Today, we are seeing unprecedented levels of innovation across the banking industry as digital players enter the market. These new entrants \u2014 start-ups and fintech companies \u2014 offer customers convenient and intuitive applications, efficiency and a seamless service experience, forcing traditional players to keep up or run the risk of getting pushed aside.\n\nWhile South Africa\u2019s four big banks \u2014 Absa, FNB, Nedbank and Standard Bank \u2014 are responding to this increase in competition by embarking on large-scale digital transformation programmes, the pressure to change quickly enough in order to compete with new entrants is substantial.\n\nIn this Q&A, Christine Wu, managing executive for customer value management at Absa\u00a0Retail and Business Bank, explains what Absa is doing to provide better customer experiences, make smarter decisions and how they are using technology to serve a real purpose for the business.\n\n\u00a0CIO Africa: What technology initiatives are currently making the most impact in the banking industry? What trends are you watching?\n\nFor us, the focus is on making the move from automation to decisioning. In order to do that, a few trends need to come together. Something like moving to the cloud and making sure that we have the necessary data science capabilities to make quick decisions is important. We need to go from having a menu of options that our consumers can choose from to having a conversation with our customers. Security is also a major priority. But it\u2019s about balancing security and experience. People often don\u2019t fully understand just how important it is for us to balance customer experience with strict regulatory governance and risk management requirements. \u00a0\n\nCIO Africa: You\u2019re facing a lot of new competition as more and more emerging competitors enter the banking space. How can tech help you to compete with these new players?\n\nOne needs to remember that technology is a democracy \u2014 what benefits me, also benefits our competitors. The differentiator is your ability to execute, to use tech effectively and deliver what customers want and need. Where I do think we have an advantage is that we have close to 10 million customers already so we understand how to humanise technology and we understand user experiences and customer journeys. This large and established customer base also forces us to think about the application of technologies at scale from the word go. We can\u2019t be designing a product that only serves people living in a specific suburb. We have an obligation to develop and design technologies that have broad appeal.\n\n\u00a0CIO Africa: You\u2019re migrating to the cloud in an effort to future proof the bank. Can you tell me more about this? \n\nMigration to cloud is an inevitable trend. Often, we think about cloud migration as a cost saving initiative but for me it\u2019s so much more than that. It\u2019s a complete rethink of your business model. Having moved some things to AWS, we understand the potential that cloud holds. That being said, we do not envisage that we will deploy 100% to public cloud within the foreseeable future. A continued hybrid model, mixing both internal private datacentres and public cloud, will be our approach. We started the journey towards adopting public cloud around seven years ago. During this time, as regulations have evolved and as local cloud service provider options have evolved, we have increased our footprint in the public cloud through a combination of new cloud-native solutions development, as well as the migration of previously\u00a0established solutions to public cloud. This is in both our internal ERP solutions space, as well as a number of our RBB (retail and business banking) and CIB (corporate and investment banking) customer-facing core business solutions. For example, our primary portal\u00a0is in the public cloud, deployed as far back as 2015. But it\u2019s not without its challenges. This mix means that our architecture is somewhere between legacy and the future, which means that we need to manage everything we do quite carefully so that we don\u2019t get disrupted.\n\nCIO Africa: You\u2019re also dabbling with AI. Can you please share a bit about what you\u2019re doing? \n\nAbsa actually has a pretty state-of-the-art data infrastructure. There was a significant investment made into Hadoop a while back. We also made a concerted effort to migrate data onto Hadoop because we understood the full potential of our data and what it can do for us. This gives us a very rich environment for data scientists to do amazing stuff. To give you some examples, we work quite closely with our Absa rewards partners \u2014 using their data and our data \u2014 to try to come up with predictive ways to maximise benefits for our customers. From a sales perspective, each different product area would run propensity models and then try to sell to the high propensity customers. But with AI, we can incorporate different models so that we have an overarching view of customers. This enables us to make decisions on an individual level. Depending on the use case, we may work with external vendors to support our AI efforts but we also have to have strong in-house capabilities because you can\u2019t manage the vendors effectively if you don\u2019t know what you are doing yourself.\n\nCIO Africa: You\u2019ve also been using chatbots and virtual assistants. Can you share how you\u2019re using this tech?\n\nFor most, chat bots are still in their early days. I really believe that we need to think about the use of chatbots in generations. Like with your cell phones, the first ones weren\u2019t great but they\u2019ve become better and better over time. Putting out a chatbot is pretty easy but what we need to do is use each generation as an opportunity to learn. We understand the limitations of this technology. For us, it was important to play around with chatbots, designing things so that we can have interactions with customers and learn from these interactions. As the interaction library builds, we can enrich the function and train it so that the next generation is better than the one before.\n\nCIO Africa: How does all of this come together to provide a better experience for your customers?\n\nBanking is already quite different from what was the norm five years ago. With the stuff that customers see \u2014 like tapping your card to make a payment or scanning your face to open a bank account \u2014 to the stuff that customers don\u2019t see that happens behind the scenes like the automation of fraud detection or the streamlining of decision making around granting or denying credit. But all of it benefits the customer in the end and aims to provide the customer with the best experience.\n\nCIO Africa: With several emerging technology projects on the go \u2014 are there any key learnings you can share?\n\nThere is always temptation to do too much. Yes, you need to stretch your team but it\u2019s ineffective to try to do one hundred things and land nothing. Similarly, with so much competition out there, it can be easy to get distracted by what others are doing. So it\u2019s critical to be focused, while also being aware and open-minded. Finally, I think that it\u2019s important to balance technology change with business change. The two need to work hand-in-hand. When you don\u2019t get this right, an adoption problem is inevitable. Often we think about innovation as only being about implementing new technologies. But it\u2019s actually about transforming businesses and the work that people do. Today, all business leaders have to be much closer to technology. I don\u2019t think there is any industry that hasn\u2019t been disrupted by technology. But, in the same breath, a lot of technology leaders need to improve their business skills. It\u2019s important to think about technology as being integrated with humanity. The two can often diverge but a good leader needs to force the convergence.