Westpac has set for itself an ambitious goal: to be the "best digital bank" in New Zealand, if not the world. Based on some of its latest tests with Google Glass, iBeacons and smart watches, the bank has a shot at the title. We spoke with Simon Pomeroy, Westpac New Zealand's chief digital officer, about some of the technology he's piloting.
What does it mean to be the world's best digital bank?
Delivering consistent online service across all platforms, predominantly through the mobile phone, will separate us from [other] banks we're seeing.
How do you think people will bank with Google Glass in the future?
It's a great question. I think the customer will decide. It will come down to the capability of the device and how people choose to use it. The greatest analogy I can use for this is around mobile phones, how people were using them five years ago and how they're using smart phones now. No one was banking on a mobile phone then [five years ago], and now 35% of our customers are using them every day to bank.
The answers around Google Glass and wearables will really be customer driven. Customers want faster, easier ways of doing things. We see that now in all facets of life. CashTank is a great example of an app we built for mobile where customers can get their balances with a tap on an Apple or Android device. We see that being a real opportunity for wearable devices, whether it's a watch or Google Glass. But I also think things like notifications, about account balances or when a payment is due to go out, are great things to use on Google Glass or smart watches. Also being able to do things like find the nearest ATM or the nearest branch, being able to make a payment or transfer between your accounts. Those are things that customers want to be able to access quickly.
Do you put fraud alerts in that category, too?
For me, it's all the transactional things customers want. We give our customers the ability to set up alerts and notifications around a whole range of banking needs. To be able to have that notification come in in real time to your Google Glass or your smart watch or to your mobile phone, really gives customers more control.
In the U.S., Google Glass made a big impression when it first came out and then it became something for nerds. A lot of people here feel wearable computing has got to be trendy and fashionable rather than something that labels them as an ultra-geek. What're your thoughts?
It's probably not that dissimilar from a smart watch. At the moment you have Google developing the [Glass] capability and Samsung and Sony in the smart watch space. I think if customers adopt this technology, you'll see more designer brands entering the market. You can see a world where while Google Glass might seem geeky to some people at the moment and not in the hands of mainstream customers, in 10 years you could have High Street shops selling Google Glass or some other technology built into everyday specs. We're at the cutting edge at the moment, but it won't take long, particularly in mobile, for this new technology to become mainstream.
What is happening with Westpac's smart-watch trial?
We put the CashTank app on a Sony smart watch, and we're about to drop it into a Samsung smart watch as well. We've been using the technology in house to test its capability. At this stage, we've limited it to the balance inquiry. The reason we wanted to try it on the watch was to see how easy it is to develop on the device. We're building technology and applications that are very scalable across different devices really quickly and easily. We put the smart watch app together in less than a week, and the Google Glass app will probably take a shorter length of time.
How do you make such projects happen and how do you get the funds to do them?
We've got a philosophy that what we're trying to do is ultimately drive customer value, improve service for customers, making it easier, giving more capability to customers to do more of their banking with us. We're looking at the customer and saying, what would this do for a customer if we adopted it? Then we start listening to customers about what they want, how they want to access it, what devices they want to be using. And we look at international development. The smart watch, Google Glass, and iBeacon are good examples where we're seeing international media and business attention on these things.
Then we say, if these are devices people will be using in five years, how do we keep ourselves at the forefront of that technology? We've made no bones about it that we want to be the best digital bank in New Zealand, if not the best digital bank globally. To be that, we've got to be able to develop at the forefront of the industry. We put most of our core investment spend into mobile, tablet and internet banking.
How do you define being the world's foremost digital bank? How will you know when you're there?
To be the best digital bank first means being totally focused on the customer. Listening and talking to customers, driving customer feedback, tracking customer needs and sentiment is important. The other key thing for us is how do we benchmark ourselves. We recently took part in a Finalta survey. That's the research arm of McKinsey. They benchmark 65 banks globally. Westpac New Zealand scored really high in terms of digital engagement. We had the fastest observed mobile growth of any bank they've observed in the last 12 months. We scored high in digital engagement. It's a case of benchmarking ourselves against other banks globally, listening to our own customers, and taking a lead in terms of the way we drive the customer experience digitally but back it with human beings. We're following our own strategy. We're not looking to replicate any of the banks in New Zealand.
I find iBeacon [Apple's indoor wireless location sensors] really interesting. Do you have a vision of what this will do in banking?
We'll use iBeacon for a number of things in the branch. We'll make it an opt-in service. Customers that want faster recognition when they walk into the physical environment, will be able to upload their photo into our mobile application. That's been used by different organizations and industries successfully. In my airline days, customers wanted to be recognized as individuals when they walked into the lounge. They could just scan their ticket and an agent would welcome them by name. This is no different. We're just using smarter technology to do it. When our customer walks into a branch, on an opt-in basis we can identify who they are without them having to identify themselves. That recognition is important.
The other thing we're keen to look at is at a branch level, at what parts of the day are the customers using a branch, what parts of the branch are people going to, what are they looking for, so we can better manage that in terms of the operation and drive a better understanding of traffic during the day. We also want to talk to partners such as retailers, to work on some strategy together.
One way you can envisage this working is a customer goes into a café or restaurant and pays for or orders a product easily and seamlessly while sitting down. The customer won't have to get up and go to the counter to pay. There are a number of ways payments can be made simpler and easier for the customer using iBeacon technology. We'll start trialing this in our branches around customer recognition, being able to identify our customers in a personalized, individual way. The second thing we'll do is figure out how to use our technology to drive better, easier, smarter ways to do payments and other transactional services. Some of that will be sharing some of this thought leadership with some of our partners.