How Santander’s technology transformation allows it to improve customers’ lives

Part of the global Santander Group, Santander UK has become a mainstay of British banking, and is a familiar sight on the UK high street with over 1,000 branches and 50 corporate business centres across the nation. Now, the finance giant is undergoing a significant digital transformation in order to improve the lives of its customers and their communities.

Keen to explain this transformation and what it means to the bank were David Hayes, Chief Data Officer and Head of Data Services; and Andy Pearson, Managing Director of Santander UK Technology and Head of Digital Services. We caught up with the pair at Santander UK’s Milton Keynes office. Known throughout the UK as a ‘new town’ built almost from scratch just 50 years ago, Milton Keynes has a reputation for cutting-edge modernity and so the location, as well as the office itself which has been revamped with colourful open spaces and well-lit breakout areas to promote collaboration between staff, truly reflects Santander’s personality as a decades-old institution which is still tech-driven and keenly keeps up with a changing sector and the rapid development of customer demands.

An evolving industry

Technology is disrupting every industry, and banking is no exception – but with organisations like Santander forming such an integral part of everyday life, present at key moments and within communities, this throws up unique challenges and opportunities in the sector. Hayes comments on the recent transformation of the industry: “Data has become prominent for many reasons. Here in banking, there’s a whole world of data at our fingertips that can help us improve the lives of our customers.”

The entire industry is adapting to new technology, and indeed Hayes is an active participant in national organisation DataIQ Leaders as well as FIMA, an annual European conference on financial information management. Hayes also recently spoke to the Bank of England about how Santander leverages Big Data among other disruptive technologies. “They’re on a very similar journey to us, and were keen to discuss some cultural and principle things Santander is doing that they can learn from. As a whole, the banking industry is really taking these technologies on,” he adds.

A technology focused institution

Santander is taking these industry changes in its stride, all the while focusing on the most important aspect: customer experience. As Pearson explains: “Technology is fundamental to banking and fundamental to what we do here. Our aspiration is to be the best open digital bank so we need to stay abreast of the latest developments and adapt to new ways of working, and be responsive to what the market and the customer needs.”

Pearson cites two key elements of technology transformation: “One is how we interact with our customers – and the changes in the way we’re building applications for mobile… we’re looking to digitise the way we interact with our customers.” However, the second element comes from within: “We also need the right data at the back end, and to explore that data to make sure those interactions are as meaningful and insightful for our customers as they can be.

“Data is fundamental to both of these things, and as we move forward increasing our understanding of data through AI and machine learning is key,” he adds. “Customers are used to using Instagram and Facebook – they’re used to instantaneous responses, so we need to be able to provide that. Our goal is to give a seamless, transparent journey to our customers.”

All about the data

Gathering as much data as possible can help to improve this customer journey – but only if the right tools are in place to make use of it. “Data gives us the ability to analyse and understand how our customers interact with us, so we can design processes more effectively,” Pearson explains.

Within Santander too, it’s the data that makes the difference. “Big data has been absolutely transformational to us as an organisation. We partner with Cloudera to run our big data platform here in Santander UK. I was able to understand through this collaboration that we don’t need to have silos of data going forward – and if you get rid of silos, you can truly transform the way people across the organisation behave.”

Santander’s use of data reflects its commitment to its customers, as well as how integral a part the bank plays in people’s everyday lives and in wider communities. “The human element is really key, particularly if you’re making difficult financial decisions,” says Hayes. “If you’re going to take out a mortgage which is going to shape your life and your spending for the next 25 years, you need to trust and know that you can rely on us.”

A trusted member of the community

“Communities are really important to us in Santander,” Hayes emphases. “Santander has targets to make sure everyone takes part in community work, be that abroad or locally.” Indeed, recently a group from the Milton Keynes office returned from building classrooms in Cambodia, whilst raising money for charities closer to home, Age UK and Barnardo’s, and last year Hayes himself spent some time helping a local food bank. “The motivation you get from making a real difference in your local area is great, and is very healthy for an organisation like Santander,” he adds.

In addition, Santander as a global organisation is busy strengthening its commitment to the UK with a revamp of its Milton Keynes site and a brand-new £75mn office in Bootle, Liverpool, which is set to house 2,500 staff. “These are historic sites for Alliance and Leicester and Abbey National. The UK bank is one of the biggest elements of the Santander group and we’re very committed to our UK base,” Hayes explains. “We’ve got 14mn active customers here and over 20,000 staff in different parts of the organisation.” 

