Dharmesh Mistry: Welcome everybody to Zafin’s Banking Blueprints Podcast Series Two. I’m your host, Darmesh Mistry. And this week, we have two esteemed guests, Chad Hamblin from Microsoft and Chris Dickin from Zafin, Chad. Can I ask you to introduce yourself and your role within Microsoft, please?
Chad Hamblin: Sure. Thank you. Yes, I am part of Microsoft. I am part of the worldwide financial services industry team. I am director focused on banking And one of the areas that I happen to focus on is customer experience, but also focus on retail banking as a broader vertical and also employee experience as well.
DM: Chris over to you, Can you introduce yourself and your role?
CD: Absolutely, Dharmesh. Good to see you again. My name is Chris. I lead the global partner strategy here at Zafin. So this is everything to do with Zafin’s partners, inclusive of Microsoft and other system integrators, the advisories, the different co providers, etc. So this is all about how do we go to market indirectly together with those partners?
DM: Great. Welcome to the show guys.
Chad Hamblin: Thank you for having us. Thank you very much.
DM: Brilliant. I mean, this is a really interesting podcast for me because we’re going to talk about customer experience. There’s a lot of confusion about it. Still, I think, you know, everyone talks about how important it is. Everyone’s got an opinion on customer experience, but I still think that there’s kind of confusion. So maybe to help demystify some of that confusion, Chad, can you give us your definition of what customer experience actually is?
CH: Yeah, I mean, I think, you know, everyone probably has their own definition. So I don’t profess to sit here and have the only definition. But I think, you know, from a layman’s standpoint, customer experience is really the lasting impression and image that a customer has of The different interactions that they have with a company across the different channels that they may offer, right? So at the end of the day, whether they’re talking to them in the contact center or going into the branch or using online banking or exchanging emails or texts, Whatever it may be, all of those things kind of constitute a broader customer experience, that customer associates with that organization, right? So it’s really about the customer journey and all the different interactions that are taking place with that place of business and the customer.
DM: And so, I guess that is important, but why is it so much more important now than before? Do you think?
CH: Yes, I’m going to actually share one thought here and I’ll let Chris chime in. I actually think it’s I’m going to talk about why I think it’s even more important in financial services as opposed to other industries. And I’ll kind of come back and talk about maybe the now versus before piece. But in financial services, many people know it’s primarily a services based business. So different from automotive, where you have very clear differentiators in a car or pharmaceuticals, where you may have a different kind of patent and pharmaceutical makeup or high tech, where you can create kind of the world’s best computer or software. You can differentiate on products. In many cases. In other industries. When you think about financial services, a lot of the financial products and services that firms offer are very similar in that they, you know, there’s a 30 year mortgage, there’s a savings product, there is, you know, a… checking product, there are financial and more investment products. Yes, there may be some variances across those different financial products amongst the different institutions. But by and large, the core construct, the core product, the core offering is very similar in nature. And so because of that, it becomes more difficult for financial service firms to differentiate on product alone three year mortgage. But one of the areas they really can differentiate on is that kind of unique customer experience. So that’s first of all, I think it’s really important to financial services. And then in terms of why it’s even more important now than compared to before, I think COVID really kind of put everything in perspective for a lot of people. And it also made a lot of the banks find out that they have to really be creative in how they interact with the customers. They need to give the customers a convenience that they’re asking for because during COVID, people couldn’t walk into a branch or maybe interact in the ways they previously… had. And so it really forced banks to realize that, wow, they have to offer this kind of holistic customer experience across all the different channels And they need to do it in a way that’s more personalized and more kind of relevant. And I think part of the reason why it’s even more important now than say even five or 10 years ago. Did You have a lot of these online businesses like Amazon et cetera, that are giving that kind of personalized instant gratification experience? And so now customers have higher expectations of what they want from banking firms. So I think it’s a confluence of a couple of different things. One in terms of kind of COVID being a little bit of a reset, Two financial services being a much more of a kind of similar product industry where you can’t just differentiate a product alone And then three, you have a lot of the kind of more art of convenience organizations like Amazon did that are giving customers that kind of instant experience that they now expect in other industries.
