New Delhi, June 2 – The pandemic brought the urgent need for enterprises across the spectrum to adopt new and emerging technologies. The global banking sector has been at the forefront in investing in the latest technologies like AI/ML, advanced analytics and Metaverse.
NatWest, a major retail and commercial bank in the UK, has made strong progress over the last 4-5 years embracing technologies like private and public Cloud, RPA tools, AI/ML, Blockchain and Metaverse.
According to Amit Sakhuja, Head of Risk Analytics, Technology, Natwest group, will further unlock value for its customers, while ensuring that these new ways of doing things have consumer protection in mind.
Speaking of the Metaverse, he emphasized that it will create a virtual space where customers can transact, access banking information, and avail various banking products from the comfort of their homes.
Excerpts from the interview:
Q: The pandemic compressed the technology transformation journeys of many enterprises. What were the key strategic pillars on which you built your technology strategy over the last two years at NatWest?
A: NatWest Group’s technology strategy is guided by seven key strategic pillars, which form our technology principles. These are:
Customer focus: We prioritize what is most important to our customers and deliver at pace.
Simplicity: We keep things simple, removing unnecessary complexity, duplication, and cost.
Sustainability: We build evergreen solutions that are modern, componentized, and flexible, powered by Cloud technologies, data, analytics, and Agile and DevOps culture.
Security and resilience: We ensure our solutions are secure and resilient by design.
Data centricity: We ensure the highest level of data stewardship through meticulous data mastery and life cycle control.
Capability: We nurture and develop talent, enabling our people to do a great job now and in the future.
Collective responsibility: Our actions and behaviours, all align to our “One Bank” collective responsibility.
Q: How are you leveraging data and advanced analytics to serve your customer needs while maintaining full regulatory compliance?
A: NatWest Group has made significant investments over the last few years to become a data-driven Bank, powered by advanced analytics, to serve our customers’ needs:
Best-in-class credit decisioning engine: We have built a world-class credit risk decisioning engine using Cloud technologies and a variety of data, which has not only helped us cater to the borrowing needs of our retail and commercial customers faster but has also allowed us to comply with the regulatory obligations in a timely manner. For example, the Basel regulation to calculate capital that needs to be set aside to withstand future credit losses.
Conversational intelligence is a key focus area to deliver outstanding services to our customers. NatWest has developed sophisticated language models which are trained on data from multiple channels, i.e., video, voice, text chat, emails, social media etc. and generate deeper actionable insights. These help us understand customer queries better and assess the performance of various channels to pre-empt issues, improve digital self-service, and enhance chatbot capability to convert them into true digital assistants.
Personal Finance Manager (PFM): This is a feature available to our mobile banking customers to help them make the most use of their money by providing automated categorization of their spend, so that they have an opportunity to set aside a budget and receive useful insights to foresee challenges and help them reduce their spend. Customers are provided with a holistic view of their finances, so they feel empowered and in control of their banking relationship with NatWest.
Personalized offers: NatWest has invested in creating a near real-time decisioning engine to offer personalized recommendations to its customers. It predicts the “next best action” of the customer based on his or her historical transactions and other behavioural data.
Q: What are some of the emerging technologies which you are most excited about in terms of disrupting the banking industry?
A: While NatWest has made outstanding progress in the last 4-5 years in the adoption of technologies like private and public Cloud, RPA tools such as UIPath, APIs and microservices, we are excited about leveraging Artificial Intelligence (AI)/Machine Learning (ML), Blockchain, and Metaverse technologies to further unlock value for our customers and NatWest as well as ensure these new ways of doing things have consumer protection in mind.
AI/ML: We are moving our AI and ML models from “innovation” centres to everyday projects and utilizing MLOps & AIOps to operationalize the machine learning models. We are using hybrid AI Cloud technologies to revolutionize how the Bank handles and generates insights from loads of data that we produce and manage every day.
Blockchain: We are excited about the use of Blockchain technology as it has the potential to revolutionize the way people do business across the world. It can significantly expedite payments with cheaper processing fees, decrease payment settlement times with greater transparency and tracking, streamline trade financing and lending process, and reduce counterparty risk.
Metaverse: Despite Metaverse’s origins in gaming and social media, its application has extended beyond entertainment to traditional sectors like banking and financial services. Several practical applications of Metaverse technology including Virtual Reality (VR) and Augmented Reality (AR) have facilitated the buying and selling of goods in an entirely virtual environment.
These virtual environments enable companies to obtain greater exposure without geographical constraints, changing the way in which customers shop and make payments altogether. This has led to a redesign of customers’ purchasing decisions and interactions, creating the next evolution of consumer spending patterns.
Metaverse will create a virtual space where customers can transact, access banking information, and avail various banking products from the comfort of their homes.
