TAdviser Interview: The board member of Otkrytiye bank Sergey Rusanov - about digitalization priorities
The board member, the head of the IT block of Otkrytiye bank Sergey Rusanov in an interview of TAdviser in January, 2020 told about what way the company in the field of digitalization goes and as it affects its business.
In May, 2018 the business development strategy of Opening till 2021 with the stated key purpose — to become fast and convenient bank with the first-class client experience was approved. What digital solutions did you implement since then to promote achievement of this purpose?
Sergey Rusanov: It is important to note that digital solutions in bank were always. I consider that the term "digital transformation" in principle is not really applicable to the Russian banking sector. It is possible to tell that banks were digital also earlier, especially appeared in the nineties. For example, let and through dial-up, but far off it was possible to work with banks already then. At that time it was "digit" too in terms of what is meant it now.
The modern concept of digitalization means unprecedented development of mobile devices. Their penetration and convergence – when in one device are joint functions of phone, the modem, the computer, the navigator, the camera and others – became the driver of development of different customer services. Banks participate in this process too. Therefore it would be wrong to say that we were not digital, and then began digital life.
Primary activity of bank – financial therefore at us the technologies allowing to improve client experience in the field of financial services develop, first of all. A priority for us is development of remote channels. For clients it is important to have an opportunity to interact with bank instantly, simply and conveniently, without coming to department. We have essential practices in the field of RBS for all client segments.
We pay much attention also to participation in initiatives of Fintekh Association, for example, in the system of fast payments and the system of biometric identification. One of the key directions for us also is development of open API for applications. For example, for small and medium business we implemented an opportunity to be connected quickly to different interfaces and other service providers. But, in addition to improvement of client experience, our strategy assumes development of the basic IT connected with increase in availability of services, reliability, scaling and high-speed performance, safety of data.
And all this becomes against the background of restructuring of the IT economy of the attached banks which got to us in inheritance. At the beginning of 2018 the shareholder made the decision on consolidation of Otkrytiye bank and B&N Bank. We needed to merge assets, commands, business processes in the minimum terms and to build effective business. The board set the task to create uniform IT infrastructure, to remove the duplicated processes and systems, to reduce costs and to create the base for the further growth and development. At the time of consolidation we had 546 systems with duplicative functionality, by the end of 2020 there will be 215 direct systems.
And now on the ready, transformed infrastructure we begin technology breakthrough, essentially improving quite good digital customer services which we already have. We not on start - we in the movement, and I speak about acceleration of this movement.
Some of key and large-scale internal projects of the last time, perhaps, can call SAP implementation of HCM. Consolidation of banking groups, large-scale reorganization and staff rotation resulted in need of creation of a single system of personnel records and payroll. The task in 6 months to pass to a new system in scales of all united bank was set, and it was about 25 thousand people. At the same time it was required to save all historical data and to provide the continuity of all processes.
Since 2019 the bank lives in a new personnel system. Having built basis, in 2020 we pass to creation of the HR around the employee model when around any needs of the employee within it, we call so, lifecycle in the company the convenient services allowing to make its work comfortable and effective are built.
In 2019 the Otkrytiye bank presented the new Single Frontal Solution (SFS). What do features of this project what technological solutions and methods of the organization of work were applied consist in?
Sergey Rusanov: The main objective of EFR – to provide the single interface for customer service at offices and the contact center (CC) of bank. Time of training of employees was as a result reduced and work process became simpler that allowed to increase service rate of clients. All this improves the user experience and raises customer satisfaction from interaction with Otkrytiye bank.
Historically in bank there were more than 20 systems in which there was a customer service. Any of the being available solutions did not allow to implement all required scenarios. Therefore the decision on development of a new single system was made.
The project is started in the middle of 2018. By March, 2019 based on infrastructure of a private cloud (private cloud) the EFR command started the platform part of the project which received the name Digital Platform there is a pipeline of continuous delivery of changes on demand, a technology basis of the microservice layer which is the cornerstone of EFR, and further omnichannel solutions. In May, 2019 the pilot of EFR on pilot group of departments which receives daily updates of a system for check and debugging of implementable solutions was started.
In July trial operation of EFR on a limited number of departments in Moscow and regions and also in contact center of Otkrytiye bank started. At last, in September the solution was replicated on all network and contact center of bank.
Unique for the market we consider the fact that the project of similar scale was initially started and implemented on process methodology of Agile, using such modern information technologies as microservices, containerization and private cloud. The concept of the omnichannel platform was put on the earliest blueprint stage. The continuous and completely automated delivery of completions to the industrial environment with a frequency several times a day significantly reduces costs and allows to reduce considerably time-to-market for business of bank. Thanks to these innovations it was succeeded to do the huge volume of work as rather small command in the shortest possible time and with the minimum costs.
May you give the examples showing communication between digital transformation and sustainable development of your bank?
Sergey Rusanov: For example, tell the indicators connected with increase in penetration mobile and Internet bank in the retail block, small and medium business about such communication. So, in 2019 the number of retail clients, active in mobile and Internet bank increased by 13%, in a segment of small and medium business — for 14.8%.
