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Trinidad and Tobago Unit Trust Corporation, the Caribbean’s largest mutual fund company, has seen its significant share of the domestic mutual fund market become a prime target for global financial services firms. Chief Information Officer Warren Sookdar describes how a comprehensive digital transformation strategy is key to safeguarding its much-coveted heritage.
Few organizations have the kind of customer reach of Trinidad and Tobago’s Unit Trust Corporation (UTC). As at December 2019, an astonishing 41% or over 617,000 of the islands’ population of 1.3 million are unitholders — with almost every single household a UTC customer.
However, that presents a tantalizing target for others. As financial markets have been deregulated and online and mobile services have lured a younger generation, UTC’s traditional franchise has come under attack from international banks, insurance companies and other financial institutions that have sought to expand their offerings into mutual funds.
For UTC’s CIO, Warren Sookdar — and the rest of the UTC management team — the challenge of crafting a strategy to protect the Corporation’s unique and powerful position has been the number-one focus for the past five years. What they have concluded is that only through a comprehensive digital transformation that encompasses structural and cultural change, the application and integrations of a host of new technologies and targeting of customers can UTC be expected to retain — and even grow — its current market share.
Imperative for change
“We currently have a competitive advantage that has been sustained for over 37 years. And if we are going to continue to maintain that, we are going to have to operate by a new set of market dynamics,” says Sookdar.
That new competitive playbook is being defined by banks and insurance companies that have diversified and “started to compete directly in UTC’s back yard,” he says.
For UTC that realization is hardly new. The company started its transformational journey in 2015 and, given what’s at stake, is not easing up on the gas pedal any time soon.
“The new competitive situation has been before us for a long time. As a result, our belief has been that our entire methodology, thinking, strategic objective and way of doing business remains proactive and forward-looking, whilst, in a very pragmatic way, dealing with current market changes. We guard our competitive advantage with our lives,” says Sookdar.
“Unlike other financial institutions that may have a broad portfolio allowing them to draw on other business initiatives, this is our bread and butter,” he says — albeit one that generated annual revenues of TT$1.3 billion ($200m) in 2019 and had TT$22.6 billion ($3.4bn) in funds under management.
“Our belief was that we needed to disrupt ourselves, with the understanding that if we did this well, we could drive customer loyalty, reduce operating costs and increase profitability. But we also knew we didn’t have the luxury of time,” he says.
The starting date for that disruption was 2015, when UTC launched its 2020 Strategic Plan. The Plan focused on three elements of transformation: the integration of new digital technologies, the realignment of the organization to address the changing business landscape and the adoption of a much more targeted customer approach.
First up was a comprehensive analysis of the organization’s whole technology environment (undertaken by strategic partner Fujitsu) to determine whether it could support and enable the 2020 Strategic Plan. “The answer was a plain ‘no, it wouldn’t,’” says Sookdar. “But it showed us what we needed to ensure the way forward, what elements we needed to keep and what we needed to modernize.”
Trinidad and Tobago UTC headquarters
Facing years of constant change, success was going to be dependent on getting buy-in right across the organization. And that meant developing a company-wide understanding of the plan and why it was important.
“We are investing in new technology and taking strategic risks that create opportunities to drive the business forward. But with [the introduction of] a plethora of technology options, our teams have had to get ‘comfortable with being uncomfortable,’” he says.
Becoming a data-driven organization
One underpinning element of the strategy is to exploit data much more effectively to drive business decisions at all levels. But to do that UTC had to build confidence in the integrity of its data — not something that was universal back in 2016, says Sookdar. “We had to ensure that we had a well-structured, well-organized database from which we could launch our digital enterprise.”
Again the company looked to Fujitsu’s experts, who worked alongside UTC’s development and maintenance teams to undertake a data-cleansing project that was successfully completed in a year.
But that was just the foundation for a wider technology renewal program that, Sookdar says, was long overdue. “As a company, we were not doing the kind of progressive development of IT over the years which would have allowed us to stay current. So instead, we undertook a transformational exercise which is nothing short of revolutionary. We had to embrace a completely new suite of applications, while also modernizing some of the tried-and-tested elements of our legacy systems.”
That program included a new core banking solution (which is integrated with online and mobile solutions), new systems for portfolio management, financial management and reporting, supply chain management, customer relationship management (CRM), document management systems and data analytics.
A significant part of that — CRM, financial management, supply chain and several modules of the core banking system — is destined for the cloud. Today's mature cloud solutions presented some compelling opportunities, says Sookdar. “Our approach to business and our assessment of the competitive landscape holistically presented us with the opportunity to take a hard look at where we wanted to be in five to ten years, and we saw that cloud was the best option. It is going to provide us with the agility and the adaptability required in a fast-paced industry but it also speaks to our aim of changing [our cost base] from CapEx to OpEx. In the past we have been bound down by millions and millions of dollars in datacenter and business continuity costs, plus a whole factory of people to manage those. And that is not something that is core to business requirements.
