INTERVIEW WITH EDMON PALLEROLA Chief Operating Officer (COO) of Vall Banc
“In search of a satisfactory customer experience”
The coronavirus has brought about changes in many economic sectors. Has the financial sector been a leader in adapting to digital transformation?
Yes. It has perhaps been the sector that has evolved the most. Throughout the situation of COVID-19 we have seen how financial institutions have had to adapt quickly, investing heavily to increase the capabilities of their digital tools. All this effort is being made to accelerate a movement within the industry called digital transformation. This evolution already started in 1980. But given the rapid development of the world of technology and financial innovation, it is a continuous, endless task; one which no banking model, whether commercial banking or private banking, can escape the obligation to implement. And if this transformation was already rapid, the pandemic has accelerated it even further.
What are the challenges facing banks today?
Due to the pandemic, there has been a downward trend in customer visits to branches. The need for digital tools has become more urgent, so there is an urgent need to invest in the development of online banking portals and/or mobile banking applications that present no obstacles when carrying out a transaction. Even the very beginning of the relationship between the banking entity and the individual must be a remote one.
But this not only affects the relationship with customers. Doesn't this also mean that bank employees and executives have to adapt to this new model?
Exactly, the employees and executives of these institutions must be prepared to work remotely from home. The concept of the model towards which digital transformation leads us goes much further than providing a solution to specific points such as resolving customer visits or having bank employees adapt to the new tools. Giving a satisfying experience to a banking user, using the channel they want most, and providing immediate customised solutions, is a project that cannot be born out of the effort to adapt to a spontaneous crisis. It is a task that lasts for years and is not just a matter of investing time and money.
For the digital transformation of a bank to take place at the speed of innovation, three points must be taken into account:
1. The baseline technological infrastructure.
2. The types of executives and employees who make the decisions.
3. The evolution of Fintech.
Let's analyse each point. With regard to the first point, with what infrastructure do the banks in the Andorran financial sector, for example, start?
Many banks, here in Andorra and abroad, have a very extensive history of technological infrastructure, with systems based on macro computers, which support large numbers of computational functions. Subsequently, to allow access to online clients, they have had to integrate another online system under this huge infrastructure. It is important to understand the state of this central system that has undergone changes and evolved over the years. It is very possible that it has become the most significant behemoth standing in the way of effective evolution of the digital transformation of entities, as they will be forced into modifications, integrations of new applications, data transformation to more modern and compatible formats, etc., and all this with a heavy-duty system can be slow and expensive to move or change. A negative combination if we are in an environment where users do not want to wait to have the latest technology.
In contrast, there is another model of banks that have had and currently have a more accelerated digital evolution; they are precisely the banks that avoid this heavy infrastructure and opt for virtual hosting for both their data and computer systems. These are what are known as cloud systems. They are the new agile banking entities, such as the Neobanks. They are success stories with a faster than average customer acquisition speed, as they are able to give consumers what they want in the field of technology and digital channels, and more quickly.
How important is it for a bank to streamline systems infrastructure?
Adaptation is crucial for any financial entity and in this case, Vall Banc will be the first in the financial sector to adapt its systems to a virtual medium that will allow it to be agile and a pioneer in this digital transformation.
But does this mean that Vall Banc will be transformed into a Neobank?
It means that Vall Banc will have a modern system capable of quickly integrating all those applications and advances that are taking place in the technological financial world as well as others that our clients are asking for. We will do it in an agile and efficient way. But this is expected to become a reality next spring. A time when Vall Banc will work on a digital and experienced platform, which is currently used by more than 75 financial entities with a very high level of user experience satisfaction. It is clear that our clients will enjoy digital channels in service and technological progress that make us stand out from the crowd in the industry.
So let's move on to the second point, in this evolution is it necessary to take into account who makes the decisions?
The technological model chosen for evolution is just as important as the creation within the entity of an intelligent organisation that recognises the need for change and is able to carry it out.
They must be employees and executives with an open banking model culture, with no barriers or set beliefs about the industry. Despite the many years of experience that employees have in the sector, they must be able to evolve and transform their functions. Adapting, anticipating and acting accordingly to the current and future needs of existing and future clients is the basis of the transformation philosophy. We must be constantly on the lookout for a satisfactory customer experience.
Which products and channels to hire will be the most attractive for clients of the Millennials generation?
According to a survey conducted by DITRENDIA, more than 50% of banking users between the ages of 18 and 35 only use the mobile banking application, even rendering online banking completely obsolete. Therefore, entities that can differentiate their mobile application in terms of quality, whether by design, clarity of functions, the wide range with operational capacity and a long... and so on, will have a more advantageous value proposition.
And as for the last point, do we need to be on the lookout for Fintech?
Of these initiatives, most die as soon as they are born. Some, however, end up being a real success, with higher growth than any other financial entity. BIZUM, PAYPAL, INVOICETOGO, KANTOX, HIPPO, MANBU, N26, REVOLUT, etc., and we could name many more. Of course you have to be vigilant. A key and critical point will therefore be to have a good innovation and strategy department that analyses these initiatives and evaluates applications to integrate them quickly into the banking system. However, special attention needs to be paid to the evolution of artificial intelligence in the financial sector.
Does this evolution in banking have no end?
Digital transformation is an endless project, necessary for any financial entity, which since its inception has changed the functionality and previous work model, and has caused the birth of a renewed banking worker, with an open mind and good knowledge of the financial and technological sector. In short, a professional profile, which will be much sought after in the future, and which will have a clear mission within the financial entity: to make things possible, in order to ensure a satisfactory customer experience.