welcome to the uk finance webinar channel my name is andrea rogan director digital technology and cyber in today's section uh session in association with services now right we will discuss what the priority should be from pending austerity a partnership's the key to maintaining relevancy in an open finance world and can the digital divide be closed including best practice and lessons learned from the upcoming sixth edition of the exclusive optima study in the uk market now joining me today i'm very delighted to be welcoming a panel of experts for the discussion the first is keith pearson head of financial services for emea at services now joining keith will be mark o'keefe mark is the founding director for the optima consultancy now we intend to present for approximately 45 minutes and then answer questions for the remaining 15 minutes but ultimately what we're looking for here is a conversation between ourselves uh and you our audience so keith and mark over to you yeah yeah and thanks for the introduction so i i think the way that we're going to do this mark and i we talked about it earlier is um mark would like to cover off some of the findings of the the optima survey i think it's it's one of the most challenging and stimulating pieces of work that's done in the industry in in uk and i for me um you know every every six months or so and every time it comes out there's really contentious stuff about about how the various banks are failing in their digital transformation journey so so mark's going to talk about some analysis on a particular topic i'm going to talk a little bit about how we see that from a servicenow perspective and how we're trying to help our customers uh and and uk financial services organizations deal with that so without further ado mark maybe over to you to get going yeah thank thank you keith thank you rogan and i guess we'll start with a couple of quick questions really to gather from the audience and and the first one really would talk about how we engage in a digital world and how we engage in an analog world and how do you prefer to contact a company not necessarily a financial services business uh but obviously that's that's sometimes we have day to day interactions but how do you prefer to contact a company so we've got a few options on there many of us had lots of reasons to contact companies and so we'll just give you a moment or two to um to provide your answer fairly straightforward and that's kind of what we're expecting i i guess no no one's looking to do it themselves search helpful or faqs all that hard work that goes into organizations providing lots of content and yet we'd rather perhaps talk i was going to say to a human and that seems to be the uh the dominant answer that and we'll explore that a little a little bit more when we explore what's happening with service and the telephone is quite hard to to sometimes get hold of people and that leads us to to our second polling question how long will you wait for an answer or be on hold so five minutes or under five to ten ten to thirty up to sixty minutes or however long it takes how much patience do you have so again we'll give you a a few seconds to answer that one and we'll return to these when we go through the content okay so that ten minute threshold maybe five to ten minutes is done and no one's gonna wait up to 60 minutes which again is interested in this covered backdrop where where resources uh are finite or under under real constraint there so we talked really about a widening digital divide and covert in particular has accelerated a trend that was was happening anyway and as keith so kindly mentioned uh we're going to share some some exclusive insights from our upcoming sixth edition of the mobile banking app review um we've spent about the last four years now uh gathering a lot of data on on the main uk mobile banking apps and we we have all of those accounts open and live and transacting not done our credit score is much good in in the uh the team here but we've done that so we can really get under the covers of of what the digital service looks like and alongside that we capture a lot of other um secondary data that we try to sort of piece together that jigsaw if you like of this new digital world and those reports are available to download for for free from our website and and we'll share some of that uh subsequent to this this session as well in terms of some exclusive data um so if we look at covid accelerating and widening that gap we can see across the recent results from the the the main banks in the last few weeks there's lots of measures there about what we mean by digital and what we mean by by service so for example we can see if we look at nat west group um significant growth in cora their sort of digital chat bot and again we can come back and look at that research in that poll in a second to see that customers are happy using technology like chat bots so you know it may have been something that people weren't accustomed to didn't want to talk to something robotic now actually it's a friendly sort of help it's a navigation through that search and help and how do i solve the problem i'm looking um to cover here we can also see from lloyd's group there they're mobile app users growing twice as fast as their mainstream digital so we know the mobile device is becoming the tool with which we're expecting to engage digitally it's the thing we carry around with us all the time as much as as maybe we don't want to the other trends we see there from from barclays and hsbc is the depression if you like on the analog services so if we look at branch visits for barclays taking obviously a big impact from covid and digital sales sorry um branch sales from hsbc in terms of the gray there clearly lockdown has an effect on customers engagement in a physical world and we've got a second lockdown that we've got at the moment but how much of this changes is going to be permanent and we suspect actually that customers that get good digital experience are going to continue using those digital channels and what does that mean then in terms of how we we deal with with our digital offering and now just picking up what we've seen in terms of um app store uh ratings and and reviews um in in particular on android and and we can talk about um apple as a separate piece but what we've seen in um when we had national lockdown was quite a surge in the number of reviews and that's a reflection really on customers taking digital services for the first time and and we expect now customers are going to continue using those services if they've found a digital alternative to what was a previous physical or telephone experience and and actually if that's