ING Direct’s Chief Operating Officer speaks to FST Media about how banks are facing a new paradigm of responsive services in the age of the millenial customer.
FST Media: What is the ‘holy grail’ that is yet to be delivered in financial services?
Andrews: The ‘holy grail’ in financial services is when you have the intersection of an issue or a problem with a business’ imperative to get the technology to make it come alive. On that note, I think rather than having a holy grail, there’s still what we perceive as the ‘holy trinity’ of reliability, agility and pricing. I always look for the reliability of technology, above everything else, but security and agility are also important. As we are taking in this new paradigm of responsive services, technologies that are highly responsive to customer needs – with speed to market and a low price – are driving our expectations. Customers and banks now want that agility. And, one other key consideration that we can never entirely walk away from is efficiency and the cost aspect of delivering these services.
FST Media: What your thoughts on the emergence of digital disruptors like Google and Apple in financial services – are they a threat or an opportunity for banks to innovate?
Andrews: A few years ago we spent a great deal of time talking about threats, and I think we realised that the disruptors are nothing more than simply picking the eyes out of the market as to what’s available, so it means we’ve left something on the table. As banks, the harder we push ourselves to not hold on too tightly to the old constructs and business models, is something that allows us more readily to become disruptors. I’d rather have a unit within the bank disrupting something else and agreed to be of real value, thereby capturing a bigger share of the market in future, than sitting there and bemoaning the fact that someone has proved more adept and more agile of being able to deconstruct banking. I think Apple Pay is a pretty nifty feature when it’s on your wrist, as opposed to, taking it to your phone. Apple lives in an ecosystem: if you’re an Apple person, you’re going to use Apple Pay. When Apple Pay first arrived in the States, they were solving a bit of a problem by building a market for themselves. I think there’s less of a market here. In my view, their ecosystem or franchise is not as strong as the ecosystem here of some of the major banks. If you’re using the applications of some of the major banks, does Apply Pay bring you that much more? The court’s out on how that will move and the direction it will take. For us at ING Direct, we’re currently a small player. We don’t have a huge franchise when we talk about a customer base, so we’re more likely to join most of these ecosystems because we think we will have customers who want to choose many of them. Some of our customers may in the future want to make bitcoin payments. It’s important that we facilitate that for them; otherwise they’ll have to go to a disruptor or to a major organisation who’s looking to provide those services to their customers. It’s very interesting how it will pan out, but as I said, I like to think we’re still in the disruptor space.
Looking at the industry, the banks are increasingly moving to meet customer needs than they were previously. The New Payment Platform (NPP) that’s being worked on for 2017 in Australia is a great example of this. Banks are at the heart of this innovation, with the view to providing real-time irrevocable payments for retail customers. If you had that in your smartphone app, there would be no need to be engaging with other payment mechanisms that afford you the same type of facility. I think this is actually an example of innovation in the payment space that has not yet even found the business models behind it. At the moment it’s just a function that will allow real-time payments, but people have to build the business models and the services that will go with it. As a result, NPP will be opened up to other players in the industry and people outside the industry to use the mechanism and reap its benefits. NPP is a great example of how banks are moving forward themselves and collectively when it comes to innovation, which is something I find really interesting.
FST Media: What is next for Zero Touch, particularly in terms of mortgage origination?
Andrews: Zero Touch was created to build on our strategy for a primary bank and we obviously want to leverage the private cloud. Mortgage origination is a project that we’re currently working on. We have a private cloud where we manage all of our own infrastructure and that hasn’t changed. The next step for us will be to consume resources external to the bank. And when we say resources, I think the main consideration for us is services. Having done Zero Touch, we can make connections to third-party suppliers now. What we’ve been working on since delivering Zero Touch last year is to work on our own applications. The applications which we host on our infrastructure wouldn’t be unique, but as a set of applications, they’re quite unique to us.
We have almost 300 applications in the bank, so when we completed Zero Touch it gave us great new capabilities. Some of those capabilities were not fully ready as yet because we hadn’t completed renewing the applications at the bank. Mortgage origination, which is a workflow tool, is one of the applications that we are working on at the moment. Later this year, we will implement the next version of workflow for ING Direct Australia on the new infrastructure. It will also be compatible such that it won’t be something that we have to manage ourselves. At the moment, we’re also working on our digital channel, where we will look to replace and improve our current digital platform.
As we move into 2017, we will very much move into the agile space in terms of delivering a lot of function and feature very quickly. Until you put those platforms in, you can’t innovate on an iterative basis because you’re busy working on the last initiatives. From 2016 onwards, we will be exercising the capabilities of the cloud that we have, and in some ways we will be moving to consume resources outside of our private cloud. Consequently, we will be able to bring product services more quickly to the market after we complete a couple of these larger platform replacements, which is where most of the attention is at the bank at the moment. That’s a key focus for us as it is a very specific delivery on what the customer wants.
FST Media: What key technology or innovation has had the most significant impact on your career?
Andrews: I would say it’s never really an innovation; it’s the experiences where you have the biggest learnings. It may be in relation to a particular technology or innovation. Admittedly, the biggest single project that I’ve been involved in is Zero Touch. There was a very great concern that it may not work, but working with a few customers; working with a hundred, a thousand, a hundred thousand is nothing like serving 1.5 million. In that context, undoubtedly the Zero Touch delivery has been overwhelmingly the most innovative and the biggest single project I have been involved in over my career. However, my most significant learnings had been before that. When I was going through very complicated technical projects were beyond my technical understanding and capability, I could call it up and assess it and make decisions about it from what I was being told as well as how it was being represented.
FST Media: What three qualities are essential to being an effective leader?
Andrews: Overall, you have to be consistent and hold yourself to account as you would the other people in your team. You can’t have any more regard of yourself than anyone else, so I would say that that’s consistency and respect. You also have to have trust. And another key quality that differentiated a leader would be decision-making, because you often have to deal with ambiguity and you have to deal with uncertainty when you’re making decisions. We would always expect someone to have these facts before they could make a decision, but you have fewer and fewer certainties on which you make decisions.
FST Media: Every leader has a legacy that they wish to be remembered for, what is yours?
Andrews: I would like to be remembered for achieving something great, because I like delivering. I’m part of a fantastic bank here. We are a relatively new bank and I’ve been at ING Direct for over 20 years already. I’d like to be remembered for leading great teams who left a legacy themselves, allowing for someone else to build on top of all that we achieved.
Simon Andrews will be speaking at FST Media’s 10th annual Technology & Innovation – The Future of Banking & Financial Services conference in Sydney, in addition to a distinguished panel of executives across financial services from November 10-11. For more insights and information about the event, register here.