Driving digital transformation in retail banking

13 April 2021

When Macquarie was redesigning its mobile banking app, it looked beyond financial services and at the user experience provided by some of the world’s leading tech companies to build out a faster, more efficient and intuitive offering for its retail customers.

As a digital bank, Macquarie’s retail banking and financial services business – Banking and Financial Services (BFS) – is, at its core, a technology business.

“We’re a digital-first business, and in a world where the digital experience is a defining factor for customers in choosing your brand, our offering has to be the best it possibly can be,” says Richard Heeley, Chief Information Officer at BFS.

“Our biggest challenge and opportunity is keeping ahead of evolving user expectations. Being able to deliver on them in a timely and efficient manner is dependent on the quality of the systems we have in place in the background,” he adds.

Recognising that the pace of digital transformation was only accelerating, the business embarked on a large-scale project to migrate its core banking IT systems to a flexible cloud-based solution. This presented an important opportunity to combine what had previously been a more complex web of disparate platforms and accelerate the use of data and analytics through embedding them in the bank’s central decision-making systems.


Taking an inside-out approach

To build its technological capabilities and upgrade the core technology infrastructure to ensure reliability and resilience of services, and increase the personalisation of digital customer experiences, BFS collaborated with the Corporate Operations Group (COG).

The largest of Macquarie’s four internal service groups, COG provides specialist support services to the four operating businesses ranging from technology to data and digital transformation, market operations, human resources, business services, risk management and strategy.

“The benefits for BFS of working with COG in this critical project were three-fold,” explains Heeley, who is both part of COG and leads technology at the retail bank. “Firstly, as an inherent part of Macquarie, our experience and understanding of the Group businesses – and the part we play in the wider Macquarie story – is unparalleled; it’s not something you can easily replicate. Secondly, in such a highly competitive industry, critical to retaining advantage is proprietary technology and the ideas and systems being built.”

“And, thirdly, the skills, expertise and understanding of the COG team and its engineers are second-to-none – we understand what BFS is trying to achieve and take dual-ownership of project risks.”


Putting data at the heart of the solution

As a rapidly growing bank, access to reliable and efficient data and analytics sits at the heart of BFS’ ability to make timely and accurate decisions on everything from lending assessments to prioritising new features for its mobile banking app, responding to risk and regulatory management requirements, and identifying operational efficiencies.

“In an industry such as ours, the ability to store, access and make decisions using data and insight is a critical differentiator that can determine whether customers choose you and regulators trust you.” 

Richard Heeley

“A new platform that made much better use of data and analytics was needed if BFS was to understand and evolve its customers’ digital banking experience, meet the changing breadth and scale of regulatory requirements, and make use of new tools to improve fraud detection and prevention,” he adds.

Having been an early industry adopter of cloud technology and taking a cloud-first approach to its systems strategy since 2014, COG had a solid understanding and experience of the reliability, scalability and efficiency that such solutions offered.

Working with BFS, the team identified the need for a single, cloud-based solution that would allow the business to respond to customer and regulators' needs and grow in a way that met demand for operational efficiencies.

“The costs of storing, managing and accessing our data were growing exponentially, and yet it was becoming harder for business teams to get the data they needed to make the best possible decisions,” says Ashwin Sinha, Chief Data Officer at BFS.

Investing in a single solution

A comprehensive data tooling solution – one that brought together data collection and analysis capabilities – was considered a necessity. Not only that, but it had to consolidate many existing systems, be easy to use, and be scalable to adapt to business growth over time.

The resulting ‘data harbour’ combines a repository for raw data with the tools and storage for processing and refining the data, and makes Macquarie one of the few banks in the world to have all its data and machine learning workload in one platform that sits on a public cloud platform.

“BFS’ data harbour provides the foundation necessary to meet the needs of the next generation of banking, which requires flexible data aggregation, comprehensive views on client data, and deep analytics capabilities, such as machine learning. It also enables improved risk management and helps identify opportunities for continuous improvement in the digital experience,” says Sinha.

Benefits for customers and the business are already being felt in several areas. The greater use of machine learning is helping to detect fraud across the home loan and credit card businesses much earlier, whilst a new early-warning signal now allows the risk levels of specific business banking clients to be reviewed more accurately using multiple variables.

“Having our data in one system – one source of truth if you like – is allowing us to think more radically about how we see and use data to benefit our customers and organisation,” says Heeley.

“Alongside the ability to deliver a personalised customer service, it has improved our ability to tackle fraud and manage portfolio risk in a level of detail that others just aren’t able to,” he adds. “That allows us to identify, monitor and control our exposure much better.”


Staying one step ahead

As customer demands evolve, so do the requirements of the regulatory environment and the threats emerging from a rapidly changing cyber risk landscape, placing pressure on financial institutions to have the systems in place to respond to them quickly and accurately.

“The success of a digital bank is dependent on the quality, speed and usefulness of its data. We have designed and put in place a solution to both drive digital transformation and meet the external demands placed on the business, using some of the most advanced technologies and methods available to do so but in a way that has simplicity of use at its core,” concludes Sinha.  

Richard Heeley is an Executive Director at Macquarie’s Corporate Operations Group, and Chief Information Officer of its Banking and Financial Services group, based in Sydney.

Ashwin Sinha is Chief Data Officer of Macquarie’s Banking and Financial Services Group, based in Sydney.