DM: Brilliant. Chad, I love the summary because I was just about to do that, but you’ve done it for me which is great. Chris, I mean, what’s your perspective on, you know, the importance of customer experience?
CD: I think guys, Chad, you did an amazing job there too to summarize a lot of what’s going on in the industry. The only thing that I would add as some of the, I think all the audience have come to know me, I’ve come mostly from the digital banking side, of the equation of the bank, right? So more the front end spending a number of years doing that. Until at one point I came to the realization That the digital front end which essentially is what banks have been working on for say maybe the last decade… Didn’t include a key component of the full UX if you like of the full customer experience. And that missing component was the customization at the personalization at the customer level of the product and price for them. So at the end of the day, what a bank sells and puts on the shelf is its product and the price associated or the proposition associated and the price associated with it. But if you look at what’s going on in the industry, It has been down a path or is going down a path of commoditization of the banking products At the end of the day, a loan is a… loan. There really is no much differentiation than that besides maybe the price. And so if banks want to bring a more holistic view to what UX should be? Or is it’s not just about the front end and making a pretty shelf and a storefront for that, You really need to put an innovative product on the shelf. And I think that’s the wave post COVID or during COVID that we are seeing now. And it’s driving an interesting set of dynamics within the banking industry. This new wave is the competition for product on the front end for banks.
DM: Yeah. I agree. I mean, I think as Chad kind of highlighted that there isn’t a physical product in financial services as such. So it really is a virtual business in effect And the products are virtual, right? So it’s absolutely geared up for digital delivery Yet, you know, it’s been amazing that fintechs have kind of innovated on the customer experience and banks have kind of had to follow them. But actually what’s really happened is that it’s easy to copy a change in the screen flow or a simplification of the screen flow, But it’s much harder to pitch the right product at the right time for the customer. Is that where you’re heading Chris as the overall compelling experience for part of customer experience?
CD: You’re bang on Literally, what has happened over the last decade is fintechs have come in and you could argue they have won the front end game Like the ease of use, flipping from an Amazon, flipping from a Facebook or a TikTok over to a fintech, is much more aligned with what you would experience with a bank. So take that aside. Then what does a bank offer? They offer a product? And interestingly enough over the past few years, the fintechs have mostly been the front end and then using a white labeled bank as a front or the back end regulated product provider. But the banks haven’t, really leaped on to come and innovate on a product standpoint model. What do they actually present to both either a fintech or to their own customers? And so, I think where we come from is the opportunity to essentially innovate on the propositions and the pricing models that banks can actually give to their customers. Like literally they can tailor this to a segment of one. And guys, what I’m talking about is I’m in the market for a loan That’s what banks typically hear and cater towards. But in reality, I’m in the market for a house And a house is not a loan. A house is the loan plus the legal fees. I also have to set up my home IoT. I also have to see what my Netflix subscription is going to be like. Do I have to transition that over? There are a ton of things that can actually be a part of a proposition that is priced out and essentially provided by the bank. That’s what we’re thinking about. From an innovation standpoint. There are multiple things that can be done differently. And it’s not just a loan That’s just a commodity product.
CH: And I think Chris hit on an interesting point about FinTechs because I think at one point there was a lot of talk about, oh, the FinTechs are going to take over banking and traditional banks are going to go away and it’s going to all be these unicorn FinTechs. And I think what’s actually transpired and Chris, I think you hit on this is that The fintechs are very good at thinking about kind of the art of convenience and dialing into customers and creating kind of very intuitive interfaces and kind of, you know, let’s just call it more born in the cloud type of technology, But they don’t have a banking license. They don’t have core banking systems. They don’t have a risk and compliance department. Typically, They don’t have the deep expertise A lot of the banks have. And so what I think a lot of the fintechs realized over the last five to 10 years is that, yes, they’re very good at some of the front end stuff and some of the customer facing pieces, but they don’t have all the other pieces needed to actually run a banking type of company or service. And so a lot of the fintechs ended up actually partnering with the traditional banks And working with them as opposed to working against them. And now, I think we’re kind of seeing this confluence of both traditional banks and fintechs working together. And also, I think the banks have really up leveled their game as it relates to technology and innovation. So now, I think, you know, both of them are kind of spurring innovation across the overall industry.
