Enhancing the customer journey through smart automation

High-leverage opportunities for customer journey improvements Removing friction to deliver simple, easy, fast Aligning front-end delivery (web, mobile) to back-end processing [toggle title="TRANSCRIPT"] Hi, everyone, and welcome to this session, enhancing the customer journey through smart automation. I'm joined by Sean rose, the Chief Digital Officer of Scotiabank. Sean has been with the bank for more than four years before which she was the Chief Product officer at money supermarket group. Shawna spent time at Pearson, IBM Watson media and CVS so he has a variety of experience in different industries. And he also went to school at Mizzou, which has undoubtedly the best journalism school in the world. That includes alumni like yours truly. Right. Oh, yeah, right on awesome. Yeah. Great, great squad from the Mizzou mafia. Sean, the floor is yours. Thanks for being here.Unknown Speaker 7:35 Thanks. Thanks for having me. And Hi everybody, and and welcome. My name is Sean rose, and I'm the Chief Digital Officer at Scotiabank. I'm really pleased to be part of the 2020 banking automation summit, virtual experience I see on the program that I'm listed as being on demand. I was pretty proud of that until my eldest kid pointed out this very morning, that on demand and in demand are two very different things entirely. The title for today's talk is enhancing the customer journey through smart decision making. But before we get into what that means, I need to go back to what I did for a living before I got into banking. I actually got my start in search at AltaVista in Yahoo A long time ago now. And right from the beginning, even in the early days of dial up internet, it was obvious from the searches people were creating that we are all every one of us creatures of habit. For example, searches for coffee shops pika two times in the day, every day, not even deviating 30 minutes from each other. The search for the term unblocked games peaks just before school starts, just as kids are looking for something to do or not do lots of unsavory terms peak at 130 in the morning, which is self explanatory, but very tellingly, the word lonely peaks an hour or so later. All of this means for predictable, and the predictability of our searches is mirrored in the purchases we make. As far back as the early 1990s, for example, marketers noticed a correlation between buying beer and buying diapers, got all kinds of retail folks excited and set the stage for deeper data driven analysis of how people make their purchases. Of course, all of that has been helped by the fact that in the last 25 years, we've developed better and more sophisticated methods of capturing massive amounts of consumer data. And we're not just talking about aggregate data, but also very specific personalized data sets with such specificity that we can reasonably predict the next purchase you're going to make with something close to 70% accuracy. Now, I'm not saying this is this to make you all feel bad for being predictable. I'm certainly not doing that. Because if you think about it, the fact that we all act and react in similar ways is kind of reassuring, it's human. In a world where we spend a lot of time talking about what seems to be really profound differences. It's nice to know that in some ways, we're not that different after all, but for all of us in this summit as bankers, what human predictability means is that we can give our customers exactly what they want, when they want it. In a way that's so simple, they barely have to think about it. Because what we call the customer journey isn't a journey so much as a number of small, discreet, but highly meaningful interactions that specific moments in time. And the shorter the journey, the better. We're talking a journey that is seconds long out of Peter Jackson movie. And if that journey is smooth, the customer leaves us satisfied. There's no question of it. If the journey causes friction, let's just say it rubs the customer the wrong way in there. So today, I want to talk to you about the ways that digital banking is removing that friction, making the customer experience smoother, not coincidentally, improving the profit profitability of banks at the same time. I listen, I could talk about this stuff in a whole lot of detail all day long. But for day, for today, I'm going to stick to three ways we can enhance the customer journey, using smart decision making comes down to design, speed, and uptime. First, let's talk about design. And here I'm not talking about physical design, like the phone or the device itself, because that's out of our hands. But rather, how do we design the applications that customers use, and how we organize and lay those applications out. Let's go back to the beer and diapers example for a second. Once that story got out, some grocery stores in the US started putting beer and diapers beside each other in the aisle, the result greater sales both and a higher correlation in sales and people thought possible, which shows us that if you design digital interactions around the way that customers actually purchase, and if you capture them in the moment of intent, you get less friction, greater seamlessness. There's an example. Here's an