“The more we have digitised processes, the more capable we are of enhancing information analysis that enables better decision-making. You have information at your fingertips that allows you to understand where processes are working and where they are not. The whole inside analytics part is facilitated by digital transformation.”
Insightive.tv: Can you begin by giving us an overview of your current customer contracting process?
Andy: At its core, it is a multi-channel offering. It varies slightly between products — but our key commitment to our customer is choice. More specifically, you could divide our business into savings and mortgage products. We deal with some SMEs and Local Councils, but we don’t offer corporate banking services. Our business primarily services individuals. In this regard, we currently have a straight through online account opening and servicing process. But how customers interact with that depends on the product and the channel they choose to initiate a purchase.
During 2015 we completely redesigned our core banking platform. This transition was quite a challenging project for us. But we went live in June of last year, and although we intend to improve our services, it sets out how we see the future.
We worked with a company called DPR Consulting who provide an end-to-end, online based system that we could deploy into our omnichannel approach. So, for example, with a savings account, it is the same core platform whether you are using a branch, telephone or digital channel of communication. That joined up system goes all the way through data warehousing and regulatory reporting.
The mortgage market is different because about two-thirds of our business comes through intermediaries or brokers. The customers that come to us directly traditionally did so through the branch network, but are increasingly coming over the phone. It is hard to imagine this becoming significantly more digitised because regulation requires an advice aspect to that process. But we do still integrate digital aspects. From a broker’s perspective, much of what they do is digital — but it is in the context of a face to face conversation with the customer.
We are looking to introduce digital-only options, within the next year, for customers looking to switch products. But we have to be very careful about making sure customers are clear about what they want. It is our responsibility to determine whether or not their actions require an advisor, rather than just letting them do things completely self-service. The product necessitates an omnichannel approach.
Insightive.tv: What are the main drivers ofdigitising that customer journey, both the mortgage and savings side?
Andy: There are really two main drivers. The first is customer behaviour, and in that I am including the distribution aspect of intermediaries or brokers. The second driver is an internal one — we need to continue to look at how we can be cost effective and drive productivity within the context of keeping our channels easily accessible, intuitive and informative. This is particularly true because for the last seven-plus years the base interests rates have been at exceptionally low levels — driving up margin pressure.
The challenge for us is to move at a pace that keeps customer’s trust and engagement. There are new entrants that are coming in with a digital only model. We aren’t starting from there. We can improve our productivity and keep costs down by using one account opening rout, within an omnichannel, that customer can choose to interact with either on the phone or online.
Behind all of that, there is a regulatory influence that is quite significant. This is probably most apparent in the mortgage process. But we have to be responsive to that.
Insightive.tv: In regards to productivity increases, what specific operational efficiencies are there? Is it just about reducing costs?
Andy: Cost reduction is important, but it can also directly benefit the customer’s experience. If you can replace a process the customer has to undertake manually with a digital solution, that is plus for both parties. Digitalisation can also increase the overall speed of a process — credit checks, automation of decision making, using digital to improve targeted engagement with customers are all excellent example of improvements that directly benefit us and our customers.
It also flows through internally. The more we have digitised processes, the more capable we are of enhancing information analysis that enables better decision-making. You have information at your fingertips that allows you to understand where processes are working and where they are not. The whole inside analytics part is facilitated by digital transformation.
Insightive.tv: Looking forward over the next few years, how do you see the customer journey changing?
Andy: The main change we are working on implementing is making it easier for customers who have an existing account with us to make changes in a self-service manner within the bounds of regulation.
I also think we will continue to see an increasing use of digital channels within our customer base. We are already seeing those who have not engaged through digital channels migrating to that approach, and others engaging with is digitally in a deeper way. We have introduced services such as live chat — I think we will see greater usage of those options.
The market will change, and I think mobile access will become more important. In the last 18 months, we have moved our core website to be a fully responsive proposition that works on any device. We are increasingly going to a mobile world for media consumption. I think transactions will go that root as well.
It is a fascinating time. We have some very large existing players and more niche incumbent players. But there is so much new stuff going on. From my participation in the FinTech world, there are many great ideas coming along, and an explosion of activity. There is a risk element that comes along with change that we have to be mindful of. It is not an option to get things wrong in areas around buying a home or saving for retirement. But this is an exciting and dynamic time.
Andy Lucas is Chief Operating Officer and Commercial Director at Cambridge Building Society. He has worked with the company since 2010, and has a long record working in Operations, Development and Marketing — giving him wide-reaching experience to direct customer facing operations and IT development. We spoke with Andy to get his perspective on digital contracting, and how it has impacted Cambridge Building Society’s digital strategy and future plans for customer interfacing.
The Cambridge Building Society provides buy-to-let mortgages, and a range of fixed and variable rate products, serving customers since 1850. For the last three years, it has been ranked as the Best Regional Building Society by What Mortgage Awards. This year they invested an additional £3 million in IT infrastructure upgrades to bolster their customer focused commitments.
Part of THE DIGITAL FUTURE OF CUSTOMER CONTRACTING series