DM: Yeah, I think again, you’re spot on because what we’ve actually seen is that fintechs have kind of innovated in a very small part of financial services And there may be lots of them, but they generally don’t overlap on the banking side. Yes, the neobanks have arrived as well. And that’s a full on head on competition. But, you know, at the same time, even the neobanks don’t have the same product breadth that banks have. So… actually could, you know, it’s been interesting to see that fintechs have been much more complementary than competitive. I mean, just switching back to customer experience, Chad, what do you think makes a lasting customer experience? Like how do we get beyond just be, you know, something that, oh, this is quite nice. You know, it’s simplified this one little bit. The screens look fantastic. How do we get to something that’s you know, there for life? I guess, you know,
CH: Yeah, there’s a lot of things that are coming to mind here. So I better speak before I forget them all. But I think number one is consistency. You have to start with consistency across all the different channels. If you call into the contact center, you talk to the branch and they’re not exchanging notes, saying you’re starting from zero each time you’ve lost customer interest. So I think it starts with consistency That’s almost like table sticks across all the different channels. Number two, I would say is probably really hyper personalization. And what I mean by that is Really personalizing products and services that beyond just my broader demographic, you know, beside the fact that a white male who’s in his fifties who lives in Seattle. Okay. That’s table six, Understand me, understand my interests, understand, you know, where I’m trying to go with my financial plan, Understand, my household not at a creepy level but at more of a financial level, Understand me as a true individual. So I kind of just maybe call that hyper personalization slash personal. Thank you. Number three, I think is sincerity and integrity, Come to me with offers that actually match my needs. Don’t just send me a bunch of, you know, junk and, you know, emails and things in the mail and texts that have no relevancy to me. And, you know, this kind of pray and spray approach that really annoys me as a customer. If you’re going to really treat me as an individual, then show that you understand me. But also don’t bother me with all that noise. I don’t know, I need to take time to look and figure out if it’s something I should evaluate or not. The last thing I would say is look into the future and anticipate my needs. You know, I mean, there’s banks that I work with. I’m not going to mention them that have done really good jobs of actually Kind of opening my eyes into areas that I hadn’t even thought about from a financial planning or a financial standpoint, because I did something else with them or I bought another product or I went and talked to one of, you know, the relationship managers or the branch manager, and they said, well, have you ever thought about this? You know, I noticed that you’re doing this? Or I noticed that you have this kind of pattern. I noticed that you’re planning for college, you know, anticipate, help me help educate me, help me see things that I can’t see If you can do that. Then, you know, you probably have me as a customer for life. So those are the three or four. Things that I would say are really critical.
DM: Yeah. I mean, one thing I kind of picked up in between all of that is this thing about like personalization is also what you don’t say to the customer, what you don’t send to them as well Because, you know, as you say, I can, my life is full of clutter. And if you make it more cluttered, you’re going to annoy me. So actually, you know, filtering some stuff out is a really good form of personalization. I’ve never really thought about it as personalization. So fantastic, A very good point. Great Over to you, Chris. I mean, from your perspective, you’ve been helping banks already, you know, with their customer experiences through Zafin, Can you tell us a bit about that? And also, you know, From that, tell us what you think you know drives a lasting customer experience?
