We don’t innovate alone – we want to build an innovation ecosystem to constantly disrupt… We move really fast and that’s why companies like these love working with us. If we say we are going to do something, we will get it done in the next six weeks, giving us unrivalled agility.
 

FST Media: How do you define ‘innovation’?

Hatton: We are focused on ‘next practice’ not ‘best practice’. There is no point innovating for innovation’s sake; innovation is about doing things faster and more efficiently than anyone else out there and staying focused on bringing smarter, simpler, and better solutions to customers. Innovation also demands continuous education of your teams. We are constantly cross-skilling our people to prepare them for the future.

FST Media: How have you sought to foster a culture of innovation within your team?

Hatton: We invest our time and our funds in a 70:20:10 model. The 70 per cent is things we’ve got to do; 20 per cent goes to things likely to work; and 10 per cent goes to things we are willing to risk. We keep a healthy tension in our culture to build confidence in innovation. You also have to be ruthless with prioritisation. When we look at our capacity, and where we are in the innovation cycle, you sometimes need to reduce the 12 things you wanted to do just to get the top three done.

FST Media: As a challenger bank, how is UBank responding to the challenge of digital disruption?

Hatton: We don’t innovate alone – we want to build an innovation ecosystem to constantly disrupt. This includes partnering with organisations, such as the University of Sydney’s Business School, which has run MBA capstone projects with UBank, as well as IBM, who – through their IBM Watson technology – helped us build RoboChat, Australia’s first virtual assistant for home loans. We move really fast and that’s why companies like these love working with us. If we say we are going to do something, we will get it done in the next six weeks, giving us unrivalled agility.

FST Media: What is next ‘big development’ for UBank in customer engagement?

Hatton: In July, UBank revealed a neuro-marketing experiment, which we commissioned in conjunction with Dr Phil Harris, a neuroscience expert and honorary fellow at the University of Melbourne, to understand what prompts Australians to save. The insights we garnered are helping to shape an AI-fuelled savings application slated for release early next year. This new technology will help our customers manage their financials more closely to achieve their goals.

FST Media: What fintech initiatives stand out for you as particularly promising for the financial services sector as a whole?

Hatton: For us, voice is the next opportunity and it’s something we’re looking at as we speak. Voice is already impacting the customer’s digital ecosystem with Alexa and Google Home, so there are key opportunities for us to engage in this space and to think about how we can help unlock the use of this technology in order to give Australians more freedom in the way they spend and manage their finances.

FST Media: How is UBank utilising analytics to develop more customer-centric service channels?

Hatton: I believe you need a data-first culture at the centre of your business in order to embrace innovation effectively. Look at our customer segmentation, for example. We refer to our customers as ‘self-directed money managers’ – people who want to be in charge of their own finances and are savvy enough to navigate the experience on their own. This segmentation is really a psychographic target, rather than a demographic one. Our customers often chose a digital-only service because they want to be empowered to make their own decisions. RoboChat is a great example of a service that was built to help enhance the online home loan application process with these people in mind.

Now, one in 10 UBank home loan applications is done through RoboChat. Helping customers with easier and more common questions instantly makes the application experience better and lets our bankers spend time handling more complex enquiries. By using AI and cloud computing, we can enhance the customer experience faster and more efficiently.

FST Media: How do see Artificial Intelligence (AI) enhancing customer engagement? Where do you see its limitations (if any)?

Hatton: Artificial Intelligence is infiltrating every part of our lives. It’s already powering self-driving cars, detecting cancer, and helping to write music, so I think it will continue to play a huge role in the financial sector. As an independent ‘attacker’ brand, UBank’s mandate is to disrupt traditional banking. Everything we do is centred on creating a simpler, better, and smarter experience for our customers. Customers expect you to know them intimately, and individually we couldn’t deliver on this with traditional technology alone, so for us, AI was the solution when looking at ways we could enhance the home loan application process.

Having a human-centred design process with AI is key. When building RoboChat, Australia’s first chatbot to help customers with the home loan process, we not only ensured we had the right partner with IBM Watson, but also that our teams and our customers were intrinsically involved in the design.

FST Media: Where do you predict traditional banking will be in five years’ time?

Hatton: We have always seen ourselves as a fintech with a banking licence. There are enormous possibilities for a bank like UBank. As a digital-only bank, we have the ability to accelerate at a faster rate. As an industry, we can’t stand still; we only need to look at how the current traditional retail model in Australia is being challenged with the arrival of Amazon and a forced move to online expansion. Anyone already operating in this space knows it’s cost-effective and allows you to evolve faster. As a digital native company already, we are one step ahead.

FST Media: What are you hoping to achieve from your presentation at FST’s Future of Financial Services conference in Sydney?

Hatton: I look forward to sharing the story of RoboChat, including its evolution, speed to market, and how partnering with IBM enabled us to completely transform the way we interact with our customers. We had a lot of learnings along the way that helped shape its continued progression and inspired a number of new initiatives on the horizon.

Lee Hatton will be a featured keynote speaker at FST’s Future of Financial Services conference on 9-10 November, 2017, Sydney. Don’t miss out! Register now to attend.