“People don’t care if you’re back office or front office. They care about the end-to-end transaction and the level of service,” says Stephen White with a degree of assured honesty, describing how digital has broken down boundaries once seen in traditional finance organisations.
“A group of smaller financial services players, I believe, will emerge in the next five to 10 years and be seen as providing something fundamentally different – a new world of finance.” And for Yorkshire Building Society to lead that group, this means delivering on the vision to become the country’s most trusted provider of being simply brilliant at mortgages and savings.
White has been Executive Director and Chief Operating Officer at Yorkshire Building Society (YBS) for just over a year. He is fully aware of the magnitude of the task ahead, but equally convinced it can come to fruition.
“Back in the 60s the bank manager on high street was one of the most trusted people you knew, up there with doctors and lawyers. The financial crisis in 2008 destroyed trust in financial services companies across the board. The trust is not there. I was approached by YBS to try and recreate something different in the market.
“I’m not saying we’ve achieved it yet but we certainly can achieve it. Building societies have a unique opportunity because we’re not a bank and don’t have shareholders, we have members and can really focus on that service proposition, the key differentiator.”
White’s new world vision emanates from time spent in Asia and Australia, regions with different approaches to banking. A proud Scot, he is the first to admit the UK has fallen behind other more innovative parts of the world.
“That really shaped my thinking around what the realms of possibility are for financial services here,” he adds. “From 2009-2014 I was in Australia with NAB, in charge of customer processing and payments, and part of that role was also looking after the customer servicing in the international offices, which included Hong Kong, Singapore, Tokyo, New York and London. This gave me real exposure to different forms of technology and digital and what was happening elsewhere in the world.”
A new challenge
Family priorities brought White back home in the summer of 2014, where he initiated a digital restructuring and transformation journey at Allied Irish Bank (AIB). Approached last year by YBS, he decided to take on a different, though not dissimilar challenge.
Such a challenge can be outlined in three major strands, the first being complexity brought about by rapid growth and acquisitions post-2008 crisis. The business doubled in size, and with that came new brands and product ranges. Second is cost control and pressures created by new regulation, coupled with the need to innovate. This has created a necessity to become as efficient as possible without sacrificing the final component of the challenge – meeting ever-heightening customer expectation. The demand for easier, accessible and more personal services has grown exponentially alongside the proliferation of multichannel communication.
“I believe YBS is small enough to be nimble but at the same time large enough to meet these challenges and change the market,” White comments. “This is a five year journey, and five years is not even an end point. However, we’re already starting to make a difference.”
Indeed, YBS already sees significant volumes of online traffic. More than 560,000 of the building society’s three million customers are registered to use its online services, amounting to 3,000 daily transactions.
YBS also has a history of being an early mover. Back in 2007, it became the first bank or building society to facilitate debit card payments as a way of paying mortgage fees and into online savings accounts. A year later, YBS became the first UK lender to allow mortgage applicants to complete an entire application online. Conveyancing was also brought into the online mortgage application process in the same year.
Mortgages: the meat and drink
And it is mortgages where the most impressive progress has been made in recent months too. Enter Nick Mortimer, Head of Marketing and Ecommerce, responsible for key brand messaging and driving ecommerce activity.
“Mobile devices, especially tablets, are delivering much greater volumes of mortgage application traffic,” he explains. “Around 40 percent of our applications begin through mobile devices, and we are about to launch a fully-responsive mortgage and savings applications process on mobile.” The amount of existing borrower transfers being carried out online has also risen, last year seeing a jump of 60 percent. Webchats are also being incorporated into the YBS website, again helping customers to achieve more online.
Further enhancing the convenience factor for customers is a 10-minute mortgage agreement in principle service, rolled out last year. “If you’re looking to buy a house, one of the first things an estate agent will ask is whether you have a mortgage agreed. In terms of ease, simplicity and confidence, it really helps,” Mortimer continues.
Overall turnaround times were halved during the course of 2016. Average turnaround for an application now lies at around 11 days, compared with 23 just over a year ago. Central to this has been listening to feedback from brokers, who account for around 60 percent of YBS lending. Introducing a system where individual underwriters take ownership of cases has proven key to speeding up the system.
This had led to a remarkable improvement in Net Promoter Score (NPS) ratings, with brokers (and customers) up and down the country benefitting from the newly streamlined process. Broker NPS has risen from -11 to 46 in the space of a year. Another important metric underlining these improvements comes from KPMG Nunwood and its Customer Experience Excellence Analysis, which ranks YBS 27th best in the UK across all industries examined.