CD: So many things to decompose their dimension And let me just go through them. So as banks come to the realization that they need to innovate from a proposition or pricing standpoint pricing model standpoint at speed. The first thing that happens then is you get lines of business owners at the banks going and knocking on the door of the chief information officers and saying, how can I do that? And the answer typically is yeah come back in 12 or 12 to 18 months and I’ll give you a new product That is unacceptable. So now the question is you need to Modernization your stack and decompose that to enable the bank to actually innovate from a product and pricing standpoint. And that’s exactly where we come in. So what we’ve observed from our customers is they go from… that experience to completely modernizing the approach to how innovation is done at a bank from front to back. And that entails decomposing the older cores, extracting what is the pricing product and pricing components out of them and enabling the bank to, at the front end start to really do product management in a way that is product management and not project management of IT resources That’s essentially where we come in. And the important fact in all this is now with the advent of AI is how can we at that front end help product managers to distill mass and vast amount of data sets and information in such a way that it’s easy for them to understand? Ok, this is now my new cohort. This is what I’m going to propose to them. And this is the reason why Now let’s go into the execution engine and actually execute this. That will lead towards once you start to look at the opportunity out there in terms of integrating many metadata sources that could inform the eligibility and the suitability of product and pricing for a person that will take that customer experience to a completely new level. I’ll give an example Like where we’re at today? Is I’m banking with a major tier one bank that does not use Zafin, I recently deposited a large amount of money. This was six months ago. I have received absolutely not a single call nor a single proposition for this is what you should do with that. Nothing, Take it to the extreme to say vast amount of data. I have, a house is essentially a pipeline. It’s in and out of data. It’s, a, it’s a dwelling with ins and outs of data. Banking is just one… data. You’ve got hydro, you’ve got gas, you’ve got. So, many pipes, Those pipes just have data. If you connect data sources into the eligibility and suitability rules. Now, you can suddenly affect positive outcomes for somebody financially even with other data sources. Do you want to reduce your energy bill? Do you want the so many things that can come together in a banking proposition that actually positive and potentially affect ESG outcomes? Like literally banking can be completely different when you start to think about it from a visionary standpoint, That for me would be, the ultimate way that banking would happen is where the bank falls away, It becomes invisible because it’s intricate to how you manage your full life. And that’s every single pipeline that comes in and out to you to your house, to your family and loved ones.
DM: You know, what you made me do is actually rethink some of what I kind of think I understand about customer experience. Because actually what you’re really saying is that if you get the employee experience right? So they can launch products quickly and personalize to the customer, then that’s a natural way of the customer experience themselves, you know, improving. So I really like this whole point about improving the product manager’s life kind of experience to get to the customer, you know, to get the right product to the right customer at the right time, It’s a really good point, Chris.
CH: And it’s not just about product managers, right? There is this virtuous cycle between an empowered employee or an empowered banker and a happy customer, Right? So the more that you can give the bankers and employees of banks the information that they need, the more that you can empower them, the more that you can give them the right tools and insights at their fingertips. The better service and higher to say quality interactions they’re going to have with the customers, right There’s nothing more frustrating. Not even just for a product manager, for a teller, For a relationship manager, for a branch manager, nothing more frustrating than to have to do tedious administrative tasks or not having the right information at your fingertips. And that prevents you from better serving your customers, right? At the end of the day bankers want to serve their customers. So there is that kind of virtuous loop between the two.
DM: Yeah. I mean, I’ve seen it in lots of banks that I’ve come across where, you know, actually, you know, the staff really want to do the best by the customer, but they just don’t have access to the data or the systems in one place. They typically are, you know, control tab to the next window to try and work out what is right for this customer because their products live in different systems. I mean, I think that’s got to be a major challenge, right? For most banks because most cores are handling, you know, different products.
CH: And that’s where I think, you know, Gen AI can really be a game changer, right? Because Gen AI can really reduce a lot of those administrative tedious laborious tasks. And Gen AI can, you know, give kind of the bankers the insights they need at their fingertips and, you know, give them more flexible tools. And Gen AI can even help from a product and pricing standpoint. I know Zafin, and, you know, team over there are looking at how they can apply Gen AI from a product and pricing standpoint. There’s some really interesting things that can be done. I mean, I’ll just give you One example here. I’m not going to put, you know, Chris or Zafir on the spot but, you know, traditionally mortgages come in three or four different flavors. You got the, you know, the variable interest rates, you have the, you know, the three to five year variables, you have the 30 year, you have the 15 year and maybe you’ll have a, you know, a 10 year, But let’s say I have some specific life events where in 13 years or 17 years from now, I want a mortgage and it doesn’t meet the round numbers of a 30 or 20 or 15. Maybe Gen AI could somehow dynamically look at different types of mortgages and terms and say, you know, what for this customer? Let’s offer them a special 17 year mortgage because it aligns to the retirement date of this individual and their income is going to change at that point. They want to have everything paid off by that point. I mean, just being more flexible and kind of creative in the approach, right? And that’s where I think there’s a lot of promise to be had.