successful they're going to continue to use that digital service so we think that the covid that acceleration that we've seen not just in banking but in our use of e-commerce our use of apps our use of of um chat bots and the like is going to be a a permanent change in fact the webinar we're in right now this virtual world is a change from our physical so these trends are going to to really just cement what was already a significant amount of digital growth uh keith yeah thanks mark and i think um you know that that idea of the digital divide um and the inability that the difference between the organizations that can provide that service in a rapid way in an integrated way and the ones that that cannot i think from our perspective is just it's just widening all the time and and my thinking on it is that i think we're at a tipping point i think we're going to get to a point quite soon where that the ones who are behind are not going to catch up because the ones who are in front you know they they are it's better to serve customers it's quicker to serve customers it's easier to acquire customers and and so you really start to see that that broadening of things but why does that happen you know why is it that one organization can accelerate their their mobile and digital capability and another struggles to do it well from my experience um over the last 10 years or so it's it's a thing that i refer to as fragmentation you know and and there was a piece of work done by mckenzie last year that suggested that 90 of digital transformation um initiatives and financial services face challenges and 25 and failed completely now if you think about that one in four initiatives that you start completely fail and i believe it's it's because of all of this fragmentation it's fragmentation of data tooling workflow risk control insight it's so hard to get your architectural head if you like round the entire perimeter of a major bank or or even even a significant bank and as a consequence of that initiatives start in silos and and things like value streams and customer journeys and so on and agile delivery models they help they start to to focus people's attention into particular technologies and particularly delivery if you like vehicles but they still really perpetuate that fragmented thinking um so it's a really really challenging kind of environment to be able to accelerate the delivery of your um of your technology so that you can have that digital capability but at the same time you know maintain your service position and meet the regulatory objectives and so on we're going to come on to talk about that but for me success comes through seamless integration of systems and people and again in my experience you know people said that that's too much too big we'll never solve it all don't try and boil the ocean don't try to eat the elephant but unless we have that vision of what a financial services organization can be where all of its capability technology and people integrate as a seamless kind of organism to develop to to deliver the the business outcomes and deliver those customer those customer experiences and we're never ever going to be the kind of optimized financial services organization that we kind of want to be and from our perspective at servicenow you know this is a big statement but this is our strategy our strategy is to help our customers drive the financial services revolution we believe that in 2020 this widening of the digital divide and the fact that we really are on the precipice of the future of the one to win and the ones who lose that the difference is going to be the ability to be able to integrate hyper automate and transform and and those ones that will will win they will out disrupt out engage out evolve and outperform the competition and and really you'd say well you know what servicenow got to do with that uh you know lots of people still think of servicenow's knight ticketing tool but if you've seen what's happened for example to the servicenow share price it's rebounded back harder and better than any other major technology stock globally there are a lot of customers now across the world who are starting to use service now in a very very transformational way so you know in an i.t environment it becomes the platform for it enterprise technology management my previous employers that that was the way that we were going there was service now really was about end-to-end connection of technology and so the idea that you would manage the data around the design and governance and life cycle uh pre-live and that you would manage the same sort of scenario post live in the operations environment on a single platform integrated to your other tooling was a very very strong concept and the thing about that is that in our thousand or so customers across global banking 19 of the world's 25 top banks what we've done is we've put you know a very very powerful technology in the hands of i.t and i think the organizations who are really getting their heads around servicenow are starting to see that they can use that single platform strong integration strong workflow strong embedded analytics um you know machine learning hyper automation capabilities embedded into a single platform to become you know some something more again so we've equipped it in the digital functions with something that's arguably more powerful than than the technologies that they're using at the moment to you know if you like to transform the middle and front office and so we become this platform for hyper automation helping business leaders to drive a new operational reality starting to become more relevant beyond it and and starting to drive uh you know opportunities and transformations across things like payments and cards uh we'll be doing stuff in lending later on this year but in the risk business in the security business in the hr business and so on and joining the organization up and when you start to do that you start to become a driver for performance you become you you allow the chief financial officer you lay the chief operating officer to start to pull the big levers of cost reduction and start to support the rationalization of that supply chain and consolidate consolidate you know the supply chain environment make things simpler and bring things together architecturally and it's for that reason that we talk about servicenow as a platform really going to be one of the key technologies that over the next 10 years drives this revolution in financial services mark back to you yeah and i guess i just just if i can i just go back to the to that because i think that poll result which is a reflection i think on some of that transformation that you talked about keith which