Digital and Innovation

Banking Brief:
Shock to the system

6 minute read

The global pandemic has reinforced the need for businesses to be ‘shock-ready’. But where does the bank fit into this brave new world? Jamie Broadbent, Head of Digital and Innovation at RBS International, shares his thoughts.

No one in the banking sector is unused to disruption – the past decade has seen more seismic change than perhaps at any other time in history. But the current coronavirus crisis has intensified the sense that banks are facing extraordinary upheaval not in the way they develop products and services, but also in how they fit into the broader business ecosystem.

Jamie Broadbent, head of digital and innovation at RBS International, has spent the past few years working at the bank to help develop plans for this brave new world, where blockchain, open banking, emerging challenger banks and the growing muscle of the fintech sector have created a sense of disruption that few have seen before. Creating a ‘shock-ready’ business has been a full-time job.

Broadbent was speaking at the second RBS International banking brief session, a series of online webinars covering a range of core topics, from the economic impact of the pandemic through to the need to engage customers as new technology threatens to erode some of the sector’s long-established norms.

And while the intensity and scope of the disruption were already presenting a challenge, the global pandemic has made his job that bit harder. “I like to steal a line from the great philosopher Mike Tyson, who memorably said that: ‘Everyone has a plan until they get punched in the face,’” Broadbent said.

Facing the future

The current crisis, he said, represented not only a challenge to banks but also an opportunity to focus in on how customer needs have changed – and how they will continue to evolve.

He said: “50% of my day job is spent planning for the future, and while we came into 2020 with lots of plans, the year delivered a blow, the impact of which no one could have predicted.”

The pandemic has had a marked effect on the use of cash, the suspension of face-to-face interaction and a whole set of concerns for clients grappling with unprecedented uncertainty.

However, rather than trying to predict and plan for every possible scenario, the ‘shock-ready’ business focuses on instilling a sense of agility – so that if the unexpected does arise, the company is ready to adapt swiftly and meet whatever challenge appears.

“Our challenge has been to fundamentally change the way we operate as an international bank, while at the same time still servicing a global client base that is also undergoing that level of disruption,” Broadbent said.

That has led to some interesting changes, he observed, as traditional methods, boundaries and hierarchies have all been challenged. “We’ve had to put the right people around the right problems and empowered them to make important decisions,” Broadbent said, pointing to the fact that simply aiming to return to ‘business as usual’ is unlikely to equip any firm with the necessary tools to survive.

“So as we move through the crisis, the big question for us as a bank is this: how do you take all those new innovative ways of working, and the rapid-response mindset that we’ve had to employ, retain it and make it part of the way you work going forward?”

“How do you take all those new innovative ways of working, and the rapid response mindset that we’ve had to employ, retain it and make it part of the way you work going forward?”

Jamie Broadbent, head of digital and innovation, RBS International

The new normal

As the economy begins to unlock and various operations creak back into life, for many businesses the emphasis will fall on developing a recovery strategy. But where will their bank fit into that? Do businesses really see their banks as partners in their success or simply a passive provider of sometimes opaque services? For Broadbent, tackling this perception will be the next big challenge.

And while there are few businesses that would put banking at the top of the list of their favourite admin tasks, that is something Broadbent believes can change. “Most people see banking as a chore, and I often think about the statistic that 71% of millennials would rather go to the dentist than interact with a bank,” he said.

“But we all want to have a better relationship with money. So the future customer experience will see banks stepping into this role to help individuals, families and businesses to really thrive by improving their relationship with money. And that happens through the delivery of transparent, easy-to-understand financial products and services, which removes friction and effort that we associate with banking – and allows people to get on with living the lives they want to as financial services are taken care of in the background.

"So the height of our innovation won’t be through offering shiny new things all the time, but instead it will be the simplicity of the services that we can offer our clients and the added value we can offer them as a consequence.”

What's the problem?

Those services are set to increase in both scope, scale and specificity as digital technology continues to drive much of what customers want. And Broadbent said that banks must not only invest time and money in new technology, but also invest time in identifying exactly what pain points currently affect their customers.

“Banks have always run listening programmes, but it’s fair to say we’ve not always heard what people have told us,” he admitted. “But this has been a timely wake-up call to all of us to focus on what’s important. And that is doubly true of banks – we haven’t gone far enough or fast enough to respond to what people need. So we need to work closely with clients to understand exactly what they need.”

Central to that is retaining a human face in a digitally led bank. “We need to build seamless and connected digital experiences but make sure we can connect with people and treat them as individuals,” Broadbent admitted. And while challenger banks are redefining some of the digital tools and channels that can really impact on customer experience, the need for a human face will never go away.

Dialogue and customer engagement was already central to the RBS International journey even before coronavirus led to such widespread dislocation, and Broadbent said the crisis had only intensified the need for that. “That means connecting with customers, and we’ll achieve that through constant testing and learning,” he added.

“We want to deliver value quickly and ask [customers] how it works for them and what we can do better – and we have a standing invitation to all our clients to work with us to make sure we get that balance right.”

 

By Christian Doherty