CD: We’re already doing it. Oh, wow. We’ve integrated Cloud AI into our front end solution, which effectively, what it does is it goes out and looks at the totality of the product set and the price points and the composition of the product suites within different competitive banks and distills the information for a product manager at a other singular bank. To say, okay, now that I have all this information, and before that would have been done by vast streams of data and analyzed by data scientists. But this has been essentially using Cloud AI to distill that information and make it palatable for a product manager to consume. And then to enable them via a proposition canvas to craft what would be that next proposition for a… target market. We’re already doing that. Then our execution engine is where essentially you just build it out and it goes to market. This is how flexible and how fast you can do this. And we’re incorporating GenAI, One thing we should not forget about and that’s a crucial thing for banks and always comes up in conversation is everything around security. And so that’s when everybody starts knocking on the door and saying, well, what about security? Where is this all hosted? And how is it done? Product manager? And so that’s where we come in and say, look, we’ve chosen in this case, Microsoft as our singular partner for cloud where we run the Zafin techs. And so, what else can you ask for? Any single bank out there? Every single bank in the world is using Microsoft in some way shape or form. And that’s why we, we’ve leaned onto the Cloud stack And so that’s the level of security that we’re providing to the banks for this.
CH: And we certainly appreciate that partnership with Zafin And as many people know, Zafin is one of the leading product and pricing lifecycle management companies in the market today, And that’s why we’re partnering together, right? And I think we both have a leadership position in our respective area. And we’re very excited about some of the things that Zafin is doing as it relates to product and pricing, and taking kind of Cloud Open API and applying some of the Gen AI capabilities To their product offering. From Microsoft standpoint, we pretty much bet the house on Gen AI, right? We are 100 percent convinced that this is kind of the next paradigm shift in technology And we are throwing all of our weight behind it. And we’re trying to work with a strong independent technology vendors like Zafin to further kind of compliment and extend our capabilities. The one thing I will say though is as much as we’re excited about Gen AI, And we really created a wide stream of Gen AI capabilities across our product suite and all of our copilot products. And don’t get me wrong, we are super excited about that. But specific to banking, there is a little bit of a different level of concern or how shall I say? Not so much concern. But I guess, yeah, maybe extra consideration that you need to apply And that is as it relates specifically to kind of financial products and compliance, and regulation, and equity. And so when you think about, Gen AI is a great tool for streamlining tasks and creating doing dynamic proposals and doing kind of maybe supporting sellers and supporting customers. And so many interesting things you can do with Gen AI. But the one area we have to be a little more careful about is not necessarily using Gen AI as the chief decision maker. It can be an enabler. It can be a tool, it can help both customers and banks. But it shouldn’t necessarily be the making the final decision. It should be part of that process. And part of that is, you know, just to make sure that there are no biases or any other things that are in LLMs that are being used as part of that Gen AI solution. So for banking that’s probably a little more specific than some of the other industries where they may not have that issue. So it’s very powerful and we are 100 percent behind in Microsoft, but it has to be used in the right way.
DM: I mean, you’re spot on because in the UK, I can tell you we had reams of banks being fined for mis selling products, right? And this was because, you know, branches and bank staff were being targeted with heavy, you know, kind of incentives to kind of push products and they were being sold, right? But the due diligence wasn’t being done. And so, some of the things that I’m seeing in the Gen AI space is this kind of like little coach that sits in the background listening to the conversations that staff are having and just flashing up a little prompt saying, oh don’t forget to ask that, you know, what their risk appetite for risk is. Oh, don’t forget to ask, you know, certain bits of information that gets them to a compliant cell.
