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Innovation overload? Follow the customer

02:00pm November 16 2018

George Frazis, Westpac consumer bank chief, says people are at the heart of innovation, not technology. (Getty)

People often confuse technology with innovation.

Don’t get me wrong, I love technology. But I’m not interested in technology for the sake of it, rather how it helps solve people’s problems because that’s true innovation.

It starts by finding out what consumers want – expressed or otherwise – and creating new ways to help them attain it.

And as I see it, there are three key ingredients: being curious; an advocate; and ready for change.

Early in my career, I learned the valuable lesson that curiosity – listening carefully, genuinely wanting to understand someone, and constantly asking “why?” – unearths people’s underlying wants, needs and dreams. This leads to insights that can be used to help people, in turn building trust.

We see this through the bank’s most innovative ideas often coming from employees who work directly with customers, rather than those in, say, our technology teams. For instance, a branch-based employee was behind the creation of the St.George Concierge App, which helps customers find and book time with the right person in-branch, thus cutting wait times. It might sound obvious or minor, but it took someone on the frontline to improve this everyday frustration.

Being an advocate for customers is about constantly asking “what is in the best interests of the customer?” Banks haven’t always nailed the balance between customers and other stakeholders in every decision. But a “customer first” philosophy is enshrined in Westpac’s vision and we are alert to the fact that delivering long-term returns cannot come at the expense of customers, now more than ever.

Customers no longer compare their experience with Westpac against other banks. They benchmark us against Google, Airbnb, Amazon, Apple and others.

What I’ve found from working in engineering, consulting and banking, is that being an advocate often entails having a good knowledge of both your own and the customers’ appetite for error.

When I was a RAAF engineer, I had to deal with intermittent fuel blockages with our fighter aircraft, obviously a very serious issue which could cause engine failure. So we’d test the aircraft non-stop for three days, inspect and test all fuel lines and components and, even if we could not replicate the problem, I’d replace the five most likely causes of the fault.

I had zero tolerance for error, which incurred a high operational cost, and that was in peacetime. 

As a RAAF engineer,  despite the high operational cost, there was zero tolerance for error.


But in banking, zero tolerance for error can mean customers at the edge of any process – like taking out a mortgage – can miss out, potentially leading to a credit squeeze. That’s because at the start of a process, customers often don’t run through all the risks; they just know they want a loan so they can buy a home.

But if things go wrong, a customer’s attitude to risk will change. They’ll question a bank’s processes and decisions, as will the regulators. However, key to being a good advocate for your customer requires good data. And during my banking career I’ve seen how technology and innovation can help reduce errors and improve decision making without being overly costly for customers or banks by digitising and categorising each customer’s expenditure.

Similarly, Westpac has invested in many initiatives to deal with the major issue of fraud, including detection before a customer is even aware it’s occurred.

But innovation isn’t always digital.

After Karen Cooper from the Victor Harbour branch recently helped an elderly customer recover most of the money he’d lost through fraud, she decided to develop a fraud-and-scam workshop to which more than 200 retirees have been invited to learn tips on how to protect themselves against financial scams.

Interestingly, 79 per cent of Westpac employees surveyed a few months ago said that, yes, they were encouraged to find new and better ways of doing things. The next step, like for all large organisations, is empowering people to be proactive, with several initiatives underway.

The final key to innovation – and it’s as much an art as a science – is the need to prepare for change, to anticipate future behavioural and technological changes and get ahead of the curve.

And right now the pace of change is unprecedented.

We’re seeing the merging of multiple trends, such as globalisation, the Internet Of Things, exponential computing power, big data, artificial intelligence, autonomous cars, robotics, 3D printers and much more. Customer behaviour is shifting as fast as the technology and there’s no guarantee today’s solutions will work tomorrow.

As a father of four, I see first-hand that digital technology is the platform for the next generation’s lives, and businesses have to keep up. Everything must be digital, mobile and accessible – 24/7.

To prepare for this, Westpac is modernising the entire home loan journey, for customer and banker. Called the Customer Service Hub, it’s using technology to transform the process – cutting out paperwork, delivering home loan documents through the cloud, and protecting customers’ interests by tightening compliance.

The bank is partnering with IBM's supercomputer, IBM Watson. (Getty)

We’ve also partnered with IBM Watson – an IBM supercomputer combining AI and analytical software to generate a question and answering robotic machine – to create “Astro”, which answers any questions our bankers have about lending and provides the relevant policy within seconds. This makes it faster for bankers to serve customers, and helps them meet all regulatory compliance obligations.

The same AI technology is also behind “Red”, an online chat app we plan to launch, that customers will be able to access when they’re banking online to get an answer to a banking question, almost instantly.

Being curious, an advocate and prepared will underpin this type of innovation, but it doesn’t mean you’ll always get it right. Trial and error is the nature of the game.  

Eight years ago, Westpac could see voice-recognition technology gaining significant traction and decided people would want to use it when doing their banking. So we invested early, developed voice-recognition capabilities and launched it to customers.  

But they didn’t want it.

Instead of giving up, a calculated risk was taken to keep researching, learning, investing and improving. And today – eight years later – the bank is at the cutting edge of what is now called “conversational banking”, as customers have become comfortable speaking to their devices, even to conduct their banking online.

This enabled us to be the first major Australian bank to collaborate with Apple to offer Siri for Westpac. Customers can also check balances and transactions using Google Assistant, including Android users from next year. And this isn’t the first time Westpac has led, being the first bank in Australia to introduce internet banking and, more recently, biometric fingerprint log-in.

Innovation requires you to follow the people – understand them, anticipate their needs, help solve their problems. Technology, as much as we love it, is simply the enabler.

George was Chief Executive, Consumer Bank from 2015 to 2019 with responsibility for all consumer distribution, digital, marketing, transformation and banking products and services under the Westpac, St.George, BankSA, Bank of Melbourne and RAMS brands. He joined Westpac in 2009 as Chief Executive, Westpac New Zealand before becoming CEO, St.George Banking Group. Before Westpac, George held senior roles at National Australia Bank, Commonwealth Bank of Australia and Boston Consulting Group, and was previously an officer in the Royal Australian Air Force.

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