Everyday banking is no longer confined to call centres and branch visits between 9am and 5pm. Business and individuals now bank on the move, on any device and at any time. Call centres have become multichannel contact centres; branches are becoming highly automated, creating greater focus on individual customer service.
Allied Irish Bank (AIB) now has over one million active online users, 578,000 mobile users with the average monthly logins continuing to increase. 53 percent of all credit card sales are now through online channels and 76 percent of personal loans applications are through digital channels.
AIB is at the forefront of this digital transformation in Ireland, whose capital city Dublin is rapidly being recognised as a booming European technology hub. And it is by leveraging global partner talent that AIB is growing its own capabilities, driven by the end goal of making the banking experience as seamless as possible for its customers.
Philip Thomas is AIB’s Group Chief Procurement Officer (CPO). Since joining the company, he has overseen the progress of the bank’s outsourcing strategy, finding the appropriate expertise within Ireland to take it to the next level.
“Companies like Google, Facebook, LinkedIn have all set up European centres here of substantial scale, while there is a strong population of excellent people in Ireland, there are huge demands pulling upon this talent,” Thomas says. “For example, Google probably has up to about 6,000 people now, so they, like others are attracting a lot of technology resources out of the market, with their strong social media brands. The shortage of resources is making it difficult for businesses to recruit technology talent in the local market.
“We decided that we needed to work with partners that could bring that talent to us in our market and that’s how the partnership ecosystem came about. But here lies one of the critical things in that part of the ecosystem, the fact that they had, or were willing to invest and establish delivery centres in Ireland to complement their global delivery capabilities. That was crucial.”
It was soon clear that to become more agile, reduce risk and align with changing patterns of consumer behaviour, AIB had to depart from a traditional in-house delivery model.
The first important partnership was actually formed before Thomas joined as CPO. HCL helped to overhaul legacy infrastructure and installed a new virtual desktop, compatible with mobile and tablets across the whole organisation, from head office to bank branches. “This provided some early learnings for us around the outsourcing world and allowed us to think about the longer term strategy,” comments Graham Fagan, Head of IT Partner Management.
With the HCL partnership successfully deployed, AIB set about establishing a partner eco-system to support the other areas of their technology operation and digital transformation, EY were engaged to support the complexities of creating the eco-system and establishing the operating model. AIB has entered into a number of similar relationships with partners that have all bore fruit.
“The first agreed in the first half of 2015, was with Wipro who provide strategic infrastructure management services. They have brought in their expertise and we are working with them to build agile and adaptive infrastructure while improving the predictability and cost effectiveness of our services,” Fagan explains. Wipro also supports critical payments infrastructure in ITO and are setting up a Mainframe Center of Excellence in Dublin.
AIB’s three other partners include Infosys, eir and Integrity 360. The latter handles the vital IT security function, while eir provides the communications requirements, from voice data to contact centre technology, optimising omni-channel communications between agents and customers. Infosys provides application development and management for AIB, and has invested significantly into innovation projects in Ireland, including a dedicated site to develop products, including its flagship Finacle product, a universal banking solution.
“Critical to the success of the partner eco-system is ensuring that they work as an extended part of the AIB team. The partners unanimously understood the key to successfully realising this ambition was to create and maintain a ‘trust centric’ partnership, where everyone worked collectively together with a ‘fix first, discuss later’ culture. There is a risk and reward mechanism in place where each of the partners put a percentage of their fees at risk to ensure collaboration is endemic across the ecosystem,” Thomas says. “Experience to date has been positive with the ‘One team’ culture prevalent.”
AIB still has its own technology team, which is split into two vital component parts. The first handles running the bank’s services and driving operational excellence, led by the Chief Information Officer, Tim Hynes. The second is a digital group, driving the front end customer experience and dealing with new challenges that digital transformation presents, led by Seamus Murphy, AIB’s Chief Digital Officer. Both units leverage the expertise of AIB’s partners.
“Our partners will support us developing and delivering excellence in customer service through transformation of our technology services,” says Hynes.
Thomas explains how AIB has looked at examples of many other banks and taken what he sees as the best elements of various outsourcing strategies. While cost has been a benefit, the dominating motive behind the partnership network is all about improving AIB’s capability and supporting the delivery of its ‘Simple & Efficient’ transformation programme.
“Our partner selection criteria is different, depending on the service line,” adds Fagan. “For example, if you look at eir, they have a strong indigenous network. We’re not looking for a large global telecoms player to come in and just front somebody’s infrastructure. We’re looking for in-country investment and long term investment in the development and quality of the network, because that’s going to impact the experience of our customers, from a branch perspective.
“Whereas if you’re looking at an ADM partner, you’re looking for local capability but with global strength in some respects. Wipro and Infosys both fall into that category. They have both invested and setup local delivery centres and innovation centres, as a result of the operations with AIB, and they maintain those AIB staff who transferred locally.”