CH: Absolutely. And there’s a lot of good that Gen AI can do. I mean, just think about financial education right There’s. Some general to kind of cut and dry things about financial products. People just don’t understand You could use Gen AI as almost like an intelligent trainer or tutor, Say, hey, you know, did, you know, within 30 year, fixed mortgages, you need to be aware of this Or, you know, hey, were you aware for savings and checking products? You should be aware of this Or, hey, as you’re planning for, you know, college or, you know, having kids, you should be thinking about these things. So, you know, there’s a lot of good to be had as well. It just needs to be, you know, Gen AI needs to be focused in the right areas.
CD: That’s why just to add guys, the application of AI in our own stack is literally at the front end for distilling information. The actual creation of the rules is done in the execution engine within Zafin. And the more important piece of the whole thing is that one aspect that we elevate and we allow banks to do in an integral way is to demonstrate that the rules, one that hasn’t been biased, number two, that the rules have been created in such a way that you can extract a log and understand why you Chad, for one product, got a different price than you Dharmesh for the exact same product. That’s one key aspect that banks struggle with today. And that’s why you see so many consent orders or mostly because they cannot demonstrate why they peddled so much product out and they gave different prices to each one of these people. And so that is held today and nothing against Microsoft. But it’s held on Excel spreadsheets within the bank. That is not the way to go to do that from a regulatory standpoint. And that’s where we come in, right? So it’s distinguishing where you use and be creative, but at the same time be intelligent of how you actually apply AI to banking is crucially important.
CH: Yeah. And then one more thing and I’ll just mention to Gen X, I don’t want to go too far down the tangent, but there’s a lot of benefit for customers too. If you just think about, you know, the typical kind of account onboarding process or the KYC process, know your customer process, right? At banks, these are very laborious multi departmental, you know, processes where you’re the customers that are saying, yeah, now, you need to do this, verify that, send us this information. And these things From a customer standpoint are very frustrating because we’re so used to this kind of world of convenience, right? And you’re always thinking why does it take this long? Why are there so many steps? Why do I have to wait for this verification Or that verification? You’re thinking about Gen AI and kind of using some of the capabilities in the workflow and orchestration and the dynamic providing information and kind of connecting departments. You know, just so much benefit you had And you think about just a typical home mortgage process, you know, from the Pre authorization to the income and tax verification, and to the discussion around rates and terms, and the appraisals, and all the closing documents, Once again, a whole nother process that could really be streamlined using GenAI. So, I do think there’s a lot of benefit for customers in GenAI. It’s not only for the banks, there’s also a potential benefit for the customers as well.
CD: You almost go back to the story that you sort of hear on multiple levels whereby, hey, I’m a customer of the bank, I’m going to get a new product and I have to fill out this form And they’re asking me things that they already know about me, What’s my age when I was born? And all, Like, what the hell? You guys, you know, this information, Then they ask me what other products do you have at the bank? Like why do I have to answer this when you already know this?
CH: Right. Exactly. Very frustrating.
DM: It is amazing. I mean, I remember the first time I, it was a long time ago that I worked in a branch, but it just amazed me how that, you know, from a branch back in those days, this was like, you know, 30 years ago, We still had, you know, signature cards, we verified checks with in the branch until that was all automated. But I still remember like coming back into IT and then thinking my gosh but, You know, this is just, you know, this is a makeover that the branch staff are doing that, you know, everything is integrated Whereas actually, you know, they personally know the customer, They’re putting the pieces together themselves, right? But how does that work in another branch? Well, it doesn’t That was the problem, right? So your experience was really down to the individuals that you got. And if you got your favorite teller then she knew or he knew all about you and you got a great experience, But that wasn’t scalable I guess. And this is the power of what’s possible with the technology is that we can pull the data together and give that Look. It’s been fantastic talking to you guys. And I have actually learned a lot and especially love the point about, you know, employee experience kind of driving the customer experience, you know, and, you know, making them everlasting. So really great to have you on the show.
CH: Thank you. It’s great talking to you. Good seeing you Chris.