An interview with Zubair Ahmed, Executive Vice President & General Manager of Middle East & Africa at VeriPark
Today's retail banking market is hyper-competitive. One of the biggest challenges banks face is how to remain top of mind and be the primary financial institution (PFI) for their customers. In this interview, we asked VeriPark's Executive Vice President & General Manager of Middle East & Africa, Zubair Ahmed, to outline some of the ways banks can become the PFI for their customers.
Q: What do you mean by primary financial institution (PFI) and why is it important?
Becoming your customers' PFI involves much more than persuading them to open an account with you. It's about building the emotional connection that makes your institution their trusted first point of contact for everything from savings and loans to longer term financial planning, such as mortgages and investments. Customers have more choice than ever before. They have thousands of financial institutions available at their fingertips. This means they can easily select the best bank for different products.
In a well-connected digital world, they are also not restricted by bricks and mortar branches or the location of ATMs. This access is still important, but it's only part of the overall equation. As a result, banks have to ask themselves 'how do we capture customers?' and 'how can we nurture that relationship to build loyalty? In other words: How can we become our customers' primary financial institution (PFI)?
To improve customer retention and increase profitability, banks must remain top of mind and become an invaluable daily resource for their customers. The keyword there is daily resource. It's all about becoming part of your customers' lifestyle rather than simply being a banking app, website or venue where customers go just to do their banking.
The fierce competition for market share is likely to intensify as disruptive forces, such as digital technology, continue to change the landscape of the banking industry. We've already seen lots of new trends and market entrants competing for market share over the last two decades. Now, the Covid-19 pandemic is expediting yet more inevitable changes.
Q: What impact do you see Covid-19 having on customer behavior?
There has been a huge shift to digital; not just in banking but also in other areas such as online shopping and booking travel and hotels for example. This has been one of the biggest ways human behavior has changed since the pandemic started. More than ever, customers are ready for digital experiences.
There are big opportunities here for banks to add value. Customers want fast, convenient digital experiences with self-service tools and more choice. Yet, they still love having expert advice at their fingertips; when they want to go deeper into a product, they value human engagement. And, they don't want to have to wait around for it.
One thing that remains the same in the pre and post pandemic world is trust. But, banks now need to exhibit their trust worthiness in the digital as well as the physical world.
Q: Has Covid-19 been a wake-up call for retail banks in terms of digital transformation?
Many banks see these disruptive market forces as a difficulty or threat. In fact, they are an opportunity to expand their services to current and new customers. We are already seeing this happening, even just in the last six to nine months.
We have found that, when they embrace the changing landscape, banks can deepen their customer relationships. In some cases, we've seen customer acquisition rates climb by up to 10% and customer interactions increase by around 250%. As a result of this, operating income can increase by as much as 30%.
According to the latest research into the 'new normal' for banking, more consumers than ever intend to switch their primary financial institution and leave their multi-location mega bank. This is another big opportunity for some operators. Pre Covid-19, the propensity to move from a mega bank was around 13%; this has increased to 27%.
There are a number of reasons for this. But, mainly it is because the pandemic has forced many customers into digital banking for the first time. Digital banking is no longer seen as just for millennials.
Q: How can VeriPark help banks become the PFI for their customers?
Digital customers are often seen as less loyal because they have more options and it's easier to change banks if their needs are not met. Customers can manage multiple providers from a single mobile or laptop screen. However, this is not what excites them.
They don't want to have one app for their credit card, another for lifestyle discounting and a third for budgeting and planning. They would prefer to have everything they need in one 360 degree app. This Super App concept is what will enable banks to become their customers' preferred financial institution (PFI).
A Super App means having a single mobile app for onboarding, payments, budgeting and planning, savings and investments, loans, insurance and anything else you desire. It all comes built in.
For example, with a Super App onboarding involves just five steps and takes four minutes. Pre-planned, pre-approved elements are built into the rule engine. This requires a lot of integration to pull in the information; document capture, performing OCR, face recognition, video capability and more.
It's not just about having a good-looking front-end and then another 20 people in the back office spending the next 48 hours stamping papers. It's a total end-to-end automated onboarding process.
Then, the payments service needs extra functionality; so you can make a payment to a friend who is a customer of another bank for example. Within the same Super App there's a budget planning element where you plan your goals, decide what you want to spend your money on and create interesting ways of saving. You can shake your device and introduce some gamification, so it tells you that the payment you are about to make goes against your budgets and goals.
Other elements might include onboarding for pre-approved loans or meeting special insurance needs, such as emergency 24-hour cover for example. An umbrella concept surrounds the entire app so it progresses with you through life. That way, when you are in a position to start investing money for example, the option is already there for you.
Maybe your investment service connects to the latest stock market stories and tips. Some of these services may come from third party providers but that will be completely transparent to the customer within the app. And, it is all completely personalized; the customer can adapt it suit to their needs and everything that happens is context sensitive.
With a full understanding of an individual customer's budgeting, planning and lifestyle goals, banks can send offers, discounts and coupons at a time that makes sense to that specific customer, rather than at a time that makes sense to the bank. All these functionalities come from lifestyle thinking. In a nutshell, you have a Super App that pulls together experiences and shared memories, such as splitting restaurant bills with friends, into a single app where the functionality enriches as you grow; from graduating and getting your first job to getting married or starting a business.
It's all about transforming from a transaction centric to a customer centric mindset.
Q: That sounds great. Can you give us an example of how it works in real life?
Together, Enpara.com and VeriPark have created rich and meaningful digital and mobile customer experiences. Enpara is living proof that if you do what you promise, the customers will come. Read their success story here.
Watch this 20' session with Zubair Ahmed about the same topic, recorded at the ENBANTEC Retail Banking Conference EMEA on Nov.19, 2020
Would you like to find out more? If so, get in touch with us.
