Customer service powered by data meets CSOB
As one of the largest banks in the Czech Republic, CSOB offers a full range of banking services to individuals and companies.
The bank is owned by Belgium-based KBC Bank and the whole group has taken enormous steps in the digital transformation of its business in recent years.
Now it is shifting up a gear by introducing the personal and fully digital assistant, Kate, which is powered by data, Artificial Intelligence technology and straight-through processing.
The technology enables clients to be served in a personal way, taking into account their situation and needs.
Ludek Slegr, CSOB’s IT Executive Director (CIO), joined the bank eight years ago following several years in the German business industry, working for companies such as Deutsche Post DHL.
His return to the Czech Republic was an intentional one, yet he was mindful that he still wanted to work in an international environment. CSOB has given him that opportunity, as well as the chance to innovate through technology.
He explains, "My whole career has been spent working for international companies, starting with a German digital document management company, then working in the transportation sector for Deutsche Post DHL. But at some point, I felt like going home and I wanted to experience how Czech-based companies work.
"At the same time, I didn't want to completely lose touch with my international background, therefore I chose CSOB. It's not just a Czech company, with KBC as its mother, it's a Belgium-owned bank insurance group. This presented for me the opportunity to check out the financial services industry."
Developments in financial services
The past decade has been one of immense change for CSOB impacting equally business and IT, driving them much closer together than ever before. The business needs have driven the technology side of things but also the transformation of the organisation in terms of business IT fusion for sake of efficiency and flexibility.
CSOB is now an entity that operates with agility, from its internal processes to its delivery of services to customers. “It cannot be overstressed how many changes we've gone through including those under the surface,” Slegr says, but swiftly focuses on future changes that are still pending for the bank as it is clear he feels as though there is still much to be done.
From a people perspective, the transition has been a great success, and has been achieved through nurturing an agile mindset, says Roman Masek, Director, IT Digital Services for CSOB.
He explains, “We achieved our primary goal. Once the people adopted an agile mindset, they discovered its power and beauty and the more technical aspects clicked in place much easier. But the initial phase is far from easy and it is not for everybody. We are using the SAFE methodology framework with success, but the agility in minds of agile teams is the key ingredient to deliver business value faster. We have proven that project and agile principles work very well together.”
Technology enabled solutions
The digital transformation has been as much about streamlining processes as it has been about reorganizing teams and their interactions. Slegr is aware of the pace of technological innovation, and he wants CSOB to be ahead of the game.
"Technology is developing as we speak," he says, "and we need to focus on leveraging the power of data combined with AI techniques. These are elements that are strongly in our portfolio and we are working intensely to teach us how to use it for the client's benefit."
The pandemic has also been a driving force behind the digital changes of the past 18 months, although many of these developments were already planned and, in the pipeline,, but were “moved up the calendar” when COVID-19 hit.
He says that taking the bank’s staff away from the centralised offices and having them working from home was a surprisingly successful endeavour, but at the same time, the sense of isolation has created difficulties in terms of building new teams. The answer has been a roadmap set out by CSOB which has prioritised certain techniques and technologies that have helped create a more seamless experience for staff as well as customers.
“Our journey has been very much about using whatever technology we can to make the experiences of our clients as smooth and simple as possible,” says Slegr.
"We employ many more technologies from the AI realm, which have allowed us to replace a lot of routine tasks carried out by our business colleagues in the past. They range from image recognition to text understanding. This saves a lot of time. Not just to us, but also our clients. And our colleagues can use the capacity for more creative work."
Straight through processing
CSOB focuses on Straight Through Processing (“STP”), which is essentially about avoiding any human interaction in sales and service transactions. It improves customer experience in terms of speed, quality and reduces costs at the same time.
Jiří Halouzka, Director, IT Core Services at CSOB, says the systemic approach to this is of paramount importance for the bank and its employees. In the long run, we will be able to concentrate on better serving customers with more complex requirements, than managing the day to day routine transactions.
Halouzka explains, “Straight-through processing is where the transaction from the start to finish is done without human interaction. It is extremely important for CSOB. Clients expect it. They want simple products and services.”
He says that if underlying processes are complicated and there is often a lot of human interaction in the back office, then a client won't be prepared to wait one week until the product is finally introduced. So, this is the external driver. "We want our staff focused on automation, instead of doing some let's say low-value manual work. This also makes our business more efficient and less costly."
Two key trends in corporate IT
We experience two at first glance opposite tendencies, says Slegr. One is the business IT fusion which means that related IT and business teams collaborate and ultimately become one virtually or even in respect to line organization. "We believe fusion is much more efficient than trying to align two separate," he explains.
Integration is the second trend, where common IT agendas are centralized, which increases efficiency, security and speed while having cost reduction potential.
“These two trends work well together and make the role of central core IT much more important,” says Slegr. “We still need and want to maintain some common standards. It is advisable to have certain platforms, processes, policies, managed centrally.”
Halouzka points out that in addition to the obvious benefits of integration (like better efficiency), it's become much more difficult for smaller companies with their own small IT departments to maintain the very high-security standards which the bank and the group demands. Therefore, CSOB has created a lot of synergies by managing outside security teams as part of the bank's internal security department.
As part of the collaborations, CSOB has entered into many partnerships. The one with GuideVision for ServiceNow stands out as service management is the backbone of every IT organization. Slegr says that this partnership has been instrumental in assisting the bank in getting ahead with all its key processes.
"One of the huge benefits of using ServiceNow is that we have been able to standardise many of our processes and get rid of a multitude of tools, which are difficult to manage, and are also quite expensive to run," Slegr says.
The future of banking
CSOB is keen to differentiate itself from the crowd, and it is using innovative technology to provide its customers with a unique offering. Called Kate – the transformational solution is an AI-driven service bot that can handle virtually unlimited sets of tasks and has huge potential to expand into a centralised role in terms of providing personalized service to bank-insurance clients.
Slegr explains, "It's based around the idea that our clients will be served by the digital assistant. It resembles Siri or Alexa, but with financial expertise. We start with more basic use cases, but continuously add more elaborate ones.
They include both product sales and customer service. While our clients will interact mostly with Kate, the whole strategy and ecosystem goes much deeper. It starts with data, AI technology as well as straight-through processing capability.
"The channels for Kate are different too. The service may be delivered via the chatbot or voice bot, but the underlying information can be used as traditional lead, which is provided to the branch that way, to somebody who takes care of the client. So it nicely links all aspects together."
The digitisation of the bank has also changed the distribution network for CSOB. The physical role of staff in branches is no longer the same as the online banking app handles much of the bank's day-to-day transactions. Instead, Slegr says, those branch workers will gradually adopt a consulting role.
“Basic transactions were carried out manually in the past. But that’s not the case anymore, although there are and will be exceptions in more complicated cases. But in the future, these colleagues will be taking much more of the role of financial consultants.”
Mixed offerings and sustainability
As well as the technological side of things, the team believes banks also need to offer more products to customers, partnering with other industry companies to do so.
Along with this is a commitment to sustainability, with CSOB deciding only to partner with organisations that support the Paris Climate Agreement and the zero-emissions agenda.
Halouzka says, "Our bank now has a strong focus on corporate social responsibility and sustainability. It's not just about going digital. We are now carefully selecting the companies we provide finance to. For example, we don't provide financing to companies from the military industry or coal mining. So this is an area which very strongly is becoming part of our culture."
Slegr agrees. He adds, “Before joining the banking and financial service industry, I didn’t realise how much power and related responsibility the banks have in this regard. Allocating money to projects contributing to sustainability has huge impact for the good of all of us. It’s future-proofing through finance.”