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Digital and mobile technologies are revolutionizing financial services and elevating customers’ expectations. But, as one of Belgium’s biggest banks is proving, meeting those new requirements means treating digital as much more than ‘just another channel.’
There’s a growing realization among businesses that ‘digital transformation’ has to mean what it says. In other words, if you’re introducing digital technology into an organization, it’s unlikely to give you the agility and competitive edge you’re seeking unless you focus on its true potential to transform the way your organization works – both in terms of your internal processes and how you engage with your partners and customers. One company that has understood this better than many is Belfius, the third largest bank in Belgium with around 1,000 branches across the country.
“Our core businesses are increasingly being attacked by new entrants so it’s essential we can embrace new business models,” says Belfius COO Olivier Onclin. To this end, he believes digital technology is a game-changer. Six years ago, the bank adopted a ‘mobile first’ strategy and today it has around 1 million active mobile customers. “That’s huge in terms of pickup speed and has really outstripped our expectations. But mobile is not merely a transactional channel. It has grown to be one of our most important sales channels as well. In terms of day-to-day banking products, we now attain about 30%-50% of our sales though our mobile channel,” he says.
So how has this bricks-and-mortar banking giant managed to fend off upstart digital challengers so effectively? Essentially, it has done so by realizing that simply offering customers a mobile ‘front end’ to services — as many established banks have done — was not good enough. “Becoming digital means becoming digital end-to-end,” Onclin says. “It became a kind of religion for us. We decided we would only transform certain processes if we could make them wholly digital.” And that, he adds, meant a war on paper. “End-to-end digital means you have to become 100% paperless.”
Digital as a differentiator
Traditionally, opening accounts or signing up for other financial products required customers to formally sign documents manually, even if the rest of the question-answering and form-filling could be done digitally. “We decided that customers had to be able to activate all basic banking and insurance products via digital and mobile channels. If you make a digital promise to clients, and then direct them to a physical channel to complete the transaction when they try to sign up for a product, many will drop out of the process,” says Onclin.
Previously, the bank’s hands were tied by Belgium law, which did not accept the validity of digital signatures on legally binding documents. However, thanks to the evolution of secure digital signature technology, the legal impediments have been overcome and in January 2017 Belfius became the first Belgian bank to let customers open a current account directly from their mobile.
Secure digital signatures
For Belfius, the key was a novel technology from global ICT company Fujitsu. Its Sign’IT software captures not just the image of a handwritten signature, but information such as the speed at which the signatory moves their pen, at what angle they hold it, and how much pressure they apply to each segment of the signature. This results in a highly secure — and legally acceptable — biometric signature, which is embedded into the bank account opening form and cannot be altered.
When a customer has to sign a document subsequently, they simply ‘sign’ their smartphone’s screen and this is verified in real time against the secure, stored signature information. Cédric Jadoul, application services portfolio manager for Fujitsu Belgium, says: “Although handwritten signatures are still the most popular technique — and often a legal requirement in the financial industry — printing paper copies of documents just to sign them is a waste of environmental resources, time and money. The future of banking is largely digital and the signature process must reflect this. Electronic signatures are a highly secure way to validate documents and business agreements, almost impossible to fake, and very user-friendly. Unlike passwords, a signature cannot be stolen or forgotten.”
Onclin says the technology was fundamental to Belfius’s digital transformation. “For us, Sign’IT was the enabler for a totally digital customer on-boarding process. Customer on-boarding can take up to one hour if you go to a branch, and most digital experiences in the market today take 15-30 minutes of form-filling. Now we can do it in less than five minutes. And it has clearly had an impact — since integrating this capability, our conversion rate has increased by 50%,” he says.
In addition, legislative changes have introduced more possibilities to create novel services that depend on the ability to securely sign documents digitally and remotely. “As a result, we are now considering implementing Sign’IT technology for other products, applications and other processes,” he adds.
With one of the major technical obstacles to end-to-end digital banking cleared, Belfius has been able to pursue true digital transformation in earnest, overhauling its processes so that previously separate channels are integrated for customers into a truly seamless, omnichannel experience. “You cannot expect clients to accept that when they walk into a branch after running a product pricing calculator on your mobile channel, for example, that your employees in the branch wouldn’t be aware of that fact. So, we made sure that every channel instantly knows everything about clients’ interactions with the bank, irrespective of where and how those interactions occurred. It’s critical to take a holistic approach like this because, ultimately, your success relies on the experience and convenience you create for your customers,” says Onclin.
Changing culture is key to success
Such an approach involves much more than just technology. “It requires huge change in terms of people. You need to put a lot of effort and resources into ensuring your workforce is capable of making this transformation possible,” says Onclin. “And since it’s not realistic to replace your whole workforce with digital natives, that means putting significant efforts and resources into reskilling.”
Belfius initiated a wide-ranging education program to bring employees up to speed with digital. “That is a heavy investment but it pays off in the end,” says Onclin. And the most significant changes that staff need to take on board are cultural, not technological — most notably, the ability to step outside the old ‘silo’ mentality and embrace a world of open collaboration. “That spirit of collaboration needs to thrive inside your organization,” he says.
People in the organization also need to be encouraged to embrace a more experimental attitude – so they’re confident to try out new ideas, even when they know there is a risk these might fail. Without such a culture, your organization will struggle to try anything new, and in a world of accelerating change and competition the biggest risk isn’t failure, it’s standing still. “A lot of people talk about the principle of ‘failing fast’, but you actually need to adopt it and champion it. Too many businesses pay lip service to the concept without really accepting it,” says Onclin.
But the importance of these changes means they must have the active support of senior management. “All digital transformation projects should be carried and supported by top-level management because otherwise you cannot drive such a fundamental level of change across the company,” says Onclin.
Scaling new heights through co-creation
The cultural transformation isn’t just about encouraging internal innovation. The borderless nature of digital gives companies new opportunities to extend that collaboration to a growing network of partners and stakeholders in order to create and exploit innovative market opportunities that simply wouldn’t be possible alone.
In other words, collaboration needs to be based on ‘co-creation’ through genuine and deep technology partnerships. Onclin says: “Co-creation is key. We cannot be the smartest and the best at everything, so we need to combine competencies in the market. The way we collaborate today with our partners such as Fujitsu is a major change from traditional vendor-client relationships. Now we co-work in the same space and approach things as one team — indeed, it’s sometimes hard to tell whether someone’s working for us or one of our partners,” says Onclin.
Dave De Graeve, account director at Fujitsu Belgium, says: “Our co-creation project with Belfius is a great example of the Fujitsu Digital Co-creation strategy in action. We have a long-term partnership with the company that started with IT infrastructure, and we’re happy to be expanding that as we support the company’s digital transformation.”
While digital transformation at Belfius has clearly boosted its business today, the progress made by the bank to date has also opened up new avenues for it to explore in future, including thinking about entirely new business models. “For example, we are exploring the possibility of developing our own technological assets into new products and selling them outside Belgium,” Onclin says.
None of this would have been possible without the ability to work 100% digitally, collaborate freely, experiment with confidence and work with partners to co-create new products and services. Belfius’s transformation has greatly expanded the range of possibilities open to the business, and is helping it to thrive in the digital era. And with challengers increasingly snapping at the heels of established banks, those that still aren’t taking full advantage of today’s digital opportunities would do well to heed its example.
• Olivier Onclin was a keynote speaker at Fujitsu Forum 2017 in Munich
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