As well as having serious implications for people's health, Covid-19 has had a huge impact on the global economy and business community. Some banks were better prepared than others to handle the unexpected and fast-moving changes. In this interview, Adewale Salami talks about how FirstBank Nigeria (FBN) responded positively to the crisis and how they are now looking ahead and investing to ensure they thrive in this new environment.
Q: How do you think the global pandemic has affected banking? What do you consider to be the biggest challenges?
Covid-19 had a huge impact here in Nigeria. We had a complete lockdown for around three months. Our head office and branches were closed because no one was allowed to go to their office or to their bank. That has now eased but we still have some restrictions.
For us, the biggest challenges were the loss of social interactions between our teams of employees and the fact we could no longer serve our customers face-to-face in the branches. That meant we had to serve our customers digitally and rapidly transform from a cash-based to cashless economy. As a customer-centric bank, we had to ensure our customers were ready to embrace this digitization. That meant having a resilient IT infrastructure and services to support our employees and customers and make sure our banking systems continued running despite the lockdown.
Q: Do you think Covid-19 became a wake-up call for banks in terms of digital transformation?
Yes. Embracing digital transformation became a "must" for banks and customers. The need to move to a more digital banking model has been on banks' agenda for a long time, but the pandemic has made this need for improved digital banking experiences more important than ever.
Q: How did FirstBank Nigeria respond to COVID-19? What actions did you take to support your customers and employees?
We were well-prepared; we had invested in digital core banking and employee collaboration systems last year. We had also put a huge amount of effort into thinking about how we collaborate with our customers and our colleagues. This proved to be a good move; even though we weren't physically together, we could still communicate digitally.
Q: Covid-19 is changing people's relationship with work. We observe an acceleration of remote working trends. How do you see the future of work?
Around 60% of our employees are now working from home, including many IT teams and branch staff. We use Microsoft Teams to facilitate our remote working. This makes everything easy for us; our teams now work remotely without supervision and we even have our board meetings on Teams. This is the new normal. Digitalization is the way to go.
Q: How has Covid-19 changed customer behavior? How important is it now to provide digital offerings and personalization?
Covid-19 has given us a big opportunity to customize and to embrace digital. We saw a spike in digital transactions and e-commerce during lockdown. But, we think this is a permanent change; customers now trust these digital channels and they enjoy the efficiency and convenience of internet banking and mobile banking.
Our focus now will be on digitalization and removing bottlenecks to provide faster, better digital services to our customers.
Q: Regulations in many countries now allow processes, such as customer onboarding, to be completed fully digitally. Do you think we'll see more push by banks to persuade regulators globally to deliver end-to-end digital experiences?
Yes, the whole industry is working on this and regulators are starting to collaborate more with banks. For example, we can do around 80% of the KYC process digitally, including photo ID, but we can't yet do proof of residence digitally. We really want to completely digitize the KYC process because it would significantly improve customer onboarding. I really hope that by the end of this year the policy makers will allow this.
Q: How do you see the future of branch banking post-Covid-19?
Many of the branches that closed during lockdown are still closed. Nationally, only around 50% of them have re-opened. At FBN, we don't intend to re-open all our branches because customers are happy to use our digital channels.
Q: How did VeriPark help you during these difficult times? What functionalities, capabilities that VeriPark provided helped you the most during the COVID-19 times?
Our retail customers started using our contact center and digital channels much more. If we didn't have these capabilities in place, we would have had a lot of issues; it would have been chaotic. Our corporate customers also found they could do everything they needed to do using our mobile app.
The reason we were able to do all this was down to the digital investments we had made with VeriPark. In fact, we were called upon to share our knowledge and digital CRM capabilities in other jurisdictions across Africa, where it became mandatory for all banks to implement similar processes for tracking customer interactions and customer issues.
We have already deployed all the VeriTouch CRM modules and they are being used 100%. Soon, we will be launching the Next Best Action (NBA) module. NBA is focused on using sophisticated rules, analytics and algorithms to better predict customer needs and in turn offer more relevant actions and offers leading to improved wallet share and loyalty. It requires a lot of data, but will ensure our front-line teams have the customer insights to cross sell and serve our customers even better.
Q: What are the future plans for FBN in a post-Covid-19 world? What do you think should be the key priorities for banks to steer a course through the uncertainty and shape the path?
We have to continue with our digitalization, being agile and supporting our employees to work remotely. Our customers trust us and we cannot let them down now. We want to create more value, new product lines and make sure our banking services are in line with their lifestyle so they can bank wherever they are. To do that, we need to continue investing in cloud technology and engaging digital experiences.
Thank you, Adewale. You can read more of our FSI Gamechangers interviews here.
To be digital-ready for the post-pandemic recovery, financial institutions must build resilience, reimagine and reinvent their strategies and operations. In this interview, Connie Leung, Senior Director, Financial Services Business Lead - Asia at Microsoft , tells us how Microsoft has been adapting to the new normal and helping financial institutions to succeed.
Q: How do you think the global pandemic has affected businesses in the financial services industry? What do you consider as the biggest challenges?
The pandemic has become the biggest risk event worldwide and we see that the current implications are profound with the slowdown of the global economy, zero interest rates, loan losses, and widespread business disruptions within the Financial Services Industry (FSI) and beyond.
We are working with our customers in the industry to support their immediate priorities and needs, which we have realized center around a few key things:
This is crucial for organizations to measure risk exposure and modelling. One of the challenges was quantifying Covid-19's impact while ensuring compliance with regulators on core ratios. With the rise of sophisticated fraud and financial crime during this time to exploit the fear and concern of customers, organizations have also needed to step up on security against cyberattacks and identity scams.
