanded answers. The problem was fixed and ‘business as usual’ returned. Until the extra leap-year day in February. Another corner case that the solution was not designed for. This time senior management ramped up the blame. Risk was not tolerated in the bank- a failure to run the project ‘properly’ introduced significant operational risk. The team were placed on a disciplinary process.  Everyone saw how the story ended and no-one wanted to end up being treated this way. That pretty much killed any innovation within the bank. The bank’s culture of ‘zero risk’ and insisting on ‘process over people’ destroyed any internal entrepreneurialism at a stroke.

Now let’s imagine that at a time in the future, the CEO of the bank hears of his competitors successfully incubating new ideas from the grass roots up. There’s a mandate to encourage ‘skunk works’ projects in the bank. Inevitably this will fail. Unless the underlying culture is fixed such projects are doomed to fail. Culture is often bigger than the whim of the CEO. To build internal innovation capability, to enable test and learn, business agility and a can-do mentality, this story tells us a lesson. Do nothing until you understand the culture and ensure that it can provide the oxygen for innovation to flourish, not suffocate it.

How the retail banks are addressing customer experience

A few weeks ago I attended the Customer Experience Management for Banking and Financial Services conference, presenting on driving agility into your customer experience.  There were some great presentations, it is great to see the banks taking customer experience seriously. From my notes, what follows are some of the presentations and ideas that resonated with me.

Anthony Thomson, Metrobank

Anthony Thomson, chairman of Metro Bank was inspiring. Everything they do is from the customer perspective.

For everything Metro Bank do, they ask ‘why are we doing this?’ Is it going to make our lives easier, or is it going to give our customers a better experience? The second trumps the first every time.

Metrobank see that they (like all banks) are essentially a money shop who sell the same products as their competitors. The only real differentiator is experience and service. With the Vickers Report recommending “the early introduction” of a system that makes it easier to move accounts and that is “free of risk and cost to customers”, this is going to become increasingly more important.

Retail is detail is the old adage. Think about something as small as the pen on the counter. Chaining it down may suggest security, until you see a chain with no pen attached. Anthony questioned what is the cost of a pen? What is the value of having your branded pen in your customers’ kitchen? Talking of branding he showed a picture of a Metrobank van. Banks use vans all the time to transport the pens and stationary to the branches, but they are never branded. Is this security trumping marketing? A lack of joined up thinking? He commented on the press comments on Metrobank attitude towards dogs. Focussing upon the dog misses the point. Customers love their dogs, why shouldn’t they be allowed in the stores and be positively welcomed! By saying “no dogs” are you saying we care more about our carpets than our customers?

Another detail thing – how often have you waited outside a bank to open in the morning, or be hassled out because it’s the end of the day and is now closed. Metrobank have flexibility, they’ll open a little earlier if people are waiting outside and stay open till the last customer leaves.

A theme through Anthony’s presentation was of empowerment. Empowering staff, removing pedantic rules that get in the way of delivering a compelling customer experience. He told a story of how a customer had to wait longer for assistance than expected and incurred an £8 parking ticket. A member of staff wanted to refund the customer and suggested giving them £4. To which Anthony commented “and only half piss them off?”

Empowerment starts with recruiting good people. Only a fraction of the people who apply get to work for Metrobank. They understand that skills can be trained so they recruit for attitude. If someone whose job is to interact with customers on a daily basis doesn’t smile, they don’t get the job. When it comes to targets, they ‘measure what matters’. They incentivise on service not sales because with good service comes sales.

Rob Hawthorn, Barclays

Empowerment was a theme that ran through the presentation that Rob Hawthorne from Barclays gave. He’s taken a leaf out of the hospitality industry and borrowed from Ritz Carlton with their Credo Card, a single sided card that reminds their staff of the levels of service they should provide. Barclays corporate staff are empowered to fix the problem. Like Metrobank they strive for no stupid rules and put the customer first. For example a customer pays in £230.60 and only £230.20 is credited to the account. They now refund then investigate. By introducing this policy change they say a 65% reduction in customer complaints.

