We are currently going through difficult times for the bank as it faces major challenges, beyond the digital revolution:
- Profitability, highly damaged in the financial sector due to the interest rate situation.
- Changing regulations. During the financial crisis we saw that it was necessary to change our game plan that, eight years later, is still changing. The need to adapt to this changing environment generates difficulties.
- The sector's reputation, also in tatters throughout the world as a consequence of the financial crisis. This must be restored.
The result is that banks have to juggle their digital transformation (long term) with the need to safeguard their balance sheet (short term).
Digitalisation has to work from two premises: both customers and competitors are changing..
On the one hand, a change is taking place among customers. Mobility makes customers more demanding.
- CaixaBank has more than 5 million digital customers, representing 39% of total customers. The average percentage in the sector in Spain is 36%.
- We keep on growing, increasingly so: in 2008, it took us a year to get 100,000 customers; in 2011, a month; and in 2015, it took us an hour. This demonstrates the rising use of mobile phones.
- Out of all our digital customers, three quarters also go to the branches. Logically, they do this with a different frequency and different expectations but we have asked them about it and they appreciate having an office to go to if need be.
Our competitors are also changing. Traditionally, banks in Spain have attempted to cover all financial needs, from transactional services to investment, financing, investment or protection funds. Nowadays, technology allows new in-comers, with focus points specialising on specific parts of the value chain, from neo-banks that work on transactions (as we have done ourselves in imaginBank) or aggregators, roboadvisers, crowdfunding, etc.
For traditional banks, fintech represents an incentive and an opportunity: we can offer more services and attract more customers. We have to learn how we can improve.
On CaixaBank's digital strategy. We can talk about three major fields:
- Backoffice technology: per a nosaltres, és clau l’ús d’una nova eina: l’smartPC. És una tauleta que permet tota l’operativa i converteix els empleats en “oficines mòbils”. Podem fer operacions que neixen directament digitals i es mantenen digitals. Això suposa que les operacions queden perfectament documentades i s’incentiva l’estalvi de paper.
- We have 2/3 of our staff working with this type of tablet and over 12 million digital signatures. 88% of our processes have already been digitalised.
- Digitalisation implies that physical files will disappear making more room to speak to customers.
- Improving the customer experience (backoffice): This can be seen in several types of progress.
- We have launches such as imaginBank, for people that only want a digital relationship with their bank, or consultancy using video conferencing for specialised services.
- At CaixaBank, the main transformation has taken place inside the office. We have made technology available for consultancy. We would like our stand-out service at CaixaBank to be consultancy because we have over 7,000 employees who are qualified in financial consultancy.
- The result is an office model, with 45 offices already up and running and a plan to reach 250 by the end of next year.
- These are offices in large city centres. They are different offices, not dealing in cash or counter services: the focus is on consultancy. More open, airy spaces mean that employees can move around freely. The SmartPC allows them to share screens with customers and encourages transparency. In addition, a SmartPC can offer consultancy both inside the office and on the move: we are changing how we operate.
- At CaixaBank, we now have the ReadytoBuy tool allowing advisers to focus on consultancy and defining the offer. Customers sign and check through the documentation in their own time and file it at home.
- Better service with greater added value: technology helps us stand out and we have to get it working for consultancy:
- For example, we have applied technology to advice concerning retirement. This is a process where consultancy is not easy: it is long term, there are many alternatives, you have to get the customer profile right, you have to consider taxation aspects... Consultancy using technology means we can run simulations that customers often want to do with an adviser, although they can also run them on their own. Simulation tools are also applied to private banking.
- We have created a very simple visual service that helps someone understand where their costs lie and how they relate to their income. This is a personal finance management service that some fintech provides but that banks did not traditionally offer. Now, My CaixaBank Finances has 2.5 million customers.
- Applying technology such as big data helps us adapt services to customer needs more successfully. We have been been working with a single datapool for some time and now it is important to use this data to give the customer more value. For example, big data lets us improve our scoring system to increase the number of customers with pre-awarded credit. It is easy to give money to customers with a regular pay cheque but technology allows us to offer customers big data so that, although they are not on a payroll, this gives them access to credit thanks to their financial solvency. For example, we can see this in the immediate one-click loan data with production this year of 650 million, 88% more than 2015. In addition, we can come up with car insurance for customers that costs less and grows significantly because these customers have a very low incident rate.
- Regarding application of cognitive technology, IBM Watson en Comerç Exterior is one example of its use. The 85 foreign trade specialists can offer better service and in the coming years, we will see many applications.
This innovation strategy does not revolve entirely around money or isolated ideas, but an innovation culture from which it is possible to generate processes that are bringing about change. CaixaBank has a long history of success going back to 1966 when we set up the first teleprocess in Spain using an IBM360. IBM was also present at other milestones such as installing the first PCs in offices in 1984.
CaixaBank's international awards acknowledge our capacity for innovation.
We always need a team to make a project a success but this has to go hand in hand with the team. It is important that it is a unit. Transformation cannot just involve one part of the entity. Customers use all channels. Although there is a cutting edge, transformation involves everyone and the responsibility is mine.