Q: Has Covid-19 become a wake-up call for financial institutions in terms of digital transformation?
I would say that it has very much been a wake-up call for many within the industry, both regulators and banks alike. The pandemic has required organizations to adapt rapidly to change including remote working, introducing new digitally connected services for customers and even new business models.
All this requires speed, agility, and applying adaptive measures, and would be impossible without embarking on digital transformation. Within the industry, some organizations were previously putting off digital transformation or seeing it as a nice-to-have. However, the pandemic has been a needed reminder of the integral role that technology plays today.
For organizations that have already begun their digital journey, and specifically, have adopted cloud services for better flexibility and scalability, their transition to remote work has been relatively seamless. The converse is also true. For those who have yet to adopt cloud technologies, they face significant challenges in ensuring that employees are connected to the company network securely during work from home.
Beyond Work from Home, the recent months have also seen an increased demand from customers for digital services. With the preference for services on the go, and minimized physical interactions for health and safety, FSI players have needed to rethink manual customer service processes and take this fully digital. I think that many of our customers are still weathering through the digital journey.
Q: How is Microsoft helping financial institutions in providing the best digital experiences and the agility to rapidly adapt?
Our mission is to empower individuals and organizations to achieve more. During this time, our commitment remains the same and we are supporting financial institutions in their efforts to respond to the challenges of this pandemic, as well as recover faster and reimagine their businesses for the future.
Together with our partners, we are working with the customers in the industry, so they can leverage the technology, expertise, and also best practices from other organizations. Let me share a couple of examples how we do that.
1. Empowering remote work and servicing
For employees who can work from home, we have been helping our FSI customers enable remote collaboration through Microsoft Teams. This has proven effective in ensuring seamless and productive collaboration, both within and outside of the organization, through secure virtual events and services to high-priority customers and high-risk communities through virtual banking.
Combined with Dynamics and partner solutions, employees can now operate across a full range of services to customers, including know your customer, onboarding, e-selling and e-signature. We work with customers to deploy Dynamics 365 and Power BI to drive greater customer insights and better manage client data.
2. Improving business outcomesDuring this time where physical interactions have been reduced and virtual services have been at the forefront, we help relationship managers obtain meaningful customer insights through our digital feedback loop. Developed to be a single source of truth, this infuses data and AI into every process so that more value-added and personalized conversations can be held with customers based on their preferences and current considerations. In turn, the product development cycle can be enhanced with customer feedback on an ongoing basis.
3. Driving operational agility and efficiencyOrganizations are increasingly automating their processes not only to reduce costs but streamline the processes and improve efficiency. Customers are leveraging Artificial Intelligence (AI) and cognitive services to make the automation process accessible and seamless for organizations.
In the last few months, we have increasingly been helping customers move workloads to the cloud. Financial institutions are turning to cloud services because they realize that it is integral for risk management – computer power will be needed to run risk modelling at the capacity they require at this critical time.
This includes a large bank in Australia, whom we are partnering to architect a multi-cloud ecosystem that will host 1,000 of the banks' applications on Microsoft Azure as the primary cloud. Another partner of ours is a leading international bank that we are co-innovating with through Azure to empower innovations in open banking and real-time payments.
Q: What are Microsoft's 3 most prominent products that are helping financial services organizations meet the demands of today?
We recognize the critical role that technology plays in supporting operations and business continuity. As the industry faces new challenges, we are committed to helping customers stay up and running, and transition toward the eventual rebound and moving to the new normal.
I think every customer is unique. And there is no one-size-fits-all scenario. What I would say though is that the most prominent products and solutions are those that make the biggest impact for our customers, allowing them to adapt and transform. Let me name these, which our customers are betting on for their transformation within the FSI industry today:
1. M365 modern workplace solutions
These have been critical for remote working, collaboration and in enhancing the productivity of employees. At the same time, they meet the regulatory security and compliance requirements for financial industry customers.
2. Teams, Dynamics 365 and Data and AI
This second category has been instrumental in driving the new digital customer experience that organizations within FSI need to develop today. Not only do they empower seamless real-time communications to customers, but this is also supported with rich insight for personalized services that aid in customer retention and success.
3. Microsoft Azure
Cloud is becoming an increasingly important part of the equation to enable the agility and resilience required to keep the industry thriving. Specifically, the modernization of core systems such as payments and core banking, as well as security measures to mitigate the risk of attacks. Azure cloud also provides built-in compliance features to address key requirements, meeting the broadest array of certifications and standards in the industry—more than 90, spanning over 50 regions and countries.
We work with a variety of financial services businesses across Asia who choose Microsoft Cloud. Across our various customers, there is one thing in common: we create technology platforms and solutions to help our customers innovate, grow, and transform.
Q: Covid-19 is changing people's relation to work. We observe an acceleration of remote working trends. How do you see the future of work?
I think that remote working is here to stay, and we will transition to what we call a hybrid workforce. Many of our customers within FSI are already planning the comeback with a remote workforce, as people are witnessing how much can be achieved remotely.
We are unlikely to go back to pre-Covid times where work was synonymous with being in the office. Through this time, we have seen how digital capabilities have given employees the flexibility and agility to work and engage at anytime and anywhere. This has been crucial in improving customer engagements, now that they can have the option of interacting with financial institutions both at physical locations and remotely. This same flexibility and agility will drive tremendous changes in working behavior, a change mindset to drive further business outcomes and growth opportunities for our customers.
The pandemic has also shown us that we do not need to be bound by geographical boundaries, which has opened a huge opportunity for organizations in the future of the workforce as they transition toward recovery.
Q: How do you see the impact COVID-19 has made on customer behavior and how do you think financial services can improve it in the long term?
