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Why online means the end of IT as we know it

October 22, 2013 Leave a comment

If you work for any fast growing company these days it’s highly likely that enabling customers to access your products and services through online is a key plank in your company’s strategy and success.

Which, in an age of mass technology consumerism, probably also means that your company has a technology-enabled workforce to support your customers. And your Information Technology department has a dual focus of supporting the enterprise as well as an external focus in creating great digital customer experiences.

And what I’ve firmly come to believe is that this situation of having the most technologically-skilled part of your workforce getting it both ways is bad for your IT department and bad for your business.

If you look back this wasn’t the nature of IT departments when IT departments originated back in the  60s and 70s. Your original IT department was born out of the teams of skilled technicians who made the telephone network in your organisation work; kept the fax machines humming and were the team responsible for grappling with the implication of the 4004 microprocessor post 1971.

But because most companies weren’t technology-focused, IT weren’t part of the “business” as we’d recognise “the business” now. They were the electrical engineers who kept the lights on and spent their days ensuring the workforce could communicate and share information as efficiently as possible. They would never, or rarely, deal with the needs of external customers.

With the dawning of the internet and the growth of digital businesses in the 80s and 90s it suddenly occurred to businesses that these backroom guys were also the ones who were also able to code web pages; build servers and were suddenly essential to digitally enablement. IT’s role was now about building internet experiences and more for your external customers and also keeping the phones and fax machines running.

So the technology guys suddenly became absolutely key to business strategies and the customer experience. For technology companies founded in the 1970s like Apple, Microsoft the IT department was the business. To work for one of these companies you obviously needed to understand technology – but equally obviously your customer needs as well. These technology companies, so familiar now, changed the face of business and IT forever.

Amazon is a company founded in the mid 1980s and whose success is purely due to embracing the new paradigm from the get go. This was an IT department selling books to the world who then ended up selling IT to the world. Their CEO Jeff Bezos came from Wall Street but was, and is, intensely customer focused.

He once said: “I’ve always been at the intersection of computers and whatever they can revolutionize.
True to his words Bezos created a company that didn’t separate the IT department from the business, its IT department was its business.

And Amazon’s success should be a template for all companies worth their salt these days – and for most digital start-ups this is the case. The techies aren’t in the basement cooking up the medicine – they’re in customer-facing delivery teams working alongside the product and marketing teams.

The focus of an IT department should be not just on satisfying internal customers. They need to be part of the business (if not the business) that’s working to satisfy the customers who buy your products and services. Drag them out of the basement and get them in front of real customers.

In the companies I’ve worked for in the last 10 years (Orange; Telecom NZ and Kiwibank) I’ve experienced both ends of the spectrum as the pendulum has swung between IT teams being integrated or not integrated into business units. In that time the most success I have seen is when IT hasn’t been IT, but been driving the business from the front. And that’s why many companies, including my own, are embracing Agile software development and delivery.

That’s great for external customers – and internal staff too:

Google CIO Ben Fried: “I see a lot of CIOs spending a lot of time — which is very important to do — on major business initiatives. But I often see an inadequate amount of time spent where the day-to-day, most frequent touchpoints are, which is with all the other ways the people in the company are their users. One of the big changes that has come with the mass consumerization of technology is that IT needs to flip that around a little and spend more time focusing on the overall employee experience.” There’s more from him here.

With online being a key strategy for all large businesses I believe the pendulum is now stuck and the era of large IT departments is over. IT is our business.

Banks, big data and doing the right thing

July 21, 2013 Leave a comment

How comfortable are we about our banks mining personal data?

Banks around the world are wrestling with the complexity and the opportunity around big data as a way to deepen their relationship with customers online.

According to a study earlier this month by Infosys nine out of 10 people would be happy sharing some data with their bank if they received more customisable offers or experiences.

The study compared consumers attitudes to sharing data with retailers, banks and doctors and, probably predictably, banks came out as slightly behind the other two sectors when it came to data trades.

However, despite the finding above the study clearly shows consumers are in some conflict over the benefits and drawbacks of banks using big data.

Almost half  (49%) also say they do not want their purchase and transaction data used to offer new services based on their habits but, almost in the same breath, 48% of bank customers would be happy for the bank to use email or social media to provide them with updates or insights.

The study also finds consumers are more concerned with their account security. Around four fifths (82%) want their banks and financial providers to mine their data to detect anomalies from identity thieves, with the same amount (82%) expecting their banks to already be doing this.”

It is such an important issue that just over three quarters (76%) agree that they would consider changing banks if one offered assurances that their data and money would be safer in their systems.

Financial services futurist – and co-founder of MovenScott Bales has an interesting theory that following Edward Snowden’s revelations the strength of feeling around how our data is used could create a new social and political movement around transparency.

