Turning the Bank Upside Down: How Data Speed Will Define Winning Financial Institutions

A conversation with Macquarie Group Chief Digital Officer Luis Uguina

istock 1297596683 1
iStock

The financial services industry has long struggled with commoditization. One savings account, or credit card, or mortgage loan, is pretty much the same as any other. So how can banks stand out—especially as the age of the brick and mortar branch fades into obscurity and customers have extremely high expectations when it comes to digital products?

If you ask Luis Uguina, chief digital officer at top Australian financial services company Macquarie Group, the answer has a lot to do with building a cloud-based data infrastructure that can deliver comprehensive services to customers in real-time. How do you do that? For one thing, you need to build a data architecture that can take advantage of data in motion or “fast data” -- the information flowing between applications and IT systems that require real-time engagement in order to produce the experiences that banking customers have come to expect.

The A$255.8 billion asset Macquarie is in the midst of a massive push to have 90% of its technology infrastructure running on the public cloud by the end of 2022.

We spoke with Uguina about why cloud technologies—and fully managed cloud services—are critical to producing a real-time experience for banking customers. He spoke about the journey Macquarie is on to move to a cloud-based data infrastructure and create fast, unique, personalized products for its customers.

What are some of the challenges you faced?

Customers expect the system will be more and more personalized, every day.

A high level of personalization can only be done when you can understand, in real time, the behavior of the customers. But not only from a financial point of view.

When I send you an alert, do you grab your phone? When you are working with the app, how are you connecting? Where are your workflows? All of that is data coming into the system.

We are a bank. Our mission is not to be updating databases, operating systems, playing with networks, or putting more and more metal every single day in the data center. Our mission as a bank is to deliver the most incredible customer experiences and the best financial products.

All the time we spend on managing a database or operating system is time not spent on delighting our customer in terms of customer experience and product definition.

That’s why for us, not only the cloud, but fully managed services on the cloud, are the future for us as far as technology.

If you were to look back at where you started in 2017, what kind of things did you have to unlearn?

In 2017, we started to use DataStax Enterprise. We started using a smart data store that is middleware that is running on the digital platform. And basically that middleware is receiving all the customer info from all of our legacy systems and all interactions. Having that approach—this layer is the only layer that has been running nonstop with zero downtime since 2017—that gives you a sense of how important the product is. For the first time in the history of the bank, we can provide a real 360-degree view of customers—not only to internal people, but also to the customers: all the products in a nice, simple view.

We have had engineers constrained by what the relational database can give you—this is the amount of queries we can give you. But now you have a greenfield. You can do whatever you want with the technology.

We had to tell the business side, “Imagine the features that you really want. Don’t tell me, business, that you need faster horses. Really reimagine what you want.”

Every single system is going to be streaming information, in real time. You are going to have probably an average of 12 million to 15 million data points coming through the system in real time. The database will be able to absorb it, but what about all the processes, switches, firewalls, networks?

Moving into a fast data world is going to put the whole company upside down, in terms of the business, the engineers, and the infrastructure. That's why the only way we see this as being doable, is a cloud plus fully-managed approach.

At this point every single model that you have in the company—the way you work, the way you are organized, the way you train the teams and even the way you launch the projects—it’s all upside down. Which is, I think, good because at the end, everything that we are doing is going to create a much better customer experience and I would say it's probably going to re-innovate the way we are working.

What do you see as next-stage outcomes, experiences, and capabilities that will be possible?

We have a vision of what the banking industry should be in 2025. And everything that we have been doing so far since 2015 when we started our journey, it’s been about what’s the best customer experience that a bank can create.

We are moving everyday into a product that is going to be a commodity. Credit cards are the same; savings accounts, banking accounts, even home loans.

And look, if the product is a commodity, right now the differentiation between a credit card of yours and mine is that the bank is marketing the card as, “Oh, it's made of recycled corn, that it is not plastic anymore.”

What is going to be different in the banking industry in five years? First, the speed that we put in every single process we have is going to be really, really important. There will be a massive amount of business attraction if you can approve a home loan in one hour instead of three weeks. We are in the model of “We want everything, and want it now.”

With all the open banking and open government and open insurance initiatives worldwide, you should be able to say, “If you give me your credentials, i will access, in a fully controlled way your bank, your insurance company, your government -- if you give access to all my data in real time, you don’t expect the bank to take 4 weeks. Let me know now.

Second thing, the banking industry has processes that have been there forever. We have processes that are heavy and slow. Credit collection, onboarding processes.

We are now in this model where the onboarding process for a new customer should be three minutes -- at the end of this process, your mobile banking, ebanking -- everything should be fully activated.

Personalization will be more and more important.  This can be done only by understanding the customer behavior. How do you crunch the data in real time faster and faster, how do you create better customer experiences, in terms of faster processes and doing things faster with faster turnaround. In our opinion that will be the key differentiation.

Questions and answers were edited for clarity. To watch the full interview, please check out the latest episode of The Data Innovation Hour.

Copyright © 2021 IDG Communications, Inc.