Though much has undoubtedly been achieved, more is required. Head of IT Andy McCleod, already a key protagonist in White’s team, will have an important role to play. “There are so many other things to focus on once you have your mortgage offer, and we are starting to ask whether we can intervene in other parts of the process,” he says. “The typical home buying process takes 120 days – what can we do to improve that? Working with our brokers has been one way we have successfully explored.”
“How do we get it to less than five days?” White asks. “How do we get it to one day? These are the questions we are now asking ourselves.”
Behind the scenes
Reaching a one-day mortgage turnaround may appear like a huge project to be undertaken, but YBS’s success to date boils down to a series of smaller-scale, fast moving initiatives.
“This is not necessarily about big projects, rather making sure that everything we do is grounded in customer understanding and insight,” explains Mortimer. “What we did last year was examine every fine detail that matters to our customers, making a series of small changes. Our NPS improvement is all down to these small, detailed bits of work we have done with the customer at the centre. Commercially we also had our best ever year online. Our agile, fleet-footed approaching is paying dividends.”
White agrees, adding: “The whole concept of how we deliver change is evolving. Twenty years ago you would create a project, give it some money and implement it, and for some things that works. But once you start a project it is very hard to stop it, because that is the way the organisation’s culture works – you give the money to see it through. So what I did at AIB was bring in an experimentation culture I found in Australia, which involves setting aside some investment to learn fast and move fast. If it works, great. If it doesn’t, close it down and move on.”
Mortimer’s ultimate objective is to open up digital space to more of the YBS customer base. This will involve a mixture of promotional and educational activities with customers, as well as making digital processes simpler.
“I see my role in this digitisation journey as the voice of the customer,” he says. “There is something in the DNA of YBS that puts the customer at its heart, and I speak about this from my own experience at bigger banks. The competitive product portfolio and customer experience becomes a powerful combination, and my job is to communicate that to as many people as possible.”
Mortimer and his team use a huge array of insight tools to track and analyse customer behaviour, helping to inform investment decisions. This includes use of segmentation models through to more detailed analyses from Adobe SiteCatalyst, which offers visibility of how consumers are using YBS web services and points out possible inefficiencies. Clicktale software records customer sessions and displays heat maps showing patterns of click throughs, which can help YBS to place its most important messages in parts of web displays where customers naturally look.
Running in tandem to this is what Mortimer calls “common sense stuff”. Whether this be simply spending time in contact centres talking to customers directly about their experiences, gathering colleague suggestions based on what they hear on a daily basis, or monitoring social media, it all contributes to creating a bigger picture.
“We listen to all of these feeds and have a very long list of things we want to achieve, and filter these based on what can deliver a genuine difference for both the customers and the Group,” Mortimer adds.
“There are two broad ways our customer insight work joins up with our change teams. We’re constantly looking at tactical fixes and quick wins, for example testing different versions of websites and seeing which ones work best with our customers before deploying live.”
The second type of outcomes are more structural changes which deliver new capability. Mortimer points to a recent breakthrough in mortgage appointment booking as the perfect example of this in action.
He begins by outlining the issues identified with the legacy system. “We recognised that from a cross-channel perspective it was pretty clunky in terms of customers requesting to get an appointment in branch – it was a very manual process which involved call backs between branch staff and customers. We have all had call backs at times when we’re either at work or not by our phones.”
Customers can now book a branch appointment directly into a mortgage advisor’s diary via a fully automated system, also receiving free email alerts and text prompts. This has led to a higher proportion of applications being completed, which in turn is boosting satisfactions ratings and even led to YBS being shortlisted for Best Digital Service Initiative at last year’s Banking Technology Awards. A project lasting a total of nine months, this involved close collaboration with BookingBug, and has led to more than 3,500 appointments being made online, which translates to around 15 percent of all appointments.
Mortimer continues, pointing to another feature of the new system. “We can also do some pre-qualifying studies with the customer as part of this process, where we set out what we need from a mortgage customer.” Not only does this save time a for a customer who YBS would not be able to lend to, but also helps staff to schedule appointments that are more likely to result in a completed mortgage journey.
The mortgage appointment breakthrough highlights the massive benefit to be reaped from leveraging the expertise of partners.
Indeed, the biggest eye-opener for White in Asia and Australia was the potential of partner power, beyond simply outsourcing to reduce costs. “Now it is about a multitude of factors as well as cost, including economies of scale, risk mitigation, access to resources and agility with digital,” he states.
McCleod’s remit as Head of IT very much involves the establishment of a strong, agile partnership network; a network that appreciates and understands each other’s requirements, ambitions and approaches to innovation.