Everyday, in every Ritz Carlton hotel they have The Line-up. This is a fifteen minute meeting to review guest experiences, address issues and identify how they can improve service. It is an opportunity to tell stories, both top down (what’s going on in the company overall) and bottom up (what can we learn from individuals and their interactions with customers). Barclays corporate do this across the organisation. From the top down they have one version of the truth; what is happening in Barclays world, what is important and what are customers saying today?”

The fifteen minute meeting is a familiar concept within agile, known as the standup it’s a brief meeting where the team review what they did yesterday, what they are doing today and any issues or blockers they are facing.

“How often do you see your complaints data?” Asked Rob. What use is seeing it once a month? You should be seeing it every day. Better still (and this is something that I alluded to as well), walk in the shoes of your customer. Get out into the branches, into the call centre and see what is going on for yourself.

Richard Brimble, Veolia Water

Not FS, but Richard gave a view on customer experience from a different viewpoint.  He gave an engaging presentation that started by asking if you are a blue tit or a robin. Blank states from the audience, so he elaborated. After the first world war milk companies started sealing milk bottles with foil tops. Until then the bottles had open tops and both robins and blue tits would drink the cream from the top. With the foil tops the birds had to learn to peck through them. By the 1950s the entire blue tit population had learned this. Robins never did. Robins are territorial and solitary creatures, whilst blue tits are social. They may be scruffy compared to the elegance of the robin, but they are innate communicators. They share their learnings and copy each others successes. As an organisation are you a robin or a blue tit?!

Sean Gilchrist, Barclays

Is Barclays going all Lean Startup? Sean Gilchrist from Barclays told a story of their lean customer development approach to developing their mobile bank Barclays.mobi. The journey started in data; a significant minority of customers were accessing internet banking using mobile devices. A clunky experience at best. Rather than going the Big IT route they went lean and did some customer discovery. “What’s important to you?” they asked customers.  “Checking balance” they were told. “How about paying bills on your mobile?” they asked, “No, we just want to check balances” was the response. “How about a branch location finder?” to be told  “No, we just want to check balances”. In eight weeks and on a shoestring they built and launched their minimum viable product, Barclays.mobi. The product was instantly successful and gave the team leverage to continue development.

Sean told another story about the perils of just pushing something into production without thinking about how people behave on-line. To access account information on on-line banking the customer has to use a security device that displays digits that are then entered into the application. The digits were displayed in two blocks of four:

1234 5678

A decision was taken to replace the single field on the application where this number was entered into two fields that better represented the way the number was presented on the screen, i.e.

|1234| |5678|

The week they made this change they received over thirty thousand complaints about this change. When I’ve recounted this story to Barclays customers they can remember when this happened and what a pain it was. People who don’t touch type look at their keyboard, not the screen. They entered the number as one continuum, not in two blocks. Tabbing between fields is an ‘advanced’ technique. Suddenly the customer was unable to enter the number without having to use their mouse to move to the next field. A change that was suppose to reduce errors ended up causing more. The issue was fixed by have an auto-tab between the fields, but not before customer complaints. Usability testing (oe even having an experienced usability expert on the team) before going live would have picked this issue up.

Trent Fulcher, RBS

Finally Trent Fulcher from RBS presented on the customer experience and innovation work he has been doing at RBS. A key takeaway from his presentation was that at RBS they demonstrated a positive correlation between advocacy and revenue per customer. Not only are advocates more profitable, they also bring new customers to brand. RBS accepted that they will always have detractors to the brand and are happy to take a calculated decision not to focus upon changing their perceptions, rather focus on ‘passives’ and move them to advocates. He demonstrated how RBS modelled their customer journeys, understanding what customers value and expect from every touch point. What they discovered is that for some touchpoints they were overreaching on these expectations, enabling them to understand if they were focussing effort on the parts of the journey that Make A Difference.

Me-too brochureware banking

Take a look at this template.  Header and navigation at the top, large hero to the left, with three product panels beneath.   Log-in to account is on the right with information on security and help beneath.  If you want to be an information architect for a bank, it would appear this is all you need.  This is your cookie cutter to success.

Webpage tempalate

Don’t believe me?  Start with Lloyds TSB.

