Join Horizon live for a CIO roundtable dinner debate ‘Delivering change securely‘ 15th May
“If you know your customer. You understand their relationship with you. Not yours with them,” says Aline Hayes, Head of Systems at Lloyds Banking Group.
Hayes joined the black horse bank in December 2016 as part of its portfolio of senior business technology leaders. Since joining Lloyds Banking Group Hayes has led strategic work to define a new approach to the use of data to enable all areas of business. In addition, she has led the formation of a strong professional engineering leadership for core bank systems.
Lloyds Banking Group is one of the UK’s most well known financial services institutions and the FTSE 100 listed bank can trace its roots back to 1695. Today the bank is a diverse business providing retail banking, mortgages, commercial banking, life and commercial insurance and wealth management.
Unlike many of her peers in banking technology leadership, Hayes does not have a pure financial services career and in fact Lloyds is her first role in the sector. With a varied career, Hayes has developed a strong sense of customer focus.
“Knowing your customer and knowing the relationship they have with you is key, because if you don’t, then frankly a customer journey is a waste of time,” she said at the first Horizon CIO podcast roundtable debate of 2018.
Hayes joined senior technology leadership in 2000 with the Sheffield Hallam University, she remained with the higher education institution until 2014, having been Head of Faculty Technical Services, Head of Customer Support Services and Director of Information Systems and Technology. From 2000 to 2014 academia was still reshaping as a sector following its most significant change; the introduction of student fees in 1998 by the Labour government.
“We see students talk about being consumers and customers,” she says of the culture change. “Academics loathe them doing that in the main as they want them to think about being there for education. You have student behaviour where they talk about things like ‘I want to get what I paid for’ and they mean their certificate, not their education.
“However it is a short term relationship. You meet them through UCAS, you don’t necessarily have a relationship with the student to start with. In my university we did some research and found that most students don’t even attend an open day. They turn up on day one and that is the first time they have been in the building, so they don’t engage with us the way that we expected,” she told over 20 CIOs.
“The relationship is short, apart from alumni and gift giving, pretty much as they walk off the stage having taken the certificate and shaken someone’s hand in a fancy gown, that is it.
From 2014 until joining Lloyds, Hayes moved from Sheffield’s academia to its local authority, Sheffield City Council as Interim IT Director and then Director of Business change.
“Nobody really picks their local authority. Nobody skips down the road and thinks ‘I’m going to have Brent as my local authority’. You don’t get to choose who empties your bin, there is no unbundling in local government, they may outsource a service, but you don’t get any say in that,” Hayes says of the customers with no choice. But as government CIOs have told the Horizon CIO podcast, change is afoot.
“Local government is waking up to the fact that they need to get closer to their citizens,” Hayes says. The challenge is that there are two very distinct customer groups in local government. Those that just need their bins emptying, the street lights fixed and pay a parking fine. At the other end of the spectrum: “You get people who are truly in desperate need and for who the local authority is their safety net. People experiencing homelessness, looked after children, vulnerable adults discharged from hospital who are in social care, they don’t choose to become a customer of the local council, but they need them at their time of greatest need,” Hayes says.
“It is getting a lot harder to live in a world without a bank account. If you know anyone who is genuinely homeless, rough sleeping for example, not having a bank account means a lot of services are closed off to people. So one of the biggest vulnerability risks is not being able to access financial services,” Hayes says tying her life in financial services back to the public sector.
Banking a difference
“There is a lot of competition and it is not always what you think it is,” Hayes says of the disruption taking place in banking. “Monzo, Starling and Metro, but would you be surprised to learn that Argos is one of our biggest competitors,” she says of the new challenger banks and the Sainsbury’s owned general merchandise retailer. “Argos is one of the biggest personal loans providers in the UK. You also have BMW and Apple and Google all coming in and disrupting the financial services market. You get people who come in and take slices of the market. Transferwise who take international payments business away from us, so you see little bits of your business being taken away.”
As Hayes reveals, although the academia, local government and major banking may seem radically different markets, the focus on the customer is key as a result of changing demands.
“The relationship people have with their bank tends to be very different. So if I think about my parents day, they would go into the branch, they would go and see the manager, who would always be a man, men are marvellous at being bank managers,” she jokes. “The bank manager would know them well enough to ask them how they are. Now that doesn’t really happen and lots of people don’t want that relationship, they want to transact really quickly and as frictionless as possible. So it is a very different relationship.”
