ING Turkey COO Gorkem Koseoglu believes the bank's digital transformation from the core to the edge will keep it competitive and innovative, and insists not being able to maintain an excellent customer relationship is a bigger threat to industry than blockchain and other disruptive threats.
Speaking to CIO UK at the Tibco Now conference in Las Vegas, the CIO and COO also said that CIOs have a huge remit to have a strategic impact on their organisations with the opportunity to take a step up to broader C-suite roles including CEO and Chief Operating Officer.
Koseoglu said that being able to differentiate from their competitors was the main driver for the project, which involved three programmes running in parallel across HR transformation, IT and systems, and a third strand in processes and customer excellence.
"The whole management team was new with most of us joining four years ago," said the COO who joined in January 2012 as a member of the executive board and also Head of Technology and IT.
"We were facing the challenges of competition, regulation and changing customer behaviours. We realised we had to change the bank to be more competitive and do things differently to other banks; that was the main driver.
End-to-end process redesign
As well as the HR transformation and the core banking transformation to a service-oriented architecture and service bus model, Koseoglu said they also underwent an end-to-end process redesign and looking at the customer-facing side which really affected the user experience.
"We need to have the core capabilities but have to be able to do things at the edge also," he said. "You need a flexible core to innovate on edge or you create an even more complex architecture."
ING Turkey was able to improve its processes for staff and customers, increase sales, and offer mobile and online banking. The bank also increased its distribution channels by creating partnerships with grocery stores, post offices, airlines and electrical shops, using Tibco's ActiveMatrix BPM to offer consumer loans outside of the traditional branch. By offering banking services through these channels, the Istanbul-based bank was able to increase its customer numbers by 40% to more than three million. "We think of banking as a platform," he said.
Koseoglu said that biggest challenge as part of the project was the people and change management of such a core systems overhaul and end-to-end process transformation.
"We are a small but traditional bank," the former McKinsey partner in Amsterdam said. "We had been up for sale for five years, had been through a merger previously. We were used to waiting and seeing what will happen and didn't have a performance-oriented culture.
"But people's expectations changed and the trick was not to use hundreds of consultants, but get it done with our own people. There was lots of communication, visiting our branches and explaining to our people why we needed to change, and although some people left it created buy-in."
With opening up their IT, Koseoglu explained part of the challenge in his technology department during the cultural transformation was getting them out of their comfort zone and working with new partners and startups, while requiring a team knew more than just IT and understood business operations also.
"But the change and skill sets are even bigger on the business side," Koseoglu countered. "Technology people can speak with business people with some level of social skills, but it is hard for business people to communicate with IT - they need to really be able to define things in functional terms, understand various concepts and have basic level project management skills."
With an average age at the bank of just 33 and a department of 500 "working 90% in Agile", the COO says this empowerment and ownership at the developer level filters up to the CIO who needs to be a figurehead, leader and innovator at their organisation.
"I don't believe in the separation of roles of designers, builders and operators - everyone has to own something in Agile," he said. "This is a big change, and for the CIO and IT leadership it is not enough just to understand technology and run an efficient IT shop.
"The role of the CIO is more than being a very good IT person - it's being a good business manager, running a good tech shop, a networker to liaise with startups, a good project manager.
"And now most of the time the business is looking to IT for innovation."
From CIO to CEO
Furthermore, in the current climate Koseoglu believes that it is a golden era of opportunity for tech workers, and for CIOs.
"My background is in computer science but I started on the operations side doing process transformation," he said. "After a few years I became a CIO and COO, and now I have a CIO reporting to me.
"Some banks have very different models with a separate CIO, CTO and COO. For us it is the right model, and it makes sure process transformation gets sufficient priority.
"I have been in the sector for 15 years and 15 years ago IT was just a cost, all the board would talk about was how to cut IT costs and the CIO wasn't even in the room when they were making these decisions - now 50% of these decisions are about technology innovation.
"IT used to be some people doing weird stuff, but now I tell my team how lucky they are because they are the most precious resource in the whole organisation.
"There is also a huge opportunity for CIOs to have a strategic impact on their organisations. They need to be able to gain the right; to understand the business, understand the market and the technology trends, but the CIO role is becoming close to the CEO with their track record in being able to deliver transformation.
"CIOs are better candidates than most other C-suite roles actually to become CEO."
Looking to the future, Koseoglu said that he believes blockchain will play a big role in the future of banking, but that the biggest threat to traditional financial services companies was to those unable to maintain a strong customer relationship.
"Bill Gates said in the 1980s that banking is necessary but banks are not! Banking needs to change, but we don't see blockchain as as the biggest threat, but being able to maintain the customer relationship," he said.
"How do you integrate banking into the everyday activities of people? How do you make banking invisible?
"Our biggest asset is our customer data, we know a lot about them but with changes in the payments area with Apple Pay, Amazon and startups - the threat is we lose that customer touch and turn into a clearing house."