Q&A: David Morris, CCO of Yorkshire Building Society – automation, digitalisation & service
The chief commercial officer (CCO) of Yorkshire Building Society (YBS), David Morris, explains how the changing nature of financial services and technology is impacting its 230 branches and agencies across the UK, with tablets, digital ID, automation and other changes afoot.
Regardless of the delivery mechanism, customer experience (CX) will always be crucial to on-going success.
What automation technology is being used by YBS and in what areas?
David Morris, YBS: “Our current transformation programme is the largest investment we’ve made in our history”
Automation, with its ability to improve the way people do business with us and crucially, the experience they have, is a key focus for YBS. Customer needs are evolving all the time at an increasingly fast pace, so it’s important we respond quickly by continually developing our service and efficiently transforming our operations.
To do that, technology naturally plays a huge role and automation is evident across a number of YBS’s business areas, from our physical branch and head office to online services. For example, we have launched:
- For savers – HooYu: we’ve worked with the company to elevate our identification (ID) and verification processes at YBS. The project has led to a significantly improved account opening experience and removed operational challenges for colleagues. This makes it easier and quicker to securely sign people up.
- For borrowers – mortgages: we’ve significantly invested in modernising the YBS mortgage systems, adding a new IT platform and optimising our tech capabilities to create better outcomes for customers, brokers and advisors. We’re using more data, in a better way, to enhance service and processing.
Elsewhere, we’ve deployed tech tablets and rolled out better systems to staff in our UK branch locations, upskilling them to have the confidence and know-how to improve the support customers get.
Additionally, at our main head office in Bradford, we’ve replaced some of the more repetitive or mundane tasks, such as setting up or cancelling direct debits, with robots. This procedural automation frees colleagues up to do other things, allowing them to dedicate more time to customers who need help.
How much money is YBS investing in technology? What is your budget and aim?
Our current transformation programme is the largest investment we’ve made in our history. But our aim essentially hasn’t changed since we were founded nearly 160 years ago as a mutually-owned organisation – customer service is paramount.
Back in 1864 when we were founded, we were a safe place to save money. YBS used those deposits to lend to others, who could then purchase their own home. It’s no different today – we are still committed to helping customers with savings and mortgage solutions. But we need to use technology to help them transact in the modern ways they want to do business with us. That means digitised solutions.
As a mutual building society, akin to a US-style credit union, with no external shareholders to please our profits are reinvested into the business to create better CX. Digitisation helps this aim, with the branch increasingly becoming a service and high-value experience centre that can do many more things.
Digital acquisition now accounts for 70% of YBS’s mix, up from 20% last decade, and we’ve increased our online book significantly. This means branches can be repurposed to support marketing, service and other needs.
A fifth of lending now comes through the new mortgage solutions we’ve launched with enhanced off- and on-line IT and data capabilities. Customer satisfaction has increased by more than 40% in the last year alone, as digitalisation advances. To quantify some of the improvements:
- 12,000 brokers now use YBS’s new more digitised mortgage system. We can fully approve a mortgage application in only 24 hours now, with pre-approval steers and data-rich feedback constantly available.
- Our digital Net Promoter Score (NPS), which is a customer satisfaction metric, has gone up in successive years.
Is it easier to align technology than it is people or processes?
Automation complements the human touch for us, it doesn’t replace it. Our members value the contributions our colleagues make and welcome face-to-face interaction in our nationwide UK branches and agencies, and members welcome the conversations they can have with real people over the phone.
People are such a large part of what we do – from service to community outreach – that we will continue to invest in the more traditional ways of banking, even while we digitalise.
Digital tools are a complementary, critical element part of our future strategy. But they aren’t an end in and of themselves. They’re a way to keep us relevant, while we deliver our unchanging values.
Did Covid-19 lockdowns advance digitalisation and automation by a decade, and what’s the long-term impact on branches?
It would be remiss to suggest Covid didn’t influence how quickly customers had to adapt to new or digitised ways of banking.
The UK lockdowns made it impossible for large periods of time to operate branches as usual without compromising safety, which we were unwilling to do. Therefore, we shifted our operations immediately to different ways-of-working to ensure people still had access to their money and could still purchase homes. But as the country reopened, so too did our branches Their digitalisation has, however, been accelerated by Covid.
There is though still a place on high streets for banks and building societies. While that demand is there, we will continue to maintain physical locations. The mix of tech and people has naturally changed, but the over-arching customer service driver remains.
The pandemic meant some of our customers became accustomed to transacting digitally. The investment we’ve made in our mobile apps means it is no surprise a significant number still choose to do business with us in this way.
Hybrid banking is the way forward for us, for now. Mixing digital and in-branch services works for us.
How do you see the future of banking: is it API-enabled only, or is a hybrid approach valid?
As much as some people may like to imagine a future where open application programming interfaces (APIs) and digital-only neo banks dominate exclusively, we still believe in physical footprints aligned with digital tools. This hybrid approach can flex to meet customer needs now, as well as in the future.
It’s unlikely API-enabled systems, providing a means of easier data exchange as they do and the potential for more in-depth technology-only ecosystems, will come to totally dominate banking in the very near future.
We are aware of the API and digital-only trend, but don’t think it will drive the masses away from hybrid banking for the time-being. This is the strategy we are pursuing.
We’re proud to be there for life’s moments. And for many, the value of the in-branch human touch cannot be underestimated where money is concerned. Much of our member base have built trust with the Society. They like to transact in High Street locations or speak to someone who can help them take the first step on the property ladder. It’s all part of the relationships our people build with customers, which cannot be replicated by bots. People-based relationships matter.
But we’re far from naïve. That is why we’ve embarked on such a tech transformative journey in recent years. We’ve been able to prove just how much opportunity there still is in our business and how digitising parts of our enterprise can – and indeed has – created huge amounts of value.
We’ve got an opportunity to continue to be distinct in the UK savings and mortgage marketplace. Being both digital and human is a strength for us.
About the author
Neil Ainger is an experienced freelance business and technology journalist who has worked for CNBC as fintech correspondent and many others, after a career as an editor covering corporate treasury at AFP; banking via Banking Technology and Daily News at Sibos; as an analyst for IDC; and more. Further details via neilainger.com and @Neil_Ainger.
