E-Banking on it

Just up the street from Scotia Plaza — one of the most distinctive landmarks in Toronto’s skyline, 68 storeys of red granite that shimmers in the sun — is Scotiabank Group’s other red building, a handsome turn-of-the-century low-rise with arched windows, soaring turrets and engraved columns. From

here, Bob Grant directs the electronic banking efforts of the $14-billion-a-year, 48,000-employee financial institution.

The senior vice-president of electronic banking at Scotiabank Group likes it here just fine. “I’m far enough from Scotia Plaza that they can’t find me too easily. But I’m close enough to get over there if they need me.” “They” are the C-suite executives who hold court on the seventh floor of ScotiaPlaza, including CEO Peter Godsoe and Albert Wahbe, senior executive vice-president of electronic banking and Grant’s direct boss.

Grant seems to have the best of both worlds: the luxury of a private fiefdom removed from the politics of the executive floor and the power to steer Scotiabank’s e-channels — including online banking, ATM network and IVR (interactive voice response) system –into the future.

Grant, a 46-year-old graduate of York University’s MBA program, is a man who has found his groove. In September 2003, Global Finance magazine chose Scotiabank as best Canadian Internet bank. Then Gomez Canada, a financial service consultancy, ranked Scotiabank as the country’s No. 1 online retail bank from a field of 13 candidates. This compares with a No. 3 ranking in 2002 and No. 7 in 2001.

“Some of the most vigorous competition among this country’s financial institutions is in e-banking,” says Sam Cukierman, managing director of Gomez Canada. “Scotiabank is a story of continuous improvement.”

Grant keeps his finger on the pulse of e-banking by conducting a monthly survey of customer satisfaction and commissioning a biannual study of e-banking from a market research firm to discover services his customers would most like to have available online.

The strategy appears to be working. In the last two years Grant has introduced an average of 50 improvements to Scotia OnLine per year, and raised the satisfaction index among the bank’s 1.3 million online customers to 94 per cent.

Some of the most popular features found on Scotia OnLine include account consolidation, personalized reminders of mortgage or GIC renewals, and the ability to take out loans for RRSP contributions.

But Ask Scotia — a feature introduced in June 2003 that provides automated answers to questions asked in plain English — has been the biggest hit.

According to Cukierman, Ask Scotia responds to all questions in under 24 hours with 80 per cent accuracy. While a 20 percent margin of error is high, no other Canadian financial institution has created a better customer-service engine.

Still, Cukierman says very little separates the top three online banks in Gomez Canada’s e-banking survey, which looks at such factors as on-site resources, relationship services and cost to the consumer. Consider that on a scale of 1 to 10, Scotiabank scored 7.58, TD Canada Trust 7.52 and Royal Bank 7.47.

Grant won’t divulge the annual cost of Scotiabank’s online efforts, but says it runs into the millions of dollars. Does it make any difference to Scotiabank’s bottom line?

“About 90 per cent of all banking transactions are already electronic,” says Robert Wessel, an analyst with Toronto-based National Bank Financial. “Having the best online bank will not have much of an impact on stock price.”

Scotiabank hasn’t calculated an ROI for Scotia OnLine, but Grant says the importance of e-banking shouldn’t be underestimated. The retention of online customers is “huge,” says Grant, and they tend to own more products and offer a better cross-sell opportunity than other customers.

His online house in order, Grant’s biggest challenge now is making sure customers enjoy a consistent experience across all banking channels. The online banking experience is easy to control. But at call centres and branches — where the quality of service is all over the map depending on the experience of the agent and the tools available — it’s another story.

“We have a meeting every other week to sort out the matrix of marketing communication,” says Grant. If the call centres are running an RRSP campaign, for example, the message has to be consistent in the branches and online.

During the 1980s and 90s banks pushed customers out of branches by introducing telephone banking and ATMs. Now banks want to be in the wealth management business, which means they must lure consumers back into the branches for financial advice, and to buy mutual funds, GICs, mortgages and insurance products. “The branch of the future is going to be more about customer relationship management, and less about transactions,” says Grant. “It will be the place to go to make important financial decisions.”

In this scenario, online banking will be more important than ever — not only because it will shoulder most of the burden for routine transactions, but also because it will largely be responsible for maintaining good relations between the bank and its consumers. Grant knows this, and is making sure Scotia’s Internet bank stays ahead of the pack.

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Jim Love, Chief Content Officer, IT World Canada

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