During this time, we have not only seen a significant cultural change within organizations but also in customers, and what they expect of financial services. I think this has been a good example of how digital transformation is about change and a cultural transformation, rather than one that is solely about a change in technology.
At Microsoft, we believe that for organizations to successfully transform and have a Culture of Innovation, there must be a focus on technology adoption and culture and people's capabilities in order for sustained innovation to take place and digital transformation to be realized in the long run.
As I have mentioned earlier, COVID-19 has made the need for digital transformation within the industry so much more apparent and has changed the way that we offer digital capabilities to customers. They now expect even more seamless and personalized digital services, and this will continue to shape the way that products and services are designed, and the entire customer experience.
For our industry to reach the next level of offering improved personalized services to customers, as more data becomes available, AI-embedded services will become the new norm whether it is for KYC, credit score or special offers. What will make the difference in terms of ensuring the success of FSI organizations will be their willingness to accept change and introduce innovation both in their customer services and internal operations.
In the long term, agility will continue to be of utmost importance, and a quick time to market will help raise the levels of innovation within our industry. It is promising that many organizations within FSI are now taking the steps to go fully digital and leverage cloud technologies to improve their operations while looking to embed data and AI to empower decision making.
Q: From banking perspective, regulations in many countries allow processes such as customer onboarding to be completed fully digitally now. Do you think the pandemic will also have an impact on regulations in other countries?
At Microsoft, we have invested in broad engagements with regulators for the past 8 years, where we have had many 1 on 1 discussions with over 120 regulators, global and held several regional regulator summits. Through these dialogues, we have been able to create a constant feedback loop between regulators and customers and improve our services from a regulatory and risk assurance perspective.
It has been a journey of working with regulators to modernize regulations, which has resulted in us being able to establish our position as a trusted advisor when it comes to modernizing regulations, particularly in cloud computing.
To date, we have seen markets around the world updating regulatory guidance to provide clarity on the use of cloud, and a positive impact of cloud adoption by our customers.
I personally work closely with regulators in Asia and we are seeing regulators driving industry innovations particularly in our financial hubs, Hong Kong, and Singapore.
Overall, regulators are concerned about Covid-19's impacts and have been working actively with financial institutions to support business continuity and pandemic planning. Apart from that, they are showing flexibility to maintain resilience and liquidity, and have even been looking at cross-country collaborations to aid this. For example, the Monetary Authority of Singapore has recently announced enhanced data connectivity in Financial Services with the US Treasury and Australia.
Similarly, Hong Kong Monetary Authority (HKMA) and Insurance Authority of Hong Kong have amended their guidelines to allow the use of technology for non in-person channels to avoid physical interactions and our customers have leveraged this to accelerate the launch of new remote digital selling services.
Q: How do you see the future of branch banking post-Covid-19?
Banking channels are evolving to become a combination of various customer touch points which bank will ultimately need to create a seamless experience around for customers to be served anytime and anywhere of their choice, be it via web, a mobile app, in a branch or via the customer hotline.
Technology plays a key role to enable that journey to ensure a seamless and consistent customer experience, backed up by an intelligent digital process and customer data. There will be scenarios that customers need to be served by branch employees. The key to successful interactions would be ensuring that all customer history through other customer touch points with their respective data and insights are all seamlessly consolidated to empower employees with a 360-degree view of customers to interact and personalize their advice to customers.
Q: How does responding to Covid-19 together with VeriPark help financial institutions steer a course through the uncertainty and shape the path?
VeriPark is one of our valued solution partners that enables financial institutions to deliver customer experiences across digital and assisted channels. We believe that digital customer experience is a key differentiator of our customer offerings. VeriPark's solutions have incorporated a 360-degree view of the customer, empowered with AI tools, to help financial institutions develop personalized customers services and gain market share.
Customer experience is a continuous journey and we will continue to work with our partners to create a digital feedback loop to enhance the customer experience. In turn, serve customers better through intelligent decision making within our sector.
Q: What do you think should be the 3 key priorities for the financial services industry in the post-Covid-19 world?
First and foremost, technology is the foundation for digital transformation.
Data from Microsoft and IDC's latest study, "Culture of Innovation: Foundation for business resilience and economic recovery in Asia Pacific", revealed that 68% of organizations in our region is accelerating the pace of digitalization in response to this crisis. Today, technology is no longer a nice-to-have, but a must-have. Organizations thus need to focus on people and using trusted technology to weather the crisis.
In our new post-pandemic world, there will be new eco-systems and modes of operation. Organizations need to change the way they operate and pursue partnerships as they expand into new business and markets. Choosing a technology partner is key to support the growth, agility, and operating models to capture the business opportunities and markets expansions.
Organizations recognize that they need to embrace a culture of innovation and that fostering an environment where continuous innovation can thrive is the key to long-term resilience and success.
Specifically, 74% of all organizations have found innovation to be critical or important to their performance and resilience. Even more leading organizations with a mature Culture of Innovation share the same belief (98%). To do this effectively, organizations need to strengthen the pillars of People, Data, Processes, and Technology, which will require hard work but can pay dividends in the future.
Thank you Connie.
Work and life will never be quite the same again after Covid-19. For the financial services industry, the pandemic created an imperative to reconfigure operations to ensure business resilience. But, it also offers an opportunity to transform and reimagine business models. We spoke with Patrice Amann of Microsoft to find out more about how financial institutions must adapt if they are to thrive in the 'New Normal'.
Q: How do you think the pandemic has affected businesses in the financial services industry? What do you consider to be the biggest challenges?
The comment from Satya Nadella, Microsoft's CEO about how Covid-19 has forced two years of digital transformation in two months went viral earlier in the year, and this has been witnessed in all sectors of the economy, whether public or private. Some industries have been impacted severely such as hospitality and travel, all others have been impacted to a lesser extent. Financial Services Industry, however, has faced some specific challenges.