is if we think about perhaps how organizations were set up to solve customers problems or to deal with customers it was in a branch it was a telephone less so email because of the security aspects to it but what we see now i think in this this new sort of digital world is actually this ability to multitask where i might be doing my job in the home office but i might be on two or three live chats with different organizations trying to you know change my address or do you know the gas bill or whatever it is that i'm that i'm engaged with and that's a way that we're used to dealing perhaps with a courier firm that needs to arrange a re-delivery and and so in a way those expectations of service or those expectations of what we get as digital experience as set not just by good banks or good financial services organizations it's set by what what looks good in a digital world you know if i had a problem with it with a product and i went on yesterday to uh to amazon onto live chat connect straight away with an agent very clever in terms of me suggesting the product it bringing up the order reference that's obviously gone back to the the order system and actually saying yes i can deliver i can get a new product out to you as a replacement it'll be there tomorrow is it this and that experience then if i've got a problem with my bank card how do i expect to be able to solve it well maybe i want to be able to self-serve i want to freeze that card instantly if i want to order a replacement do i want that to be a one-button click and do it myself in app or do i want to have to speak to an agent so i think this is a really interesting reflection of where services is becoming um the the heart of kind of of the industry and the heart of of i guess the digital experience is service so if we look at previous um iterations of our our banking gaps if you like which is something very close to our heart it was a digital statement you know several years ago we'd simply put on the mobile phone you know a digital form of the internet banking statement you could do very little else what we've seen and keith you alluded to some of the good players out there what we've seen is that digital service bar being raised and it was being raised before covid kovitz accelerated this but actually the new kids on the block these new neo banks with with you know cloud-based infrastructure with no legacy have come on and and really you know set that expectation that customers have how to do things i mentioned earlier didn't i about freezing unfreeze card that's not a technical limitation that was only solved in the last couple of years that's been possible for for almost a decade but actually it was delivered in a very effective way by some of these new challenges and now actually it's an expectation that everyone has and this is where we see lots of things really setting the challenge you can see from our insight into our previous study the fifth edition that we've got the likes of revolut and starling and and monzo delivering a much richer proposition in their mobile app the amount of things you could do has to be because they're digital first and we looked just as we hit lockdown in march as our sort of covered view of hygiene factors to say if i wanted to be able to deliver service to customers who can't go to a branch am i able to do that in um in a in a digital mobile banking app and what we saw really was some some good performance from some of the the high street banks but a lot of white space down here at the bottom a lot of gaps whether that's on on the ability to have live chat which something we've all said that's my preferred way of doing things but actually it might not be offered as a service there by my provider might i change provider if actually i um i can can deal with with um my problems my servicing um in a different way in my preferred way i've learned that i don't need to go into a branch maybe i that's really inconvenient now because i i work from home all the time i'm not going to travel in to the branch that was near my my office and therefore actually it's about how i offer that service digitally now during the pandemic and in this last six months it's kind of been really interesting to contrast uh the number of features added um in our study and you can see the dark lines are the traditional providers the lighter ones are the challenges and you've seen some really positive steps actually hsbc is a big call out really in terms of of during a pandemic of actually adding some significant features to their app contrast that at the bottom there we've got someone like nationwide who haven't added a single feature now you could look and say well they've got all the features their customer base needs or it could be they're focused on dealing with the pandemic and this is really that challenge about how do you develop and deliver against what you're doing as a as business as usual and what does that mean if we kind of update that covered hygiene factors and and taking that analogy one step further in testing positive or negative there so if we look at the positive top half of the table you can see that impact actually from someone like hsbc they've not just added sideline features they've added features that um that enable customers to deliver things on a digital basis now you might have been surprised to say you couldn't amend the standing order or delete a direct debit in the mobile app anyway but they've at least filled that gap but again the second half of that table if you like the bottom half lots of gaps some of it from these new challengers who are building out their proposition but also some from some of the bigger high street banks there or high school or you know long-standing challenges but again you know if i want to be able to and to have live chat can i can i do that if i want to be able to search faqs and help now to me that that would almost be something that should be simple to solve but actually and keith will touch upon some of that complexity is what causes a problem how do you join those different different pieces of the jigsaw together to to solve and that's kind of a you know a really interesting aspect from from our side that the the bar is raised in terms of what good looks like and keith you mentioned sometimes it you know causes a bit of hoo-ha when we publish some of these results but you know we're just looking at it as a customer can i do x i can do it in this app can i do it in another and it's how you maintain that battle and race that we think is going to be fascinating as we come out of covid but customers are used to operating now in a digital way keith yeah mark listen i i mean every time i see some of the stuff that