This commitment to communities reflects the trust which Pearson is keen to emphasise as integral to Santander. “Trust is a really strong foundation – security is important because our customers have entrusted us with their information. Security is fundamental for any bank,” he explains. “We have a design principle of building security from the bottom up, and going forward the banking industry has the opportunity to build on that trust. There are new value propositions we can explore here, and indeed for the wider banking industry, to provide identity management for the wider market.

“Customers are trusting us with their data. We need to verify identities for a whole variety of regions – so there are opportunities for a bank as that trusted partner within the wider industry, and that’s something we need to look at going forward.”

This strong culture of trust, community and collaboration runs through every aspect of the business, not least the relationship Santander maintains with its vendors and partners, all of which have equally stringent principles on security and much more. “When we work with a third party, we try to make sure we work in partnership with them,” he emphasises. “We spend a fair bit of time making sure they have the right fit for us, both culturally and architecturally.”

“Part of our methodology is to see, experiment, improve concepts, test and learn before we take a leap into particular technologies,” says Pearson. “Experimentation and building that collaborative relationship is important in understanding we’re working with the right partners moving forward.” Alongside Cloudera, a leading platform for Big Data and data science which enables Santander to become data driven, the bank works with a variety of carefully selected partners that have been critical for its ongoing digital transformation. This includes Microstrategy, which provides an enterprise wide platform for Business Intelligence (BI) and analytics; NuoDB, a cloud database for digital applications that can run on premise; Pivotal, a technology development company that provides platforms and tools enabling organisations to develop digital experiences; and Everis, a consultancy providing business and technology solutions for mission critical challenges.

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The right culture

Throughout the significant technology transformation Santander continues to undergo within a changing industry, its people remain key, and managing the significant culture changes transformation brings is vital. “It’s easy to underestimate the amount of impact that cultural change has on the ability to make technology change,” Hayes reflects. “We run change management programmes and provide training, but of course we have some way to go. We’re on a journey. One thing we have to do is to articulate data as a profession; understand and appreciate the different elements of that. There are very different skillsets that come in – soft skills and technical skills need to be brought together to drive change.” 

Ensuring that these skills are in place across the organisation, Santander is also committed to diversity, such as ensuring a mix of men and women in the tech-led organisation. “Gender diversity is very important to us,” says Pearson. “We were a founding signatory of the HMRC Women in Finance Charter. We know that in the industry about 17-20% of roles in technology are filled by women. We’re fortunate that we have about 30% of our roles filled by women – however, we currently only have 19% in senior roles, so our goal is to get that to 25% by 2022. Role models are very important,” he adds. “We are participating in the Thirty Per Cent Coalition where we have role models, both men and women, to mentor women in our organisation, and women at Santander are being mentored by those from other organisations.”

Technologies of the future

In addition to Big Data being fundamental to Santander’s offering and the care it can provide each and every customer and community, the bank will continue to explore other technologies such as artificial intelligence, machine learning capabilities and more. “Machine learning is a technology we’re exploring with some gusto at Santander,” says Hayes. “So far, it’s been important from an operational efficiency perspective. It’s going to change the way we work, the way we think, the decisions we go through, the speed at which we interact with our customers and the offering we can give them – but to embed machine learning we need to make sure it’s built with great data engineering to sit behind it.”

Pearson adds: “Establishing our big data ecosystem is key to us. We’re still early on in our journey of AI and machine learning. Now we have that core data platform, that’s going to allow us to explore these new technologies increasingly as we go forward.”

Hayes, Pearson and the Santander community all keep a finger on the pulse of new developments in the evolving industry, with Open Banking set to take centre stage. “That changes the game for us,” says Hayes. “Data is an asset and this allows competitors to build on assets we’ve got – when you then throw in the capability to build AI or run machine learning algorithms, the opportunity through technology is massive.”

Pearson, too, cites Open Banking as one of “a whole series of regulatory activities that are changing the face of the banking industry”. He adds: “The making available of information about customers to a whole range of new players is going to fundamentally change the way customers interact with financial organisations. There will be new players – and as a bank, we need to respond to that. We need to measure the experiences we build, and remain relevant for our customers as we support their goals in life. Opening up banking data gives us opportunities to understand who our customers are and how to be more relevant in their day-to-day activities.”

Overall, Hayes concludes that the centuries-old banking industry will fundamentally transform with Santander at the fore. “I firmly believe that technology will completely change banking in the next 20 years. The challenge for the industry will be to embrace those technologies – and the winners will be those who can do that in a way which is right for the customer.”