TSB is creating a cloud-based digital bank capable of reacting quickly to operational outages and able to automate customer services from a single contact point.
Two of the biggest headaches for large, full-service banks are unexpected outages in their systems and the inability to provide straight-through processing for customers. Complex IT infrastructures made up of thousands of systems make the former more likely and the latter less so.
But addressing both is critical to customer satisfaction and in repairing TSB’s damaged reputation following a monumental IT failure in 2018. During a major migration to its new core banking system, known as Proteo4UK, customers were unable to bank and TSB’s IT team were unable to identify why.
To avoid a repeat of this, TSB is working with IBM through a cloud services contract that sees IBM manage multiple cloud platforms for the bank as well as joint development, including creating a smart agent for processing customer requests.
TSB chief operating officer (COO) Suresh Viswanathan joined the bank in the aftermath of the IT disaster after spending a decade at Barclays, where he held senior IT and operational roles.
He joined TSB at a time when it was restructuring its IT operation following learnings from the 2018 problems. A major report into the disaster by city law firm Slaughter and May said the fact that Sabis, the IT services subsidiary of TSB’s parent, Sabadell, was not ready to operate Proteo4UK was partly the cause of the IT meltdown.
One of the changes to come out of the 2018 disaster was the decision to take control of IT away from Sabis.
“We wanted to make sure that TSB is fully in control of its tech,” says Viswanathan. “Sabis was almost an internal outsourced service provider for TSB and we are moving away from that model.”
“We have no proprietary datacentres – everything we do is in the cloud”
Suresh Viswanathan, TSB
At the same time, TSB wanted to have better control of its various cloud platforms – which is where IBM came in. “Rather than have a plethora of partners that manage the infrastructure for us, we thought it appropriate to do it through a combination of TSB folk and IBM,” says Viswanathan.
IBM had some insight into TSB’s challenges after the bank commissioned it to compile an early report on the failed migration, after it was initially brought in to help TSB fix the problem.
As it moves IT control away from Sabis, TSB is moving operational processes from Spain to a combined IBM and TSB team in the UK. Part of this new model meant opening up a tech centre in Edinburgh, with more than 100 positions created.
“We can now operate our ‘run the bank’ platforms through the IBM contract,” says Viswanathan.
Today, TSB is totally cloud-based, he says. Its core banking platform runs in the IBM cloud, but it also has about six other suppliers providing cloud platforms, including Amazon Web Services, which hosts its open banking platform, while telephony is run in a BT cloud, bank cards on a Fiserv platform, and the bank runs its HR platform in the SAP cloud. “We have no proprietary datacentres – everything we do is in the cloud,” says Viswanathan.
“By the time one of our agents asks for a customer’s mother’s maiden name, they have already gone through all these cloud platforms.”
The advantage of multiple cloud platforms, says Viswanathan, is that TSB can move parts of its infrastructure much more quickly than if it were running it internally. But multiple platforms present a major challenge, which IBM will help address, he says.
“When you are running things across platforms from multiple suppliers, things are great when everything is running well, but when things go pop, you have to figure out where the problem is,” he says.
This can take time and in today’s competitive market, where customers expect to be able bank 24 hours a day, this can be disastrous.
“The customer threshold when things go wrong is very low today and they keep raising the bar, so a bank needs the tools to identify where the problem is and fix it quickly,” says Viswanathan.
“But banks lack the required instruments to manage across on-premise and on-cloud environments. This is an area missing in the industry, with a lot of talking, but no real software available.”
Viswanathan adds: “This is where the IBM partnership is very important. There are very few companies that have software that helps you run across a multitude of environments.”
Access to TSB’s systems provides a good environment for IBM to develop software that can address this challenge, he says.
Robot says yes
In parallel with TSB’s plan to strengthen its operations through the IBM cloud services deal, the bank is also addressing customer services.
To this end, it is investing in the development of software robots, otherwise known as smart digital agents. TSB’s Project Smart Agent, which has already seen a smart digital agent serve customers during the Covid-19 pandemic, was created in five days and will be expanded to automate services wherever possible.
“The winning ticket is really how many things can you get done and how much of this can be done by the bot,” says Viswanathan.
Early experiments will soon go beyond the fringes of banking. “The bots are getting more intelligent as we speak, so by the time we roll it out in the authenticated channels, the bots will be much smarter than where we are today,” he says.
The speed at which the bots can be created is helped by TSB’s openness to multiple suppliers. “We are not precious about which supplier’s software to use, so we use tools in the cloud,” says Viswanathan.
“A lot of organisations agonise about it, but for us, it doesn’t come into the equation because we don’t have datacentres and it has to be hosted by someone in the cloud.
“So, for the [Covid-19] support bot, we chose a cloud-based tool and then what took most time was putting it into our public website and building an authentication toolkit around it.”
Ongoing work to make smart agents more intelligent involves using IBM Watson, says Viswanathan. “Each person speaks differently and uses different words to say the same thing. The smart money is on the bots that can pick this up – that is where we are using Watson.”
TSB is certainly putting its money on software robots, with plans to create something like a central nervous system able to direct customer interactions to the right systems automatically.
Viswanathan says banks have traditionally built separate connections between customers and different systems, but that is changing with automation through bots. “Everybody woke up one day and had found religion and thought ‘why not build one motorway to connect it all?’,” he says.
But even if there is only one instruction needed to direct customer interactions, challenges still remain around usability. With customers demanding the ability to do more and more of their banking on a smartphone, there is a risk of apps becoming hard to use.
Bots will also help TSB to ensure that apps remain easy to use, says Viswanathan. “To put everything that a bank does on a mobile app will mean customers will eventually struggle with discoverability,” he says. “If you put all the items on a screen, you need a very sophisticated search capability for customers to find the exact thing they want to do, but with a chatbot, they can just type free format asking a question, and if the bot becomes smarter, it is much easier for us to react to it.
“As the bot matures and understands the intent, we are one step away from going straight through for the customers.”