Fagan also explained the importance of cultural compatibility, and all AIB partners boast a strong track record and reputation with an eagerness to innovate and change with the times.
“The other thing I’d add to that is their willingness to invest in the relationship because actually, we’re looking at long-term relationships, and because we are mutually beneficial to each other,” says Thomas. “Certainly, if you look at the likes of eir and Integrity 360 locally, outsourcing is relatively new to them. They are growing their businesses as a result of our partnership, so that’s beneficial to them and it’s also beneficial to us because if they grow, they provide us with better services.”
All the partners have also taken on AIB staff as part of the agreements, meaning they each have tailored knowledge of how the bank runs, and its exact requirements. This does not mean they are no longer part of the AIB fabric, however. “Their local delivery centres are almost in walking distance of the key AIB buildings, so there’s people moving back and forth,” Fagan explains. “There’s space set aside in both buildings. They dine in our canteens and there’s still a very collegiate feel, even though they distinctly work for a different organisation now.
“However, we can’t lose sight of that fact. We have done a lot to maintain the collaboration and the goodwill and that, in turn, plays into the knowledge share. You create the conditions for people to share knowledge and work together and that’s something a lot of thought has gone into.”
Hynes adds: “Building partnerships takes a desire, willingness and commitment from all parties to make it work, our relationships are in the early stages but there is a great spirit, commitment and collaboration to build something special.”
Revitalising the bank branch
AIB’s backstage work with key partners translates into a forward-facing, modernised organisation visible on the frontline. Innovation is at the centre of the bank’s customer first ethos, no better demonstrated than in it’s innovation centre, ‘The Lab’, in Dublin’s largest shopping centre in Dundrum.
Customers are able to trial new technology and provide feedback which helps to shape AIB’s agenda for its new partner-powered IT ecosystem. “Customer-led design ensures we are relevant and delivering what customers need,” Thomas adds. The partners themselves are also encouraged to innovate, using their global reach and experience to deliver proposals to the bank.
“We want to give our customers choices in how they bank, while maintaining a consistent customer experience, whether they’re online, in a branch or on a mobile device,” Thomas says. “One of things we have trialled in The Lab is a video service to our contact centre, so customers can receive instant support on things like mortgage applications, whether they start the application in the branch, with the contact centre or online the experience is consistent allowing them to change channels to gain support or advice and their application continues from the previous interaction, creating a complete, consistent and connected customer experience.
“The feedback we received was excellent so we are now looking to roll this out for customers to be able to use this video technology on a much broader scale. Other such services that were trialled in the lab and are now live, allow customers to digitally upload documents, as part of a loan or mortgage applications.”
Many will point towards branch redundancy as a sign of banking modernisation, however it is still very much a key component for AIB. It is refurbishing scores of its branches to reflect the demand for more modern banking services with a personal touch, over half having been modernised by the end of 2017, and with a recent pilot of a branch in SupaValu, a market leading supermarket, where customers can avail of extended bank opening hours for staffed advisory, sales service and quick banking facilities.
These bold innovations have been recognised within the industry, with banks now coming to AIB to understand how it is transforming. AIB has also been formally recognised for its advances with numerous awards.
International banking magazine Euromoney named Allied Irish Bank the best bank in Ireland, praising its progress in reducing non-performing loans, new lending drawdowns and pre-tax profits, driven by impressive delivery of efficiency. Most important according to Euromoney, however, was its ‘edge over its competitors in terms of its digital offering’. Indeed, its app is in the top quartile in Europe.
Other awards claimed include the Consumer Experience Award from EFMA and Accenture, Business2Business Awards’ Best Business Bank of the Year and Procurement and Supply Chain Team of the Year, collected at the National Procurement and Supply Chain Awards in 2015.
“I think what AIB did in entering the outsourcing sphere was a very bold move,” Fagan says. “It’s taken other organisations maybe 10 years to do what AIB has done in two and a bit. There’s always a lot of risk involved in doing that, and it requires real leadership from people like Phil and other leaders to take that and be at the forefront of this type of change. These awards are good validation of the execution of the strategy, and the vision that they had at the start of this process.”
Thomas adds: “External recognition of our achievements provides the teams with context for what they have achieved in this timescale. It is sometimes too easy to focus on your own tasks and lose sight of the big picture of what we achieved as a team.”
Despite only being a few years into the digital transformation process, AIB is thinking long term with its partner ecosystem, beyond the five-year agreements that are formally in place.
“The partners are already having strategic impact in certain areas of the business which is great for us,” Thomas says. “We’re already seeing the green shoots but I think, like any journey, the intent and ambition is there to make them even more strategic.”
“This is so we can feel the presence not just in the back room, in the data centre or in the quality of our infrastructure, but also the impact that these partners have on our customer proposition, in every which way.”
Fagan concludes: “It’s all about the customer experience and it’s all about building that capability so we can quickly react to our customers.”