Seamus Murphy, the chief digital officer at Allied Irish Banks, talks to Joy Macknight about delivering key enabling technologies, tooling and frameworks to speed up the bank’s digital transformation.

Seamus Murphy

Data is the foundation of digitalisation, according to Seamus Murphy, chief digital officer at Allied Irish Banks (AIB). “A digital transformation journey moves an organisation from a process-defined world to a data-driven world,” he says. His career was steeped in data roles until, in 2016, he traded in his chief data officer hat to lead the bank’s digital team.

In line with this perspective, AIB recently held its fourth annual AIB DataHack. The competition combines a hackathon, a datathon (using analytical tools and machine-learning models) and a webathon. The theme was Smart City solutions, and more than 200 third-level college students participated, the highest number to date. “This event has gone from strength to strength and is only made possible through extensive cross-team collaboration and dedicated volunteers,” says Mr Murphy.

Such efforts help bridge the gap between cultural change and technological change. “The pace of change in AIB has increased significantly for both customers and staff,” says Mr Murphy. “Our customers’ behaviours and needs are changing, and we must adapt our work practices to be able to deal with this increased rate and sometimes more complex degree of change.”

To address this challenge, the bank created dedicated self-contained agile teams to implement its digital transformation strategy. It also brought together traditionally separate IT and business units into ‘DevOps’ teams, composed of cross-functional members working collaboratively towards a shared goal.

Listening to customers

Part of the digital transformation process is continuous customer feedback through multiple channels. AIB created ‘The Lab’, situated in Dundrum town centre just south of Dublin, which is open seven days a week to help customers with their everyday banking needs or to answer questions about the bank’s services. “Customers can experience all of AIB’s existing offerings, test out the upcoming and concept technology, and share their opinions on the technology they would like to see their bank use,” says Mr Murphy.

AIB’s customer-led design approach to digital transformation emphasises getting the design right. “We’ll measure twice and cut once,” he says. “Our approach to digital transformation is channel neutral; we’re creating frictionless experiences for both physical and digital channels.”

In 2015, the bank committed significant investment over three years to improve system resilience and deliver better customer experiences. It identified 11 customer journeys and set out to “transform customer pain points end to end through digitalisation”. For example, the bank successfully transformed its change of address process through staff-assisted and self-service channels enabled by digitalisation.

AIB is also collaborating with fintechs to deliver better customer experiences across its products and services, according to Mr Murphy. In November 2017, the bank invested €30m in TransferMate, an Irish digital payments provider. “This investment demonstrates our commitment to deploying our capital and expertise in support of leading enterprises such as TransferMate,” he says. The approach dovetails with AIB’s strategic priority to increase the pace of innovation to serve changing customer needs by working with both dedicated internal teams and with external partners and start-ups.

AI, blockchain and cloud

While robotics has been deployed in AIB’s back office for high-volume, low-value tasks, the bank is currently reviewing complex processes to deploy cognitive solutions. “We have built a chatbot for the contact centre to answer simple customer queries, and in 2018 we hope to underpin our webchat with a chatbot,” says Mr Murphy. “The next evolution of our chatbot will incorporate natural language processing.” He adds that AIB’s research and innovation (R&I) team has showcased a robo-advisor prototype, which was built using Amazon Alexa.

AIB’s R&I team is also working on two blockchain-related projects and is planning more for 2018. For example, in collaboration with the treasury team, the R&I team intends to join R3CEV, a consortium of major banks and other industry players. This will help AIB to prepare for the potential emergence of worldwide inter-bank payments using distributed ledger technology. “We’ve commenced development of Corda distributed ledger as a proof of concept, to fully understand the potential of the R3CEV ledger platform,” says Mr Murphy.

Additionally, as part of the Digital Leaders Group, chaired by the Banking and Payments Federation Ireland, AIB has been working with other domestic banks to evaluate options and solutions for a digital identity solution across banking. As part of this exercise, the potential for a blockchain-style solution is being assessed.

Looking beyond 2020, Mr Murphy believes that the digital landscape will transform more rapidly. Digital assistants, including chatbots, will be commonplace and will decrease the need for human, manual assistance. Significant transformation will follow in customer authentication and cyber security.

“Cyber security is, and will remain, a top risk due to forces such as open banking, sophisticated and complex technologies, the Internet of Things and the increased use of mobile technologies,” says Mr Murphy. “With heightened regulation, partnership with ‘regtechs’ could play a major role in our technology strategy.”

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