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Reshaping the Banking Experience
By Sangy Vatsa, EVP & CIO, Comerica Bank
One of the major tasks for CIOs is to methodically start increasing their share of mind and drive controlled operational and transformational shift through a culture of continuous experimentation, constructive disruption, and ongoing focus on talent and culture development. At the 2018 Detroit CIO Executive Leadership Summit, I spoke about tri-modal digital leadership, a neologism to create awareness about three core priorities for every CIO to focus on—operate, transform, and disrupt. This can essentially help every business harness partnership with other business units to ensure operational efficiency, transformational change and constructively disrupting their business before others do it to them. The opportunity here is how do you make disruption a pleasant business growth outcome versus a painful regret.
Keeping pace with technological advancements, customers want to consume products that emotionally connect with them, and it’s the creators of these products who must fulfill this requirement. As a result, we have instituted a co-creation product development approach inside the bank where tech-savvy product owners and business-savvy technology leaders are co-innovating and co-delivering these consumer products with speed and agility. With a strong strategic focus, Comerica Bank plans to actively start partnering with the Fintechs, leaving no opportunities to innovate in the realm of banking technology. When we deploy a cloud strategy or applications, it includes innovation coming from the cloud and security vendors, in addition to thought-leadership from our technologists, to deliver the most secure solution.
Based on my assessment, four of the following digital trends are influencing the banking industry:
1. Frictionless Digital Banking:
It’s the ability to execute most of the banking services from a customer’s digital device of choice in a paperless way and minutes versus hours and days. Digital banking carves a way for consumers to use the banks for high-value transactions and allows organizations to nurture relationships with their customers. As a result, we are planning to carry out paper-free real-time payments and other secure digital capabilities for customer acquisition.
2. AI-based Robots:
This is a collaborative effort between the software robots and humans to offer exemplary services. We have built a solution for a retail contact centre where certain emails are being answered by robots in seconds, which eliminates a day’s delay in reply due to human intervention.
Leveraging an API approach, we are in a position to actively partner with the start-up businesses to benefit from the value creation opportunities
Thus, we are freeing up our colleagues in the contact centres to assist customers with high-value services.
3. Fintech Integrations:
Similar to what we offer, this is where we see the start-up forums focused on displacing the existing financial services offerings. Organizations have now realized that requirements like customer trust, relationships, regulatory knowledge, and implementations of those regulatory requirements are difficult to achieve. They are instead shifting to a vendor-partner relationship to introduce their modern technologies in the space of AI, cybersecurity and other key areas.
4. Blockchain and Beyond:
It’s a fast-growing general ledger technology platform that can be applied to speed up execution, lower the operating costs, and provide higher security for a wide range of business transactions. As an example, Comerica Bank has established a community of practice with representation from various teams within the bank to explore opportunities like cross-border transactions, smart contracts, and payments reconciliation. In the future, if developers start integrating blockchain with emerging technologies like quantum computing, the collective benefits could be far-reaching.
Identifying the Right Solutions
For beginners, we have established a strategy on how to engage start-ups in our line of business (LOB). Such partnerships mitigate the concern of the start-ups being acquired by a large label. Leveraging an API approach, we are in a position to actively partner with the start-up businesses to benefit from the value creation opportunities. This approach enables our organization to recouple with another start-up if it proves more beneficial. We strive to identify how we can integrate APIs into Fintechs to drive benefits specific to the customer, such as the AI-based adviser or a user-centric tool for customers’ 360-degree view.
We also work with various venture capital (VC) firms to identify a portfolio of start-ups that could benefit both the parties involved. By leveraging our portfolio of VC firms, we provide appropriate funding depending on the technology needs and our technology strategy that we refer to as TechVision 2020. In addition, we possess a clear set of strategic priorities for the bank, which allows us to innovate in a very methodical and a repeatable way. Our APIs are built by both our divisional domain teams— shared services (engineering and data) and distributed—that are experts on domains like payments or lending.
Leadership Advice for CIOs
Leaders should effectively embrace and integrate business and technology knowledge, which is also foundational to our ‘Two-in-a-Box’ model. This model’s intent is to drive awareness about the need of business-savvy technology leaders to co-create products, services, and partner with tech-savvy business product leaders and was recently published crowned by Gartner as one of the best practices in the IT product development space. It enables us to have a peer-level of partnership and focus on business and technology acumen to bring the best of the understanding inside the box before exploring out-of-the-box opportunities in a highly collaborative way.
Strive to deliver exceptional customer experience. Start with the end goal in mind and work backward from there, as you are designing digital capabilities that delight your customers. Also, make security knowledge and operational implementation an integral part of your operating model—what I refer to as a “built-in security” rather than a “bolt-on security”.
Finally, learning should never be underestimated no matter how much success one has achieved. Every leader should have a personalized ‘T curriculum’. The horizontal line of the letter ‘T’ identifies the width, such as understanding of digital technologies and banking regulations. The vertical line signifies the depth like data analytical algorithms, and how those algorithms can be used in the AI Construct.