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Barclays and experimentation as a way of life

Stuart Lauchlan Profile picture for user slauchlan October 24, 2016
Summary:
Experimentation as a way of life at a 300+ year old banking institution - Head of Experimentation Owen Gardner explains why digital is a CEO agenda item.

owengardner
Owen Gardner, Barclays

There comes a point when you ask, are you a bank with a big IT function or are you an IT function that provides banking services?

With 28,000 technologists on staff, that’s a valid question for banking giant Barclays to pose and one that the firm’s Director and Head of Experimentation Owen Gardner poses rhetorically as part of a wider contemplation of the bank’s attitude to innovation and transformation.

Barclays is more than 300 years old - older than the USA and the Bank of England, observes Gardner - and across that time has jumped the innovation curve many times:

Throughout our history we’ve had to be innovative, to adopt new technologies and business processes to allow us to succeed. We had the first ATM. That helped the customer by meaning they didn’t have to go into the branch to access funds. You can see how that continues today with digital transformation and the digital payment systems that we have. We were the first UK credit card, another enabler for our customers to live the life that they want to live.

It’s all about the wider issue of keeping up with and preferably keeping ahead of the forces of change, delivering services to the customer base:

Throughout that history, we’ve had to jump innovation curves from time to time. If we were still hanging out with paper ledgers and writing cheques by hand and with branches without technological capability, we’d be long gone in the annals of history.

Gardner adds:

What we’ve recognised is that it’s really important to embrace the customer, to work with the customer to make sure that they’re getting a good experience that they want to have, rather than trying to guess. We recognise that it’s an honor to be able to support our customers and the services that they want to receive.

One way of doing that is through a delivery model build around Service Design. Barclays set up a dedicated Service Design Officer around seven years ago and this has contributed to a culture of working that prizes design alongside technology and business outcomes. There’s also a way of working that is based on greater experimentation - hence Gardner’s job title. He explains:

If you look at the way that products and pilots and proofs of concept are done traditionally, you’ll get a certain amount of money to go and build a pilot based on management intuition more than any real data. Barclays recognised that a better way to do this is to do small experiments more rapidly. So we’ve put a lot of resilience around developing a very specific hypothesis, creating an experiment around that, running that experiment, providing the learning into a learning library, then either putting it into production or going back and changing the hypothesis.

That might result in a new offering built on Salesforce, Barclay’s cloud platform of choice, or it might lead to Barclays building a platform independently, but  the important thing is that it enables the bank to experiment and deliver quickly. This is supported by more collaborative ways of working, an idea made manifest through the bank’s CoLabs, internal cross-functional work environments:

We used to talk about DevOps being development and operations coming together to work. Now it’s about bringing multiple disciplines together, not just Dev and Ops - business, finance, human resources.

That makes for a potentially much more complicated acronym than DevOps, but, says Gardner, the benefits are real:

We try to bring these disciplines together strong in an environment to really swarm around a problem. This is happening in a lot of areas around the bank now to meet new challenges and new capabilities that we are going to supply to our customers. It really is a very dynamic way of working. In 325 years of history, we’ve gone from very silo-d organisation delivering technology in the historical manner. To try to make that pivot to doing collaboration is so important.

Six reasons for CEOs to heed digital

Gardner also makes the point that digital needs to be a CEO agenda item, for 6 specific reasons, which he cites as:

Security

Security is absolutely critical. It would be a beautiful day if we didn’t have to worry about having secure systems, but with new technologies come new threats and new risks. Even the adoption of new technologies can expose us to new risks. We have to be very resilient in the way that we manage our customer data. They have to have confidence in us to look after their very important personal information. The older generation will consider the public cloud to be like a public beach where you can walk along picking up grains of data quite freely. It’s not like that at all, it is incredibly secure. But we have to be resilient in the way that we manage that.

Customers

With customer expectations, if we had it that people still had to come into the branch to buy paper money and that was the only way we service our customers, that would be a disaster. We would be already out of business. We have to meet customer expectations and millennials live in a digital age where they are very digitally lucid in the way that they interact with their technologies. We have to meet their expectations and delight them, give them a great experience.

Regulation

Regulation is paramount. We’re probably in a tighter regulated environment than we ever have been. If you look at the Open Banking regulations being brought in in the UK, where we have to open up APIs for our services, we have to meet that, all our legacy estate. We have to meet the new regulatory demands on the investment banks.

Competition

We are seeing new competition and it’s not just from our peers. We also have new competition coming from new industries. Look at Apple Pay - that’s going to be a big threat to us. Look at the Chinese capabilities, they’re building on the digital platforms. We have to acknowledge that the way they are implementing is very successful and meet that challenge face on and stand up to it. We’ve already seen the scale of FinTech and that it can pivot very quickly. We can either challenge that and go aggressively against it or we can embrace it to help us with our own capabilities. That’s incredibly important.

Efficiencies

Look at new technologies, like Containers, that allow us to be more efficient in the way that we are running our organizations. So as well as generating new revenues, we can use these new technologies to drive down costs in the way that we deliver capabilities to our customers in a more timely manner. It’s not just a case now that we’ll have a plan in two years time to deliver a new product. We can pivot very quickly and deliver that new product to our customers.

Talent

These new capabilities require new talent. We have to be able to attract talent to our organisation and give them an enjoyable experience and learning capability so that we can benefit from what they bring to the organization.

Given that Barclays has taken all six of these drivers on board, Gardner sees continued innovation as a critical part of the organization’s future and predicts that social platforms will see more activity:

If you look at the way that social platforms are being developed in China, there are a lot of financial services that are being provided on that estate. We have to recognise that that’s a way forward and we have to engage with social platforms to provide the kind of services that customers want  to have on their device. So it’s less about having a Barclays app to pay a bill, it’s more about how do we integrate with the social platforms that currently exist and provide the level of service that you would expect from your apps and your devices.

We’re seeing things like Containers coming through. Where you have a large organisation with a large legacy estate, being able to de-risk our estate while managing these new technologies and embrace them, that’s something that we need to focus on and keep our eye on the ball. If we step away from that, we could fall into the annals of history. What we want to do is to be around in the next 350 years as an organisation where you’re managing your finances through thought control.

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