comes out of your research i just think it's amazing hopefully other people in the caller are enjoying it as well um it does create a real debate but when you and i started talking um i love the fact that your your research is action based it's practical it's you know it's people who are actually you know opening accounts and using these apps that way so it's kind of unfettered and and i love it and the other thing that i love about it and i'll just put puts it out there is my previous employer it's really really great to see um you know lloyd's banking group so high up as a as a as a legacy bank because for me that that reinforces a couple of things um you know one the digital strategy that that bank has had for the last you know five to ten years but it's been formalized really in the last three or four years um is really paying dividends and you can start to see that acceleration and as i've joined and come on board service now and start to take on this role and leading our financial services um go to market uh globally now actually um you really can see the difference between the organizations that have you know got this in their dna now and the ones that are still um you know making that that effort to keep going but it really is all about service and you know i'll come on to um if i don't flick myself past it you know i'll i'll come on to our platform again there's a reason it's called service now you know it's been hidden there in plain sight for the last 15 years as we've gone from start up to you know hyper growth juggernaut and and it's the fact that at the heart of the servicenow platform is a services-based architecture uh when when we were deploying it into sorry we were deploying deploying intelligence banking group we we really looked at the concept of how do you build a services-based data model at the heart of the provision of the platform and that would connect your infrastructure components your application components into the business services that would actually being delivered by the bank to its customers and and when you do that and you have that service catalog and service architecture at the heart of of the platform it means you can start to build capability that orbits around that definition of service and so from our perspective as we continue to invest in our platform and build out new products and new areas and come and talk about those you know in the next section we really believe that what we can do is start to connect and enable the front middle and back office to join up that service now can coexist with the digital channel on the front end so that customer contact centers can start to get that benefit of integration and consolidation and connection into the digital front end so the customer regardless of the channel they come in through everything is integrated in that channel they can go to the branch or they can go to they can pick up the phone or they can use the mobile device and the experience is seamless and connected and everything is being updated real time but then you know when there are issues and people do have problems you know today if it's a payment for example if i try and pay you 100 pounds mark and it leaves my my mobile um account or my mobile device and it doesn't get to yours you know where's it going well how do i go and find out where my my you know 100 pounds is going how do you find out why you've not got it the only way to do that today is to walk into a branch or is to actually pick up the phone you can't interrogate and investigate that particular piece on a mobile device and so the case that's created there in a fragmented organization it goes through multiple handoffs there's a lot of failure demand in the process nothing's connected and nothing's integrated and what we've started to do is we you know with that that sort of provenance that we've got as a platform in the back office in it as the kind of platform for technology management we've expanded out into those operational support support functions and helped customers to join those up and integrate those and of course now what we're doing is we're moving into the operational servicing areas and into that front line in that customer channel and connecting the whole thing up so you know when when you look at one of the big target things that many many big banks have been trying to get out of over the last 10 years is the single customer view single operational view and we've done so much to try and get to single customer review single operation we've data lakes and data warehouses and you know all sorts of data science technologies and you know we've put our hats in the ring on ai on machine learning there's so much investment going into these things but this is a logical and structured way to take the technology you've got today and integrate it in and connect it up through a platform like ours so it's a more logical and it's cheaper and it's arguably a more incrementally safe way of going to trying to get to that single view single operational view that's your mark yeah and i see we've had a you know a question come through about asking are we seeing similar trends in business or for business customers and i think that's for me that's it's a great question and we get asked this a lot and we are toying with the idea of repeating the study for for business and that's really hard to do because actually to do it in the same way actually we need to open the 25 or 30 business accounts um which again is is in itself sometimes quite difficult given in the current covid backdrop a lot of organizations have stopped opening new business partly because of people applying for for c bills and and bounce back loans so so it's it's something that's on our radar but i do think and we mention this at the outset that our expectations of service and and multi-channel being able to to solve my problems are set by lots of good organizations and in the same way the customer that may have previously only opened a business account through their personal banking relationship now has a wide choice out there and and i think therefore the the bar is is definitely raised for the business as well you know if i can do it as a consumer i expect to be able to to do that for the business and so if i want to open a business account well you can just check on companies house and and get all my details and open it why do i have to make an appointment to go in the branch to do that so i think the the bar is also being raised and i think some of the capability i think for me the big difference or expectation with business is probably that connecting further beyond the organization as well so into an open banking open ecosystem i want to connect my accounting