Friday, December 18, 2020

The Humanization of Digital Banking & Transformation

EJ Achtner, Head of Digital Banking & Strategic Change, U.S. Wholesale Banking HSBC speaks about how we rose to the needs and challenges required to transform

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EJ Achtner


EJ Achtner, Head of Digital Banking & Strategic Change, U.S. Wholesale Banking HSBC

As an international bank, HSBC saw first-hand the impact of COVID-19 on businesses of all types and sizes as the pandemic quickly spread around the world. We knew our clients were going to be up against many challenges – and that we’d have to move quickly to help them. This manifested in many ways, accelerating the deployment of digital tools our customers and associates needed while working from home, collaborating across the organization to streamline our processes to move faster while still managing risk, or leveraging our global network to help piece together fractured supply chains. However, nothing prepared us for what was necessary to support various emergency COVID-19 government lending programs. In the U.S., that came in the form of the Paycheck Protection Program (PPP), part of the CARES (Coronavirus Aid, Relief and Economic Security) Act designed to help business owners continue to pay their employees during the economic downturn. Very quickly, we knew that we needed to rethink everything.

The impact of COVID-19 surrounds us – from stories of personal loss, to customers and their employees facing unprecedented turmoil. We often talk about the “purpose” behind digital transformation, making the lives of our customers easier, helping them grow their business, etc. In many cases, you can see the benefit over an extended period of time.  However, as we learned more about what was necessary to reserve PPP funding, we knew we needed to move very fast and be extremely nimble because the program was constantly evolving.  Our goal from the start was to make the application process simple in order to remove as much stress from our customers as possible. Behind the scenes, we built a “Virtual Digital Factory” from scratch using a combination of existing and new digital platforms, as well as hybrid workforce comprised of people and “robots” working together in a new and efficient way. HSBC’s teams from all over the world provided support, reaching new levels of professionalism and personal sacrifice to provide emergency relief so that our customers could support their employees. Driven by this purpose, and enabled by this new hybrid approach that synthesizes digital and human with a new “way of working,” we were able to secure PPP funding for 100% of our eligible customers, while also reducing projected operating cost by 3x and application processing time by 4x. As we would soon realize, this was the easy part.

PPP loans are different in that if a customer uses the proceeds for specific purposes as set forth by the program (for payroll, as one example), the loan would be fully forgiven by the US Small Business Administration. We quickly learned that the “forgiveness” process would be rigorous and require the need for personalized and secure digital interactions with our customers at scale. This included everything from the collection of data, exchange and categorization of documents, fingertip access to both human and digital support agents, and integration into the US government’s new PPP platform to provide, in some cases, real-time updates back to our customers and front-line staff. The team began by assessing several third-party applications, offerings from consultancies, and potential fintech partners, thinking that would be the most expedient path. We determined, however, that modifying an existing HSBC digital platform was best for achieving what we envisioned for our clients. Enter HSBCSmartServe.

HSBCSmartServe was initially developed for a different set of customer journeys. However, the platform perfectly aligned to our principles as it was easy to use, at the early stages of global deployment, had capabilities necessary to support PPP, and was based on human-centric design that made processes easy and intuitive for our customers, giving them greater peace of mind. Although we needed to have something in place for PPP swiftly, we also wanted to be sure we could support a comprehensive range of clients. That's why we took the time to directly collaborate with our customers throughout HSBCSmartServe’s development, ultimately working together to co-create a platform that met their immediate needs while also laying the foundation for future digital solutions they would benefit from.

Within a matter of weeks, we launched HSBCSmartServe, giving our customers  the ability to get a head start on the PPP forgiveness process – the modified platform became the foundation of yet another new “Virtual Digital Factory”. The team learned a great deal from the initial stages of PPP, so we included real-time information and digital servicing tools  such as a Virtual Assistant with PPP specific content, as well as members of our program team using Live Chat within HSBCSmartServe to answer questions in real time. We also decided to “future proof” the platform by embedding additional capabilities such as the use of electronic signatures and automated outreach – critical during the pandemic for executing important loan documentation. Using an agile delivery process, we were also in the position to implement changes on a daily basis based on customer feedback or the evolving program requirements. Throughout this, we maintained close collaboration with our risk and audit partners, as we jointly transformed how we work together to sustain the face pace of delivery while managing risk – incredibly important to ensure trust is maintained. Moving to a more digital environment lowers operational risk by introducing advanced, automated controls to facilitate much greater transparency. 

Using an agile delivery process, we were also in the position to implement changes on a daily basis based on customer feedback or the evolving program requirements.

Even in the midst of the frenetic development for PPP, the team always considered our customers’ longer-term needs. How could we take what was built today and turn it into something that benefited them long into the future? That’s why we’ve built HSBCSmartServe to be a sustainable digital asset that would serve our customers worldwide long after this crisis has passed. We are in the very early stages of our digital journey. HSBCSmartServe has been deployed to 18 countries and has a very robust set of enhancements scheduled for 2021. This new operating model is  beginning to transform how our employees engage with each other, and our customers. What used to take place via email or phone, or even in person,  is now being consolidated into our digital platforms. In fact, we tested this new process while supporting PPP by launching a concurrent “Customer Information Review,” historically known as a KYC refresh. The results have been positive – completion time has been shortened from 90 days to 12 days, customers take on average 10-12 minutes to complete their part of the process, and the unit-cost reduction for this customer journey has been between 50-60%.

Looking forward, our plan is to build more advanced capabilities into the platform, creating a next-generation digital ecosystem that will complement HSBCnet, our world-class treasury, payments, and transactional banking platform.  PPP has taught us that there’s a different way to approach the challenge of digital transformation, particularly the role that a clear customer-driven purpose plays in galvanizing a team toward a specific result. We have found that the “impossible” is not only achievable but within reach. By honestly challenging ourselves about what we’ve done in the past, we’ve found ourselves in a place where the principles of customer-centric design thinking have met real-world delivery –

perhaps challenging the conventional wisdom of what is possible.

I could not be more proud of what the team has accomplished and the trajectory we’re on, but more importantly, it’s not my perspective that matters as much as how our customers’, who have responded quite positively. That is the greatest validation of all.

We’re proud to have our digital transformation journey recognized by third party expert Greenwich Associates as a Standout Performer in Digital Transformation in their Future of Banking report. To learn more download, the report here.

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