Lloyds TSB homepage with overlay

Yep, that seems to fit.  how about Halifax.  Almost the same grid being used there.

Halifax with template overlay

Can’t be coincidence can it?  Let’s look at HSBC… There’s the hero again. And the three content boxes. And internet banking on the right.

HSBC homepage with overlay

This is getting a bit repetitive.  What about Santander?

Santander homepage with overlay

There’s a pattern going on here. Looks like they are all at it! Does any other industry segment from such ‘me-too’ism? If it was the right model to be using it wouldn’t be so bad, but their consistency is around consistency of what they do. No-one is really thinking about the customer and what they want. Barclays gets close, but there’s little in the way of understanding customer needs and goals. Little to support customer journeys. It’s all about the Bank, with Products and Services. And Access your accounts on-line! (And ‘We’re so complicated we need help on our home page’). And if everyone else does it obviously we are doing The Right Thing. Does this matter? Isn’t there a better way to design a bank’s brochureware pages?  I’m looking for examples.  I fear I’ll be looking for a while.

Bank home pages all the same

Tractors, nuclear powerplants and the bleeding edge

It is common for organisations to select a major technology leader (such as IBM or Oracle) and ride their product development cycle.  On client I worked for stated that they would:

“not follow a ‘best-of-breed’ approach, but rather select a major technology leader (IBM)… This means we explicitly seek and accept the “80% solution” rather than trying to optimise for each and every possible requirement. …Shortcomings will be made explicit in order that we can escalate with IBM, and influence their product strategy”.

Influence the IBM product strategy.  Good luck.  This one-size-fits all approach to technology maybe appealing on paper, and certainly has its benefits, you recruit a certain type of developer who has skills in that technology stack, if you are big enough your buying power may get a small voice in future releases that you will pay through the nose for.  But is it the best approach for the business?  A colleague, Stuart Hogg, takes three metaphors for enterprise IT.  The tractor, the nuclear power plant and the bleeding edge.

The tractor. This is the technology that keeps the lights on.  It is commodity software, it is the HR system, email, intranet etc.

Nuclear powerplant. This is the (generally bespoke) mission critical software that drives the business.

The Bleeding edge. This is the platform where you do cutting edge stuff, test and learn.  The ideas may one day be migrated to the nuclear powerplant.

All too many organisations get confused between these three models, loose sight of where they should be investing and plump for a one-size-fits-all technology to do all three.  Thus we see tractor technology trying to do the bleeding edge (Is it possible to innovate at speed with those Big Enterprise Solutions?)  By trying to combine utilitarian computing with strategic and speculative innovation, using the same skillsets, timeframes, processes and models, IT will never truly deliver the value for which it is capable.  Another ThoughtWorker, Ross Petit reiterates this point using a banking metaphor of utilitarian retail banking and speculative investment banking. He divides IT into “utility”, around 70 percent of IT investment (tractor and the nuclear powerplant); and “value add” the other (bleeding edge)30 percent.   Like other utilities such as electricity and water, ‘you don’t typically provide your own. You plug into a utility service that provides it for you’.  In IT that means SAAS and outsourcing and taking a strategic decision to differentiate between the different functions that IT performs.  He concludes:

Separating utility from value add will make IT a better performing part of the business. Because they’re comingled today, we project characteristics of “investment” into what are really utilities, and in the process we squandor capital. Conversely, and to ITs disadvantage, we project a great deal of “utility” into the things that are really investments, which impairs returns.

As a business function, IT has no definition on its own. It only has definition as part of a business, which means it needs to be run as a business. The risk tolerance, management, capabilities, retention risks, governance and business objectives of these two functions are vastly different. Indeed, the “business technologist” of value added IT needs a vastly different set of skills, capability, and aptitude than she or he generally has today. Clearly, they’re vastly different businesses, and should be directed accordingly.

Separating the utility from the value add allows us to reduce cost without jeopardizing accessibility to utility functions, and simultaneously build capability to maximize technology investments. Running them as entirely different business units, managed to a different set of hiring expectations, performance goals, incentive and reward systems, will equip each to better fulfill the objectives that maximize their business impact.