example from our own bank, we spent a lot of money and time trying to convince our customers to save more money, we advertised the heck out of the benefits of saving money, we advertised our awesome interest rates on savings accounts, the results were not spectacular, then we consulted with a behavioral economist, spent a lot of time understanding how people think about their money, how they think about managing them, and where it makes the most sense to interact and educate them. So that we don't have to keep going back to the diapers and bear example, perhaps we shift to presenting you, our customer, the equivalency of a pair of affordable Converse sneakers, just as you're googling the word shoes. Similarly, we found that when we step in at at the point of account creation, or putting money aside, and we say would you like to do this automatically each month customers like that, and etc points and they never have to think about it again, we support them in the moment of intent. Another example is he transfers. If a customer has to set up a password for each transaction, not only is that time consuming, it's also way less secure than other deposits, there were customers likely don't realize that last part in the moment, we found that the best time to convince people to use audit deposit is in the exact moment they're keying in the password. We say in effect, we're going like this to be an easy transaction forever afterwards. More often than not, they agree. So a lot of what we do through design is putting positive choices in front of the customer that steer them in the direction of frictionless automated processes, which ultimately improves the time spent on each transaction. Which brings me to my second point, speed. And this goes back to predictability. If we can predict the next transaction a customer's about to perform so that we can display a shortcut to that transaction, we can cut down on friction even more. Using an example from our bank say that you you pay your phone bill around the 15th of the month, we could set up the app to send you a reminder on the next month at the exact same time. So just before the 15th you would see a pay boat, pay your phone bill shortcut, tapping it would send you to the payment page, minimizing errors, reducing time to transact and reducing friction. That's something we're rolling out soon. We've also developed a service we call lightning login. It's the fastest biometric authentication in North America, it gets customers into the app faster, which ultimately gets them out faster. And there's a direct correlation to customer satisfaction in that after we launched lightning login, the ratings reviews for our app jumped all the way up to 4.9 in the App Store from 4.7 proven that for customers. It's platform over product, product over feature people over everything, every time, you can jam all the features you want into an app. But if it's not moving fast enough, it just doesn't matter. People are super irritated if they can't authenticate fast enough. Another way we're improving speed through automation goes back to my first job in technology search. We know that typing on a mobile phone is brutal. So we made our search results refresh at every key press. For example, you don't need to search for the phrase send money to show a navigation link to the send money page. You only need to type the first two letters or characters. Auto filling with instant search means fewer taps and less work. But it also means that the search function has To become a better, more robust way of navigating the app. The biggest change, though, is foundational. It's a whole lot of nuts and bolts infrastructure working behind the scenes, and a ton of heavy lifting. And this is where we in digital banking still have a bit of a struggle, where we still may need to convince others that digital transformation is not a discrete project, or even a new service. It's a whole bank transformation. At Scotia, we created an internal banking as a service platform, a design system called canvas. This enables our swipe function for applications where you swipe right to make transfers. Starting this past May, we migrated 2.6 million of our customers from the previous application to a new Android and iOS app. And it was a massive lift. Since that time, we've seen credit card applications go from eight minutes to two minutes. Mortgage transaction time cut in half, small business accounts go from over a week to 20 minutes and day to day customer onboarding, reduced to almost no time at all. What does this mean? We're giving our customers their time back. And we realized that reducing friction and increasing speed actually go hand in hand. It's that way in physics, and it's that way in digital banking. But none of that matters, not speed, and not design if you don't have reliability. And that brings me to my third point how uptime and error free rate matters. About four years ago, the error free rate on our app was rather poor, often exceeding 10%, which meant we were definitely rubbing people the wrong way, there's no question of it. But now we're approaching four nines 99.99%, or at a minimum 99.9% three nines of error free state, which means most people will never ever, ever experience an error on the