Q: With the technology landscape evolving so rapidly, what should a successful CIO/CTO focus on, to stay ahead of the curve?
Technology is changing at an exponential rate with new software and systems emerging constantly. The fast pace of technological advancements requires businesses to work at pace and stay-up-to date with these changes and remain competitive. There are several ways in which these businesses can be better prepared for changes and stay ahead of the curve:
Embrace growth mindset
From Cloud to Artificial Intelligence to Metaverse, the tech space is ever evolving and is doing so at breakneck speed. So, you need to be receptive and adaptive to change, however uncomfortable that may be. Investing in your learning and exhibiting resilience will help you. Thrive despite challenges, and not get overwhelmed by it.
Being in the know
Stay close to developments in the latest technologies, such as Blockchain, Metaverse, Artificial Intelligence, Machine Learning, and Cloud to name a few. This will enable you to envision the use of these technologies to advance with your business priorities.
Address skill gaps in your team
You should be very honest about diagnosing the strengths and development areas of your team and focus on both organic (upskilling the team) and inorganic ways (acquiring talent from outside) to address the skill gaps.
Respond rapidly to change
Technology leaders should act with a sense of urgency and be quick to experiment with the adoption of the latest technologies through prototyping, while being open to failing fast. They should collaborate with product companies, the fintech ecosystem, and academia to learn, partner, and improvise on the latest technologies.
Solve challenges of today and tomorrow
You should focus on creating technology solutions that are customer-centric, scalable, reusable, and performant for the challenges of today and tomorrow. For example, Cloud solutions to cater to the ever-increasing compute and storage demands, build reusable configuration-based frameworks to avoid build from scratch, convert monolithic architecture to microservices, and to improve agility and time-to-market.
Q: What did cloud technology enable you to do that you couldn’t do before?
A: By investing heavily in Internal Cloud (e.g. PCF) and Public Cloud (e.g. AWS) technologies, we can react to the evolving needs of our customers faster and better, while driving down costs for the bank. For example, we have built our next generation credit decisioning engine on Cloud, which is now being used by 3,500 relationship managers dealing with 1 million businesses and supporting 1,000 lending related enquiries per hour.
More specifically, the use of Cloud technology has enabled us to reap significant benefits in multiple areas:
Elastic scalability – With increased banking regulation like Basel, IFRS9, European Banking Authority (EBA), there has been a drastic surge in the number of Credit Risk models, which needed huge compute and storage. We have been able to leverage AWS managed services, like EMR, EC2, S3 etc. to address this need.
Rapid innovation: We are able to innovate faster with access to the latest innovative Machine Learning and Artificial Intelligence products on Cloud. This has helped us to better manage Credit Risk for the bank.
Pace of change: We have been able to reduce time-to-market drastically by leveraging a host of native and third party services provided by AWS. For example, Amazon Sagemaker to expedite the model development and deployment pipeline, Amazon EMR to run technology batches faster, Tableau for self-service visualisation capabilities etc.
Reduce operational risk: We have been able to standardize and automate technology implementation leveraging infrastructure as a code on Cloud, thereby, helping reduce operational risk.
Employee engagement: Cloud technologies are exciting to work on, helping us attract the right talent from outside NatWest and drive employee engagement.
Q: India is your second largest employee base outside the UK. How are you attracting and retaining top talent given high attrition rates? Could you also tell us how NatWest is helping its workforce develop the necessary future technical skills needed which have become so crucial.
A: At NatWest, we create a great place to work for employees by offering them a fulfilling job, healthy workplace, fair rewards, and excellent development opportunities through effective and great leadership. We focus on providing them a job that is equally challenging and rewarding, thus, ensuring they have the right tools to succeed and feel a sense of direction and purpose.A
We focus on all aspects of wellbeing (mental, physical, financial) for our employees and invest in their learning to help them build their skills for today and in the future. In addition, we equip our managers to provide their teams with the right guidance, support, and leadership they need to thrive.
NatWest has invested heavily in helping its workforce develop skills. We have collaborated with a variety of learning partners to outline learning journeys appropriate for various roles, like Data Engineer, Data Analyst, Data Scientist, DevOps Engineer etc. and then provisioned best-in-class learning content on technologies like Cloud (both public and private), APIs and Microservices, RPA, Data & Analytics, Agile, and DevOps.
Based on the business and personal development needs, employees are encouraged to consume this learning content under the guidance of subject matter experts within the bank. We have also done a very successful experiment recently on reskilling our non-tech employees and intend to scale it out.
Lastly, we focus on educating our employees on the latest developments taking place in the financial services industry by bringing in external speakers who can provide a perspective on how they are leading and managing disruptions within their respective organizations.