ME Bank’s CIO speaks with FST Media about what the payments space will look like in 2020.

FST Media: What are your IT priorities for the next twelve to eighteen months?  

Gay: Our number one priority is driving value from ME Bank’s four-year technology transformation program due for completion later this year. This will leapfrog our capabilities to deliver on our immediate growth plans and deliver digital enhancements that will please our customer. We aim to enhance customer loyalty and deliver on profitability in future years.

Our second priority is helping ME Bank move down the Agile path, which is critical to the success of our organisation and many other organisations that are undergoing change. By Agile, I mean driving incremental change over a period of time rather than going through ‘big bang’ transformations, which are too large for most organisations to sustain. 

FST Media: In your view, which emerging trend or innovation currently flying under the radar will make the greatest impact on the financial services industry?  

Gay: While not completely under the radar, data analytics and customer insights will definitely have a great impact on the financial services sector. This will translate to treating digital channels no differently to how you would treat a retail floor space – treating them as real people. Across our industry, digital channels have not been used well, but everything is slowly evolving. 

FST Media: What role do mobile platforms play in the overall customer journey and delivering a seamless experience?  

Gay: In the financial services industry, we are now seeing roughly 50 per cent of all online banking interactions being made through mobile devices. With this high level of penetration, we are seeing a shift along the value chain in terms of the types of transactions people desire from a banking app. It has moved from the basic premise of ‘what is my account balance?’ to ‘how can I apply for a credit card?’ and other high value origination requests.

FST Media: How can social media channels of interaction help to deliver value to the bank?  

Gay: The biggest value that social media can deliver to banks is customer insight, including what they think of our brand. It is really important to listen to these voices and have the right tools to monitor and respond. 

FST Media: How significant are data analytics and insights in enhancing your interaction with a growing Gen Y customer base?

Gay: Data analytics and insights are a big factor in customer interaction. The industry is witnessing a shift where, for the first time, financial institutions are spending more on data and analytics than they are on marketing. The challenge for Gen Y and Gen Z is that their loyalty to certain brands is just not there. If we can meet Gen Ys expectation of us as a bank and prove it to them, then we can retain them as our customers. 

At ME Bank, we value customer insights greatly and we are planning to launch a customer promise around it later this year.

FST Media: What are your thoughts on the emergence of digital disruptors like Google and Apple? Are they a threat or an opportunity for organisations like ME Bank to innovate? 

Gay: I do not think these disruptors are a threat to ME Bank, in fact I would actually put us in the same category. ME Bank does not have the same ‘baggage’ as bigger banks. We have sufficient scale and opportunity to drive change and position ourselves as the best bank in the digital era.  

We are of the opinion that technology will define which banks succeed in the 21st century and we are unashamedly putting technology at the centre of our growth plans. ME Bank will complete its four-year technology upgrade in 2015. The entire system is being rebuilt, which provides the infrastructure from which we can launch new digital services in the future. This will underpin our growth plans in the near future.

FST Media: What will payments look like in 2020?  

Gay: By 2020, cheques are likely to become completely obsolete, cash will be used less and more people will abandon their wallet for their phone or wearable technology to pay for items. Payments will be made in real time, and novel developments in touchless payments will likely include ‘bumping’ technology where phone users can transfer money by literally ‘bumping’ each other’s handsets together.  

FST Media: How do you encourage a culture of innovation in your team?  

Gay: For me, embracing a culture of innovation is close to my heart. You need to reward reasonable risk-taking within an organisation and celebrate failures, as that is the only way for you to learn. At ME Bank, we feel strongly about this and we recently introduced the notion of ‘having a swing’ to our set of employee values.

Innovation used to be a top-down approach in many organisations, but I firmly believe this system needs to be flipped on its head in order for companies to succeed in the future. It is important to have a mechanism or a forum to surface innovative ideas and validate, prioritise, and execute them where possible.

Organisations need to hive off a certain amount of budget each year to invest in innovation. If you are serious about innovation, you need set aside money to fund the really good ideas.

FST Media: How significant is the role of technology in your everyday life?

Gay: Technology plays a pivotal role in my day-to-day life. By way of example, on my train commute this morning, I controlled the central heating in my house, paid some bills, composed some emails, and read the Financial Review all on an iPad, a device that cost less than a monitor 20 years ago.

FST Media: Every leader has a legacy that they wish to be remembered for. What’s yours?  

Gay: I want to be remembered as the CIO that helped make ME Bank the best bank in the digital era. At a personal level, I want to be remembered as someone that fosters a culture of innovation and supports reasonable risk taking and entrepreneurship within IT.