Agile Banking IT. Manuel Lavín Delgado Head Global em Digital da GFT 26 November 2015

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1 Agile Banking IT Manuel Lavín Delgado Head Global em Digital da GFT 26 November 2015

2 DIGITAL TRANSFORMATION People have changed but you already knew it

3 71% Of young people would rather go to the dentist than listen to what banks are saying. Source: Scratch Agency GFT Group

4 PEOPLE HAVE CHANGED People have changed Lack of Innovation 53 % of millennials don t think their bank is any different from other banks = 73 % would be more excited about a new financial services offering from Google/Amazon/Apple/ Square/Paypal than their own bank Looking for fresh ideas FinTech momentum 33 % believe soon they won t need a bank at all! 33 % are open to switching banks in the next 90 days No loyalty Source: The millennial disruption index GFT Group

5 DIGITAL TRANSFORMATION Players have changed but you already knew it

6 35% of banking revenues will be at risk by 2020 due to disruption in the financial sector, from new digital financial players as FaceBook or Google Source: Accenture, Banking 2020 Report GFT Group

7 COMPETITORS HAVE CHANGED FinTech Summary Number of categories 19 categories Number of companies 1362 companies Average Funding/ Company $44 million Average Age/ Company 6 years Average headcount/ Company 167 employees Top Geo Locations US, UK, China Source: Venturescanner GFT Group

8 COMPETITORS HAVE CHANGED What are FinTech doing? Focus on Leading and Payment Source: Venturescanner GFT Group

9 COMPETITORS HAVE CHANGED What are FinTech doing? Move from banking infrastructure to investment Source: Venturescanner GFT Group

10 DIGITAL TRANSFORMATION Financial services industry is evolving but you already knew it

11 FINANCIAL SERVICES INDUSTRY IS EVOLVING Theory of Evolution and Natural Selection Society is evolving faster than ever, and technology is, at same time, cause and consequence Financial sector is one of the most dynamic actor because a new client segmentation based on technology has appeared, and banks must decide how to evolve to cover their needs Traditional Banks Disruptive Banks Evolutionary Banks FinTechs Customer digitalization Analogic Customer Do not like, do not know how, or do not want to use technology Digital Customer Digital believers GFT Group

12 FINANCIAL SERVICES INDUSTRY IS EVOLVING What are the banks doing? Create Digital Factories & Labs The definition of Digital Factory will keep changing as industry evolves Scotiabank pursues best customer experience for our 21 million customers Silicon Valley Bank acquired Standard Treasury to enable better digitized services to our clients Wells Fargo Digital Labs to simplify customers financial lives HSBC FinTech innovation labs to promote new technologies from startups and partners within the bank Deutsche Bank Innovation Laboratories to improve its digital banking operations and fend off new market entrants Citigroup Citi FinTech development of its mobile banking services GFT Group

13 FINANCIAL SERVICES INDUSTRY IS EVOLVING What are the banks doing? Focus on Consumers Within five years 80% of interactions will be online or mobile. Banks play defense againts new entrants (Google, Amazon, Alibaba,...) Barclays Bank- Pingit: send/receive money instantly & scan items in shop windows Bank of America: analyses transaction data to give customers cash back on transactions at frequently used merchants Garanti s igaranti (Turkey) & Standard Chartered (China): app sends alerts on special offers for your favourite shopping brands Commonwealth Bank (Australia) offers a mobile app that uses augmented reality technology to help with home- buying GFT Group

14 FINANCIAL SERVICES INDUSTRY IS EVOLVING What are the banks doing? GFT Group

15 FINANCIAL SERVICES INDUSTRY IS EVOLVING What are the banks doing? GFT Group

16 DIGITAL TRANSFORMATION The relationship with customers has changed but you already knew it

17 THE RELATIONSHIP W ITH CUSTOMERS HAS CHANGED Customers are demanding more services GFT Group

18 DIGITAL TRANSFORMATION What do I have to do? and you may not know it.

19 W HAT DO I HAVE TO DO? The pillars of Digital Transformation Human Centric Approach Customer Experience: Design thinking/service design Big data & Analytics Omni-channel Digital Transformation Organizational Change Digital Banking Vs. Traditional Banking Design Thinking to drive digital innovation through the whole organization Agile methodology adoption Technology Transformation (Agile Banking/Insurance) Innovation Methodology Dev. Architecture DevOps GFT Group

20 W HAT DO I HAVE TO DO? Innovation Innovation starts when we ask ourselves a question or have a problem to resolve a challenge How can we improve the commercial proposal empathizing with them? How can we improve the acceptance and perception in the market? How can we give service to a new segment? How can we reinvent the sector in which we operate? How can we improve the experience of our clients, starting from this channel? How can we reduce the Customer Effort of our clients and be present in a transparent way in their day to day? Desirable Abstract and unclear Innovation process Viable Specific and profitable CHALLENGE RESEARCH CONCEPT DESIGN EVALUATION GFT Group

21 W HAT DO I HAVE TO DO? The key to Evolution: Agile Banking Agile Banking is a cultural movement, it s all about people The basis is the collaboration across roles, with the focus on business instead of silos (departments), trust and confidence and a high degree of learning by failing: Fail Often Fail Fast Fail Cheap Requires management commitment and collaboration with the teams (Business and IT) to create a culture of collaboration and sharing GFT Group

