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The approach has proved highly effective — and rapid. By 2017, Ibercaja had lifted the share of transactions using its digital channels to 43% (up from 22% in 2015) — a figure that continues to rise steeply, says Hermida.
Ibercaja is now in a second phase of transformation that will run to 2020. While continuing to enhance internal workplace models and applications and its customer-facing channels, the bank is modernizing all of its commercial and marketing processes, and all the applications behind those. “We are digitalizing the whole value chain, from the first contact point onwards,” says Hermida. That also involves getting to know its customers — and its own operational activities — a lot better through advanced data analytics capabilities.
Vital role of partnerships
As well as retraining and retooling many of its 5,500 employees to support its digital transformation, Ibercaja has relied heavily on its close partnerships with technology suppliers. “As a midsized bank, we use partners to complement our internal resources. We have very good people but we don’t have a large IT department or the capabilities to do everything we need to do ourselves,” says Hermida.
“Partners are helping us to modernize our operating model. They help us challenge our approaches and move forward,” he says. That includes exposing the bank’s teams to advanced technologies and Agile ways of working. “It moves people out of their comfort zone, which can be tough,” says Hermida, “but it’s working.”
He cites Ibercaja’s longstanding collaboration with global ICT company Fujitsu — a close relationship that has matured over 14 years. The partnership began with a focus on mainframe technology and data centers — infrastructure that is still central to the bank’s operations and the subject of a modernization program. But the collaboration extends to the bank’s ATM network (also in the process of renewal designed to create a unified customer experience) and in-branch applications and terminals.
Ecosystems for the future
Behind such activity is a keen perception that the world of financial services needs to change so it can participate in wider commercial ecosystems. “We must be able to add our services into other value chains or include other services from different industries in our value chain,” says Hermida.
Banks need to focus on customers’ needs — and that may not mean a financial service. “Ultimately, the customer is not really that interested in a banking service such as making a payment; they are interested in buying something. If you focus the experience on making a payment you are missing the whole point,” he says. “For example, we traditionally concentrate on improving the experience of applying for a mortgage. But the real interest for the customer is buying a house, not applying for the mortgage. So we need to expand our outlook to other ecosystems and value chains that fulfill the real customer need.”
That might translate into the bank collaborating with e-commerce marketplaces that incorporate its services — with the customer’s identity verification, creditworthiness and financing handled by the bank. Or it might see the customer able to access an e-marketplace, such as a car purchase, directly from a banking app.
Customers increasingly expect their needs to be fulfilled through a single set of joined-up services — services that inevitably come from an aggregation of companies. “Already many major players are evolving to create such ecosystems. And it’s the way we need to evolve — not just in banking services but broader services too,” says Hermida.
• Leandro Hermida was a speaker at Fujitsu Forum Munich 2018
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