Lloyds enterprise transformation chief eyes up the bank of the future

Imagining the bank of the future is a challenge for all incumbents charting their digital transformation journey. Gill Wylie, enterprise transformation director at Lloyds Banking Group, prefers to describe a set of capabilities that a future bank must embrace. “First, we need to have a flexible mindset because no one can predict what the future will look like,” she says. “But we can expect a much higher digital adoption rate, so the bank of the future must be able to exist in that space. And we must be able to connect to customers on their terms through a range of channels.”

She believes that banks should be more strategic in their architectural choices and conscious of the technical debt they are leaving behind. “We want to ensure that we aren’t creating a debt for the future. The future bank won’t have that level of legacy architecture – it will have a more flexible architecture that allows much faster delivery,” she adds.

Coping with legacy

Like other incumbent institutions, Lloyds is grappling with its legacy IT estate. “How do we transform – not continually improve but truly transform – when we don’t want to disturb our payments system because it is our lifeblood?” she says. “We must carefully consider which areas can be rearchitected to provide an enhanced customer experience and deliver value in a short timeframe. As such, the architecture team is very important and emerging technologies, such as cloud, can help us get there much faster.”

Another challenge is helping people understand what digital transformation means, according to Ms Wylie. She joined the bank two years ago, following more than a dozen conversations with peer groups, CEO António Horta Osório and the executive team. “In an institution of this size, it is critical to have backing from the very top of the house and the Lloyds’ leadership is able to articulate its mission incredibly well: we are invested in helping the UK prosper; and we are invested in the communities in a way that is connected to customer needs – like the bank of the future needs to be.”

In its most recent three-year strategic plan, launched in February 2018, Lloyds pledged £3bn ($3.85bn) for strategic initiatives that will drive its transformation into “a digitised, simple, low-risk, customer-focused UK financial services provider”. In addition to the investment, the bank restructured its organisation to reflect its digitalisation drive.

Strategic alignment

Ms Wylie is a director in Lloyds’ 18,000-strong group transformation division, formed a year ago under group director of transformation Zaka Mian. The new division brought together three communities: the classic IT engineering community; the business change community; and the digital division. “We brought them together to work side by side and help understand each other’s strengths, so they could act more effectively as teams. It also allowed us to remove the duplication seen in siloed teams,” she says.

She oversees the enterprise transformation unit, which includes major core programmes that run across the bank at an enterprise level, for example General Data Protection Regulation, and Open Banking and Payment Services Directive 2 (PSD2); classic central functions, including risk, finance, people, payments fraud and financial crime; digital channel operations; and enterprise-level enabling technologies, such as machine learning, robotics, mobile applications, chatbots and data, which is at the heart of the bank’s customer-led propositions.

In her role, Ms Wylie helps introduce emerging technologies into new areas. “For example, a team member from enabling technologies is now running the risk value stream, basically the business change, IT and digital folks for risk,” she says. “He is an expert in robotic process automation and machine learning and brings a different way of thinking to the table. As such, he has been able to help embed an experimentation mindset into traditional programmes, such as big compliance programmes.” She also promotes greater collaboration and co-creation, recognising that organisational boundaries can be the greatest barrier to progress.

Embracing open banking

While the adoption rate of Open Banking and PSD2 has been slow to date, Lloyds has taken a strategic approach to open application programming interfaces (APIs) and Ms Wylie thinks that the general trend is a “tremendous step forward”. She says: “I see this as a great opportunity for the industry. We already see some of the account aggregation services coming through. For example, with the Lloyds banking app it will be possible to see all your accounts, whether a current account, savings, credit cards or even your pension.”

The API layer will also allow fintechs to connect much more easily. “It starts to open up a world of innovation. Our innovation and proposition teams are coming up with some great ideas but so are plenty of external innovators. While it is uncertain what that will look like in the future, it will be fun to watch as it develops,” she says.