Santander began as a local bank in Spain back in 1857. Fast forward more than 150 years and the Santander Group now has a retail and commercial business that covers 10 main countries, with 194,000 employees and 146 million customers. Unsurprisingly, this long history has resulted in Santander, as is the case with most traditional banks, facing a number of technology challenges in terms of connecting up the dots and offering global digital services that boost the bottom line and better the customer experience.
Aiaz Kazi joined Santander as Chief Platform Officer back in February 2019 to help the bank solve some of these problems. For those unaware, Kazi has a long history in the enterprise technology industry, having previously served close to a decade at SAP, as well as a number of years at Google Cloud.
I got the chance to have a virtual catch up with Kazi recently, where he outlined some of the projects he has been working on, with the primary focus being on creating open financial services platforms for Santander. He also shared his thoughts on the impact of the COVID-19 on the bank's work and how the pandemic is shaping his thinking for future projects.
First, an example of what creating ‘platforms' at Santander actually means. One such piece of work has involved creating APIs that connect to the bank's backend systems to create a global ID service that can be utilised by different organisations across the group, as well as third parties. Santander is using a host of different modern cloud-based architectures to support these endeavours Kazi explained:
I remember when I came on and we talked about the Open Financial Services Platform, which is what I was brought in to do - to help set that strategy and move it forward. What are the business services needed to support that? What are the infrastructure services needed to support that? What data is needed to support that?
As an example of that we built out the global ID service, which allows our countries to have access to cross-products with a single ID. The beauty of that is that it's a single API, we did all the hard work of connecting that API to the backend systems. And now if a third party, say Amazon, Uber or Airbnb, wants to come in and use that global ID to connect with us, they just have to do it in one country and it's the same everywhere else. That's a very powerful statement for a bank to make, which has effectively been a collection of multiple countries.
You get the idea - platforms allow for open access, but also mean that something only has to be created once for multiple use where necessary across the organisation. In the past, prior to modern internet applications and architectures, individual countries or organisations would typically create what they need at a local level. This clearly does not enable a global, digital business and creates a mess of different systems. It also doesn't allow local entities to take advantage of the best available technology or specialist skills that could be more easily acquired and concentrated at the centre.
Another area of interest for Kazi at the moment is thinking about the crossover between data use and consent. He said:
I think data and trust are two key pieces. You hear the cliche that data is the new oil, I think it's important to understand what are the different aspects of data. Now you're seeing a lot more specialisation going. Then there are other capabilities like mobile, collecting what the user actions are, managing that. You can look at data from a CRM perspective too in terms of a single source of truth. Or you can look at business process management, where it's important to understand not just what the workflow is or what the workflow process is, but how many times a particular process has been executed. It's important to understand all these different aspects of data.
The one that I think is most relevant now, is how do you manage consent? There's data that you can get to by creating global and local APIs, which takes care of your core banking systems. How do you connect to the backend, etc? How do you collect consent from an end user so that you can get more external data, additional sources of data - and manage the privacy of that data based on consent.
As an example, Kazi is working with one of Santander's larger banks in Latin America on a pilot at the moment, which is focused on getting access to additional sources of data to improve the lending journey for customers. He said that if he can improve the acceptance rate by just 1%, this equates to an impact of multiple millions of dollars on the bottom line. Kazi added:
So taking consent based data, which at the simplest level is taking data from their other bank accounts, their position and where they stand, and other information the customer is willing to offer, so they can get a better rate, a better officer, they can get accepted, their journey improves. And not only do you improve your acceptance rate, but you minimise risk at the same time.
So then the question comes, how do you make sure that you have the right data? One of the ways is with this consent based data to get real time access to positions. And open banking makes that easier.
Priorities for platform thinking
Kazi also took the time to share his thoughts on the impact of COVID-19 on the banking industry, as well as the economy more broadly. In terms of how companies are responding, Kazi said that it is his belief that a lot of what has come before the pandemic will now largely be irrelevant - and that companies need to adopt a far more real-time and forward thinking view of how to approach data and services. At Santander, some of his work will now involve helping customers transition away from the old world to the new. He said:
Most companies have thrown their models out the door for now, because they're based on rear view models. There's no point. That's where I think the access to real time data becomes even more valuable because you can't rely on the rear view, because that's based on a very different world now.
Nobody predicted the pandemic. If you look at some of the small businesses who are our customers, they are just trying to survive. So my success as a platform will be about being able to create something that allows them to provide, thrive and bounce back. But what does that mean? That means finding an easy way for SMEs to sell. How can they go digital? Finding an easy experience of converting these people over to digital.
Another aspect is helping Santander transform internally too in response to COVID-19, which is likely to involve some heavy data work. Kazi added:
You have to architecturally build out what you need, which is what we are doing with making sure we have access to the right data, building our APIs for the core systems, etc. And on the infrastructure side, making sure all the data lakes are in place. At the same time you have to drive what the business needs.
For instance, one of our large banks and countries is dealing with a data quality issue. They have data on millions of customers and they have realised with the pandemic that that data is not where it needs to be. They are trying to contact customers now without them coming into the branch. How do you deal with that? So you have to look at, how can you score your data and how can you present it to the customer in such a way that next time they are in they have an option of updating it? So there are things like account verification that we are looking at, in terms of how do you manage that more intelligently with the data we have?
Finally, in terms of the challenges facing the platform team at Santander over the coming months, for Kazi it's always about balancing the short and long term needs of the business. Platform thinking isn't always about the quick wins, but for an organisation like Santander, each quarter matters. Getting that balance right is critical. Kazi explained:
There is the daily rigmarole that comes with dealing with large companies. That's just the everyday grind. But if you take a step back from that, I think the key is: how do you continue to provide short term value while you're building out for the long term? It's the holy grail.
They have a much shorter window, it's quarter to quarter, they have to make the revenue and not rely on something that's going to bring value 24 months down the line. So the question is, while you're building that, how do you deliver short term value? Every large organisation has this organisational memory and they can't help themselves. They say yes you can take 18 to 24 months to build a platform and come back, but it doesn't work that way. You have to find the short term wins. Which is why I'm laser focused on the internal wins. Over the last 18 months I've been focused on the internal wins so that I have the credibility to do this.