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Opening the innovation vault

Banks are preparing to roll out a raft of new products, based on all our data.

Matthew Burbidge
By Matthew Burbidge
Johannesburg, 22 Jul 2016
Talent pool.
Talent pool.

Maybe it's the coffee, but by mid-afternoon, the CoLab in Absa Towers North has teams of people sitting at tables, writing on whiteboards and talking to one another. Some use standing desks, making them look somehow more important than their seated colleagues, but they're all just part of the team.

It looks like more of a startup than a corporate environment, which is exactly what it's meant to be.

"It also helps when you're trying to recruit talent, because it looks less like a bank," says Jen Drabble, a product manager. This is a 'new way of working', she says. "It's really about how you move away from a desk and the traditional corporate style and co-locate a team so that when there's a problem, you're sitting next to the person who can help you solve that problem."

Every few metres, there's a meeting nook, or a 'break-up space'.

"If you've ever worked in a large corporate, trying to book a meeting room is a nightmare, and being able to have these ad hoc conversations makes such a change," says Drabble.

"For me, the power of working with a team is to get around a whiteboard and be like, 'How would we even tackle this?' and you're all standing there trying to draw up a solution."

For an outsider, there's an air of secrecy about the place, and when I ask what a specific team is doing, all Drabble will say is that it's 'one of our apps in development'.

One team does, however, appear to be working on voice recognition.

The makeup of the team is also important, or as Drabble puts it, 'getting a good mix going'.

Yasaman Hadjibashi, the chief data officer for Barclays Africa Group, refers to Drabble and her colleagues as 'digital wunderkinds'.

90-day mindset

Hadjibashi, who is known simply as Yassi, says the product managers, 'understand design, they understand customer experience, they understand delivery, and have agile execution mindsets'.

"We don't like things to take forever - six months, 12 months - which is chronic for big organisations. We have a 90-day quarterly mindset. We work just like Google, and we say we care about every quarter. A quarter is a year for us. And that's how we keep that rhythm of constantly shipping new experiences and new products out of the door."

She says it is also a challenge to raise funding, 'because the bank has to believe in this; they can't just give you millions'.

The philosophy is that this has to be done by bank people, for the bank.

Nanda Padayachee, Standard Bank

She says three years ago, very few were talking about big data, but now, those working in the space are sought-after. South African universities don't offer a data science major, and those wanting to enter the field would need to focus on computer and actuarial science, for example.

Hadjibashi says banks typically don't hire data team product managers, which is why so many struggled to monetise and articulate the value these teams bring to the business.

"Every single bank around the world has realised that while they have ideas, they're not agile enough to execute them. So the only way to accelerate this is to partner with startups, not only to get access to more ideas, but to do that innovation faster, more efficiently and cheaper."

Insights

It appears that banks are putting paid to the image of monolithic and slow moving organisations and instead, a new kind of agility is emerging.

Banks collect gigabytes of data every day. They know where you're spending your money, and what you're spending it on. They also know what your peers are spending their money on. All this leads to a wealth of insights, some of which are already being used to help people better manage their money. They can also offer their customers more meaningful rewards. They could also conceivably offer insights and analytics to SMEs into transaction patterns, customer behaviour and demographics.

Although banks have always used data, it was probably stored in a filing cabinet and would typically describe something that had happened in the past. Now, petabytes of unstructured data, some of it from social media, is being caught by banks: every time you use your smartphone, change your Facebook status or dash off a tweet, for example. The challenge for banks is to process this data in real-time, and use it to predict what will happen in the future.

Using a model to detect stock trade anomalies, Barclays now SMSes customers who may not be able to make a payment obligation. The service - which has been rolled out to 200 000 customers - 'nailed' the Global Data Creativity Award for Emerging Markets at the I-COM Global Summit in April, says Hadjibashi, who accepted the award in Seville. The SMS is sent to customers three days before the payment is due, and about 67% take action by transferring money, making a deposit, or taking out an overdraft.

At Standard Bank, Nanda Padayachee, the group IT head of data services, says the bank is preparing to release a number of customer products that were traditionally housed internally.

With 30% of the card business in South Africa, he says the bank has a 'massive position' of insight. He also sees opportunities on the continent to track crossborder trends.

Standard Bank is also making investments in feeder programmes, such as at Wits, at which it sponsors an honours programme in the computer science faculty around big data and analytics. For their honours projects, the students are set real-world problems that the bank is looking to solve in its big data environments. Some students then receive full bursaries, and (afterwards) are employed at the bank.

Talent pool

Referring to the talent pool, Padayachee believes that for the ecosystem to work, the bank has to provide something as well as draw from it.

While it has partnerships with some fintech companies, it's not looking for people to come in for short periods of time and complete a task on the bank's behalf.

"The philosophy is that this has to be done by bank people, for the bank. We're absolutely clear that we have to have the skills, the IP, and the ownership to be able to manage that accordingly."

Standard Bank also has the Quad Digital Academy for graduates who 'are not quite ready to enter the workplace'.

Padayachee says, as an organisation, it needs to expose people to how things are run at the bank, as well as the tools and boundaries, 'before they start doing real work'.

While it's not buzzing like Barclay's CoLab, Standard Bank's IT data services department at its campus in Roodepoort still has a few things to distinguish it from a normal office. There are diminutive orange traffic cones perched on cupboards and desks marking team leaders, as well as the ubiquitous sticky notes.

There's also a large room called 'Obeya', which, according to Padayachee, is a Japanese word for a visual style of management. Here, the sticky notes are clustered thickly around the walls and this is where 'key epics' are tracked. There are also signs up all over the office saying, 'Don't touch, don't move, don't clean' after some projects' progress was accidentally erased.

For Padayachee, data allows his organisation to understand the nuances around a customer, what their needs are and 'where they are in their life journey'.

He says it's not all about 'product push', but rather, 'if you're able to connect with a customer at the moment of truth, and have the context around their engagement and the urgency of their need...that's true customer service'.

This article was first published in the July 2016 edition of ITWeb Brainstorm magazine. To read more, go to the Brainstorm website.

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