“The challenge facing the industry at the moment is one of ‘what is a digital strategy for an organisation?’” he says. “Our partners are very keen to understand that so they can respond with services and applications to support and enable it. So while our partners may or may not have a distinct digital strategy, they will understand what our future is and allow us to become more agile by, in many cases, connecting up applications that already exist, rather than building their own.”
Again these partnerships and technology investments circle back to the needs and expectation of YBS customers, with McCleod’s decisions as Head of IT very much intertwined with the priorities of Mortimer’s marketing function.
“Vendors are creating more adaptable models so they can provide unique experiences for each different business, regardless of the industry they are serving,” McCleod continues. “Brand isn’t just about the YBS logo, it is about the experience we give. Customers are increasingly basing brand loyalty on values, so this means we must work even harder to deliver compelling communication and experiences.”
Partners in action
Often it is transformation at the back end which can optimise internal processes, and thus lead to more effective end-to-end delivery of services for customers. Creating an agile digital workspace is one major priority currently being explored with the help of Computacenter. The basic premise behind the partnership is to allow YBS colleagues to choose how, where and what device they want to work on.
“We’re not talking about mortgage application workers here, as this is regulatory controlled,” McCleod explains. “We’re talking about knowledge workers and those in leadership roles and how they can become more creative at problem solving. We have a myriad of applications that can help our colleagues but they’re difficult to deploy, often because of licensing models being expensive and thus limiting our choice. So Computacenter has been looking at this dilemma to help us give people more flexibility, more freedom and more mobility to work in a way that is most effective for them. It is an interesting and exciting dynamic.”
Enabling further flexibility within the organisation is the work carried out in partnership with HP. The computing giant is helping to renovate YBS’s core infrastructure to establish greater connectivity to applications that have already been built. This will allow more efficient distribution of resources in the future, while helping YBS to consider whether on-premise or off-premise models work best for a particular function. “Business models in our industry are beginning to shift and the ones that are able to connect to other data sources and business model transactions will bear fruit,” McCleod observes.
Another key partner is IBM, especially when considering its work around creating what White describes as a fully functional customer hub. “We have carried out a lot of positive work with IBM around our customer hub, and there is still much to do,” he says. “The customer hub maximises our use of data to develop better service for our customers, and IBM will continue to be a key influencer on this.”
Sharing the wealth
Away from mortgages and savings accounts, an important line of business for YBS is the facilitation of company share plans. YBS Share Plans offers the full end to end digital customer experience for corporate clients and their employees, whilst recognising the need to support these with traditional telephone and postal processes, enabling customers to communicate with us through their preferred channel. The service covers client on-boarding and all related employee engagement channels through the life of the plan, to the vesting/maturity.
YBS Share Plans connects with other businesses in financial education and wealth management to support employees in making the right choices when joining a plan or at vesting/maturity, when decisions need to be made taking into consideration tax liability when individual financial advice might be appropriate for example.
This again materialises from a network of partners working in tandem, with YBS at the core. “We work with several vendors to deliver this service, and this ecosystem of clients and vendors use YBS as a hub, which is an important part of that customer’s journey from joining a share plan to realising the growth in their savings and shares over time,” explains McCleod
“We are helping customers by connecting them to the relevant information to support them in making the choices that are right for them, taking the lead in the overall project planning and logistics around delivering a cross-industry model; and we believe this is a digital business model in its own right that can be evolved further.”
What does the future hold?
As these lines between traditional financial service providers and quick-to-market fintech companies continue to dissolve, a natural endpoint to our conversations sees a discussion on how far YBS will head down the digital road.
For McCleod, the overriding vision is simply for YBS to become the number one in the market. “Our vision is to make YBS the best provider of mortgage and savings experiences,” he says. “To do this we have to compete with everybody and make sure our offering is better than theirs. If you follow that through logically, we will get to our one-day mortgage experience, and brokers will be able to deal with more customers.” How much digitisation this will take, is an intriguing question, and one that McCleod believes is an important conversation to be had.
Part of this conundrum is neatly summarised by Mortimer. “This is still a complex process,” he says, “and we do not want to trivialise or oversimplify a mortgage application. We need to convey the important messages – this is a big decision for somebody to make in their life. This said, there are ways to communicate this that can help customers navigate the process much better. It is a constant evolution.”
And it is this balancing of the scales which White has pressed from the beginning – the need to excel in all channels, not forgetting that one of those still lies in-branch.
He concludes: “Do we want to become more digital? Yes. Do we still believe in branches? Yes. We want to provide a seamless experience across all of our channels, recognising that our digital channels are going to grow.”