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Posted by Bill Doyle on October 23, 2013
It's happened. A critical mass of consumers have become "digital first." And the banking industry is no exception. In less than 20 years, Internet-based touchpoints have become the channel of choice for bank customers worldwide.
Despite this massive shift in channel preferences, few banks have made a radical shift in spending. They still budget far more for their branch networks than for digital channels, and spend much more on traditional broadcast and print marketing than on digital tools like social media. This is why I’m particularly excited to have Fergal Coburn, Head of Channel Strategy and Development for Allied Irish Banks (AIB), speak at our Forum For eBusiness & Channel Strategy Professionals in Chicago on November 5-6.
Five years ago, AIB was nearly ruined in the global financial crash. To rebuild its business and restore trust, the bank had to do something radically different -- and decided to transform itself into a digital bank. Fergal has led the design, delivery, and operation of AIB's digital banking capability. Fundamental to his strategy is a widely shared understanding of the need for digital. “Without recognition of this you are doomed to fail,” he notes.
In the run-up to the event, Fergal was kind enough to answer some questions that we posed to him on what he’s been doing, how his efforts have evolved, and what advice he’d give to others on the journey to digital business. I hope you enjoy his responses as much as I do, and I look forward to seeing many of you in Chicago!
Q. When did your company first start getting serious about digital business?
In Ireland, AIB has been the leading ‘digital bank’ over the last 15 years. From the launch of Internet Banking 15 years ago, over 50% of AIB’s customer base are now active online bankers and over 40% of Generation Y in Ireland have chosen AIB as their primary financial services provider. So I’d say AIB was always serious about digital – however, with the financial crash in 2008 and the particular challenges to Ireland's banking sector I would describe AIB’s approach over the last three years as “digital acceleration” to return AIB to a viable and investment-worthy bank. Evidence of this is the surge and evolution of our online propositions tailored to customer needs. Within one year of launching our mobile banking app over half of our active customer base are now mobile bankers – one of the fastest adoption rates in the world. Additionally, within one year of launching our social media channels AIB ranked 7th fastest bank in the world for Facebook adoption and 10th fastest for Twitter adoption – astonishing figures for a small Irish Bank on a global stage.
Q. What steps has your company taken to infuse digital business and skills throughout your business?
Relentless communications has been foundational in terms of infusing digital across the organisation. A pre-requisite for this has been clarity of understanding, vision and sponsorship from the very top coupled with highly visible mobilization of empowered and engaged (energized and committed) resources. It’s understandable for people to feel uneasy and intimidated by the scale of change and this is amplified when there are any understanding gaps. Everyone should know and understand – why digital?
When people see for themselves what you're trying to achieve, then the "asks" from them tend to make more sense. This is fundamental to having an engaged organisation where innovation to resolve traditional roadblocks becomes commonplace. In this type of environment, calling out and celebrating successes creates even more momentum. The process of calling out and celebrating creates visibility that leads to learning and improved understanding of how to achieve success in a digital way.
Q. What is different about the way your company runs digital programs now versus when you started out?
On the surface of it, one would say we now develop and deliver services in an ‘agile’ way versus our traditional ‘waterfall’ approach. However, the real transformational difference in the organisation is in the culture across the organisation from front-line service and sales staff through to senior leadership and financial approval authorities. We’ve had a program for the last 18 months called “Integrated Distribution Transformation.” This initiative spearheaded the communication of an unambiguous vision and within that context executed major step-changes across our physical branches and digital channels. The culture that this change programme embedded puts the customer at the very centre of our design and delivery processes. Our traditional constraints in the areas of regulatory compliance, IT legacy systems and scarce expert resourcing are still there, but are no longer insurmountable in a ‘can-do’ environment where all stakeholders from compliance, legal, HR and IT are aligned behind a clear customer-centric vision. In such an environment it’s been amazing to see how innovation has become a plentiful attribute.
Q. What advice would you give to an eBusiness professional trying to elevate the role of digital business in their organization?
Fundamental is to create an understanding and appreciation of the need for digital. Without recognition of this you are doomed to fail. You need qualified and convincing dialogue about what's happening in the marketplace, what competitors are doing and could do, tangible opportunities and threats. Then, secure senior sponsors who can mobilize the cross-functional (and organisational) resources required to execute an end-to-end digital strategy. Small, achievable and visible benefits early is essential to building confidence from which momentum can be built. This provides content for more evidence-based communications to the wider organisation. From then on, maintain an ambitious vision for the future that is couched in proven benefits delivery. That will help embed the cultural change required to perpetuate digital success.