system i want to connect other things um and this leads as i i guess to this quandary really of kind of uh obviously zuckerberg once famously about moving fast and and break things um it's not necessarily what what we want to do in a financial services arena um and and i guess this is this is really the the the challenges out there we've got another uh poll question for for for you guys i guess is the first one around money money talks doesn't it especially when we're under in intense pressure how much budget do you expect to have in the next planning cycle and to deliver change compared to what you've currently got so in terms of a lot of you will will be in the the final throes of a budget for next year's cycle um how much do you expect to have relative to what you've had this year to deliver change mark just while we're waiting for those results to come in just to remind everyone of the ability and capability to ask questions via the q a widget down the bottom of your screen certainly encourage uh respondents and people who are viewing this at the present time to uh to put questions to our speakers today and and look to engage in the engage in the topic okay so so hopefully people have answered that let's see where we've got to fascinating okay so again probably no surprises for uh for people there in in terms of um the pressures that everyone's under in terms of the impact kobe has had but actually to deliver change and we might argue and sort of keith and i would probably argue there's more change needed than ever right now to transform organizations but there's probably less less money around uh to to to do that with um and then our final polling question here and is maintaining reliable services so keeping up time more important than delivering uh frequent change and enhancements so is uptime question right again it's the killer question of digital transformation that one i think in financial services right okay we were talking in our rehearsal about we wondered where how how close to 100 this would be um and and i guess and it plays back in a way to the title of this this last section about you know moving faster not breaking things that you know great when you're delivering uh you know a social media app or something fun something that's not your cash not your money then okay you probably don't mind if it's not available right now but there is there is something very different about financial services and and this is the quandary and the challenge that we face i want to share a couple of slides to lead us into to this last segment and then we'll kind of open it more generally to to to the floors and uh the questions that we've got and and obviously a bit more discussion of the results with with keith and i so um so speed and and you know are we seeing people getting faster are we seeing people tread water here now what you see on this chart is the no so we look specifically at the the apple um operating system the mobile apps and we look at the number of updates done per year and the bars you see 2018 and 2019 and the dotted line you see the estimate for 2020 based on the um the three quarters of the year that we got through when we when we cut the data off so i suppose how you read this i guess is if the if the line's gone above the bars someone's accelerating they're getting faster they're deploying more releases if they're underneath uh if their bars are if the dotted line is has gone below their bars and this year looks like it's going to be slower they'll they'll do less and if they're in line they're kind of keeping us as they are and we again we're not saying that oh it's really important to do an app update every week or every two or three days but as a mentality as an approach to delivery we definitely see the challenger brands these new guys are in a different psyche a different mindset that says i found a bug i fix it i've got a new idea for a feature i'll release it and get some feedback i'll deploy quickly and frequently i'll answer and respond to the to the changing um demand that's there from customers and and i suppose if you compare and contrast that you've got generally speaking sort of the the second half of the chart here sort of your mainstream banks that are typically delivering about an app update once a month um which which is an improvement from when we first started the study and looked at 2016 and 2017 or perhaps an app might not have been updated for four five six months now as we've moved on as a customer is using this as you saw at the very outset of the presentation the increase in the use of the chat bots the increase in in the use of digital services this is my main mainstay i think lloyd said 25 logins a month on their mobile app customers are logging on once a day plus therefore they expect it to work they expect bugs to be fixed they expect it to be responsive they expect it to be quick and they expect it to improve if it's missing things that i now need to do in the app i expect to see that there and that's definitely a you know a trend that that we've seen which is this sort of this pace of change this speed of operation uh from from the new kids on the block is phenomenal and it's really pushing the the traditional providers who are having to battle as we've seen perhaps less money to spend on change um and and millions of customers that they've got to make sure that they can deploy a stable service to now we've got um the latest published stats here from the reported incidents covering mobile banking from the fca the latest stats are due out i think next week or the back end of this week and again this is something we we track alongside looking at logging times from apps to say well what does good look like you know how quickly should your app load um and that in itself is a fascinating well you know what what does good look like um and what you see here is how many incidents have been reported to the fca under the um the the psd2 legislation that says this was a major incident affecting mobile banking um and the the green shows you an improvement in the last 12 months and the red shows you a deterioration and you can see obviously on the far right-hand side here some some great stories from the likes of nationwide and starling who in the last 12 months have not had a a reported uh incident to the fca in fact since we've checked this starling haven't had a single incident that they've reported to the fca now again keith mentioned about this causes a lot of debate is this people managing and manipulating what they report to the fca possibly in terms of what determines an incident but you can't hide from the fact that there are outages and those outages get more and more noise now because