Major firms leveraging technology

The point of the digital factory is to streamline business processes for clients, collecting information only once and using technology to create a faster, more seamless experience, says Michael Zerbs, executive vice president and co-head of information technology and enterprise technology with Scotiabank.

“This [fintech initiative] includes working to identify new, streamlined approaches to allow us to enhance further the end-to-end customer experience, such as having customers provide information online ahead of coming to the branches,” he says. “This would help our financial advisors to focus their full attention on our customers’ financial needs.”

The thought process underlying the digital factory began last year, he says: “We brought together key teams that go across business, technology, compliance and support functions. We said, ‘Forget what we’ve done so far. Let’s reimagine the way that we onboard a customer’.”

Scotiabank isn’t the only financial services institution to use the innovation hub model. In August 2014, Toronto-based Manulife Financial Corp. partnered with Waterloo, Ont.-based technology incubator Communitech Corp. to form Red Lab, a fintech innovation centre designed to help Manulife develop prototype technological solutions.

One of the key areas of focus for these companies is mobile technology. In fact, the Red Lab has focused heavily on mobile technology in the past year, resulting in a new banking app scheduled for launch in this quarter, says Donna Carbell, senior vice president for customer experience in Manulife’s Canadian division.

Mobile is a foundational technology for financial services firms trying to improve their customer experience, Zerbs says. In fact, time spent on the Internet using smartphones and tablets surpassed time using desktop computers to surf the Internet in January 2014, according to Virginia-based Internet traffic monitoring company ComScore.com.

“People think of the mobile phone today as a life organizer,” Zerbs says. “We recognize that trend. So, clearly, as we develop new capabilities in the digital factory, the presence of mobile capabilities still is absolutely critical.”

Scotiabank is no stranger to mobile technology. In fact, its subsidiary, Tangerine Bank, has made several strides in this arena by using mobile apps to help make access more secure, taking advantage of new features in smartphones, such as fingerprint-based biometric authentication. Specifically, in late 2014, Tangerine was the first bank in Canada to introduce support for Apple Inc.’s Touch ID biometric system, enabling clients to access their accounts by using their fingerprints. The parent bank followed suit, introducing the technology in its own banking app this past October.

Next up for Tangerine is authenticating clients’ access to their accounts using voice recognition, says Charaka Kithulegoda, the firm’s chief information officer: “Voice authentication is in testing and will be going into production in late December in the contact centre channel.”

Although these technologies are being applied mainly to everyday banking products thus far, fintech has the potential to streamline customer interactions with their investment accounts as well, which would lighten the load for advisors. Scotiabank, which also is experimenting with biometrics in its digital factory, hopes to scale up its fintech to an enterprisewide platform that streamlines access to a wide variety of online services.

Manulife introduced voice authentication in its banking products in June and since has opened up that technology in more products. This fintech goes beyond mere security, though, using natural language recognition to help to route calls to the right people. This ability moves customer interaction beyond conventional interactive voice response technology, which forces customers to wade through a list of options and peck out numbers on their smartphone’s dial pad.

This initiative is one example of a move made by Manulife to speed up customer interactions using technology. Another, introduced this past May, is the Manulife Quick Issue Term life insurance app, which moves a client’s life insurance application online, asking a series of simple questions and processing applications far more quickly than when they were done manually, Carbell says.

“Eighty per cent of [insurance applications] are approved and issued in one business day,” she says, noting that the process used to take around three weeks. The app’s questions are phrased in such a way that they mostly eliminate the need for medical records and fluid tests.

Manulife’s app is an example of how innovation in back-office systems can help interactions with clients. Carbell explains that Manulife fed a wealth of historical information from years worth of insurance applications into a predictive analytics system, which helped to refine the questions the app asks for application. “We eliminated a whole lot of legacy insurance questions,” she says.

These developments, which affect both front-end customer interfaces and processing in the back office, require new levels of agility in financial services institutions, says Zerbs. This is why “agile” development teams will be a big feature of Scotiabank’s digital factory, he adds, as these teams accelerate software development by introducing new cloud-based technologies that let teams create and test new features quickly, refining them on the fly.

As financial services companies continue to experiment with technology, that process is likely to result in a plethora of new and enhanced services for clients.

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