Usability and the $1 trillion mistake

Is this a case of fat fingers, a usability flaw or poor design that enabled a Citigroup trader to have placed an order to sell $16 billion, instead of $16 million? P&G shares plunged by 23% because of this individual erroneous trade. What followed was the algorithms kicked in and automated trading saw the Dow loose a tenth of its value in less than half an hour. (And Accenture dropped to 4 cents down from $42!)

Before we go blaming human error, questions should be asked why that error occurred. How can someone make such a simple mistake so easily? Was it a case of entering two many 0s? (Don’t stop to look or think, answer the question as soon as you’ve read it – how many zeros are there in this number? 160000000. Same thing again, how many zeros are in this number 12,000,000. That’s a bit easier isn’t it. Only an ‘N’ separates the B from the M on a qwerty keyboard, in a hurry, easily mistaken?)

I’d start by looking at human factors and experience design, and question why (assumption here) the IT team who implemented the system didn’t have before a UX designer on the team to think about the human factors. Could this be the most costly example of poor design?

Article: Big drop, was it all a mistake?

Invest in infrastructure not doggy bowls

Interesting times in the UK retail banking industry.  The public consider the banks to be pariahs; cue a number of new entrants to the market.  Virgin, Tesco, the Post Office, Metro Bank, the one thing they all share is the focus upon the customer experience that is perceived to be broken with the established players.

At Metro Bank, the customer is king and our goal is to reinvent British banking by building fans, not customers.”

The concept of a bank seeking ‘fans’ rather than customers is very ‘of the moment’, it speaks to the marketing buzz on all things social, to a world where ‘Facebook will rule the Web during the Next decade‘ (indeed where once all journeys started with google, now they are just as likely to start on Facebook with Facebook now surpassing google in daily traffic).

So what does it mean to strive for fans rather than customers?

Let’s leave aside the dictionary definition of a fan “an enthusiastic devotee, follower, or admirer of a sport, pastime, celebrity, etc.:” (an enthusiastic devotee of a bank? Now that’s a stretch goal) Or the fact that it’s origin is a shortened term for fanatic (what are the consequences for having customers with unquestionable loyalty when you evolve and want to do things different? Will MetroBank one day have a Glazer Manchester United moment?!)

Placing the customer at the heart of everything you do is more than just the shiny stuff at the front of house.   “A friendly welcome to dogs and their owners, with water bowls and dog biscuits on hand for man’s best friend – dogs rule at Metro Bank!” said the bank’s announcement.   It is more than paying lip service to a social media strategy (Rentokil thought they could get all social without taking their traditional PR along on the ride – see what happened).  It is about having the right infrastructure in place; robust systems and flexible processes.  It is about investing in the unsexy stuff that rarely sees the light of day, because if you don’t do this things will inevitably go wrong.  When the bank upsets a customer because the systems don’t allow the customer to do what they want, or make a mistake, perceived or otherwise, no amount of doggy bowls and seven day opening hours are going to get around that one.  Metrobank and the new entrants are well placed to avoid too many of the issues that the incumbents face when trying to be truly customer centric, but they will be doing themselves no favours if they don’t place as much emphasis on the back end systems that the marketing team don’t see or understand as much as the shiny stuff in the branches.

We didn’t build it because the business didn’t prioritise it

Agile software development is inherently democratic.  Choice over Prescription could be included in the Agile manifesto.  We give the customer the choice, the choice to decide what is most important to them, what will deliver the greatest value and build that first.  We do not prescribe that they must build a complex framework first- the software will evolve, You ain’t gonna need it (Yagni) until you need it.

The problem with this democracy, with this unleashed choice is that, if you don’t have the right mix of stakeholders, the (agile project) customer doesn’t always know what is best.  They are not always the best people to choose.

There is a difference between domain knowledge and what I’ll call ‘experience’ knowledge.  A banker may know the banking domain inside and out, they can tell you the difference between all the different types of balance and how (and where) they are calculated; closing balance, running balance, etc.  But unless they have done any research with customers, unless they have ‘experience knowledge’, when it comes to  a question such as which balance to provide as an SMS alert, their ‘domain’ knowledge is as good as your common-sense.

