The group head of international banking and digital transformation at Canada’s Scotiabank is a firm believer in building a flexible and open technology architecture to take advantage of the innovation ecosystem. Joy Macknight reports.

Ignacio Deschamps

Ignacio Deschamps

Achieving alignment across the bank and securing commitment to a single digital transformation strategy was the first step in Scotiabank’s journey, according to Ignacio ‘Nacho’ Deschamps, the bank's group head of international banking and digital transformation.

While Scotiabank has operations in more than 40 countries, just six represent 80% of its earnings: Canada, Mexico, Chile, Colombia, Peru and its wholesale operations in the US. From a digital transformation perspective, the bank has focused on where it has large retail businesses: its home market and the four Pacific Alliance countries.

Mr Deschamps attributes the bank’s progress to a full alignment among the board, CEO and executive committee to execute the digital strategy launched in 2016.

Career history: Ignacio Deschamps  

  • 2016 Scotiabank, group head of international banking and digital transformation
  • 2016 Scotiabank, digital banking, strategic advisor to the president and CEO
  • 2012 BBVA, global head of retail and South America
  • 2006 BBVA Bancomer, chairman and CEO

Digital engagement

“To become a champion in the digital age, we need to get employees and customers digitally engaged. Our target is to have 70% of our customer base – about 25 million people – digitally connected to the bank,” he says. “Second, we want to reach the point where digital represents 50% of sales in our retail business. Finally, we want to reduce the number of financial transactions done in branches to less than 10%.”

As of the fourth quarter of 2019, these numbers stand at about 40%, 30% and 15%, respectively, with meaningful progress made over the past three years. In line with this strategy, Scotiabank has been transforming its extensive branch network into places of digital education and advice, rather than transactions.

“In our model, we listen to our customers every day, and branch employees play a key role as digital ambassadors. It is more like an Apple store where customers go to learn how to use the bank’s new apps or financial solutions,” he says. “The branch of the future is a place where customers and employees can share the same tools, which improves productivity, efficiency and customer experience.”

Tech infrastructure

Scotiabank spends about C$3.5bn ($2.65bn) a year on technology and has a cloud-first strategy. “We have created a layer of application programming interfaces [APIs] based in the cloud, which can connect to our legacy systems in a seamless way,” he says. “We have also created a marketplace of APIs that all developers in the five [key] markets are leveraging and enriching.”

In Toronto, Scotiabank created the ’Digital Factory’, which Mr Deschamps says is one of the largest agile workshops in Canada. “It is more like a tech workplace, where we can attract developers, designers, engineers and so on. We bring in product, risk and regulatory experts from the bank to work in scrums – interdisciplinary teams – to create applications that solve customer problems.”

The concept has been rolled out in Latin America and the bank now has a network of connected agile workshops across Mexico City, Lima, Bogotá and Santiago. “What excites designers in Colombia, for example, is hooking up with the Digital Factory and building solutions for their market, but at the same time sharing and being challenged by design experts in Canada, Peru, Chile and Mexico,” he says. “Our framework of best practices is being leveraged across all of our factories, and today our teams are designing mobile and web customer experiences five times faster than our peers because they are learning from each other.”

Connecting the ecosystem

To ensure the bank is plugged into the innovation ecosystem, Scotiabank launched its digital advisory council in 2017. This includes four industry figures: Nigel Morris of QED Investors, a US venture capital (VC) fund; Neil Hunt, previously chief product officer at Netflix; DJ Patil, who served as chief data scientist to former US president Barack Obama; and Odile Roujol, former CEO and president of Lancôme and chief strategy and data officer at Orange France.

“Every quarter we have an ‘open kimono’ discussion with them about our digital strategy, raising questions and doubts about which way to go. Their experiences have added great insight into the strategic decisions we’re making around our transformation,” says Mr Deschamps.

In addition, Scotiabank has teamed up with VC firms such as QED Investors to identify and jointly invest in fintech start-ups, such as Konfio in Mexico, which is an online small business lender. “It is an opportunity to learn, do proofs of concept and sometimes partner with fintechs because these start-ups are obsessive about solving customer pain points. Their challenges are around scaling up, accessing a larger customer base and attracting funding,” says Mr Deschamps.

To engage in the ecosystem, banks need to have a flexible and open technology platform, according to Mr Deschamps. As such, Scotiabank is building technology “faster, cheaper, safer, and with an open architecture so that we can connect with third parties when it is mutually beneficial”.

For example, Scotiabank works with e-commerce platforms such as Mercado Libre in Chile, which is the largest real estate channel. “We have embedded an API within the portal so that we can approve the mortgage faster, thus improving the customer experience,” says Mr Deschamps.


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