New to the C-suite: CDO

What does it take to bring a large bank to the next level of digital transformation? We sat down with Frank Verkerk, Chief Digital Officer (CDO) of ABN AMRO, and asked him about the achievements made.  

As for ABN AMRO’s digital transformation journey, where does the organisation stand in terms of maturity? 

“We are considerably digitally mature. Due to the COVID-19 situation, a number of programmes have accelerated and we completed the final stages to facilitate decentralised working from home. Not only did we succeed in achieving this, but we were also able to do this in such a way that we can continue to work like this in the future. ABN AMRO is a fully digital bank.”

Frank Verkerk
Chief Digital Officer (CDO) of ABN AMRO

"In the years 2015-2016, the bank’s IT and digital focus was mainly on automating processes, each with a clear beginning and end. As of 2017, we made a shift towards becoming an agile organisation. Truly, this is a huge task for a company employing thousands of employees. In this period, we eliminated the division between IT and 'the business' – a process that required lots of energy, but also paid off. Not that we didn't do anything special before this date. In 2010, we were the first Dutch bank to offer a mobile app with a real-time balance check. That was groundbreaking at the time. Today, customers can arrange an extra repayment on their mortgage through their mobile phone. Bringing the bank to the mobile phone is a mega transformation, but above all it is a process that never stops. Since contact with the customer is mainly digital, we are constantly thinking about how we can further finetune the online customer experience."

"In March, a new reality set in due to COVID-19. In a way, this was a good test of the bank's digital resilience. With the exception of the tellers, we succeeded in transitioning everyone to working from home in no time, including advisors and, for example, all call centre employees and engineers in India working at our outsourcing partners. It should be noted that a bank is a regulated environment and that when it comes to advice or certain back office functions you’re dealing with sensitive and personal data. We already had a project in progress to realise this, but we were at least 12 to 18 months away from completing this. We now have achieved this in just a couple of weeks."

“Video is key for digital transformation, enabling customers to talk to their advisor in a pleasant and secure way. Possibly, video will be crucial for future innovations and improvement of service delivery.”

“We have certainly not completed our digital transformation. This process is unlikely to ever stop as consumers will align their expectations with the customer experience from Amazon, Netflix, and Coolblue. The excuse 'but we’re a bank' is no longer valid. You must be able to provide a digital experience that can match those market parties. And we can do this when talking about our service offering to our B-to-C customers.”

“However, there is a bigger challenge in providing these services to medium-sized and larger companies. In this particular segment, banking services often consist of complex processes, but in the meantime individual employees expect a similar accessible interface that they are used to being consumers themselves."

"The best compass for digital transformation is ‘talking to your customers’. What do they experience at other companies, in other sectors? What are their expectations? Keep listening continuously and fortunately there are lots of tools to do this. Not only through actual conversations, but for example by monitoring in detail how customers interact digitally with your company. When do they click through, when do they click away? The trick is to really use these signals in the change process and not let yourself be 100% led by what is technically possible or your own strategy.”

What does it take to bring a bank to the next level of digital transformation and what are the KPI’s for a successful transformation?

"It is crucial to understand that digital transformation is first and foremost not about technology push, but also about customer pull. Secondly, nothing is permanent anymore, everything keeps changing."

"The real transformation is also on the 'people side' of one's organisation. Technology enables consultants to do everything via video, but the challenge lies in convincing them to use the tool as well. After all, it is 100% different than they were used to. Remember that we are not only talking about the conversation with the bank’s customer, but also about booking the appointment, exchanging documents, and 'digital signage' and in the background supporting the advisor with tools in terms of content. All this in such a way that there is a frictionless customer experience.”

"The opportunities offered by full digitisation are enormous. For example, we were the only bank to have advisors available during the recent Funda Open House Day, organised by the Dutch real estate portal. So consumers could have an advisory meeting about their mortgage immediately after viewing a house. By the way, the appreciation of this video advice by consumers is very high. So it's not something next to the face-to-face appointment; the video conversation is replacing the appointment at the retail bank branch."

David. L. Rogers* (2016) and others argue that “digital transformation is not about updating your technology but about upgrading your strategic thinking”, meaning that senior leadership must find ways to capitalise on new and unexpected business model innovations to optimise customer needs and experiences. Is this also true for ABN AMRO? 

"How do you accelerate? This is a balance between methodical work and ‘Fingerspitzengefühl’. I believe in small experiments. You can do this yourself, within your own organisation, but also by working together with fintechs in all sorts of ways, ranging from giving assignments to taking a vested interest in startups and incorporating them into your own environment at the right time."

"An example for ABN AMRO is the way in which we have gained experience with chatbots. This started very small within the bank, but the bots didn't learn fast enough so through the advice of an external partner we linked the bots to 'live' conversations. So if the bot didn’t succeed in answering, a call centre agent took over. As a result, we were able to accelerate and now we do more than 35,000 bot conversations each month, to the full satisfaction of clients who complete their conversation with our bots.”

"This goes to show that you don't have to say ‘no’ to everything. Another lesson learned is that it helps if you inject expertise and experience from outside the banking sector into the team. Employees with a background in traditional retail or data management, for example, ensure that you don't end up with a tunnel vision. The third factor to accelerate digital transformation is having the courage to end a project. You must also be able to end a project if it is not viable. Resources are limited and therefore there is no room to continue with hobbies.”

"An example of knowing when to stop is Kendu, our app offering wealth management services with a focus on a young audience which did not grow according to expectations. We saw a rising interest in investing in recent months, but not in Kendu. So we stopped the initiative, no matter how unfortunate, and shifted the focus to where growth can be achieved."

"You're always trying to be out ahead of the curve, but it’s a continuous process of trying and making mistakes. We chose to give projects limited funding for a designated time and evaluate on a regular basis and then consciously choose whether to proceed to the next phase with such an experiment."

In an earlier interview you said that “a partnership strategy is core to responding faster to a changing market place and meeting new customer demands.” What is the role of the CDO in this process of forging new partnerships and how does the internal organisation adapt to these new forms of partnerships? 

"Today’s reality presents constant change, with a pace going up rather than down. You can't cope with that pace without partners. No company in any sector is capable of interpreting everything on its own, of building, and above all of attracting sufficient talent. To be successful, it is important to be part of a large ecosystem. Don't forget that the customer's journey starts long before they have reached the bank."

"Not to be underestimated is having the right people, the right expertise within the team. And these days, as a financial service provider, you are competing with parties such as Microsoft and Google. I myself am a big fan of working with fintechs. This is an excellent way to have a lot of talent at your disposal. Corporate venturing will continue to be important for banks. At ABN AMRO, we're making big strides due to this. That's because investing in fintechs gives us access to that talent and technology. Talent that also attracts external money, works for large and diverse groups of clients, and can therefore scale much faster than we ourselves as a bank in the Netherlands would ever be able to do. The acceleration of digital transformation in financial services requires partnerships and connections."

"Every senior professional should realise that after 'day 2' each company has to deal with legacy. In our sector, regulators scrutinise us and data is privacy-sensitive, meaning that not everything is possible. This, by definition, reduces the power of innovation – another argument for working mainly with partners. The regulator does not have to be a limiting factor. Yes, sometimes you want it to be faster, but the supervisory eye of the central bank - and financial authority in our case - makes any implementation ultimately more robust."