When the pandemic struck and countries went into lockdowns, the immediate challenge was that all financial institutions, as a key wheel of the global economy, needed to rapidly migrate to remote working. Suddenly, no one could go to their usual work location and execute on daily business to keep the economy going: this was a huge business resilience issue. Some institutions that were progressing their digital transformation were already well prepared for this, but others struggled as infrastructures were not ready and strong enough to connect all employees from home.
Another challenge was that many institutions still have a lot of paper-based processes. This indeed varied across regions and sectors but slowed down execution of very simple and straight-forward processes.
The biggest challenge, however, was the connection (or disconnection) between financial institutions and their customers. This issue touched all segments across retail, commercial and corporate banking.
For example, in the retail segment, some older or more 'at risk' customers, are often more comfortable doing banking in branches. Yet, with lockdowns, they were forced exploring interactions through mobile and/or web channels with mixed success due to accessibly issues. We also saw some commercial banks being slow to implement the various government stimulus support packages in a consistent way and be able to report easily to the performance of these packages.
Finally, it created huge challenges for call centers. Social distancing reduced their capacity just as they were seeing spikes and escalations in call volumes.
Digital transformation has been a key driver for financial services for the last couple of years. It is all about enabling banks and insurers to deliver innovative customer and employee experiences with speed and agility, while also managing the realities of risk, regulation, legacy systems and cost pressures. So, I wouldn't call it a wake-up call, but the pandemic has rapidly accelerated the execution of this journey, as many institutions realized they were too slow and not agile enough in responding to a specific situation. It has accelerated internal cost-cutting transformations, but the main driver has been to improve customer service and resilience.
There is always a reason to not speed up digital transformation, or to not do it now. As financial services recovered well from the last crisis in 2008, and is a profitable business, the general attitude was probably about 'why change now?' There was lower urgency and very few companies were really anticipating such a potential big disruption to their business model with a worldwide pandemic that forced changes in people's behaviors.
It is often hard to force or accelerate a change in operations, business models and even culture as you might only see and measure the relevance of the decision after having been through the journey.
The banking industry now finds itself in a situation where the pandemic has been the trigger that is a key acceleration of their transformation. Some banks had to discover that the hard way. In the New Normal post Covid-19, financial institutions will need to reconnect better with their customers and offer differentiated digital customer experiences and deliver greater value. This will really be a game changer. Banks also have a social responsibility to help their customers and communities recover. As the recovery progresses and the economy recovers, customers will be loyal to the banks that supported them through the challenges.
Q: How is Microsoft helping financial institutions to provide the best digital experiences and the agility to rapidly adapt?
This is part of Microsoft's DNA. Our mission statement is to empower every person and every organization on the planet to achieve more. I think this resonates particularly well right now, as the financial services industry needs to adapt to a new reality.
Through this notion of enabling others, we are helping this industry adapt by providing the best technologies, solutions and services through people to accelerate digital transformation. That will not only ensure business continuity and boost operational efficiency. It will also transform the business to be more relevant to the customer.
We provide a trusted, secured, compliant, hyper-scale infrastructure. This will expand financial institutions' own capabilities, operational capacity, business agility and speed to market. We have a ready-to-use platform that can be scaled and gives access to innovative services, such as Artificial Intelligence (AI), Machine Learning (ML), intelligent automation, advanced analytics, cognitive services and so on.
As we bring together a broad ecosystem of industry partners, we are helping to deliver a range of measurable business outcomes with agile solutions in areas like payments, risk management, cyber security and, of course, differentiated customer experience.
Finally, as financial institutions operate in a highly regulated industry, they always must look very closely at compliance issues and ensure that their controls meet regulatory requirements. We therefore provide a framework of risk assessment as well as tools and functions for Banks to operate in a compliant way and stay in control of their operations.
Q: What are Microsoft's three most prominent products that are helping financial services organizations meet the demands of today?
The first one is obvious; it's Microsoft Teams platform, part of our Microsoft 365 solution. This has been critical in enabling remote working and we have seen a tremendous demand. When we look at the numbers, we see a huge increase in usage. Many large institutions are now using this Microsoft Teams as a standardized way to communicate and collaborate not just internally, but also for some of them to interact with their customers and business partners.
The second solution is Microsoft Dynamics 365, and by extension our power platform, which is our low to no-code environment, driving a massive transformation through rapid deployment of process automation. We hear of customers who, almost overnight, digitized processes and built agile workflows to ensure business resiliency and improve customer experience.
The third is Microsoft Azure, our hyper-scale cloud offering. This has been critical for banks. It has contributed to build resilience by enabling remote work with the support of virtualized desktops. And, it has helped banks to accelerate their process of digitization and to implement and scale solutions to respond rapidly to their customers' needs.
Across all our products, our mission is to democratize access to technology and drive tech intensity so that technologists and non-technologists alike can rapidly build and deploy applications.
Q: Online or digital is not accepted for many transactions in many countries. Do you foresee regulators starting to shift their thinking on this? For example, do you think we'll see more insurers pushing regulators globally to allow digital signatures to deliver end-to-end digital experiences?
10 years ago, regulators wouldn't even want to talk to us as their mission is to supervise financial institutions, not technology providers. We have been starting to work with some of them to learn about what is a regulated industry and how we need to contribute to help financial institutions to operate in a compliant way. We have been working with regulators for more than eight years now and we are all developing a better understanding of what needs to be done to operate services in a compliant way. Not just from a technology perspective, but also from a legal perspective so we can build the right solutions that are compliant by design. Over the years, we have been able to build regular contact and interactions with more than 120 regulatory bodies.