application. We're really proud of that. How we got there, it's actually the end result of a lot of factors though all at once, migrating to Canvas for one, design choices for another, reducing confirmations, boxes and fields, all the little things that can go wrong and make a system twitchy. And now we've removed barriers to the transactions that our customers want the most, and reduce the duration from several minutes to several seconds, milliseconds often. In other words, the error free state is both the target of performance, and an outcome of excellent design and support, and superior speed. More importantly, in the minds of customers, all those things are linked. The number one topic and the positive App Review comments has to do with design. But right behind it is speed. And this should come as no surprise customer like a really well designed and speedy app. But you don't get any of those things not good design, not speed and not reliability without a fourth factor. That takes us back to the title of this presentation, enhancing the customer journey through smart decision making. The key is smart decision making. It's about using the technical tools at our disposal to anticipate and predict using data and analytics to create flexibility using cloud solutions, to create informed design choices that take the guesswork out of using an app and to steer the customer along and what should be a seconds long journey with their bank so that they can get back to the stuff that they really want to be doing. It's beyond obvious that nothing You and I are doing today in terms of improving the customer journey would be possible without the technology that supports digital banking. But it still comes back to human judgment, human leadership, human smarts, we need to use our best judgment informed by the data we see to design the best possible experience. Fundamentally, it's about understanding what people want. It's about predicting behavior so that we can get customers where they want to go faster and more easily and let them be on their way. And that's what we mean by enhancing the customer journey through smart decision making. Thanks a bunch for sitting with me. Hope you guys have a great day be well out there.Unknown Speaker 18:51 Great. JOHN, thank you so much for walking us through that.Unknown Speaker 18:55 It's a really interesting presentation. I was wondering if we could talk about how does Scotiabank decide like where in the customer journey? automation will reduce friction? And how do they address those points? Well, we start with face to face interviews for for the rest of our most our most recent application release of our product which we refer to as Nova for your phone, we did hundreds of stakeholder interviews to to understand really that not not just the customer journey, but the customer friction points. So Do people really understand what we're intending to do? Do we truly understand what it is that that they're in that session for and then removing almost all of the extraneous from that, and and that that comes at a cost, Rick, you know, we removed about 75% of the features and friction points from the previous application, which was also very highly rated. So our new app is far more simplified, far more streamlined, and far more performant but it all really came down. To the interactions with our customers very directly. Unknown Speaker 20:04 And those interactions with customers come through. I mean, they focus groups, obviously, you know, pretty COVID. I'm sure it's virtual now. But you know, as this stuff through through App Store feedback was forms that taken. Unknown Speaker 20:17 Yeah, we so both. So we did a lot of this work between the fall of 2017, and the summer of 2019, all the way through the beginning of the pandemic, those were primarily face to face or part of focus groups, hundreds of people actually came to our digital factory on the east side of Toronto to join us and actually share their direct feedback. But as a bank, actually we we respond to each and every bit of feedback that we get in in every app store review, if we can certainly all of the negative work that that is gold. And so we responded to hundreds of bits of of feedback, negative or otherwise, through through App Store. There are a lot of other tools as well, a fair amount of people interact through through email or other digital channels too. So every single bit of feedback that we get in person or otherwise, we respond directly to Fun fact, actually, social banks new app was one of my first stories that I did, and bank innovation. So I do remember that very clearly. I had no idea. Yeah, that was about a year and a half of last spring ever. We're doing that. Right? Yeah, it's a it's been an incredible journey. The app has taught us a lot about how our customers interact directly with the bank and what they're expecting in the moment. And so, you know, one of the nice things about streamlining and simplifying our application suite, is we understand a heck of a lot more about customer intent, I can see the forest for the trees as a result. So where do the automation efforts at Scotiabank sit within the the bigger structure of the bank? I mean, does it fall under you with digital? I mean, how do you work with Scotia Bank