Accelerating Digital Transformation in Banking

Luboslava Uram, Chief Digital & Information Officer ITALY, UniCredit.

Luboslava Uram, Chief Digital & Information Officer ITALY, UniCredit.

Luboslava Uram, an Chief Digital & Information Officer and Head of Retail Business Platform at UniCredit, excels in IT services and processes, leading a team of over 1,000 people. With experience in digital transformation, she handles sales, optimizes IT, and saves costs.

1. What are some of the significant challenges and trends impacting the Banking space lately? (340)

Of course banking touches many different services and client segments. My core interests are mainly retail banking and services for individual clients, where I see the change in customer expectations as the most impactful. Customers are becoming increasingly conscious and driving banks towards more purpose and sustainability by favouring banks that accommodate such values and contribute to a sustainable future. This change can be seen across all banking channels: starting from plastic used for payment cards, paper and equipment of physical channels, ending with a reputation for financing green and climate projects or supporting local communities. It means that as a bank, we must reorganise and redefine the way we structure and design our services and branches, and how we use data to be able to evolve our offering in line with customer needs while ensuring long-term value.

The other key challenge is for sure transformation and the optimisation of the existing banking operating model. In this context, new players in the market, such as shadow banking and neo-banks, which aim to make banking more accessible by offering customers a cheaper and more convenient alternative to traditional banking, are playing a visible role. Neo banks, with innovative features, cutting-edge technology, and strong customer service, are very focused on their ability to serve their customers more efficiently in some areas than traditional banks. They mainly seek to enhance the user experience by building the products and services application layer on top of existing banking products. Traditional banks, however, have a legacy, funds, an extensive customer base, and a physical presence that provides assurance to our customers. Nevertheless, the challenge and opportunity are to continuously learn from the market and combine emerging relevant innovation with our traditional offer in a way that provides benefits of leaner and simpler operations to our clients and other stakeholders.

Closely connected to this, I deem necessary to mention, is Banking as a Platform, which refers to a model in which the bank adds digital services from third parties to its portfolio, offering these on its channels, or vice versa, offering own services via open APIs to other third parties which are embedding those on their respective platforms. However, to do this, banks must design their software and its delivery using a different approach, built on APIs, with composable applications and customer experience at its centre.

2. What keeps you up at night regarding some of the major predicaments in the Banking space? (292)

Besides the various challenges related to the current macroeconomic and geopolitical situation, what keeps me up at night would be mainly three topics. Always ensuring the strongest level of cyber security, resilience of digital operations, and continuing to attract and maintain the best people in my team. This is because one can design the best customer experience, but it will fail if cyber security is not a core part of its design or the service is not resilient over time.

Meanwhile, when it comes to people, returning to normal after the pandemic, finding the right talent and keeping existing team members, as well as newcomers engaged, are more critical than ever before. Our people must be interested in what we are doing for our customers, and at the same time, we must ensure to offer them relevant paths for their professional development and progress.

This requires a lot of time and effort. Our UniCredit Digital University, which offers all colleagues options for training and development based on their role and seniority, is an excellent example. In addition to constant learning, the management team is personally dedicating time to onboarding our newcomers and supporting them from the start when they join the company.

Working in the digital area of a bank vs. technology company, requires different processes, which fit the strict standards of a regulated industry. We need to continuously work with our talent in this context to strike the right balance of agility, openness, and the highest standards of security, which respect all necessary regulatory restrictions.

3. Can you tell us about the latest project that you have been working on and what are some of the technological and process elements that you leveraged to make the project successful? (366)

Last year saw a step-change in our digital transformation journey; to deliver new common customer experiences across different products, channels, and regions based on composable platform design.

“Neo banks, with innovative features, cutting-edge technology, and strong customer service, are very focused on their ability to serve their customers more efficiently in some areas than traditional banks. They mainly seek to enhance the user experience by building products and services application layer on top of existing banking products.”

UniCredit Customer Experience serves our existing and new customers with an E2E unique, digitally native and consistent experience across different devices and all channels to meet their needs for simplification, interoperability, and automation. We started with a focus on customer onboarding and cash loans, including credit protection insurance. Digital and business colleagues worked together to design common processes and customer experiences for these products and services, which create a baseline for their application in different countries and regions.

Based on standard process design, we have analyzed the components that can be generalised and re-used on the software delivery side. Those were then developed as global components integrated into our common software platform via APIs for individuals’ core banking systems and touchpoints.

As an example, in Italy, we have introduced new onboarding via remote channels with innovative authentication methods (video selfie, digital signature); the automation of reading documents via OCR scan; flexible data capture logic to minimise data inputs and the automation of controls in all steps of the process; immediate credit evaluation before final offer display; and “Counteroffer” proposal in case the initial request is not affordable.

As a result, we can also see that automatic decision-making has increased in Italy to around 90 percent thanks to the increased use of data and analytics for credit policy reviews, while the number of clients required to produce income documentation is reducing from over 70 percent to below 20 percent thanks to the introduction of income modelling. Furthermore, we have seen a significant reduction in the “time to decision” from an average 1.4 days to get credit evaluation confirmation to around 10 minutes in the case of an automatic decision in Italy with instant disbursement.

In parallel, we are evolving the design of components to be applicable for consumer lending in Austria and Germany as well as designing additional new components for current accounts and related banking services.

4. Which are some of the technological trends which excite you for the future of the Banking space? (321)

All the trends are very exciting, but for my team and me, the priority lies outside of technology. We are driving the digital transformation of our company. If we speak about digital transformation, we tend to pay too much attention to the digital part and not enough to the transformation part. It’s not a technological challenge alone; it’s a people one. You can easily read about or be trained on different technologies, but what is truly key for a successful transformation is the way it is done, organised and people’s involvement in it.

This is what is exciting, but also very challenging. It is about ensuring everyone in the business is a part of the story, so they can influence it and contribute towards success. We are working in organization where the pace of new developments means we cannot take time off to design the best architecture and methodology first and only then start executing it. We have to achieve this in an adaptive way whilst continuing to deliver results and new products for the business and our customers. It is a great opportunity for me and the management team to learn how to combine transformation with quality delivery and stable operations, while at the same time ensuring people enhance their skills and make software design and delivery more re-usable and open.

We are using an adaptive, agile approach, regularly looking back to understand what could have been done better and what has to be improved. This approach also means needing constant feedback from our people, and we must create the space for them to share their views with us, to continue improving for the next sprint. As a part of a large results-oriented organization, we must also always stay in close alignment with all our stakeholders with clear communication on expectations and progress.

5. How can budding and evolving companies reach you for suggestions to streamline their business?

UniCredit has been working with fintechs for years on a range of developments relevant to clients across the Group, and we continue to do so while striving to find the best solutions and integrating them in the most efficient way possible. Being part of the start-up ecosystem means exposure to many new potential partners specialised in innovative technologies.

For example, we have been a partner of Plug and Play since 2019 with the aim to increase the testing of innovative fintech solutions at Group level and continuously benefit from fintech concepts and products that can improve banking processes and enhance our customer offering.

Customer Experience

Retail

Agile