22 W HAT DO I HAVE TO DO? Agile Baking New methodologies allow IT and Business teams to work together in an agile environment Methodology Disruptors don t set out to beat you at your own game they change the rules. Application of agile and lean procedures throughout the entire IT supply chain within the organization Revenues are going to be generated in Real- Time (mobile) DevOps Agile Banking Dev. Architecture Application architectures thought to improve the continuous delivery of functionality to the customer Transform the retail banking account into a primary financial App (Moven) GFT Group

23 W HAT DO I HAVE TO DO? Methodology Continuous Delivery Financial services are facing challenges from different areas and competitors. An agile deployment process is required, Continuous Delivery allows to reduce the costs, time and risk of the solutions. Customer Management Moving to a customer centric model to respond more precisely to the demands of end users Focus IT development on the user experience SCRUM & Full-stack Scrum allows to development and business teams to be aligned during the whole project New cross-teams profiles can speed up the development Open APIs Banks can disseminate his financial services with minimum effort and cost New applications with financial added value totally integrated in the unique user experience Clients have 24x7 full access to the bank services from any application Big Data High levels of personalization are demanded by customers Faster and better decision making New products and/or services based on data analytics GFT Group

24 W HAT DO I HAVE TO DO? Agile Banking Dev. Architecture Financial Institutions are increasingly dependent on software and IT. The increasing complexity of the solutions and the rapid technological and business changes make the systems less responsive over time. Agile Development Architecture is composed by a set of patterns and principles to be used building new software or evolving existing applications. Collaborative Architecture - Emerging Design: implement only the required architecture to support the next increment of functionality. - Intentional architecture: mid term planned architecture considering trends not easily perceived by agile project dedicated teams, and giving guidance for Emerging Design - Collaboration: between Emerging Design and Intentional Architecture Program Increment Design architecture incremental and always running Keep it simple Use always the simplest architecture supporting the objectives Model to solve doubts Build rapid prototypes when there is any doubt about architecture decision Testable Architects and developers must collaborate to continuously design architecture for testability No Monopoly Innovation is a culture, ideas can come from anyone from anywhere Architectural journey Architecture must be applied in an Epic itself in order to drive changes across all the organization GFT Group

25 C.D.I. A.E.P. A.A.T W HAT DO I HAVE TO DO? DevOps - Foundation Basic requirements and components to have in place to found a DevOps approach 1 DevOps 2 3 Orchestration 4 Continuous Delivery Integration: The base for any DevOps approach. A multi-vendor capable system to allow continuous build and release of application code Automated Environment Provisioning: This component allows on-demand provisioning of environments for its target activity. Includes auto deploy and decommission after completion of activity Automated Application Testing: It enables as much as possible the automation of the different testing stages an application release has to run through before getting the Production ready status. Orchestration: The Orchestration engine is responsible for bringing together the different components. It is the core automata of the complete development cycle from the DevOps perspective. GFT Group

26 DIGITAL TRANSFORMATION Success Stories

27 SUCCESS STORIES BBVA Organizational Change Innovation first, BBVA has deployed an internal department to deliver innovation to every solution Every project has to be developed by an Agile methodology Human Centric Approach Customer data governance to understand customers need BBVA Data Analytics Lab, allows data scientists to provide more personalized offers or information High investment in UX, BBVA acquired Spring Studio a UX company based in San Francisco Real time architecture implementation. To identify real interactions from customers, to be translated into commercial events Technology Transformation (Agile Banking) Move to an omni-channel solution to deliver, what customers need, faster Front architecture: 3 changes over the last 5 years to adapt the solution to the customer requirements Adopting a DevOps discipline to facilitate new functionalities deployment GFT Group

28 SUCCESS STORIES Bankia Organizational Change New internal department to drive digital transformation within the company Human Centric Approach Analysis of the different type of users and deploy a fully adaptive solution based on the user User Experience analysis before any development: Interaction Design Organizational Model Information Architecture Prototyping Technology Transformation (Agile Banking) Move to an omni-channel solution to deliver, what customers need, faster Adopting a DevOps discipline to facilitate new functionalities deployment GFT Group

29 SUCCESS STORIES BBVA Seguros Organizational Change New corporate model definition User experience and Design dedicated teams All the projects managed internally, close relationship Development-Business-Providers Human Centric Approach New customer area to meet its needs: Claim/incident tracking Billing history Search engine optimization Testing with real clients Technology Transformation (Agile Banking) Information architecture to facilitate navigation and search functions Quick quote conceptualization to increase bookings Investment in data analytics Use of a CMS to improve the content maintenance GFT Group

30 SUCCESS STORIES Wibe Organizational Change Development of channel platform into a 100% digitally oriented World On-line positioning over off-line campaigns Human Centric Approach Extremely competitive time to market. Platform readiness in 5 months, covering both public and private areas Technology Transformation (Agile Banking) Architecture of channels and comprehensive technical leadership defining the architecture of both: Front and Service Orientation Development of reusable components for Frontend and Backend Mobile apps evolution from hybrid to native, reducing the maintenance GFT Group

31 Thank you GFT Manuel Lavín Delgado Head Global em Digital da GFT T F [email protected]