CIO? I guess what are some of the in terms of like the structure of your automation efforts? Like what does that look like? Sure, it takes a it takes a number of different forms. Rick, certainly the instrumentation that we have within the application suite allows us direct interaction in real time with our customers. But our data and analytics team, which is pretty fantastic reports to a different group. All together. And so there's there's a lot of work that goes with our business functions stitched together with our analytics teams, and then delivered directly with our digital operations. When I joined the bank digital was set up separately, about two and a half months ago, we actually tied in directly digital along with technology, which you can think of as a traditional traditional CTO organization, as well as the CIO team. So all of technology at the bank of Nova Scotia is together. And then we work hand in glove with our data and analytics and business teams to deliver good results for our customers. But yeah, so a model that's a little bit separated. But technology now is all together. There has been a movement at the bank to bring more stakeholders working side by side, and a lot of people that I speak with talked about, you know, it's no longer engineering working over here. You know, the designers are over here, and they talk to each other when they can, is it a little bit more of a joint effort and everyone's sort of mood, sitting and moving and working together? And the, you know, Unknown Speaker 23:30 jobs to be done or whatever, you know, you want to call it that type of construct. Unknown Speaker 23:34 Yeah, that that's been our way of doing things from the beginning, I think, you know, we started this journey, while I started on this journey at the bank, and in the summer of 2016. That sort of integrated agile model is has always been part of has always been part of our structure. So security risk, DevOps, design, engineering, agile practitioners, business owners, everybody has been together working on these, these digital programs to get together. So I, I can't speak to it before I arrived. But it was certainly the model when I did arrive that, that we needed to do all of this work together, actually. And that that includes traditional core banking systems as well. Those teams when we were all in the office, those teams largely sat together, presuming that they were creating the same type of work. But yeah, so whether it's risk or security or business and marketing, agile, agile coaches, developers, designers, product managers, everybody all in the same room, pulling the same way. Unknown Speaker 24:44 Cool. So um, as I mentioned, during your introduction, you have experience in a lot of different industries, from education, to media to now finance obviously, what can financial services take away from other industries, specifically when it comes to automation that you've seen in your career Unknown Speaker 25:01 Well, in financial services, it's pretty, pretty interesting. You know, the transformation around technology probably started in the late 1950s. Right? With with big iron. And so in many ways, I would say, you know, financial services have been ahead of the curve for for nearly 50 years. But but certainly now I would say what we look to is the large technology companies, Brian Porter, our CEO says, you know, we're a technology company that happens to be in the business of financial services. Not necessarily for my previous gigs in different industries, but but largely in my technology career. I think what we're looking to really as the Northstar the for large global technology companies that do a rather incredible job of providing performance services, that are meeting customers expectations in real time, it's on financial services and our bank to to mimic that a little bit in terms of the speed and cadence in which we produce our products for our customers. And so we really look to you know, we we look to the you know, Google for different reasons, Google shapes, Apple and Amazon, as highly performance systems that do subtly different things for their customers when we take an amalgamation of those things, to do what's right for ours. Unknown Speaker 26:21 I remember, when we previously spoke with you at our conference last year, I remember you saying that, you know, it's not just the big tech companies that you're competing with, for tech talent and for engineering talent. Every company essentially needs these people, whether it's Yeah, I think the example you use was Sherwin Williams, like they're gonna need engineers and designers as well. Can you expand on that? And kind of maybe explain what you meant by that, and maybe talk about how it how that would be relevant to the field of automation? Unknown Speaker 26:50 Yeah, you know, certainly as as we're progressing through our own journey of maturity, in technological attunement and growth at the bank of Nova Scotia, what we're also finding obviously, is that all the other technology companies are looking to do the same thing. And and many companies that maybe were a little bit behind the curve, are looking to take the the learnings that that we have put in place and to accelerate them. And there, there is an argument to be made, I