We've also been running, for 8 years now, a Regulatory and Compliance Summit open to all regulators around the world. It started as an annual in-person event, but with the pandemic, it turned now into an almost quarterly communication that we run digitally, and where we discuss the latest trends and what needs to be done. This will help the industry move forward and take advantage of the public cloud.
Increasingly, we are seeing regulators partnering with us: they provide us guidance and directions, and on our side we help them to better understand our Cloud Operating Models and the efforts we are making to support their guidance.
The main issue for banks is that they need to stay in control of what they are doing. So whatever we can provide in terms of tooling, contracts, services, and solutions that can help banks to stay in control is good for the business and is supported by the regulators.
Q: Covid-19 is changing people's relationship to work. We observe an acceleration of remote working trends. How do you see future of work?
We absolutely acknowledge this trend. There is a massive shift to remote working in many industries, including financial services. Some have gone from zero to 100% remote working simply because there was no other choice. And we have had recent communications with large banks who are saying they will continue with remote working.
There are some institutions, often those with very large headquarters and campuses, which are not ready to re-open at full capacity. So, remote working will probably be a long-term trend. That means, from a technology perspective, we have to provide the best communication and collaboration tools and make sure they can be deployed and used in the very best and easiest ways. Our tools are not only empowering employees; they are also enabling solutions for communicating externally with business partners and customers.
This is an area where we are starting to see new behaviors. Some institutions are offering new digital ways of interacting with customers, such as online appointments and video calls. These external calls need to be recorded for compliance and together with our partners, we have some great solutions that elaborate on the regulated recording. This is a massive and growing trend and it's important to support it from a company and management perspective.
But work from home needs to be fine-tuned as it might have an impact on mental health. At Microsoft, for example, we have programs to support our home-working employees in this regard. And we also help our customers to manage this kind of situation in the most efficient way and help them fine tune their own remote working environment.
As Bank employees work remotely for extended periods, the challenge will be to keep them engaged and supported emotionally. Banks have typically trained their employees through traditional classroom locations. Banks will need to build capabilities to help them train their employees virtually.
Q: How do you see the impact Covid-19 has made on customer behavior and how do you think financial services can improve it in the long term?
Spending patterns have changed drastically. Customers are cutting back on travel for example, and increasing their online experiences across shopping, entertainment, and banking. I think financial institutions have a great opportunity to reset their relationships with their customers by offering online frictionless solutions and standardized contactless secured payment solutions.
They can also be proactive and think about what next best action or next best offer they can provide to customers. For example, with Artificial Intelligence, banks can proactively reach out to customers experiencing financial difficulties to offer a specific loan payment deferral or connect SMEs with a government aid initiative. But there is no great AI without great data, so Data Estate will become a major topic for financial institutions to get better insights and deliver more business value to their customers.
Banks are a key engine of the economy and regulators have a duty to ensure they do the right thing and don't introduce or increase risk in the way they operate. I think regulators will always be cautious about making sure banks operate in a compliant way. But they might also allow some flexibility to foster agility.
For example, we see more e-signatures happening and we're seeing a better understanding and partnering with big players in cloud solutions to ensure offers are acceptable to regulators. This must always be done in a very compliant, secured, and trusted way. So it depends on building partnerships with trusted companies, who will do whatever they can to support the norms and standards and work hand-in-hand with regulators to enable banks to be more flexible and agile when delivering new solutions to the market.
Some bank branches closed during lockdown and, although most are now open with social distancing in place, this has accelerated the trend towards more interaction through digital channels. From a customer perspective, many want to see more digitalized processes, so they don't need to go to a branch for non-routine transactions, such as a loan application.
I don't think branches will disappear, but they will be redesigned, and you will see many more digital experiences within physical branches. Sometimes, even with no human presence at all. I can foresee a virtual greeter welcoming and directing customers to self-service tools and I can see us living in a world of remote advisory relationship managers. This is, by the way, already in use or piloted in some 'flagship' branches, where you already can have a video conversation with a relationship manager. Potentially, we could even have 3D avatars. It is all about driving effective and engaging digital outcomes.
What is essential to enable all these new scenarios is to become a data-driven organization. That would enable Artificial Intelligence and advanced analytics implementations to better understand and help customers. It's all about smarter banking.
I am confident that in the next year or so, we'll start to see different value propositions within the branch. People will no longer stand in line waiting to be directed by a physical greeter. You may self-serve directly or be welcomed by a virtual or robotic greeter. These are exciting times that will make banking much easier and more fun for consumers.
Q: How does responding to Covid-19 together with VeriPark help financial institutions steer a course through the uncertainty and shape their future path?
Microsoft and VeriPark have worked closely together for 19 years to create a specific suite of financial services products. These include, Customer Experience & Relationship Management, loan origination, onboarding, business intelligence and AI.
Our partnership with VeriPark has even expanded over the last six months. We have been working together on collective technology and IP to create a Covid-19 response to bring to market specific solutions and capabilities. These will really help financial institutions to reduce costs, improve customer relevancy and drive satisfaction. Ultimately, we are helping banks to create a truly omni-channel strategy and create outstanding customer experiences.
I also strongly believe that VeriPark's solutions enable customers to self-serve more easily. VeriPark has been ahead of the game with Next Best Action recommendations and now we are making it even more predictive so we can drive additional value and enable banks to be more proactive in serving their customers.
Q: What do you think should be the three key priorities for financial services industry in the post-Covid-19 world?
The New Normal will be different in several ways - from an individual behavior standpoint, an economic standpoint and even from a political perspective. Financial services will be transformed deeply.
Ideally, key priorities for these institutions will be:
Thank you, Patrice.
