TSB’s transformation hasn’t always been as smooth as it might have liked, but Pol Navarro, Digital CIO at parent group Banco Sabadell, says it’s now poised to reap the benefits of an open banking world.
Although admittedly a small sample, 38 per cent saw it as a risk and 29 per cent weren’t sure. Around a third viewed the dawn of open banking in the UK as a positive game changer. Two years on and, according to some of the big banks taking part in November’s Open Banking Expoin London, many customers are still none the wiser. Which perhaps makes delivering a recently-announced £120million, three-year transformation strategy at the bank a tough gig.
Given low public awareness of the immense potential of open banking to dramatically change everyone’s financial experience, it was no surprise that the following morning’s headlines almost exclusively concentrated on the closure of 82 of TSB’s 540 branches rather than plans to leverage open banking and the right third-party relationships to transform customer experience and improve access to finance. The £120million spend will be allocated to TSB’s mobile platform for in-app onboarding and sales, as well as investing in the automation of some of the bank’s branches. Part and parcel of that was an intention to take advantage of open banking reforms to foster deeper relationships with fintech startups offering innovative new services. Product providers such as Square which provides point of sale solutions to TSB’s business customers.
“It’s impossible to keep up with the speed of transformation and customer expectation without an open mindset,” says Pol Navarro, who, as digital CIO at the bank’s parent group Banco Sabadell, is genuinely excited by the possibilities of a new banking era.
For TSB, that is expressed in a renewed business purpose to ensure ‘money confidence for everyone, every day’. By 2022 it expects more than 90 per cent of transactions will be self-service and completed in real time. It forecasts that three-quarters of its customers will be digitally active by then.
Like many, Navarro foresees that a retail banking customer’s experience of accessing financial services will become as fuss-free as buying the latest gadget from an Apple Store.
“Whether you are interacting from your home or in the branch, our vision is that there will be one digital journey that is used everywhere, and we can make that experience completely seamless between channels. It’s sort of what happens in Apple Stores. You can go to an Apple Store and digitally buy some goods there in the same way that you would at home. We think the frontiers between the physical and digital experience are disappearing.”
That ease of access, of course, is predicated on bullet-proof digital identification and verification (ID&V) and data sharing.
“We are seeing more and more companies taking advantage of digital identities, whether it’s identities from big players, like Amazon or Google, or smaller ones, to transform how they provide banking services at one click. I think digital identity will transform how financial services are provided,” says Navarro.
TSB has already partnered with Jumio to reduce the time to open and start using a current account from seven days to 10 minutes, using a selfie. The AI-powered system also includes ‘liveness detection’ to prevent fraudsters fabricating an individual’s identity. The partnership is an example of what Navarro terms ‘thinking beyond your platform’.
“Today, if you want to innovate in banking, you cannot do it on your own,” he says. “There are lots of things that are already in place today – you don’t need to reinvent the wheel and try to make them better, you can just leverage on those solutions to transform how you provide services to your customers, as with the example of digital ID and verification. We’re combining the best of breed of those solutions, to provide that experience behind our brand.
“Banking is open, not only by definition, but also in the sense that you need to be open-minded to bundle solutions from different players to provide a better customer experience. Open banking is pushing for open data, and being able to easily access data from other platforms,” Navarro adds. “We are also seeing lots of collaboration around fraud and security, with lots of banks starting to share data so that they can better protect customers and make their services more secure.
“It’s clearly an opportunity for banks to leverage data from others and I think we will see more of it, not only between banks, but also between banks and other platforms. So it could be Companies House or HMRC to speed up a loan application, for example. It could be any data platform that allows banks to speed up providing banking services.”
Gain through pain
The hit TSB took from the spectacular systems meltdown during the last stages of transferring its core banking system to new owner Banco Sabadell in 2018, still hurts. But, despite the pain, Navarro says the transfer has allowed the bank to move forward digitally.
“It allows us to develop new products and services quicker, especially being quite an open platform, in terms of adopting interesting solutions from third parties. What we did recently with Jumio and also with Square, are just two examples of the sorts of things we can now easily do, thanks to our new technology.
“For us, it’s having the foundation to start thinking differently about banking and especially having the capabilities to deliver those solutions quicker.”
TSB is a keen supporter of the annual FinTECHTalents conference, which
takes place in London and São Paulo late next year, and which Navarro says provides an ideal platform to ‘combine fintech companies with talent and big organisations looking for new ways of delivering innovation’.
And, in order to benefit from the best fintech innovations, TSB has formed a group innovation team that scours the industry’s ecosystem for both investment and leverage potential .
“For example, we invested in Bud, here in the UK, as one of the startups that is using open banking to transform customer experience,” says Navarro. “We also look at potential partnerships. So, again using the example of Square, an existing product that we can leverage on the TSB brand and offer something better for our customers.
“The third thing the team does is to try to understand how fintechs work and deliver a compelling difference to the market. For example, we try to learn how they design in a more customer-centric way. So, it’s investing, partnering, but also learning new ways of working, and how these startups are really transforming the customer experience.”