Making a cultural shift
Despite the scale of the IT transformation, there's been no ‘big bang’ implementation. “The five-year program has been carried out in an intentionally staged and structured manner so that employees are not overwhelmed by the introduction of new systems, methodologies and processes all at once — an approach that has also provided space for them to receive suitable training along the way,” says Sookdar.
But he recognizes success is not just a question of implementation and the development of new technology skills. “We wanted teams to absorb and digest [the wider sense of] what we were trying to do, what we were trying to achieve here,” he says.
The transformation program requires major organizational and cultural changes. “Part of the 2020 Strategic Plan involved the realignment and, in some cases, redefinition of our organizational structure and several of its functions, all with a view to better serving the needs of our unitholders, our customers,” he says.
“That revised structure now allows UTC to streamline processes and to enhance resource allocation around the goal of being more customer-centric and customer-facing — at speed,” he explains.
But the challenge that can stop such a transformational initiative in its tracks is, above all, a culture of intransigency.
Sookdar doesn’t underestimate the scale of the task. “We’re going through a change of culture where the goal is to evolve into a digitally mature organization. But as part of that, education of all our stakeholders — internally and externally — is key.”
“One of the main challenges we have is that of resistance — by some team members and customers. They question why they should change behavior,” he says.
Warren Sookdar, CIO at Trinidad and Tobago UTC
“As the great [management theorist] Peter Drucker once said: ‘Culture eats strategy for lunch.’ No matter what strategy you have, if you don't change your culture, nothing is going to happen. You're going to get pushback, often from the areas you least expect. So education and culture change are both absolutely critical as our organizational culture will determine the speed at which this digital transformation can occur.
“Our team members are part of the changes and understand why they are happening. That eases the transition and brings team members into the decision-making process,” observes Sookdar. “When you give the team members a voice, they take ownership and show commitment to the new process.”
A parallel approach is being used when deploying changes in processes and applications in the customers environment. “Again, to bring them along with you, you have to bring them into the process and understand their needs. It’s arduous but it’s a vital part of how we intend to achieve success and maintain our market position,” says Sookdar.
“Partners for Life ”
That points to the third strand in UTC’s transformation program: targeting ‘a digitally empowered customer.’
“To set the organization apart, we need to provide a fundamentally better experience for the customer than our competitors do — and increasingly that means delivering services through the customer’s channel of choice, and aligned directly to their needs.
“We can no longer operate with a one-size-fits-all approach. We have different customers at different stages in their lives, with different investment requirements and different risk appetites,” he says. “To differentiate ourselves, our new applications and our new processes, we have to add value to each customer and each customer segment. Essentially, we want to be our unitholders’ Partners for Life.
“Paradoxically, we find that when we allow our customers to personalize their interfaces, it not only gives them control over their own investments and a greater sense of satisfaction, it also means they do much of the work [in managing their account],” he adds.
Embracing unitholders across the generations
Sookdar is conscious that as well as tailored solutions, customers increasingly want information and services when and where they need them — “especially the growing customer base of Gen Ys (fondly called millennials) and Gen Zs who are used to transacting their lives on their phones,” he says.
He expands on the theme: “We are very cognizant of the fact that there is an emerging younger demographic of millennials that we can engage more. It is essential that the systems we are building today provide the customer experience that they want and desire.
“The more mature (Gen X) and what we may call traditional savers already exist in UTC’s database. “We are preparing for the future, with a serious push into the Gen Y and Gen Z market — but that has, in many cases, been resident with us for some time,” says Sookdar.
He explains how. “Parents, grandparents, aunt and uncles have in the past opened accounts at the Unit Trust for their kids when they were born or at another early life stage, investing for things like university education, marriage, a first house. As such, by default, we have acquired a lot of millennials as customers.”
With such customers in mind, Sookdar already has his eye on some game-changing technologies that will propel the company further and faster.
“Artificial intelligence and robotics provide us with an excellent opportunity to remove manual and repetitive, mundane process that use up a lot of operational time and expense — but which are still prone to a lot of error. We have been looking at AI: we understand its value and its utility. And our agenda is to explore and implement [process automation] in 2021,” he says.
“But it is important that we get the key elements of our digital transformation strategy down first. “We have to look at our appetite for implementing change. We aren't a very large organization by international standards but with a major core operational system going in, [enhanced] online transactions and services such as our card management system, point-of-sale and ATM going to the cloud, it might be a little much to be overlaying AI and robotics on that at this stage.
“However, AI and robotics will round off a lot of what we’re doing, because we want to ensure that the whole suite of process reengineering and process reorganization takes place — and they are going to go a long way in ensuring that happens.
So what will UTC look like in five years’ time, from an internal and customer perspective?
“I envisage that the UTC of 2025 will be a wholly digital organization, providing a host of financial services not only to Trinidad and Tobago but to much of the rest of the Caribbean,” Sookdar predicts. “The realization of our digital ambition is going to give us the reach, attracting not just local people but regional and international investors drawn to the opportunity to interact with an organization that is leading edge in its use of the very latest in digital technology.
“Internally, I envisage an organization made up of digitally savvy, customer-centric, innovative and adaptable team members, enabled by products and services which enhance the effectiveness of the investment for our unitholders.”
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