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As financial institutions dig into the complex process of recovery, one truth is abundantly clear: They need to adapt to the "new normal". This requires businesses, across all sectors of the economy, to be bold, show resilience under great uncertainty and accelerate their pace of digital transformation. It's a sentiment shared by Metin Demirel of AKSigorta, one of Turkey's leading insurance companies, in our latest interview with financial services industry game changers.
Q: How has the pandemic affected the insurance business?
Let's be clear; Covid-19 is more than a health crisis. It is transforming businesses and even entire economies and societies across the globe. The insurance sector is not immune to these changes.
In April and May, we had lockdowns and travel restrictions. As such, motor insurance claims dropped sharply, along with car sales. Then, in June, our economic life bounced back with more car travel than usual, as people were cautious about using public transport. Governments also introduced stimulus packages, such as low cost loans and low interest rates, so we saw car sales jump like never before.
Now, we are seeing car sales go down again from the highs we experienced in the early summer. This is just one example of the rollercoaster times we are living in. It's challenging, but with agile decision making and a strong focus on building relationships with our agents, third parties and employees, we are making it work.
Q: Covid-19 put a spotlight on insurers, do you think it is a wake-up call to transform digitally and improve customer service?
Yes – although, at AKSigorta, we already use the latest technology to support our agents. Customers want their claims and queries handled quickly and effectively so it's essential insurers have fast, accurate and personalized digital offerings. We're well ahead on that score, thanks to our digital assistant, Ada.
Ada already handles around 10% of our operations. That's over two million interactions in the last year and this year it'll be much more than that. Ada is helping us, and our agents, stay agile and responsive to customers' needs.
We've also been using Robotic Process Automation (RPA) for over three years and it's extremely effective. Our business has doubled and our SLAs have improved dramatically. Yet, our employee numbers have stayed about the same. By automating many processes we have effectively created the equivalent of an additional 100 virtual employees – and that has given us huge leverage during the Covid crisis.
We have used that leverage to continue to improve our offer to the 15,000 insurance agents, brokers and banks across Turkey that use our services. Although, as an insurer, we have limited direct contact with our end customers. Instead, our focus is always on how we can support our distribution channels.
Agents have close relationships with their customers; they are like family. They understand exactly how to support and communicate with customers during a crisis. For example, if a customer is involved in a traffic accident, they call their agent who usually deals with the repair shop and takes care of everything.
It's essential that we provide an excellent service to all our distribution partners. That allows them to give the end customer a good experience. It's a kind of triangle.
We're also mindful that agents don't just work with one insurance company. They'll work with at least five and maybe ten. They can easily move customers from one insurance company to another, so they'll use the insurer that offers the most efficient and convenient service.
Q: Do you think we'll see more insurers pushing for regulators to allow digital signatures to deliver end-to-end digital experiences?
In the Turkish market, the regulations surrounding end-to-end digital experiences are quite flexible and many insurance claims are already handled digitally. In the future, restrictions on cloud utilization could have an impact. I think this is an area regulators could focus on.
Q: Covid-19 is changing many people's attitude to how and where they work. How do you see the future of work?
I'm responsible for retail underwriting, digital operations and IT at AKSigorta and we have been working very effectively from home since mid March. Thanks to Microsoft Teams, we've found that we can all be in a virtual room together and stay well connected. This has helped us to become more productive than when we worked in the office. We've also become more efficient by using our digital assistant for some of our internal operations.
The pandemic forced us all to work from home. But, we took an innovative, agile approach and combined our teams into squads. When we worked in cubicles in the office, it was actually more difficult to work in an agile way because that set up was designed for hierarchical organizations.
Our employees have really embraced remote working. Commuting, especially in big cities like Istanbul, is a challenge and it's inefficient. Even waiting around for the elevator in a high-rise office creates inefficiencies.
Remote working is also a big motivator for employees. They enjoy working in a less hierarchical way. Now, we are all on Microsoft Teams, everyone can do their job effectively and no one worries about whether someone is a director or a manager.
Q: How has VeriPark helped you to during these challenging times?
We have been working with VeriPark for many years, especially on CRM. Although we work with distribution channels, we still need to monitor our customer touch points. Car repair shops, for example, act on our behalf and the service they provide to customers affects our brand reputation.
When we implemented VeriPark's CRM solution, VeriTouch, we integrated more than 20 partners and even outsourced part of our call center. This has been a huge help to us, especially during the Covid crisis. The call center service is amazing and I was particularly impressed by how smoothly they transitioned to home working; VeriPark's tools definitely helped with that.
Q: What are the future plans for AKSigorta in a post-Covid-19 world?
I believe this is going to be a new world. We will not be returning to how things were before and the businesses that adapt will be a great success. Those that can't adapt will probably not survive.
AKSigorta is adopting an agile working environment because it is the right fit for this new world. That means working remotely on a flexible schedule. We are already working with a consultancy to plan how the whole company will work like this from now on.
Working in an agile way is the key to future success. Covid-19 is accelerating our digital transformation and it will bring new products, processes, and customer and employee experiences. Silos and hierarchies are the old world and, even though insurance is a very legacy heavy industry, we should not try to go back to the old way of working.
Q: What do you think should be the key priority for insurance companies in this new world?
We are investing heavily in Artificial Intelligence (AI) and machine learning, especially on the pricing side. Insurance pricing is challenging since you are giving a price for something that is not certain. And, you need to segment customers to give them a fair risk price.
We have already started to see the benefits of this investment during the Covid crisis. By applying AI we can reduce our prices and improve customer experience with faster decision making. But, crucially it also means we can constantly monitor and adapt our pricing to increase our market share and profit.
If you would like read more about the CRM digital transformation partnership between AKSigorta and VeriPark, you may find this case study interesting.
