Jessica Chalk, Co-Founder and CEO of TrafficSoda, Waterloo, ON

As we’ve left the Great Recession behind, and as the largest emerging markets adjust and mature, much of the economy is in the midst of a major structural shift. And inevitably, so is our industry.

Banking is being reshaped by the digital economy, which is changing how all products and services are produced, distributed and consumed.

Ifeanyi Iregbu Customer Service Representative FCP Branch, Toronto, ON

BMO is positioned not just to hold its own in a world transformed by technology, but to reinforce the brand advantage we have been working so hard to build.

Five years ago, we began investing much more heavily in the bank’s IT architecture in order to harness the immediately scalable power of the big systems we’ve built.

We’ve been implementing agile production practices – enhancing our ability to push out incremental changes rather than holding them until the date of the next major release.

And as a result, we’re accelerating our speed to market: keeping pace with our customers’ lives, enabling more personalized interactions, and showing that we value their time.

The systems that make all of this possible are complex. But what we’re ultimately trying to achieve is not. We’re simply trying to delight – in a manner consistent with our brand – the maximum number of people at the lowest cost to serve.

By grounding BMO’s technology leadership in our vision – To be the bank that defines great customer experience – we’re deepening the loyalty of existing customers while attracting new ones, because this is what drives quality business growth and delivers value to shareholders.

As the digital economy continues to gain momentum, we’re seeing new kinds of companies and entire industries rising alongside older ones – not necessarily to replace them, but to complement and extend their scope.

A lot has been said about disruptors like Uber – but we shouldn’t overlook the fact that Uber’s biggest rival, Lyft, recently received a $500 million investment from one of the Big Three auto makers, which has launched its own car-sharing service. And the same firm has just announced the $1-billion acquisition of a California startup that develops driverless cars.

It’s hard to predict the outcome for one company, but this is a telling example of an incumbent recognizing valuable innovation and taking it on board to challenge its own business model.

A central paradox of the banking industry is that incumbents are seen as powerful economic players whose key role in the financial system demands that they be subject to oversight – but at the same time, some of these old-guard businesses are judged to be operating at a disadvantage to new, unregulated entrants to the industry.

The fact is, the pace of change is challenging to all incumbents.

The future will be won by those who don’t just keep up with – but stay several steps ahead of – constantly rising expectations. It will be won by companies that challenge their own business models to be dramatically more efficient while delivering ever-increasing value to the customer.

Jessica Chalk, Co-Founder and CEO of TrafficSoda, Waterloo, ON

Customer Experience and Efficiency: two keys to success

The bank’s transformation agenda is defined by two closely aligned dimensions: customer experience and efficiency. And what makes it possible to bring those parallel goals together is the same critical factor that drives all of the change we see accelerating around us: information technology.

In fact, technology plays such a crucial role in driving overall performance that in the latest refinement of our strategic priorities, we’ve brought it to the foreground – making it a priority in its own right.

Our strategic priorities

  1. 1Achieve industry-leading customer loyalty by delivering on our brand promise
  2. 2Enhance productivity to drive performance and shareholder value
  3. 3Accelerate deployment of digital technology to transform our business
  4. 4Leverage our consolidated North American platform and expand strategically in select global markets to deliver growth
  5. 5Ensure our strength in risk management underpins everything we do for our customers

Technology has long been a key enabler of BMO’s success – from our pioneering use of automated cheque processing, to the first real-time network connecting branches across Canada, to mbanx – our early move into virtual banking in the first days of the Internet. We didn’t recently awaken to the power of organized, readily available information – it has been core to our operating discipline.

Today we continue to lead with innovations that make life easier for our customers – whether it’s award-winning mobile apps, digitally-enabled Smart Branches, or our newly launched corporate credit card program using biometric security features – a first in North America.

Introducing biometric security features


But our investment in technology goes even deeper. We’re introducing new business models and re-energizing older ones. We’re redeploying unused capacity across the bank. And as a result of all this, we’re unlocking new sources of value for our customers and for our shareholders.

This transformation extends to every line of business and is integral to the fulfillment of our long-term strategy.

We’ve reengineered our systems to allow a single, relationship-based view of every customer. Our various businesses can perform as one bank, coordinating the delivery of diverse products and services. And it’s now far easier for customers and their bankers to access a wealth of knowledge as they explore options and arrive at the best decisions.

The result is a more personal bank for a digital world.

A good example of this evolution is BMO SmartFolio, one of the best investment experiences in the personal wealth market. Unique in the North American marketplace, it was designed, developed, built and launched in only six months – a fraction of the time it would have taken just a couple of years ago. In the same way as adviceDirect took the guesswork out of self-directed stock picking, SmartFolio, based on our proprietary family of ETFs, helps customers build a personalized portfolio in moments – and build their savings through a smarter experience. If you haven’t had a chance to try it, I highly recommend it.

