Digital channels as a key pillar of the BOC
The view that digital banks have been one of the accelerating factors of the process of providing faster and better services through improved customer experience and support is expressed by the Director of IT and Digital Transformation, George Tziortzis.
Speaking to K, Mr. Tziortzis noted that one of the challenges is for the Bank to educate its customers who are not familiar with digital channels, with their own comfort and convenience always in mind.
Finally, he stresses that software and automation do not work without supervision and human oversight.
The new digital reality is already here, radically changing business. How is this new reality being implemented in banks and how much has it changed in the past five years?
Banks, historically drivers of the economy, could not fail to be affected by the shift to the digital economy. Indeed, in countries like Cyprus, small and exogenous, systemic institutions like the Bank of Cyprus not only follow developments but have an obligation to lead the way and guide in this direction. And this is exactly what we have been trying to do over the past few years. We are guiding society to adapt to a more digital world. This effort started before the pandemic and it helped both us, as an institution, and our customers be better prepared and adapted to the unprecedented conditions that were created, and therefore we were able to cope particularly well.
What can we expect over the next five years in terms of the digitalisation of banks and the Bank of Cyprus in particular?
We believe that the penetration of digital channels will continue to increase across the full range of services offered by banks. This is not only because the banks push for it, but mainly because this is what the modern consumer and our customers want. It is worth mentioning that the data shows not just an increase in the use of digital transactions, but a general increase in transactions. In other words, we are not in a stage of saturation between physical (branch) and digital transactions but in a stage of growth of the banking services provided. In this context, and taking into account the fact that technological developments are constantly running, we should certainly expect an even more pronounced digital footprint in all aspects of banking in the next five years. This is why the Bank continues to invest in its digital services and automation solutions. Digital channels are a key pillar of our strategy and we aim to bring services that will facilitate customers and offer them new experiences, while meeting all compliance standards.
Ultimately, did Fintech threaten the business of traditional banks, or did it force you to become better?
Most of the new digital financial institutions started as technology companies providing payment and transaction solutions. They gradually started to come closer to the banking model and now have to operate under rules and supervision closer to that of traditional banking institutions. At some point in the near future, the rules will be common. But to answer our question, indeed, digital banks have been one of the accelerating factors in the process of delivering faster and better services through improved customer experience and support; but it was not the determining factor. After all, at the Bank of Cyprus we have been operating with this mindset for a long time. We want to constantly solve our customer’s problems, whether through the use of technology or otherwise, in order to simplify processes and serve their needs.
How has the pandemic changed the transactions handled by the сashier and digital channels? How much did it accelerate the digital transformation?
As I mentioned earlier, we have seen a continuous increase in both cashier and branch transactions as well as online transactions. Specifically for digital channels, last July 88.6% of our customers' transactions were done online and now more than 77% of our customers use digital channels. The corresponding figures in July 2019 were 73.7% and 66.9% respectively. At the same time, active mobile and internet banking users increased from 238,000 in July 2019 to 314,000 in July 2021. The pandemic has definitely changed decades of habits for many people and given a further boost to digital channels, so some developments may run faster than expected, a challenge that we believe we have successfully met.
We are talking about digitalisation, automation, and software. However, how important is the human factor in all this?
Perhaps more than ever before. It is the human being who develops, implements, and manages all these technological solutions and although they are credited to the neutral concept of technology, nevertheless it is human creativity and initiative that lies behind every technological achievement and the final customer experience. The human resources of any organization are equally important in managing these solutions. It takes expertise, new knowledge, adaptation, and continuous training and learning. Software and automation do not work without supervision and human oversight. If the question is whether people are now redundant for banking organisations, the answer is clearly a no and this was amply demonstrated in the midst of a pandemic, when our frontline staff and support services staff worked together seamlessly so that our customers could continue to enjoy high quality service. In this context, the Bank's management is providing the necessary support to ensure that the knowledge and capabilities of the Bank's staff are continuously improved. The effort to gradually adapt the Bank's staff to new developments is also aided by the fact that we have implemented a new flexible methodology for managing and implementing technology projects, the so-called Agile methodology, i.e., we implement each project in phases before moving on to the next one, thus building the whole structure and offering the relevant solutions to customers one by one. In this way, the affected staff also has the time to become familiar with and gradually adapt to any new development.
What do you consider to be the biggest obstacles in the process of digital transformation?
I would prefer to use the term ‘challenges’ rather than ‘obstacles’, precisely because the challenges we face are constant and are striving to deal with them concurrently with the processes of upgrading and further developing digital channels. One challenge that we believe will never end concerns the timely identification of our customers' needs through continuous evaluation of their behaviour. In this way we will be able to offer more solutions and products tailored to their needs. Safety and compliance issues are also a constant challenge and we never make concessions. In the same context, we also call on the supervisory authorities to move faster by implementing mandatory changes to old legislation and directives to bring them into line with current trends and the needs of citizens.
Another challenge is to educate our customers who are not familiar with digital channels, not because we want to increase the percentage of digital channel users to 100% but for their comfort and convenience.
What is the application of the Bank's new slogan, “Leap Ahead”, in your business sector?
It’s an absolute application. Having been convinced of the quality and security of our digital channels, our ultimate goal now is to go to the customer ourselves and not to have them come to us when they need a service. We want to provide them with the ability to start and complete their daily basic transactions, to request and receive information about the bank's products and services from the comfort of their home, without having to visit a branch unless the need for specialized and vital services arises.
And what better way to prove that we are there for them in every next move than to let them initiate it with our help but without having to reach to us in the traditional way. For us, digitisation is a national initiative as well as a necessity and that is why part of our investment is in helping our customers' businesses to enable them to digitise their communications with the bank and with each other.
So, on a practical level, what are you preparing in the next period?
An even more improved and upgraded mobile banking that, among other things, will offer the possibility of digital onboarding for new customers who will be able to access specific services without having to visit a branch. We are also working on the new version of 1Bank to make it even more user-friendly and helpful. Finally, you will get to see our first approach and our first applications towards the broader digitisation of the economy. We want to lead the shift towards the digital economy and support the national effort to structurally reorganise the Cypriot economy.