Digital natives will come to demand complete transparency on how their data is being used not just by governments, but by corporates as well.

He says: “The reality of the modern world is that if your doing something wrong behind closed doors. The Facebook Generation will find out,  they will share what your doing, and you will be held accountable.”

The Infosys study shows consumers expect better deals from retailers in return for sharing personal information and better attention from their doctor’s office for a similar trade. But banks don’t have a great track record in utilising what they know about the customer: e.g. “Would you like insurance with that?”

Post-GFC, trust in banks generally is going to take some time to recover – particularly in Europe and the US where bank failures have destroyed consumer confidence. One UK survey predicts it will take a generation before banks are trusted again.

How banks use big data to interact with their customers online (and by online I really mean mobile) in the next few years is going to be critical to the relevance of banking and the securing of trust in the minds of a new generation of customers.

There is an amazing opportunity for banks to use the data opportunity to transform their customers online experiences for the better. Instead of going down the retail route of using the data just to flog more products what if banks decided their focus would be purely on using insight to create ways to make customers richer; safer and happier?

But above all there is an incredible opportunity for banking to use big data in a way that embraces openness. That combination of deep insight and transparency could be the difference between banks continuing to be relevant to a new generation of consumers. Or not.

Flabby finances and fit bodies

April 15, 2013 3 comments

You would think personal finance management – the art of managing your money and achieving goals – would be the easiest thing to provide an online solution for.

That was certainly the thinking three or four years ago when every bank worth its salt started developing online tools that allowed customers to get a rich and useful picture of their overall finances – Kiwibank’s Heaps is an example.

heaps logo

Heaps! personal finance management

I mean it makes perfect logical sense – every bank has a wealth of transactional information that, when packaged right, can provide a huge amount of insight into where a customer’s money is going and also through automation take out all the hard work of having to manually pull together a budget.

This was the topic of a great cubicle conversation with one of my colleagues this week. D and I have been working together for the past five years on a number of major online projects – including online personal finance management.

Now D is probably one of the fittest and strongest men I know as he puts his body through a regular gym/cross fitness regime every week – and has done so as long as I’ve been working with him. His physical and mental discipline have given him a toned and hard-muscled body that would put most of us to shame. That’s his thing and even through major life interventions such as children, injury, work pressure he has kept at the training and never stopped.

My thing is Aikido. I’ve been training three times a week for as long as D and I have been working together – so it’s a good common bond that can set off some good conversations about the physical and mental sacrifices and rewards you get from long-term, dedication to doing something positive with your body.

And that’s how we got to talking about the similarities between personal finance management and physical body management – whether that be the cross-training gym, the dojo or even an organisation like Weightwatchers or Jenny Craig.

“Never be too rich…”

I don’t think there’s one person I know who wouldn’t have just a little sympathy for Wallace Simpson’s notorious quote that: “One can’t be too rich or too thin”.  By that I mean probably 95% of us would love to be a few kilograms lighter and a few thousand dollars richer. Not obsessively thinner or richer – just in control of both.

The trouble is 95 per cent of people who attempt to lose weight fail. This year it’s estimated in the US  100 million people are dieting trying to achieve the latter part of Mrs Simpson’s edict. It’s a billion dollar industry but for most it is a cyclical pattern of joining a gym or weight-loss program in January and abandonment sometime after.

With trying to get your finances into shape it’s a similar pattern – even with tools that take out all the hard work. Some people do stick at it religiously – but they are the people who were running a budget on a spreadsheet before they got these great online tools.

Finance writer Amanda Morrall says the trick is not to treat personal finances as something separate from the rest of your life. In her latest book Money Matters: Get Your Life and $$$ Sorted, Morrall looks at how average people, with ordinary  jobs, have achieved financial management, and indeed wealth, through actually connecting with their true selves. It’s a powerful insight and a great book that combines solutions with motivating tips to get people living the life they should be living.

A quote in the book has been resounding in my head since reading it. Morrall quotes the Dalai Lama responding to a question about what surprised him most about humanity:

“Man. Because he sacrifices his health in order to make money. Then he sacrifices his money to recuperate his health. And then he is so anxious about the future that he does not enjoy the present; the result being that he does not live in the present or the future; he lives as if he is never going to die; and then dies having never really lived.”

I think that describes too many of us.

Common link

But back to my cubicle conversation with D. After a bit we found a common link between building physical strength and muscle; mastering a martial art; losing weight and keeping it off or spending less than you earn and building wealth. What’s the secret?

I think it’s a mixture of truly understanding what your life’s purpose is and, as Morrall writes, building your life around that. Otherwise you end up risking falling “into the trap of consumption where financial vampires are only too willing to take advantage of your vulnerability and exploit your financial weaknesses”.