Increase in number of users of these channels and their transactional activity is directly connected with increase in sales volumes, growth of a deposit base and the loan portfolio both individuals, and the clients representing small and medium business. For example, in 2019 more than one million clients left requests for a cash loan on the website. At the same time there are more than a half of the clients who obtained a cash loan through the request on the website - new to bank.
In 2020 we are faced by a task to expand opportunities mobile and Internet bank, to transfer more and more transactions from offline to online: the order of references, removal of encumbrance on a mortgage, receiving a cash loan and many other things. Also in plans development of a marketplace with offers of B2C and B2B-services and services.
We carry to remote channels of service also contact center. Until the end of 2020 we set the purpose to learn to solve more than a quarter of client addresses using voice services. We stake on the voice assistant, but not on traditional IVR as we consider that the future behind an interaction interface, natural to the person, with machine. It clearly is visible on the example of rapid growth of the market of smart columns. Further, using identification of clients based on opportunities of voice biometrics (we are active project participants of EBS) we will develop skills of our assistant.
The chat (perhaps, messengers) will be other point of digitalization of contact center for us in which we will unroll the full chat-bot. Now we are in final project stage of preparation of fight of robots: we select from seven previously selected solutions) for selection of the champion according to the solution of requests of our clients without participation of the person.
Tell, please, in more detail how transfer of clients to digital channels promotes sales growth in general?
Sergey Rusanov: We have office network where we provide at least the first contact with the client. But the vast majority of clients, especially young - users of digital channels who do not want to visit offices at all. Digital services are now means of building of the customer base because clients do not go to banks where there is no "hygienic" minimum of opportunities in digital channels at least – a set of basic transactions in mobile application.
To hold and increase the customer base, it is necessary to have not a minimum, and something bigger. Now practically all services necessary for people are in a cyberspace, including the vast majority finasovykh / bank. Selecting bank, clients at first look for information on it and its RBS systems, compare, analyze, read responses. It occurs online too. Therefore now the digital profile of bank is his reputation, its "medal on a breast".
The increasing value purchases the personal attitude towards each client. Now we study approaches to deep personalisation of remote channels of service – the website, the Internet and mobile bank to provide to clients the first-class user experience of use of our RBS systems. The client will always select more advanced bank having more than functional "counters" in the systems of remote service.
The Otkrytiye bank stated that not the first year conducts digital transformation. What cultural changes did it demand? What changed in corporate culture of bank since the beginning of digital transformation?
Sergey Rusanov: General strategy of business of Otkrytiye bank - very multidirectional. To achieve results on all directions, including in digital transformation as one of the defining factors of the successful competition in the market, the competent, professional, steady staff is necessary. Therefore we pay to corporate culture special attention. Preparation of consciousness of people for what is digital transformation and as it needs to be performed – one of strategic tasks.
Let's begin with the fact that not all understand value of this term. Therefore we pay much attention to education: we have a program of advanced training of top management within which employees study the best practices at the leading business schools. Top management number at us - 60-70 people, it not only board. To us it is important that all of them equally understood what is digital transformation.
In addition to aiming at result, our corporate culture includes such components as achievement, trust, advancing, care. The element connected with achievements just means technologization. We impart to people understanding that they work in the advanced bank. That they accurately understood what special we do as we will achieve the objectives.
At the beginning of 2019 in bank those four corporate values - achievement, advancing, care, trust - with four meanings in everyone officially appeared. All these values are interconnected, interdependent and equal: ambitious goals and the attacking agenda of business are directed to achievement of good results. Achievement motivates to affect advancing. All this is pledge of customer satisfaction on which the financial result depends.
In bank the program of continuous changes – "T-transformation" is developed. Within this program there take place the actions aimed at the development of corporate culture: T-Day is discovery of new technologies to be one step away ahead; T-Visit is the methodology of a research of processes based on the Japanese corporate approach of Gemba complemented with assessment of other fields of activity of divisions; T-Group is team work on problem points of bank processes.
And whether you have some system of check of compliance of employees to these cultural markers?
Sergey Rusanov: Yes, we have a system of the purposes and regular control of their achievement for several levels of personnel - from the chairman of the board to chiefs of managements. At the same time in bank communication for exchange of views and the last achievements between employees is built. Also internal processes on methodology of Gemba which I mentioned when the people who are not involved in sales processes and service on short term are involved in them are investigated, a new view estimate as everything works, and reveal shortcomings. Besides, we carry out brainstorming.
Technologies of robotic process automation (Robotic Process Automation, RPA) now, perhaps, are applied in each large bank. Sberbank, for example, reported recently that due to robotization they reduced personnel of the operational block five times. As far as did your bank manage to optimize the state due to application of RPA?
Sergey Rusanov: Considering that we began to implement strategy in May of the 2018th, and before dealt with other problems, now densely undertook this story and already carried out the pilot, understood indicators of improvement of work on routine transactions at the expense of RPA. We already see that we can close some sections for 80% robots.
