Three years ago, when the company made the decision to reposition itself as a digital transformation leader, sales from digital channels made up just two per cent of its revenues. Since then, it has appointed a digital transformation leader, and grown its digital team from 50 to 250.
“Three years ago when I joined the organization, digital channels were small, and seen predominantly as a service channel – an alternate way for our clients to carry out their day-to-day banking,” says Aayaz Pira, senior vice president for digital retail and business banking at CIBC.
“As we stepped back and started to look at the opportunity of digital in financial services, we realized that digital could act as a catalyst to transform more than just day-to-day banking services,” he says. The bank began looking at how digital could transform distinctive client experience. It planned to simplify processes and drive cost reduction, and drive profitable revenues.
A landmark development for the bank was its creation of CIBC Live Labs in June 2016, located at the MaRS corporate innovation district, known as the C Suite. This is a digital innovation hub, designed to operate like a tech startup, with its own development team. It has created a range of digital products and services that have become a commercial success within CIBC.
One project of which Pira is especially proud solves one of the biggest problems facing customers applying for a mortgage: visiting the branch to fill out mounds of paperwork. The Hello Home mortgage app uses in-app chat features to help gather information from applicants.
“There are so many fields of information to fill out, so we enable image capture,” he says. “We grab all that information and fill out your mortgage document. That covers around 70% of what we require, and the other 30 per cent you can thumb in.”
This is an example of a prevailing trend in digital transformation: using technology to reduce the friction in previously cumbersome processes. Another example is the bank’s Digital Cart service, which allows customers to open a deposit account entirely on their mobile phone. It scans a driver’s license and prepopulates a form. It will also take a picture of a cheque, grab the customer’s signature from it, and use the amount that the customer wrote to fund and open the account.
“We can use that on campus to help university student to open accounts,” Pira says.
To help with entirely in-house developments like these, CIBC created its Mobile Quick Release team, which focuses on quick, incremental feature releases on digital products, typically turning them around in 60 days.
To help with that process, the bank also had to update key legacy systems, migrating them to a service-oriented architecture that delivered IT functions as services via APIs.
While it uses in-house resources to innovate in key areas, CIBC doesn’t reinvent the wheel. It occasionally reaches out to the fintech community where it makes sense.
“We believe that fintechs are a strong part of the ecosystem. They force banks off the status quo, and force us to change,” says Pira.
One example of such a partnership is its venture with online lending fintech company Borrowell in October 2016. “We launched one-click lending for existing CIBC clients through online banking, so that you can get a loan powered by Borrowell, and money into your account in less than 24 hours.”
This month, the company also launched a free credit scoring service powered by Borrowell.
Transforming an organization from the inside out to embrace digital channels is not without its challenges, though. Pira and his team had to raise awareness of digital transformation and win executive support for it in a bank that hadn’t done it before. It was like sprinting from a standing start.
“We spent time articulating the benefits,” he says, recalling that the best thing the team did was take time to plan what the bank would look like after digital transformation kicked in. “Once we figured out what we wanted to be, we built enough flexibility into the model to let us pivot as required.”
“Moving with speed in any large organization is going to be a huge challenge, just because of the nature and size of the bank, and the partners that you have to work with to get things to market,” he says.
These developments have paid off, and it shows up in CIBC’s figures. Pira says that sales from digital channels now account for almost an eighth of its revenues, and it is shooting for 20% by 2020. Customers dealing with the company primarily via digital channels have the highest net promoter score (which gauges the loyalty of a customer, and how likely they are to promote CIBC’s services to others). The next few years will see CIBC innovate even more when transforming customer experiences.