Joining a gym or a dojo or a weightloss programme are pretty much in the same vein as opening up a tool like Heaps, Xero or Sorted. They are all capable of enabling a life-changing action – but only if they can be coupled with some internal motivation to make a life-changing action.

True it may only take one small step to begin the journey – and online can be a powerful source of sparks of inspiration – but the first step must be followed by many others heading in the same direction to get somewhere meaningful.

Creating personality online

March 28, 2013 Leave a comment

Kiwibank customers have been engaging with their Online Relationship Managers for a a year or so now.

Kiwibank ORM

Kiwibank Online Relationship Manager Becks on mobile

I have written about our unique online customer champions before and they also received a fair amount of media attention (for a banking innovation) when we put them into the Kiwibank mobile banking app on IOS and Android. And to cap off the publicity they won the 2012 NZ Innovators Award for Marketing and Communications late last year.

The rationale behind the Online Relationship Managers (or the Oh-Ar-Ems as they have become known at Kiwibank) was to reinvent the traditional personal banking relationship model for customers who are now more at home in a digital world rather than a bricks and mortar one. And, as most banks know, that’s a mobile digital world these days.

The good old days

The traditional, 20th Century-style relationship manager is someone you meet when you first join the bank at a branch somewhere in town. Most people meet them once and then probably won’t see them again until there’s a life-change moment requiring a lending or investment decision e.g. you need a bigger house; want to go on a trip; upgrade the car etc. This happens maybe every couple of years or so. If you’re like me you try and deal with bank relationship managers mostly by email – rather than sacrifice a lunchtime walking down to the branch and sitting in an office for an hour.

And if you get a good one the irony is you probably won’t have them very long because the bank, for good reasons, will probably promote them and they’ll be off become a branch manager somewhere else. With my first bank after coming back to New Zealand from the UK I had three relationship managers in four years. It didn’t bother me too much because I knew I was just another name in a very long list of customers and I tried to keep my dealings with them to emails, because it was easier for the few interactions I had.

The first was reasonably extrovert and bubbly late-20s early 30s woman and sorted out my mortgage; the next was sporty-looking late 30s-early 40s Kiwi bloke who during my set up for internet banking managed to misspell my log in name so I’ve had to misspell it ever since. Maybe not a biggie – and probably made it more secure – but I’ve still always felt that I’ve had to carry a small bank error with me in every online interaction.

The third was a down-to-earth 40-something proud Mum of two who nailed a “moment of truth” refinancing request at a critical time for me and my family. And she also gave me a humorous insight into how her bank set and communicated its interest rates by cheerily sharing with me some insider stories as she tapped away at her computer.

Good eggs each and every one of them – although as I only got to meet each of them once over that four year period I never felt we were that connected.

My banking rite of passage

My interactions with these relationship managers were very different from the first experience I can remember with a bank manager. I would have been about 11 or 12 and my father took me down to our bank branch in Ashburton as “it was about time you met the people at the bank”.  As we approached the glossy pale-wood varnished counter a female teller greeted Dad. Behind her a large man in a dark suit and tie appeared from out of an office and, with a very hale and hearty salutation, came from behind the counter and pumped Dad’s hand. Dad introduced me and said he “thought it was about time my son met the Bank” in a kind of jokey fashion.

The Bank Manager turned his full attention to me, looking me right in the eye and shaking my hand, my other hand clutching the cash to deposit. As my face grew redder as a result of this unrelenting adult attention – he told me how pleased he would be to look after my money over the years. He asked if I wanted to give over that money, I looked to Dad and he nodded approval of this action. I was then directed to the teller where I went through the process of handing over my cash and receiving a passbook with the cash translated into a single entry in blue pen, dated, stamped and signed. The teller explained that over time the bank would pay me interest on what money was in the account – so the more I put in (ie the less I spent on trips to Christchurch toy shops) the more money the bank would pay me.

As we left the bank I felt like I had been inducted through a rite of passage. I had been given an insight into an engine of society and met an engineer who managed that engine. He knew my Dad and now me – so I was now inextricably linked by more than just my passbook and some numbers in it. The Bank Manager knew my name and my face and even though I knew my humble finances were small in this scheme of things – they were now generating interest, both financial and personal. And therefore I was now a person of interest.

And as with many other experiences in life that was the glamour moment of banking for me. After that it was vanilla and in the background as banking became more and more commoditised. Like buying toothpaste or petrol – the only standout experience being Barclays in the UK who gave me a fantastic student package which made the difference during my university years. I stuck with them for 10 years after that before being seduced by a revolving home loan deal with a building society.

For most of us the bank managers of old, who knew you, your business and your family, and could exercise that personal touch at moments of truth have gone the way of the Moa and the Dodo. Their replacements, while decent people, aren’t set up by banks to be anything more than a pale comparison. And most of us don’t have the time or inclination to troop down to their office to engage – what’s the point if there’s no real personality to deal with. You might as well do an email.