The bank included in plans of 2020 plans for process optimization and personnel of the operational block. In this block more than 2 thousand people work that makes about 10% of all staff of bank. But in addition to implementation of robots still it is necessary to optimize processes - in process of decommissioning of a number of systems and replacement their new.
By our estimates, it is already possible to call robotization of business processes a trend in the Russian banks. A large number of banks has a set of the outdated systems which output from operation either is complicated, or is impossible. Traditional automation of such systems is represented to competence, inexpedient or difficult in view of loss: in case of the outdated systems or fast decommissioning. And robotization in such cases becomes cheaper and simple alternative in implementation which allows to raise efficiency of work of employees of the bank.
Such situation is typical for many organizations, including financial. Feature of Otkrytiye bank is that now we are in process of harmonization of an IT landscape of bank and group in general. Outdated and legacy inappropriate systems are taken out of service and replaced with systems which rather easily are improved, and on which examination only grows. In such conditions the range of effective applications of RPA in this part for us is organic.
In the near future, I think, it is worth expecting increase in "rationality" - emergence of cognitive functions in an arsenal of opportunities of robots. It will allow to expand possibilities of applications of RPA due to adding of difficult and intellectual processing procedures of data and emergency situations. We consider that we will be able to perform not less than 30% of routine functions using robots in the near future. At the same time robots completely will not replace people, and will release them time for the solution of more creative tasks or for work with exceptions against the background of significantly large volumes of the supported transactions.
How many offices of Otkrytiye bank are equipped for acceptance of biometric these clients? How willingly do your clients hand over biometrics?
Sergey Rusanov: It is important to understand that the bank has no task or obligations to motivate all clients on delivery of biometrics. It always voluntary solution of the client. And here, maybe, there is some defect of goal-setting because the purpose – to bring all customer base of the country in this system. It turns out that so far it becomes on a voluntary basis, and clients need not really it. Opportunities which will be had by clients, having handed over biometric data, in practice are not implemented yet.
Besides, they have concerns on the fact that their personal, intimate information will be stored somewhere. With respect thereto numerical achievements in area of collecting of biometrics on average in the market so far very modest.
Our management does not force an event, considering factors about which I told and also expenses which are required by implementation of this idea. It is the expensive project, it requires an investment of money and time while the result is still unevident. There is no clarity as it will be monetized.
The Bank of Russia obliged banks to connect by the end of 2019 all sales points to a single biometric system. We have more than 500 sales points from which in 2019 we connected about a half to EBS - 230 points. Let's move further after understanding of what happens to this technology in the market. We already thought up some models as to monetize it, we will try them.
The new product of investment life insurance "Smart investments" constructed at work of artificial intelligence became available to clients of a private-segment of Otkrytiye bank recently. In what else products do you consider the possibility to involve artificial intelligence technologies?
Sergey Rusanov: Artificial intelligence technologies still are at a stage of understanding of their opportunities. It sounds beautifully, possibilities of modern mathematical algorithms and ADP equipment really allow to process large volumes of information, to take from them logic and based on it, for example, to analyze client transactions, client behavior, preferences, to develop hypotheses for sales and to do the personalized offers. But the majority of what so far becomes in the field of artificial intelligence - net hype. Many just want to be lit, as they are engaged in these technologies.
In my opinion, AI is good in several areas. For example, in analytical CRM for the analysis of any client data on the basis of which it is possible to do optimal product offers and to calculate credit limits, to limit issues to risk segments, thus minimizing risks of bank. In general, it is useful to analyze client behavior always in terms of formation of a portrait of the client and deviations from it. When we see the behavior deviating normal it means that there is a fraud probability. Security - very important use of artificial intelligence.
We consider one more field of effective use of artificial intelligence automation of work of contact centers. First of all, it, of course, application of chat-bots for processing of customer appeals. As it was already told above, we conduct work in this direction and we are going to conduct "Fight of robots".
But there are less obvious aspects of use of AI in contact center which can increase process performance of the center. For example, now we conduct negotiations on the pilot of the managed AI of training of staff of contact centers. AI analyzes calls of the employee and issues it recommendations about development of its soft skills for increase in efficiency of sales of our banking products. Perhaps, this use of AI will not cause wow - effect, but can bring benefit to bank.
What strategy of your bank in the field of development of technology non-bank products for foreign market? For example, some of banks render cloud services, and someone got own mobile virtual operators (MVNO).
Sergey Rusanov: MVNO is usually necessary for particular purposes, for example, to win target client audience transfer it on this mobile operator. Through it it is possible to sell unique products and to render services which cannot be received anywhere any more. At the same time as means of attraction in network carrier of these services (actually, MVNO) use low rates. Also create MVNO through the real mobile operator as through the infrastructure partner. We studied experience of some of our competitors in this area, but for ourselves we do not see need for creation of such operator yet.
From non-bank we have, for example, insurance and investment products. We sell them together with our partners - the companies of our group. Also now we work the idea of creation in group of a financial bank subsystem as a part of an ecosystem of a digital marketplace for car owners. Not only motorists, but also for owners of all types of motor transport – cargo, passenger, etc. But it is a subject for a separate interview.