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The Italian bank’s innovation strategy aims to improve processes and the client experience, as well as impacting the bottom line, says group head of innovation Paola Papanicolaou.

While the pandemic hasn’t altered Intesa Sanpaolo’s innovation strategy, it has accelerated trends already occurring within the market, according to Paola Papanicolaou, group head of innovation at the Italian banking group. For example, she points to the drive to become more customer-centric in retail banking.

“Five or so years ago, we were much more branch-centric – a customer would come to the branch and ask for something. Today, the customer is the decision-maker as to which channel they want to use, when and how they want to use it,” Ms Papanicolaou says. As such, Intesa Sanpaolo has updated its technology infrastructure to operate 24/7 and provide a consistent experience across customer channels.

Years of investment meant the bank was well prepared when customers began using digital channels more frequently. “We already had a high number of internet banking and app users but there was a significant increase during the pandemic, as clients migrated from visiting a branch to using the banking app: in the first quarter of 2021 we registered around 7.1 million app users, 1 million more than in the first quarter of 2020,” she says.

Career history: Paola Papanicolaou 

  • 2018 Intesa Sanpaolo, group head of innovation
  • 2015 Fideuram Intesa Sanpaolo Private Banking, head of private wealth management and banking services
  • 2014 Banca Generali Private Banking, commercial director
  • 2007 Banca Monte dei Paschi di Siena, head of alternative distribution channels/ regional commercial director of retail corporate and private banking

Ms Papanicolaou also reports a 140% increase in digital sales in the first quarter of 2021 versus the same quarter in 2020. “Such activities wouldn’t have been possible if we hadn’t already invested in digitalising processes and developing innovative solutions,” she says. “A bank must have a clear digital strategy and be ready to capture the market when it changes.”

Scaling up

Ms Papanicolaou identifies two types of innovation: incremental and transformative. Incremental innovation is generally a business need, for example to improve a process by reducing the time it takes. “Generally, we look for a solution in the market, which could be a fintech or a piece of tech,” she says.

Then there is the transformative, or disruptive, innovation. “Through our ‘observatory’, we look for fintechs that we believe will have impact on our customers and the industry more broadly,” she says. “We also look at what other industries are doing, as well as for trends that can change client habits, to anticipate change.”

Additionally, Ms Papanicolaou’s team explores whether a successful project can be deployed in other areas of the bank. For example, Intesa Sanpaolo began using artificial intelligence on its conversational platform to improve processes. “We created a chatbot for our retail bank, used it in our internet banking and app, and we connected it to our customer care call centre. A client can type a question in the app and get a quick response. If the request is complex then they are transferred to a call centre agent, so it is a seamless experience,” she explains.

The client should be able to choose if they want a more human approach or a more digital approach

Paola Papanicolaou, Intesa Sanpaolo

The bank deployed the same concept in private banking and has plans to roll it out in corporate banking. It is also using a chatbot internally to manage ‘tickets’, which are raised when an employee has a problem with technology, for example. “Around 40% of these issues can be solved immediately, but those that can’t be answered will be escalated to a person at a certain point,” she says. In future, the bank will also use it for human resources queries.

“We create a concept, use a supporting technology and then extend it into other areas,” Ms Papanicolaou says. “This is doubly beneficial: on the one hand, we can offer our employees the same experience as our clients; and, on the other hand, we have simplified our IT structure by using the same type of technology.”

Fast and agile

To deliver innovation, Intesa Sanpaolo breaks projects down into steps, she adds. “Innovation needs to have an impact quickly — you can’t do an innovative project that goes live in three years, as we don’t know what’s going to happen in that time. Instead, we need to do things in three to six months. So when we want to do something that is very disruptive, we plan how to go from here to there in small steps.”

The bank’s venture capital arm, Neva SGR, acts as an important partner for the innovation team. “We use Neva, and the connections it has, to find solutions that are interesting for us and then capture the value of that solution,” says Ms Papanicolaou, who sits on the advisory board of Neva.

Customer focus

She believes that the one-size-fits-all approach to customers is “old fashioned” and the future bank will be based on customisation and client empowerment. “We will see more banking personalisation, not only in the product side, but on the channel side, in the approach, the type of voice, the type of service and so on.”

But it is not all about technology, “as innovation has also to do with people’s mindset”, she says. “I believe in hybrid models. The client should be able to choose if they want a more human approach or a more digital approach, and when they want to switch from one to another.”

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