IT Weds Business at ING Vysya : Vaughn Richtor

Interview Questions

Full Interview with Vaughn Richtor

Vaughn Richtor:

You must remember that I worked in these countries some time ago. What I have seen is that the usage of IT has changed dramatically. But, one fundamental thing that hasn't changed as much is people's ability to adapt to technology. In fact, the technology uptake in India has been much faster than I have seen in other countries in earlier times. So, I feel that technology here is on par with the rest of the world - both in terms of systems and processes.

 

 

Vaughn Richtor:

In the retail banking space, it is clear that without robust and solid technologies, it is going to be very difficult to deliver. This is because retail banking is about banking for a lot of people, and giving them quick and easy access. So, if you don't have technology in place, you can't do that. You need to interface with the customer, and the best example is in ATM and Internet banking. To ensure that low-cost, reliable and easy-to-use systems reach the people, technology is absolutely critical.

 

Vaughn Richtor:

Over the past two or three years, the biggest initiative we have had is to install a core banking system. Most of our branches were largely manual until a few years ago. In 2006, we completed the rollout of the core banking system - and that was a big step. Our last branch was computerized in July 2006. Over the same period of time, we have introduced Internet banking as a service to our customers. We are also enhancing the reach of our ATMs, and giving customers access to them across the country.

 

Vaughn Richtor:

What is not quite clear to me is: why are people talking about IT strategy? I'm not sure what that means, but I do believe that the IT plan has got to be close to an organization's business strategy. Therefore, when we look at the business plan we have developed, we also - as a subset of that - look at the capacity of our IT platform, so that we can determine if our IT can deliver the products, volumes and capacity at the right cost. IT, therefore, plays a key role in achieving our strategy in our organization. But at the end of the day, it is about a particular business strategy.

 

Vaughn Richtor:

There are two ways of using BI. To me, one is analytical capability, and I think that we still have some work to do to improve the analytical capability of our systems. But this is just half the issue. The other half of the issue is the understanding of our people in terms of what the customers want. And that is why we look at our branches and our branch managers - because, today, servicing customers is largely branch-based. In that sense, the people in the branch are the best people to harness the analytical capability you have. In the future, as the market opens up and banking starts to depend less upon personal relationships, the ability of our company to understand our customers using technology and then deliver the same kind of personal service will be critical.

 

Vaughn Richtor:

Yes, I think that it depends on the particular market segment. In some areas, people are more ready to use customer facing IT solutions, whereas they would still prefer face-to-face relationships in other areas. It is about understanding IT in relation to the product and the particular area. What is most important is making a decision on how to deliver what the customer wants. This is not to say that we can do all things in all places - what we do is make sure that we are delivering the right solution at the right place. The other point I want to make is that when you do introduce solutions, it is not just about deploying the technology. There is also an investment to be made in educating both the staff and the consumer on how to use that technology. So, the other part of using technology in the frontline is to make sure that you invest sufficient time in education, both for the customer and the employee.

 

Vaughn Richtor:

No, I play even less golf these days. You see, when I was in my 20s, the first PCs were coming out. The big fears at that time was that there would be a requirement for less people, and that the people who were working would be working less, and therefore have more spare time. Unfortunately, what has happened is that technology has enabled things to happen much faster. Today, the demand on my time has actually increased. I think that we should, as a society, look at the impact of technology. Organizations talk about a work-life balance, but technology has made it harder to achieve.

Vaughn Richtor:

There are benefits to be derived from group synergies. If there is a tried-and tested technology that is applicable to local scenarios, then that makes sense. Why go through the pain of reinventing the wheel when you have something readymade? For specific software solutions, we have to take two things into account. First, the requirements of the local market and the products may be different, and the cost of adapting the solution may be too high. Second, different markets have to work on different cost paradigms. You can't simply take something because it may not be appropriate to local transactions. We have to take local characteristics into account.

 

Vaughn Richtor:

I cannot pinpoint IT's exact contribution. But I will say this: what IT should be doing is allowing us to deliver quicker, faster and cheaper service. To that extent, I think, what IT has done is allow us to get a much better understanding of our processes and customers. Because of this, we can provide better services. We still have a long way to go, and I'll probably be able to answer the question better next year.

 

Vaughn Richtor:

Technology is equally important in all divisions. It's just that the way in which it is used that differs. So, for example, if you look at our treasury business, Internet banking is really not that important, but having the technology to manage our market transactions in investments and derivatives is critical. On the other hand, customer loans and customer deposits are important in retail banking, and customer facing systems like ATMs become vital. The ability of technology to support each of our businesses is equally important - only the way in which it is done is different.

 

Vaughn Richtor:

I don't take full credit for ING Direct because I was only responsible for Australia, which is one of eight countries that was part of ING Direct. But I certainly think that in Australia, we had a good degree of success. In terms of vision, I think that it was not about the size or new products. The biggest success was customer satisfaction and the ability to attract new customers. We also engaged and motivated our employees while achieving this. I would be happy if we could achieve the number-1 ranking in customer satisfaction and customer growth, and the number-1 ranking in employee engagement because if you do that, then growth will automatically follow.

 

Vaughn Richtor:

I would expect that every IT investment pays. But it is not just about spending money on IT and getting people computerized. There may be cases where technology is not the right answer, and here it may be better to have people doing it. So, we shouldn't just put IT in because everybody thinks we need IT. The best way in which IT can help is by providing efficient and reliable service to the customer. If an IT product does the basic things well, to me, that is the best value-add that you can get.

 

Vaughn Richtor:

No, I don't think so. I think that the role of the CIO has changed over the years. From initially having just technical knowledge, the modern CIO has learnt how to make technology deliver business value. But this change happened a long time ago. Over a period of time, the cost of hardware diminished, and the cost of business solutions started to rise. CIOs have had to adapt to that. They have also had to understand business much more. Rather than giving somebody a computer to work on, the CIO has to ensure that he is providing a solution that delivers business benefits. Understanding the core business has become more important for the CIO, and I think that this will continue.