Throughout the podcast Hayes is clearly a CIO that sees that customer focus isn’t just about knowing who you can sell to. It is about truly understanding the customer. Her time in academia and local government has given the CIO a great understanding of how to help at: “times of need, when they get that help it is good, but when they don’t they feel it has become a faceless organisation.
“I can speak personally. At a time of need I went to my bank and I got that help and it is one of the reasons I have stayed with that bank, because I am grateful for the personal treatment,” the Lloyds tech leader says.
Characteristics of the customer
“In higher education it is highly personalised to them, but it is a mass market, so it is a deep relationship, they expect you to know who they are, they expect to see the same people in the library and they will develop a personal relationship with their tutor and they will know the administrators in their faculty,” Hayes says of understanding students.
“In local government, people either want a really quick transaction, to pay a fine or request a new bin and want it to be as easy as possible.
“We did some research in the council I worked in, and we asked why so many people were not using our core online services? They were there, but not being used and there was a lot of political discussion about deprivation and access to IT. What we actually found was that we had really crap broken services, so for example, residents parking, you had to request it, and to do that you had to prove your address, we already knew that by your council tax, you then had to send in forms of identification and you had to print the form off, complete it and mail it in and you might get a residents permit, maybe. And you have to pay for it and you have to pay for it via cheque,” Hayes says of set of processes that had no understanding of the customers needs at all. Her story chimes with so much set out by Jerry Fishenden and colleagues in the Better Public Services Manifesto.
“We actually found that access to IT was a limited thing for those kind of customers that want to transact,” Hayes adds that at times the wrong zeitgeists can be adopted and in she recalls a discussion on making the council websites “more sticky” a term used by the media in the early years of web publishing. “Who is going to surf the council website to see what else you offer? A council offers at least 350 high level services and I can’t imagine I want to spend my day looking at all the council services,” she half jokes about the belief that people would just surf for noise abatement or dog wardens.
Although the bulk of reasons customers interact with a financial services provider will be transactional, Hayes says it is crucial for the banks to be aware of so much more of their customer’s lives.
“Using predictive analytics on people before they dropout so you can support them before they do makes sense,”
Data is often seen as the key for organisations to understand their customers. CIOs are often tasked with delivering a data strategy that will improve customer insight. Hayes has some experienced observations.
“What is their perception of their relationship with you? Are you just something that they transact with? Or are they looking for something deeper?” Hayes says of the questions CIOs and organisations must ask.
“You know a lot about your customers. You have all the data. In all three of the organisations people always started with ‘we need more data’ so people can tell us more about themselves. No we really don’t, we know lots about them now. We don’t use the data, we don’t join it up,” Hayes says with great honesty. She tells her peers the most important thing is to really consider the data the organisation has.
“For someone that wants something quick and transactional, you can make it quick and transactional. For someone that wants something deeper you can do that. That is what I mean by personalised, not ‘hello Aline welcome to our website’ but truly personal and that understands me. You can do things like remove all those annoying things that waste money,” she says. The Lloyds technology leader goes on to cite how some banks send a customer who has recently taken out a personal loan a letter offering them the very same product they have just purchased.
“It is that lack of joined up organisation. The data is there, it is not being used,” Hayes says. “You can personalise and target better and be actionable, so it actually means something to them, not just flogging them something and using it as a sell opportunity.” And Hayes says that is the case for all sectors. If you are a local authority and you know someone is moving to the area, why don’t you send them a parking permit as part of a welcome pack, not just a council tax bill, that would be quite nice. If you want a genuine relationship, think about it from their perspective.
“In higher education it is important for student retention intervention. Dropout rates are hugely important issue and they want to do an awful lot to help their students, because there is a massive loss of fee income when students drop out.
“Using predictive analytics on people before they dropout so you can support them before they do makes sense,” Hayes says this is a golden opportunity for CIOs as AI and machine learning can be used to not only understand the customer, but also prevent fraud.
“Data is not always right. If it is crap data in, it is still crap data out,” Hayes goes to describe how one local government organisation used sensors on waste bin trucks and were using the data to work out why they were missing some collections. One street kept having missed collections and the authority put a lot of effort into analysing the data.
“They spent hours measuring the data, checking it, the data wasn’t going to lie. It was only when they spoke to the drivers that the particular street has speed bumps on it and they knocked the calibration of the sensors and they were not missing collections. So the data was wrong, but they were taking it as gospel.”