Our overall digital channels strategy is unfolding at the same rapid pace. In the next few years, we expect to see a further migration of personal service interactions – as much as 50% – from the branch and contact centre to our mobile channels. Customers who prefer to connect with us this way get the quick, satisfying answers and on-the-go self-service tools they’re looking for – with the knowledge that a banker is always there, when they need anything.

We’re also using technology-driven insights to improve the banking experience in areas less visible to customers, such as risk and compliance. Streamlined processes and advanced technology have allowed us to reach key anti-money laundering milestones more quickly, and at a lower cost, than we initially estimated. And just as importantly, the work is yielding deep knowledge about how all of our customers do their banking – and how we can serve them better.

In these examples I’ve highlighted, and many more I could add, the ultimate purpose of technology innovation – and the test of its success – is an enhanced customer experience.

By digitizing our business processes, we enable faster, smoother transactions at a lower cost. But the real goal is to make things easier for our customers: to give them more direct control over the choices they want to make for themselves and to show them that we understand and respect what they value most – their own time.

This isn’t about launching apps and adding convenient features. It’s about saying to customers: “We’re ready to meet you where you are, and when it suits you best, with new tools designed to help you manage your financial life on your terms.”

We all know that our smartphones and tablets are amazing pieces of technology. But for most of us, they’re also an extension of ourselves. They’re how we connect with people we care about, find and purchase things we need, figure out how to get somewhere, and watch everything from last night’s game highlights to a video of the new baby.

And banking belongs there, too.

In helping people to connect with our bank in different ways, we’re more supportive and engaged. And that’s the point: our goal in empowering customers through technology is not to avoid having conversations with them. It’s to have more conversations.

At a bank that has been transformed by technology, branches matter. But the transactions that bring customers into our physical spaces are changing – as are the skillsets of the people who are there to serve them.

You may begin a transaction using your phone, then ask a question and get a response via video chat with a real person. Or there may be a banker next to you, tablet in hand, to see if you need help, and then either show you how to complete the transaction on your mobile device or introduce you to someone else – a mortgage specialist, an investment advisor – for a more in-depth discussion with whoever can provide the guidance you need.

We’re evolving the roles that our frontline employees play – along with the physical footprint of the bank – to complement what can now be delivered to our customers in a more contemporary way, on their favourite device.

And as always, it’s customers who are setting the pace.

We can provide the products and services they need as quickly as they’re ready to adopt them – and as changes in the broader environment, like more available bandwidth, pave the way for further innovation. Because advancing our capabilities with optimal speed does not mean doing things in a tearing rush.

As we enrich the customer experience – and as we limit effort or expense that doesn’t add to that experience – it’s changing how we structure our organization, how we design our branches and offices, and how we do our jobs as bankers.

We’re evolving from linear, sequential tasks to faster, more adaptive processes – and from vertically integrated teams to cross-team collaboration. This creates more meaningful work and greater prospects for personal growth.

We’re also tapping into partnerships with third parties, if they’re using technology in interesting ways that complement our own thinking. And we’re working with our customers in the technology sector, helping them forge partnerships of their own. Collaboration makes sense when we can see the opportunity to speed up change at an advantageous cost.

BMO branch, First Canadian Place, Toronto, ON

The future:
Now it gets

A final thought on the work of innovation: it’s anchored by a fundamental attribute of the bank that cannot be invented or bought, and that’s trust.

Even in a fast-moving world – in fact, precisely because things are changing so fast – all of our stakeholders expect us to manage our business responsibly, to act with integrity and transparency, to be accountable for our actions, and to give back to the communities where we live and work.

To reflect the values of the people you serve, you start by holding a mirror up to yourself. Because we know we only earn the right to manage people’s money through the confidence we inspire.

This is how we build trust – the foundation of customer loyalty. And it is loyalty that drives sustainable growth.

Making Tomorrow Better

The sustained growth of this bank reflects our deep understanding of what customers need and expect from us. Our transformation initiatives are ultimately aimed at delivering a superior banking experience and growing our customer base. These remain the keys to value creation.

Across the bank, we’re focused on knowing our existing customers better – converting single-product purchases to banking relationships, which yield higher revenue and generate more referrals.

At the same time, we’re targeting those segments that we believe will deliver high value, including small business owners, recent immigrants, and Millennials – who in many cases have yet to forge long-term banking relationships.

Satisfied, confident customers lead to growth in both revenue and net income, delivering the value our shareholders expect.

Transformation isn’t something that’s happening to our bank – we’re initiating our own transformation and driving it forward.

At the point where customer experience and efficiency converge, we’re meeting customers’ changing needs in ways that win their loyalty and reinforce our brand in the digital marketplace.

There are many ways to talk about what lies ahead: Change. Disruption. Opportunity. Growth.

We’ve gotten closer to our customers. Made banking simpler. Unified our businesses. Expanded our footprint. Invested in new platforms. Embraced a better rulebook. And through it all, delivered consistently strong results.

Now it gets interesting.


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