Panel discussion: How Swiss banks master digitalization
Digitalization // Digitalization is also an opportunity for small and medium banks. In this interview, Bruno Thürig, CEO of OKB, and Patrik Gallati, corporate management division manager at GLKB, reveal how banks can hold their own against the big tech firms.
ti&m: What are your biggest concerns about digitalization right now?
Bruno Thürig: At the moment, we are looking at two main issues. One is building a portal, and the other is the advisor workbench (AWB). As far as the portal is concerned, we are acting as a pilot bank for Finnova. One of our key concerns is to go live with the portal as quickly as possible. We are trialling the AWB with a small circle of users initially. Then, when everything is running smoothly, we’ll roll out the solution across the bank. That’s what we're looking at over the next few months.
Digitalization also necessitates adjustments to culture. How are you approaching this challenge?
I’d like to highlight two points here. Firstly, you need the skills to deal with the new tools, and to not be afraid to use them. Management’s task is to train up employees and hire new recruits if necessary. Another task is to remove the fear of job cuts from our employees. We firmly believe that people are still incredibly important when it comes to customer contact; many customers don’t want purely digital services. In the medium term, therefore, we will need more employees than we currently have. So their fear is ill-founded.
Companies like Google, Amazon and Facebook are strongly positioned in the fintech sector. How can medium-sized banks compete?
In my opinion, it’s simply a question of establishing trust and a local presence. You can build long-term trust through a local presence, which is something the big tech firms can’t do. We also need to provide the technology to enable customers to run their business digitally. That’s why we’re in great demand. even with digitalization. Our services enable us to go further than tech corporations.
How do you strike a balance between close, in‑person customer support and the growth of the digital channel?
We have introduced a range of initiatives. The 2018+ strategy adapted our structures. We have clearly defined the areas where we are relying on digitalization, namely corporate development and the digital branches. On the other hand, we have also extended our traditional in‑person advice. We can switch between these two channels very quickly, whether via chat, phone or a consultancy meeting in person. A firm that is purely tech‑focused can’t offer that.
How do you intend to prevent banks from continuing to be merely transaction processors and from losing out to the big tech firms when it comes to contact with the customer?
Our main sources of income still lie in interest margins, assets and pension funds. Digitalization is becoming more important here too. At the same time, these sectors are very consultancy-heavy; you need trust and a personal presence. The key issue will be whether customers want to do everything via machine in the future, or whether they still want to have a contact person. I believe the dual path is the right one.
Patrik Gallati, Head of Corporate Management, GLKB
i&m: What are the main areas of digitalization you are focusing on at the moment?
Patrik Gallati: We are predominately working on automating our processes. Our main focus is on creating integrated end-to-end processes, such as single-medium opening of products and accounts. We want to increase efficiency by implementing stronger digital processes. Digitalization affects internal working procedures such as front office processing with Advisory Work Bench (AWB), as well as external ones with our portal project. We are also focusing more heavily on creating attractive products and services for customers that can then be purchased online. Many customers do not necessarily want to visit a branch with simple enquiries and would much rather do things online.
Digitalization also requires some cultural adjustments. How are you tackling that challenge?
The most important factor here is change management, ensuring that employees are brought along with the changes. It is vital to communicate actively and explain why you’re doing things. You have to show your employees as tangibly as possible to what extent the changing processes will benefit them in their roles. We therefore held a series of one-day workshops to explain our strategy to all of our employees. It is important to give staff regular updates and appropriate refreshers. This is the only way to counter the fear that digitalization will take away their jobs. It is more important to demonstrate what new roles will be available to them individually.
Companies like Google, Amazon and Facebook are focusing more heavily on the FinTech area. How can medium-sized banks compete with this?
Our strength lies in the fact that we are not only maintaining our bank’s core competencies, but also reinforcing them. In practice, this means providing personal consultations on more challenging topics. And physical presence too, that still has value. At the same time, we have to make sure that our processes are as simple and efficient as possible to be able to offer customers appropriate products and services via the digital channel too. Another option is to offer streamlined niche products. Banking is a business based on trust, and trust has to be earned. So if banks are able to offer state-of-the-art products that are also competitively priced, they will be able to compete with the big "Multis” for a long time yet.
How do you manage the balancing act between close in-person customer support and growing your digital channel?
There does not necessarily have to be a balancing act. What is more important is bringing together the best of both worlds. Take investment advice, for example, where we combine personal consultations with a customer advisor together with a guided digital process. It is also important to carefully maintain brand identity on the digital channels. The customer has to still feel “at home” with our bank online. Our brand values have to be visible and authentic both in personal consultation and on digital channels.