Scotiabank is taking a different approach to digital banking by creating what it calls a "digital factory."
The Toronto bank has set up five such factories, one each in Canada, Chile, Colombia, Mexico and Peru, where 1,200 full-time employees and contractors develop new digital features for the bank, while adding specific functionality that's unique to each country.
Shawn Rose, Scotiabank's executive vice president and chief digital officer, said the idea is to help the teams work together despite the geographical differences.
"It was really a galvanizing moment around focusing our customer experience to be in line with our business priorities," he said about the factories.
In an interview with American Banker, Rose discussed how Scotiabank reimagined its approach to digital banking in order to see gains in how customers viewed its mobile app. Following is an edited transcript of the conversation.
How has Scotiabank recently changed the way it handles the modernization of its digital efforts?
SHAWN ROSE: For us, it was about thinking about digital banking as direct-to-customer experiences.
In the summer of 2016, we basically took a lot of our customer facing traditional IT teams and repositioned them as part of the first digital factory here in Canada.
Between the summer of 2016 and January of 2017, we also hired leads in Mexico, Peru, Chile and Colombia.
Those are our Pacific Alliance countries, and between the five countries when you include Canada, that was the vast majority of the focus for the bank despite the fact that we're in almost 50 countries.
It was really a galvanizing moment around focusing our customer experience to be in line with our business priorities. And so we actually hired leadership and created digital factories in each of those countries.
Since then, we have grown at a quick clip.
In the first year, there would have been about 300 people at the five factories. Between the five digital factories, we sit at about 1,200 people.
What’s the idea behind calling it a digital factory?
I would love to say that I came up with it, but I did not. But the name is really about replicable, scalable, extensible, high-quality software production.
We didn't want to build a lab and all that would come with it. We wanted to build replicable, high-quality software. And then we wanted to be able to do this in other countries.
Each of the digital factories actually look very similar to the one we have here in Canada.
We wanted to have an environment where our people could thrive and that they could make really good software. It's become synonymous with our focus on customer centricity.
You mentioned there are five different digital factories working together, but is each personalized for a specific region?
There are two parts to that.
The first part of it was, can we get the talent to scale and then can we get the talent to innovate? And at the beginning, we just wanted to get to scale to have replicable software across the five digital factories to be able to raise everybody up at the same time.
What we've seen since then is that each of the countries has been able to add meaningful dynamic local features and products and platform elements to be able to service each of the countries differently.
The second part of it is, we do follow a rule where the vast majority of the software and design principles are similar in each digital factory.
If you went to our countries, you would see well-designed applications that look very similar, but are very appropriate for our customers in each of those locations.
We have built our systems to where we can actually pick up most of those services in the other countries should we wish to reuse them, which makes it less expensive over time to do so.
It almost sounds in a way that you’ve created an internal banking-as-a-service platform. Is that accurate to say?
It's absolutely accurate. You can even apply that to our design system, which is called Canvas.
Canvas is not just a style, it's also a swipe function. When you do a transfer on any of our applications, you have a swipe-right style. Once you pick the amount, you swipe right and the transfer immediately happens. It doesn't ask you whether you're sure; whether you want to do it. It just happens.
We have done a ton of user research to be able to say this is the standard, this is what works in the best possible way for most users in each country. So whether you’re doing a transfer in Peru or Canada, it’s the same experience.
What’s been the most significant, measurable achievement that you can point to that’s come out of the digital factory approach?
In Canada, we just actually launched our latest round of innovations in our application suite. Internally, we refer to it as Nova.
Nova was released on May 21. We migrated about 2.6 million of our customers from our previous application to our new one, between Android and iOS.
Over the last 90 days, we've received 90,000 ratings and reviews in the Apple app store. The average rating is 4.5-plus. We were at 2.4 just a couple of years ago.
It’s been a big difference over that time because of the quality of work the team has put together. We’ve actually added 400,000 new customers [using the app] since we’ve launched Nova that we’ve never seen before. Word-of-mouth recommendations are spreading about the app.
The quality of work is no longer an obstacle to get into the application. Responsiveness is down to hundreds of milliseconds for 100 key transactions within the app.
The attrition within the application has gone down. The number of products customers are buying within the app has gone up. The average session has gone from 1 per day to 1.9. The average number of sessions we see for the banking app per month is now 19, which is pretty high.
We’re making security more of a focus and the percentage of customers who are using biometric authentication has gone up to 80% from 45%.
