CaixaBank: Keeping Up With The Customer

More than a Century of Innovation.

Today’s leading digital banks combine a fundamental internal transformation with the most innovative external services and experiences. CaixaBank proves that true digital banking transformation relies on understanding and continuously delivering services that meet the changing needs of digital customers.

The 21st century customer is a demanding one. Conditioned by Big Tech to expect the highest levels of service and user experience, their rapidly evolving preferences are driving banks’ digital strategies. Attracting these customers, and building new loyalties, is a race whose winners will be able to move beyond traditional banking to a business model in which banks provide multiple services to customers through platforms able to incorporate ecosystems of different service providers.

Customers certainly are demanding change at a rate that challenges 20th century models. Take Spain’s leading retail bank, CaixaBank: In the past year, 58.5% of its clients used a digital channel and digital sales have risen 4.5 times since 2014. Of the bank’s more than 10 billion annual transactions, 24% are via web/internet and 33% via mobile. And mobile payments are growing rapidly: In 2018, CaixaBank customers made 30 million mobile purchases worth €885 million in stores, eight times the level of 2017.

Getting Data Right

Critical to delivering what these customers want is that internal transformation. In particular, banks need to de-silo their data and create a single data universe. For most banks this remains utopian, but CaixaBank saw early that data was key. Back in 2014, it partnered with Oracle on a Big Data project to consolidate 17 data marts into one. This enabled the advanced analytics and business intelligence required to extract value from the data and gave CaixaBank a head start in terms of the agility required to drive future digitalisation.

With this achieved, banks can then turn their attention to the next problem: What to do with their existing distribution networks and how to build new platforms that will retain existing customers, attract new ones from competitors, and win over the next generation.

As CaixaBank CEO Gonzalo Gortázar says, “It’s a very profound change in terms of distribution. We need to combine our people and branches with the best technology to empower both our clients and our own employees. But the transition is complex. If properly executed it will make us very different. However, it’s not good enough to be good. You need to be good and fast, and combining the two can be difficult.”

Re-Thinking Bricks and Mortar

If customers were homogenous, and all demanded a fully digital experience, banks’ task would be simpler. But, of course, banks still have 20th century customers as well as digital natives. For CaixaBank, branch-based cash withdrawals and deposits have fallen by 50% over the past four years – these vanilla transactions are moving online; but a recent McKinsey multichannel survey found that more than 50% of banking customers in Spain say they still need the “human touch” for financial advice.

So CaixaBank has introduced its new omnichannel relationship model, InTouch, based on a combination of phone, chat, video call, and other online connections to a human relationship manager, putting the choice of channel into the hands of the customer. While externally InTouch combines physical and digital channels, internally it relies upon the very latest in digitalization and data analytics. Sophisticated algorithms help to target potential customers for onboarding, resulting in a 93% acceptance rate, while data modelling is then used to target personalised products and services appropriately.

This hybrid model is not simply cosmetic. It requires the re-engineering of the branch concept, the modernisation of its very significant infrastructure of branches, and the ongoing re-skilling of its 37,000 staff from purely transactional roles to higher value-added services.

Delivering for the Digital Customer

For true digital natives, those Millennials and Generation Zers, who have grown up interacting with each other and the commercial world via their phones, new concepts, branding, platforms and ecosystems are required. CaixaBank was quick to recognise the opportunity, and in 2016 launched imaginBank, Spain’s first mobile-only bank providing services exclusively through mobile apps and social networks. Because of the investment the bank made in data and analytics, clients who log on to the imaginBank app are presented with a completely personalised menu of products and services based on their profile with the bank.

imaginBank blurs the boundaries between a bank and any other online social or retail service and creates a new kind of digital ecosystem. Customers have exclusive access to third-party offers, as well as to its physical hub imaginCafé, a multi-media space that incorporates a cafeteria, performances, gaming, multimedia labs, pop-up stores and more. During the past year, one million customers have signed up, 75% of whom are active, using the app or card every couple of days.

Continuous Innovation

The final ingredient in true digital transformation is the ability to deliver continuous improvements to those digital ecosystems. In 2017, imaginBank customers became the first in Spain to use an intelligent chatbot to explore new products and services. Gina, driven by IBM Watson technology, can provide imaginBank customers with information on all the offers and promotions available, tailored to their circumstances. Gina inspired the launch of CaixaBank’s own chatbot Neo, built into the CaixaBankNow platform and accessible via Google Home and Alexa.

And these bots are getting smarter all the time. Most recently, the application of advanced artificial intelligence systems has enabled Gina to make suggestions of the best ways for customers to make their credit payments, making it one of the first chatbots to actually manage real funds in real time.

Committed to a Digital Future

Many firms may underestimate the profound changes they must make to satisfy the needs of their newly digital clients. CaixaBank does not. The bank’s 2019 – 2021 Strategic Plan represents a complete re-think of the bank’s organisational structure, focused on digital transformation and retail customer relationships. With this new plan, and continued investment in existing and new digital projects, CaixaBank’s digital leadership looks set to continue.

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About CaixaBank

CaixaBank is a financial group with a socially responsible, long-term universal banking model, based on quality, trust, and specialisation, which offers a value proposition of products and services adapted for each sector, adopting innovation as a strategic challenge and a distinguishing feature of its corporate culture, and whose leading position in retail banking in Spain and Portugal makes it a key player in supporting sustainable economic growth.