EDMONTON – “If we harness this so it’s good for our customers, it will be incredible. If we harness it for us, it will be a disaster.”
That’s how Dave Mowat, president and CEO of ATB Financial and one of the most refreshing and innovative voices in Canada’s financial sector addressed a group of Canada’s technology leadership at the annual CIO Peer Forum held in Edmonton on Wednesday.
Mowat’s presentation, a refreshingly novel and surprisingly frank Q&A session, was focused on how he sees the role of technology in transforming his financial services company to meet the challenges of the digital era. Technology plays a key role, but equally, Mowat focuses on how the culture of the organization must change.
“As banks,” Mowat went on to say, “it’s (the customer relationship) pretty much done our way. We’ve optimized the work incredibly well for us.” The real goal, says Mowat, is “to walk around the desk – and use our knowledge of technology and banking to optimize the experience for the customer.”
Mowat’s attitude as CEO is essential if Canada is to maintain its leadership in the financial sector. In a world where scandals, poor service and ever-increasing fees have dominated the discussion, Mowat’s focus on leveraging technology for the service of the customer is a breath of fresh air.
A legacy business that’s driving change
Alberta Treasury Branch (ATB) was started in the 1930s by William Aberhart’s Social Credit government as local competition for the large chartered banks with their head offices in central Canada. Today it’s a modern financial institution with over more than 170 branches serving more than 240 communities and, most importantly – 700,000 Albertans.
The secret of its longevity has been its ability to understand and serve its customers. Under Mowat’s leadership, ATB is transforming itself to compete head to head with the large banks in Canada with a unique client service proposition as the driver.
Like his larger financial competitors, Mowat admits that he can’t do what he needs to do without technology. His challenge is to be nimbler and to stay competitive within the bounds of a much smaller organization.
His CIO is a vital partner in the transformation of his business. Asked how often he talks to his CIO, Mowat says, “every day.” It’s a relationship that many of Canada’s CIOs would give their left eye to have. For Mowat, however, it just makes sense. “We’ve gone from a financial company that does technology to a software company that does banking,” says Mowat.
Under his leadership, ATB has introduced several technology innovations. In fact, ATB is on the leading edge in many areas. Over the past few years, ATB has launched a number of new services and innovations including most recently, “Pepper” a banking robot.
But the challenge, says Mowat, is not in launching new services, but in launching services that meet unique customer needs. To do that, an organization needs to ask tough questions.
“You have to ask the right questions,” says Mowat. With new software, it’s not how cool it is. It’s “how many will use it?” As Mowat says, with rare candor, “we have stuff we’ve built that nobody uses. We suppress those numbers. If we have a target of 200,000 new customers but build something that only 5,000 new customers use, or if we have lots of bad comments,” no one is paying attention. Under Mowat, ATB is asking tough questions, like:“How many people are using it?”
What makes Mowat unique? In a world of obfuscation, he doesn’t duck. Mowat insists that the organization confess its failures, not to punish, but to force a real and honest focus on what really does work.
He eschews classic customer analysis and a distinctly practical approach to data analysis. “You can’t segment and say that women from this age to this age all like this,” he says. You need to get to a “segment of one.”
When asked about the current importance of data analysis – the so-called “big data”—Mowat took the time to tell the story about how his father sold bread door to door. Mowat’s father would look at the clothesline to see if they had children’s clothes on the line, knowing they’d have more mouths to feed. That, says Mowat, is “what big data was to him.”
Big data, razor focus
So how do you bring that practical view to the science of big data? One way, says Mowat is to realize that rationality, is part of the problem. “Banks,” he says, “are super-rational. We think money. We apply super-rational solutions to irrational problems.”
Echoing the new “lean product development” that has spread out of Silicon Valley, Mowat focuses on the customer need and rapid product development. “As banks,” he says, we tend to show new innovations only when they are perfect.” That, according to Mowat, is not enough. “Customers don’t like to be told” what is good for them.”
“It’s almost all behavioural,” says Mowat. “The sooner that we appreciate that IT and all of the technology is a behavioural study,” the sooner we’ll be successful at implementing leading technology. According to Mowat, adoption is everything. “You can have all the technology in the world,” he says, “but if (users and customers) don’t think it has value for them, they won’t learn how to use it.”
Customer experience and perception of value doesn’t only come from analysis. It comes from having a real empathy with your customer and their day to day problems. “Your life is super miserable if there are 20 people behind you at CostCo and your debit card doesn’t work.”
What’s the result? Under his leadership, ATB has become a leader in technology and has not been afraid to go against conventional wisdom and accepted solutions. In fact, Mowat believes that sometimes, going against the grain can be a true lever in digital transformation.
The company has ripped up their Microsoft infrastructure and moved to Google’s G Suite. Why? Mowat uses technology to not just enable, but to drive organizational change. “Banks are built in a very hierarchical fashion,” says Mowat. “A collaborative tool flattens the organization whether you want it to or not.”
The secret to change
The secret, says Mowat, is not solely technology, it’s how you effect change with people. “We think that this has more to do with DNA than with a skills gap. Your profession (and your skills) can be taught in a relatively short period of time. Leadership skills are harder.”
This understanding of organizational change, the relentless focus on customer experience and the embrace of advanced technological thinking may explain why Mowat thinks his ATB can not only survive, but It can thrive in the era of digital disruption. Having held his customers and even grown competing with the big banks, the new emerging fintech companies don’t frighten him either.
“Twenty-four months ago,” says Mowat. “Fintechs were trying to take down the banks. Now, they are looking to partner with the banks. You are much better trying to sell Bank of America on your authentication software, rather than trying to take down a bank.”
Clearly, Mowat has a firm line of sight on the future. ATB, under his leadership, has a “huge interest” in leading edge trends like unstructured data. He is looking at everything, including social media, to get a full and accurate picture of the customer in a way that can be leveraged to have a deeper and more meaningful relationship.
But he’s not about to jump on every new bandwagon. He has clear views on what new technologies to follow. For example, according to Mowat, Bitcoin will “never be a currency. Regulators have spent the past 20 years trying to keep money out of the hands of bad people.” He does believe that blockchain will be prevalent, but in legal, in supply chain and in other worlds, and not in banking. We’ll have our own crypto-currency long before blockchain will dominate financial transactions.”
How can he be so certain about a future that is so unpredictable? For Mowat, It starts with that idea that while the coming digital transformation is enabled by technology, the understanding the customer and their needs is everything.
“What is really required is not technology. It’s the willingness to walk around the desk and see this from the point of view of your customers. Then, and only then, can we bring true technological solutions to our businesses.”