would say that if you come in a little bit late, you can move faster and spend less money. And so there have been plenty of companies, whether it's the Sherwin Williams of the world, or, you know, logistics companies that are that are out there that are that are looking to transform their own organizations using many of the principles that we're talking about today. And so, you know, you know, smart automation and smart decision making takes a couple of forms. The first is, is how do you give real time interactions to your customer that really meet their expectations, make them happy. But there's a second part of this too, which I think all all companies are looking to do. And that is that we got to drop our cost structure. Everybody is feeling that odd automating processes and making them more real time cuts the cost at a commensurate rate. And so those two factors, in particular touch on most businesses, that that that we run into, whether it's a small business, here in Toronto, large technology companies that are here, including the banks, we're all now competing for the for the same talent, there's no question of that. Whereas, you know, just four years ago, I would say we were trying to pull from big technology companies. But But now most of the banks, most of the technology companies all the way to the FinTech ecosystem, and maybe even some of the companies that that we're pulling up the rear a little bit, we're all competing for the same talent in these areas. Unknown Speaker 28:42 So when people think of the customer journey, or at least maybe this is just me, but when I think of the customer journey, you know, I often imagine like front facing technology. Um, can you talk a little bit? How does back office automation enhance the customer journey? And I know you've touched on this a little bit throughout the talk. Yeah, maybe just dive into that a little bit? Unknown Speaker 29:02 Yeah, I'll go. I'll give you an example. You know, when, at the at the kickoff of our discussion here, we talked a little bit about how the bank's own transformation journey with technology goes all the way back to the 1960s. You know, some of those core banking platforms very, very well designed, very sturdy, not real time. And, and so how do you take some of those elements where you're looking to pass a transaction through the that by design was set up to take, you know, 48 to 72 hours for lots of really good reasons, whether that's risk or security? How do we how do you compress that to as real time as as possible? The reality is that some of the some of the hardware and software that are running on those systems there, they're very purposefully not real time. And so to be able to cut through kind of a vertical sliver of a customer interaction which is very close to real time to a back end. Often a system that has a very purposeful lag. And getting that as close to real time as possible is a constant bit of tension. And so what we really are trying to look at is how we can get the back office or core banking systems as close to real time as possible, while still being safe. And so obviously, there's a tremendous amount of costs, it cost savings with that, the faster that you can get to real time, actually, there are some advantages in terms of the security and the risks that you can give the lag itself presents its own issues. But really, we're trying always for for a healthy balance, the back office systems certainly need to be accelerated, we're doing that. And we're meeting our customers expectations as a byproduct of that for sure. Unknown Speaker 30:49 What goes into choosing technology partners for these automation projects? I know I'm, I'm sure there's probably a pretty serious vetting initiative that happens there. But what's that process? Like? Unknown Speaker 30:59 Yeah, um, you know, a big a big part of our world is making sure that we're working with, with regulators, and you have to be able to audit all of these services, they're their partners, that they will not submit to, to auditing from state countrywide, municipal governments, we just can't partner with them. And so whether it's cloud on one side, all the way to application development on the other, the risk profile of those partnerships is critically important. As well as their ability to be auditable as a really good partner. And so we make decisions all the time, where maybe it needs to be a little bit slower, the organization needs to be a little bit larger, that we're partnering with. And the processes are a little bit more mature, so that we can meet the expectations of our regulators. And by the way, I'm not putting this just on our regulators, there's no reason there's a good reason that banking regulators do this type of work. And that is really to protect our citizens and our customers. And so we make we make decisions all the time, based on the that criteria. And and that constraint, very purposefully. Unknown Speaker 32:15 Is is your your position as a massive Canadian bank that has a lot of business internationally, both probably in the states and all over. Does that? How does that sort of affect your views, these regulatory hurdles that you guys have to clear? Unknown Speaker 32:30 Yeah, wherever you do business, you know, the toughest