Imagine software were a supermarket store.  IT are responsible for the construction of the store, the basic layout, the signage, the checkout, the peripherals.  The business are responsible for what goes into the store, the merchanising, the planogram.  The business imperative is to fill the shelves and shift the product.  They want to spend their money to this goal, anything that does not directly support this will be of lower priority.  That is their domain and they will prioritise that over anything else.  If they could fill the store with nothing but shelves they’d probably be happy.

Now imagine visiting the store.  There’s no carpark, there are no shopping trolleys, there’s no emergency exits.  There’s no ramp for disabled customers.  The shelves rise to eight foot high (with no steps to reach the heights), the aisles are difficult to negotiate because of promotional displays between the shelves.  The business is happy, but what about the customer?

In the agile world, nobody is going to pay attention to this stuff unless it is prioritised.  “Sorry, we didn’t build any shopping trolleys because you prioritised building more shelf space over them”.

This sort of thing happens all the time; functional domain requirements trump experience requirements. Why? Because no-one brings experience knowledge into prioritization and planning sessions.

When stating their choice, your stakeholder wears a commercial hat, they are thinking about their targets and those are based upon shifting product.  They are living in thier operational business domain.  But cold commercials are not what shifts product.  It is the experience that does.  Now go back to the democracy of choice on an agile project.  Who is the ‘business’ specifiying requirements? Is it a balanced team? Is their an experience champion with an equal voice?  Is the voice of the customer recgognised?  If not, isn’t about time you got an customer experience champion onto the team.

I just want to talk to someone

I’ve got a query about an Account I opened with Alliance and Leicester.  I’ve got a letter that provides me with an account number and a phone number, it reads  “…if you have any further question [sp] please contact a member of the team on 0844 5619737“. So I ring the number.

“Please enter your eight digit ID number.  This is on your welcome letter, monthly statements, or internet banking ID.  It is NOT your account number.”

Hmmm. I don’t have any of those things to hand, they are not on the letter.  I’ve got my debit card, but that’s obviously on a different system.  I put the phone down and return to the letter, near the bottom, in bold it gives another number “if you would like us to send you information in the future in larger print…” I ring this number.  It doesn’t work.

So I go to the website and look for a telephone number.  I’m an existing customer.  I select my product and ring the number on the page.

“Please enter your eight digit ID number.  This is on your welcome letter, monthly statements, or internet banking ID.  It is NOT your account number.”

I don’t have that information to hand.  I choose another product.  Same message.  I’m getting frustrated.  There’s a page titled “Other enquiries“.  Lots of words, but no number.  I navigate to the complaints page, it has a number.  Hey! Kill two birds with the same stone, speak to someone in their complaints department, make a complaint about how my time is being wasted trying to find a number and get transferred to the relevant department.

I dial the complaints number, more IVR and the prerecorded message.

“Please enter your eight digit ID number.  This is on your welcome letter, monthly statements, or internet banking ID.  It is NOT your account number.”

Frustration turns to anger.  I find a number for new customers.  I get through the IVR and finally talk to someone.  “I need to transfer you to the relevent department” she says.  OK.  The line goes silent.  And then goes dead.  Lovely.  Stress.  I give up and start the motions of closing the account.

There’s nothing unique about Alliance and Leicester.  I hate to pick on them.  But this seems like a case of a lack of joined up thinking.  When you are designing processes or procedures, don’t just think about them from the business perspective, take a persona and test them with real people in roll plays.  What if someone doesn’t have what you expect them to have?  Customers do not always behave according to the expected happy path.  What are you doing about that?

What would Sally do? Personas for retail financial services

Personas are ‘pen portraits’ that bring to life users or customers of a system, service or product.  Giving a personality and back story to your customers helps keep your thinking true to their real needs and goals.  Rather than using  ‘user’ or a segment descriptor such as ’empty nester’, or ‘this is what I would do’, what would Sally do?

Here’s a set of personas for financial service organisations, geared towards the retail / B2C market.  Sally is included (Shes skint).

View more presentations from marc mcneill.
1 of 4
1234