“Regardless of the exact figures, we know that the role is currently on a steep upward trajectory in almost all industries, public and private sector, B2B and business-to-consumer (B2C), large and small,” note Gartner analysts Dave Aron and Ken McGee.
Westpac New Zealand is one such company. In January, Simon Pomeroy moved into the newly-created role of chief digital officer.
Since then, Westpac has announced a raft of digital initiatives with Pomeroy and his team at the helm. It is trialling Google Glass and Beacon and progressively rolling out a central Internet banking platform. It is also the first bank in Australia and New Zealand, and just among a handful in the world, to sign an agreement with Samsung to work jointly on digital banking innovations, with Samsung giving Westpac early access to its smart devices.
Pomeroy recently spoke to CIO New Zealand editor Divina Paredes to explain what the role entails and why an earlier grounding in human resources, not technology, gave him the optimum training for the role.
CIO: You just came back from a visit to Silicon Valley and the East Coast in the United States. What are the insights you gained in that trip that are helping you now?
Yes, the senior management team at Westpac visited Apple Google, and PayPal in the West Coast What was immediately apparent was these organisations have a strong culture of growing innovation in their business, and the way they are developing solutions through customer lens.
We also spent a couple of days on the East Coast and we met with strategic partners like IBM and MasterCard. We saw the innovation they are driving and how we can bring that to New Zealand.
Westpac is very aligned in terms of customer centricity, keeping things simple and doing things incrementally. But [also] really thinking about how we are future proofing for our customers.
It is all about the customer experience and it's all about driving solutions that customers are adopting. The way the Internet now is really transforming the way we consume is just evident throughout Silicon Valley. And it's not about technology, technology is just the enabler.
It's about the change in behaviour, essentially, of customers using the Internet to consume. And you're seeing that particularly through mobility. And I often say to people "we've had an online banking solution for about 14 years". We've had a mobile banking solution for less than two [years], and we've got half our online customers now using mobile to bank. We did a survey about 12 months ago and more than 60 per cent of our customers said they would be using a mobile device to bank over the next three years, with more than 80 per cent say they'd be doing it in five. That's a staggering amount of customers.Read more: Prepare for digital - the lingua franca of modern business: Gartner
CIO: Is it because there are more young people now using mobile banking?
I don't think it's an age thing at all. You wouldn't probably call us young, but we're actually digitally enabled. We're using multiple devices throughout the day – tablet, smartphone, desktop computer. And again, I think about our strategy of a device agnostic full Internet banking – the fact that you can use any device to do your banking at any time of the day, anywhere in the world. And now we're starting to think about Google Glass and wearable technology like smart watches.
With the likes of Google, Apple and Samsung developing wearable technology, it's not going to take long before we're all walking around with a device, whether it's a watch or a pair of glasses that we're going to be consuming on. That's changing the way we have to behave. Success will be really understanding that customer behaviour and delivering services that meet that.
CIO: What does digital mean for Westpac?
Everything has a digital element to it in this day and age. Peter Clare, our CEO, came into the bank two years ago and had the vision to say "I this is where our customers are banking, we need to develop services that meet the demand.” And so he challenged us to say in five years’ time this is going to be a predominant channel that people are going to be banking on, particularly through the mobile phone.
He challenged us with two things: Firstly, how do you give customers all of their banking online? Everything you can do in a branch today, how can you put that online and seamlessly link to our people when customers need assistance? Secondly, how do you get that onto a device agnostic platform so that you are not developing three or four times? You're developing on one platform, it's a consistent user experience and it gives people full banking on a mobile phone, tablet and a desktop.Read more: More Than a quarter of government CIOs expect budget cuts this year: Gartner
That's made my job a lot easier because I have the support of the CEO, and also the support of the leadership team. We need to have a very aligned leadership team with this strategy because you are talking about, essentially, the banking of the future.
Digital is not replacing people; it's about how you make digital and people work very closely together.
You’ve really got to think about what that looks like from an experience perspective for customers. I think it's that ability to seamlessly connect all your channels for the customer, so that if you do an online [transaction], people [at the bank], and frontline teams know what you have been doing.
Equally, if you go into a branch and have a conversation with somebody, our online [team] knows what you have been doing. So it is seamlessly connecting the experience for customers across all the channels. Our three-pronged strategy: One, delivering this new Internet bank that is fully responsive, and gives you the ability to do all your banking on any device. The second strategy, called Symphony, is our use of the data in a more effective away, total customer management in that total relationship, and being able to personalise one to one conversations with customers across all channels. The third piece is that ability to be able to talk to people in a very personalised way online when they're in session, and rethink about online in the same way as we've always thought about offline.Read more: House of Travel increases productivity and cuts cost with digital communications
For a long time we've looked at how do we create this physical branch that delivers this customer experience? And we're still looking at those things, but we're also saying, how do we deliver this online branch that delivers the same experience? How do you take the heritage and the brand and the experience and deliver that to customers in a virtual way, and seamlessly make sure that you're only ever one click away from a human being through those channels?
The ability to use things like live chat or video chat means that we don't have to then go into a branch to speak to someone. Or we don't have to go ring the contact centre to have that conversation. You can come to us straight away. And I think that's really important, because it is all about the customer experience. Banking is relationship driven. Customers make everyday decisions that involve financial services but they also make big decisions, such as buying a home, that they want to have a face-to-face or contact with another human being to talk about that. So for us, digital is not replacing people; it's about how you make digital and people work very closely together. Our digital strategy is ‘digitally led; people backed'. And customers are driving this change.
Next up: Career pathway: HR to Digital