regulations have to be followed for everybody. And, and so where we do business in the United States, where we do business in Canada, where we do business in Chile, whether it's the ownership of the rights around data, or whether it's a regulatory function, you know, a federal regulatory function, we basically take the toughest regulation, and we push it out across the board. And so that, you know, that comes at a cost of, you know, I said the word constraint before, but it's very purposeful. So wherever we do business, the challenge, I would say, is that we have to make sure that that we're serving all of our customers at the same level of support at the same level of security and risk as the others. And so you know, we do business and a lot, a lot of countries. We're the leading bank in the Americas. And as a function of that, though, that we have to be, we have to be very careful. And so wherever we have a regulatory function, any of the countries we we use kind of a hub and spoke model to be able to make sure that we support our customers and the other countries just as well as we do there. One thing I wanted to ask while I had you because I saw this news recently was the launch of Scotia advice plus the sort of the new self guided financial planning tool that that Scotiabank launched, I believe it was in September. Yep. I was wondering if you could talk a little bit about sort of the amount of like human intervention that's involved there versus like, you know, automated investing advice and just where on the spectrum of like robo advisor versus human advisor, advice plus sort of biz model? Yeah, um, you know, I don't I don't want to say on the channel too much, but we certainly we certainly, there's no, there's no limit. We're not we're not gonna, yeah, after a certain number. You know, this. I think we have a tremendous opportunity through high tech and high touch to deliver wonderful omni channel experiences and advice plus is really about leveraging our fantastic employees to deliver great customer experiences directly. And so, first and foremost, it's people empowering people empowered and amplified through technology. But it's, it's really, you know, we still believe in the value very highly of the You have face to face interactions with our customers. And so we, through the pandemic had over 90% of our branches open, safely delivering really, really great customer service and support and advisory work to our customers. Digital is a part of that strategy. So the strategy is Scotiabank, through supporting our customers through technology. But the orientation is is still around plenty of really fantastic face to face interactions, utilizing the technology as a tool to be able to do it just that much better. But it's not a replacement. So in terms of Robo, it's not really part of the discussion. I mean, it's it's a facet, but it certainly is not the primary orientation Unknown Speaker 35:48 is there is Robo advising, is it just not personal enough for for the complex needs of your clients. And is that is it just that you feel that it doesn't reach the the same complexity and the nuance is that kind of why you decided to go with human advisors in this instance? Unknown Speaker 36:04 Well, we we've been doing this for almost almost last hundred 90 years, right. And so when when Robo provides, you know, so support for our customers, we employ it when technology and digital does the same same deal, we put it in the field, but we have over 90,000 Scotia bankers that have been trained to support our customers, we're really just trying to enable those interactions to be as efficient as possible. And so you know, they're they're not replacements for you know, Robo and digital is not a replacement for a face to face interaction when you want it. I for my own experiences in particular, I've recently redone my mortgage, there's there's a there's a part of that, that you can do remotely, there's a part of that, that I still find a little bit scary that I like nothing more than to communicate face to face, if possible, use the tools with the person who can guide me in. Same thing with the car loan, and then their their other interactions that would be rather silly to to go into a branch, there is no real reason to have to go in and do bill payments at a branch anymore. Or or transfers. Those are done very efficiently through the tools and readily in their hand, their phone, laptop, anything else. But I think for a lot of interactions, you know, a high touch element. And that's really what our our advice work is that you just mentioned. It's really a focus on utilizing these these great Scotia bankers on the behalf of our customers and giving them the tools to be able to do that work just that much better. Unknown Speaker 37:46 Fantastic. Well, Shawn, this has been a great conversation. I really appreciate you sharing this with us. Thank you so much for joining us today. Unknown Speaker 37:53 Yeah, thank you. And thanks to everybody who's listening today. I totally appreciate it. Yeah, yeah, we'd love to thank all the attendees for joining us as well. We really hope you enjoyed the first ever banking automation summit, and we hope to see you next year. [/toggle]

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