Standard Chartered's Gorriz and Kundu: "Delivering digital solutions in 5 seconds"

• Standard Chartered Bank is focusing its digital solutions on the customer segment of one
• The customer journey provides the framework for those solutions, with staff incentivised based on the results they deliver
• Next best offers, staff training and augmented intelligence are key components

The goal for digital solutions at Standard Chartered Bank (SCB), said group chief information officer Michael Gorriz, is to satisfy the banking needs of customers within the screen time they’re willing to spend with the bank. “Your attention span is five seconds. It’s the outcome that matters for the customer,” he said, “how we can deliver financial services people need, shrink the decision time to the least amount.”   

            The way to deliver the right solutions Gorriz said, is to focus on the customer segment of one. “What is the next best thing you will be interested in. If you are in a certain area, salary level, you might not need a personal loan. You might need an idea of how to grow your wealth. We look at your portfolio, profile, scoring information, outside information, market analysis, using machine learning and AI. We match it to make you a suitable offer.”

            The focus for virtual banking, for example, is the mass affluent and millennials, and making specific offers to satisfy their needs. In Hong Kong, for example, SCB is targeting a specific segment, the thirty-year-olds, well-educated customers who travel a lot and need a place to store their money as well as to create wealth for their future. “We are creating specific services around that.”

            It’s important to keep staff knowledge up to the mark, Gorriz said. “We do this by a lot of training on the latest and greatest, how it applies to our bank customers. We increasingly use them (staff) to train the customer to use digital tools.”

            “What we as a bank are doing,” added Shameek Kundu, the bank’s chief data officer, “is to develop tech curricula for non-tech staff, for everybody who’s not a techie to get a broad view of what machine learning is, blockchain, internet of things (IoT), the basics of data and analytics. Work is underway to design that curriculum.”

            The way staff identify potential improvements, Gorriz said, is to focus on the customer journey. The bank has been going through client journeys in detail and looking through use cases. “We set up a digital banking team, working with the IT team. In wealth and retail, we converted this to journeys. Teams, digital solutioning and coders, sit together, look at specific customer interactions, crank out code every second week (and) release it to staff on the go. This team is incentivised on the outcome.”

            To develop the solutions, Gorriz said “we chose to collaborate, as long as it helps satisfy a client need, if it really solves problems.” The bank has also put products from start-ups in its accelerator into production. That said, there is internal development as well. In one case, Kundu said, “we replaced an expensive third party with something internal, for a tenth of the cost.”

While the bank has many digital initiatives underway, Kundu said “we’ve not done complete AI-driven innovation yet. It is augmented intelligence so far. The fundamental theme is how you use AI to expand the safe space in which we operate. Most of our initial focus is on ‘who’. If we can use AI to expand that safe space, that’s the biggest benefit.”

            One place where AI is in production, Kundu noted, is supply chain finance. When it evaluates credit for suppliers to a big multinational in Africa, for example, “we can’t change the credit grade. We can say, ‘these five suppliers all look the same. If we look at the last three years, this one pays back in time. If all five had a $100,000 limit, you can expand this one. Based on the machine learning algorithm, they are less likely to default’.”  

On risk management and financial crime, Kundu said, SCB is working with companies such as Silent Eight to develop solutions. A key challenge is internal, however, as some staff don’t believe science can replace humans. ”We’ve agreed to use AI to automate partially. The investigation can be done by the machine. A human can review and say ‘yes’ or ‘no’. In most cases, it’s okay.”

            For front office staff who used to spend a lot of time gathering information on the client, Gorriz said, “we do this in the background now. Robots gather information and initiate actions which the relationship manager (RM) should do. When the utilisation of a credit line is below a threshold, we come up with a notification to the RM, which says lower the credit line or have some active proposals for the customer to use it more. We don’t wait until the RM finds it themselves.” 

            The next step for AI, Kundu said, “is to start using AI in areas we have not experimented yet as much - the customer experience, facial recognition. We need to link all our tech innovation to our purpose. AI has to be the way we expand.”

            What’s next for SCB more broadly, he said, is “scaling up across the bank, “mainstreamisation” of this technology, particularly data analytics. If you have twenty pilots, that’s not sustainable. We have the caution we need, avoiding biased outcomes, not using data inappropriately. Fundamentally our risk frameworks have the necessary components to scale up safely. What’s next for us as a bank is to move from early production to scaling up. We should be able to use the traditional DNA of customer trust, and work with regulators.”