Putting the personality back into personal banking

So what if you could have a real individual to look after your banking with all the convenience of online, to ensure your interaction with the bank was on your terms? That’s what we asked ourselves at Kiwibank and came up with the Online Relationship Managers – the relationship managers for 21st century banking but for all our online customers. They would turn the traditional model on its head by focusing on three key problems that came out of customer research :

1. I want to be treated as an individual;

2. I want the convenience of delegating my issues online:

3: I want to deal with one person

What was key was that the service experience had to embody the values of Kiwibank – Make It Easy, Do What’s Right, Raise The Bar and Go Further Together. To be a part of Kiwibank you really have to sign up to these – it’s the only place I’ve worked where they are not just lip-service.The hardest conversations we had in the project were about how we could ensure the Online Relationship Managers would live up to these values. In my opinion they are our Taonga and what make the difference in our service experience.

The easiest decision was to put the Online Relationship Managers onto our mobile app. The internet is now all about mobility and this suddenly meant customers now have a bank in the palm of their hand.

But at the heart of it,  our Online Relationship Managers are not about technology – it’s a service innovation by putting people into an internet banking environment that has been purely about transactional information in the past.

The reaction of customers has been fascinating. There have been two marriage requests; a few “fancy dinner?” invites; regular delight at being wished a happy birthday or Kiwibank anniversary date.

ORM FB comment 2

The most heart-warming was from a woman who needed help to finance a trip for a relative who was dying of cancer and whose problem was sorted out by their Online Relationship Manager.

Bill Gates once famously prophesised that society needed banking, but not necessarily banks. Banks that have looked to gain scale by automating and removing the human factor are living up to that statement. Banking has always been more than a ledger and without personality in the online environment, Bill Gates’ words are bang on.

The online customer advocacy revolution

February 8, 2012 Leave a comment

Two weeks back at work with annual planning time kicking off and it really feels like the year has well and truly underway. But I’ve still got a few hazy memories of our sunny Coromandel holiday and a couple of things from that have stuck in my mind: One was just how much better the weather is up there than windy, rainy Wellington; and the second was more related to my day job – and that was how much our family holiday relied on online.

Cathedral Cove, Coromandel

Sun kissed Coromandel beach

Just about every place we stayed in or ate at we had checked out via apps like Trip Advisor and based our decisions on user comments and reviews; I navigated the entire way with Google maps (it only led me slightly off track once near the Kaimai Range…); days out were governed by weather or tide updates; at Napier Aquarium we used an interactive video tour; and we even received updates on the how the cat and the rabbits were doing back home thanks to PetAngels.co.nz!

I could understand some thinking that the above list sounds a bit like technology overload on a holiday – but in fact it made our holiday one of the best ever.  None of it got in the way of tramping, sightseeing; snorkelling, swimming or just snoozing on the beach. Instead it was like travelling with a native of each place we visited – who knew all the best beaches, routes; restaurants; local history or holiday houses. Yeah, the weather helped too – and I haven’t found an app for recreating that in Wellington…

My holiday made me wonder – with the increasing adoption of smartphones – how long before this online advocacy becomes a truly mass-market activity. It doesn’t take much of a mental leap to move from trusting other vacationers about holidays to trusting bank, insurance, investor customers about what organisation has the best deal – or more importantly – who has the best service.

Online forums such as Trade Me are more and more asking questions like “Which is the best bank?” and people are making big decisions based on what others say. We have always asked others for advice but now online, particularly online in the palm of your hand, makes this so much easier and faster to get an aggregate view of an organisation or a brand.

Google now includes reviews and ratings in many search results – so an organisation can say what they like on their website, but their search results will contain the real truth that potential customers want to know. As the thought leader in banking innovation Brett King says: You can’t game this. It’s a massive challenge to traditional online marketing.

At Kiwibank we haven’t been idle while this online customer advocacy has been evolving. We’re out there engaging and supporting customers on Facebook and Twitter.

And we’ve also started rolling out our own online customer advocate – an Online Relationship Manager to customers.

Kiwibank Online Relationship Manager

Online Relationship Manager

The idea behind the Online Relationship Manager is to create a customer champion within the bank who combines the convenience of an internet service with the benefits of a real person – putting the person back into online personal banking.

The Online Relationship Manager is available through internet banking secure mail. They take the time to get to know and understand customers, and help them achieve their short and long-term goals. Contact is as hands on or off as customers wish.

The Online Relationship Manager has the authority to make things happen quickly. If they can’t help, they make the resources and expertise of Kiwibank specialists – such as in home loans and lending – available to meet the customer’s need.

The online customer advocacy revolution means the customer is in control now more than ever before. The risks for businesses that don’t get this are clear – but the opportunities to those who get it right are massive and exciting.