As part of our 'Financial Services Game Changers' series, we have interviewed Esra Beyzadeoglu, Executive Vice President Information Technologies, Digital Banking and Operations with Turkey's Alternatif Bank.
Q: How has COVID-19 affected Alternatif Bank so far?
Esra: Everyone in banking has been talking about disruptive digital transformation for years. But this pandemic has mobilized us to bring about major changes in a matter of a few short weeks. So far, for Alternatif Bank, our focus has been on protecting the health of our employees and customers while continuing to provide uninterrupted banking services.
We had already been innovating and investing in our digital channels and infrastructure before the pandemic. That meant we were able to maintain reliable banking services, even during curfews when our branches were physically closed.
Q: How did you manage the switch to remote working?
Esra: It took a great deal of planning and preparation. We had our first COVID-19 business continuity meeting in February, and immediately started taking all the recommended hygiene measures. We also started getting our remote working model ready.
Our priority was to ensure all our branch and head office employees had secure remote connections. We postponed all face-to-face training, events and business trips and started holding meetings online. Our CEO has since held regular digital meetings to help bring all our teams together.
The effort has been worth it because there is nothing more important than keeping our people safe. Within a few days of the first notified Covid-19 case in Turkey, over half of our headquarters team was working from home. We increased this rate to 95% for head office and 50% for the branches at the beginning of April.
Currently, we have 98% of head office teams and 60% of our branch teams working at home. That means we only need to have four people physically present in our head office. Even our Treasury and Customer Communication Center people have been working from home.
This has been a huge and important change but we did it in just 2-3 weeks. Looking back, I am very proud of all our employees for making it such a great success. We are now all working to prepare for a safe and gradual return.
Q: How did you continue serving your customers during this crisis?
Esra: We have served our retail and corporate customers throughout this time with online and mobile banking, as well as our Customer Communication Center. Our branches remained open, but with reduced hours. We've also been talking to and helping our customers deal with the financial implications of this crisis.
For example, we have increased the daily ATM withdrawal limit and made online and mobile EFT and wire transfer transactions free of charge until the end of June. Retail and corporate customers have had the opportunity to postpone credit, interest and installment payments. We are also participating in the Check Payment Support Loan and Economic Stability Shield Loan Support packages commissioned by the Treasury and the Credit Guarantee Fund.
While this era has shown the importance of investing in digital channels, I believe it has also taught all of us lessons that go beyond digitalization.
Q: Do you think COVID-19 will change customer behavior in the long term?
Esra: With social distancing people have been accessing so much more from home. Everything from shopping and cultural events to business meetings and talking to loved ones. We've also seen a lot of new digital banking customers and I think this will continue.
We're investing in making our digital experience even more user-friendly to ensure customers feel supported. We're also sharing written and visual informational content so they can bank safely and confidently from home. I think brands that offered personalized customer support even before the pandemic were already one step ahead; for example, we were one of the first banks to offer digital customer meetings.
Customer experience is one of the most dynamic and vibrant topics in banking and it is now even more important to make customers feel valued and cared for. We're continuing to work closely with all our banking channels, and our consultant bankers, to achieve this. I believe that providing a rich banking service with value-added consultancy and remote access will be a distinctive approach in the long run.
Things won't be the same as before. We are seeing more customers preferring our digital services, such as e-signatures for applications. Also, contactless payments will be more important. Virtual cards, and the ability to manage them through digital channels, are now one of our most valued customer services.
Q: How have you been helping your older customers or those who were used to visiting branches?
Esra: We have connected our customers aged 65 and over, and other high risk groups, directly to a customer representative at our Customer Communication Center through their registered numbers in the bank system. We've also prepared short videos to show them how to transfer money and how to get passwords for digital and mobile banking channels.
Q: Do you offer digital onboarding to your customers?
Esra: We launched end-to-end digital customer acquisition in 2018. The only part of the process that is not digital is that we require a wet signature which we collect by courier. Once the customer has a deposit account with us, they benefit from a huge range of our services regardless of their channel preference. One of our big differentiators is that our digital customers have their own portfolio manager, just like customers who come to us through the branch channel.
Q: How are you supporting your corporate customers during this time?
Esra: We are keeping in close contact and responding quickly to their requests for finance, credit and restructuring. We are also ensuring our exporters can access information on the topics they need, such as letters of credit, loans, letters of guarantee and taxes, without going to a branch. They can simply call our Foreign Trade Consultants at our Customer Communication Center; in fact this expertise is available to support all international trading companies, whether they bank with us or not.
Q: How do you see the future of branch banking post-COVID-19?
Esra: I think branches will continue to play an important role. At Alternatif Bank, we have been optimizing our branch network for the last two years, making location changes to ensure we provide efficient services without reducing the overall number of our branches.
For example, one of our most important digital transformation projects has been Onboarding and Multiple Sales. This has reduced the time taken for many customer acquisition and product sales processes from 3-4 days to just 8-9 minutes. We redesigned our branch structure to ensure they can play a full role in this. Many banks have been trying to make similar changes in recent years and I think COVID-19 will accelerate this trend to more digital branches.
Q: How did VeriPark help you to accelerate your digital transformation journey?
Esra: VeriPark has been a valued strategic business partner both before and during this pandemic. We have loved working on many successful projects together. For example, we have built an award-winning infrastructure for all of our digital channels with VeriPark's framework.
We have also renewed our retail and corporate internet banking and mobile banking channels with the latest technology, and we achieved that together in just one year. We built our CRM program from the ground up; we are currently running a pilot system, which we will analyze and develop further. We are also about to start our Robotic Process Automation (RPA) journey with VeriPark.
If you would like to know more about how VeriPark helped Alternatif Bank to create one single framework to drive consistent journeys through digital and assisted channels, you may find this case study interesting.