Navigating crisis

24 September 2020

Audit. Tax. Advisory.

PwC

Agenda

Time Activity Speaker

15:00 – 15:05Welcome

Introduction

Nicolai Wassermann

Helle Dreyer

15:05 – 15:30

How to manage temporary business disruption or

the "new normal" focusing on customer

experience, working from home, infrastructure

and connectivity

George Stylianides, Partner, PwC UK

15:30 – 15:55

Covid-19 Risk Management: An Operational Risk

lens on Covid-19 business continuity

management in Nordea

Johan Hjelm, Deputy head of Group Operational

Risk, Nordea

15:55 – 16:00 Closing remarks and key takeaways Helle Dreyer

2

PwC

Practicalities

3

Please use the chat function to ask questions01

The webinar will be recorded and uploaded to pwc.dk02

We will share the presentation after the webinar03

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PwC

Delighting customers: what has changed

George StylianidesSeptember 2020

PwC

Near term challenges: impact of Covid

The numbers of customers needing additional support from their bank are increasing rapidly as a result of unemployment and COVID-19 related payment holidays coming to an end.

As a result, most firms are anticipating an increase in customer interactions to execute collection strategies, resolve issues arising including complaints, and customers becoming vulnerable.

Industry landscape

● Nearly one in four UK workers have been furloughed during the

pandemic, and one in seven UK workers are at risk of losing their jobs

once the Job Retention Scheme (JRS) ends this October

● With the Jobseeker claimant amount up by 126% to 2.8m since the

start of the lockdown, and 1.2 million credit card and loan repayment

holidays given already, the demands on Collections teams are set

to rise sharply

● 7 million households have lost all or most of their income during the

pandemic, creating a huge increase of customers being faced with

financial difficulty and vulnerability

● In addition, more customers find themselves in a wide range of

unavoidable circumstances, including bereavement and illness

● Based on trends following the Global Financial Crisis (GFC) and recent

COVID-related customer behaviours, complaints could exceed

average levels by 50% each month from October onward

● An anticipated rise in customer contact times, complaints and collections activity

coupled with exacerbated customer vulnerability puts increasing pressure on

front-line staff and the second-line of defence

● Banks need better methods for front-line teams to identify and manage the

experience for a wide range of vulnerabilities in adherence with FCA guidance

and ensure that these customers are treated fairly

● The end of payment holiday and the resulting financial impact on customers

will put pressure on Collections teams, therefore performance improvement and

capacity creation will be essential to manage cost to serve and quality of service

● Manual processes mean that there is a lack of real-time insights to empower

front-line teams with the guidance and nudges they need to remain compliant

and drive better customer outcomes

● Increasing capacity of contact centre employees by augmenting them with

technology solutions that provide them with real-time guidance and

prompts to effectively deal with spikes in complaint volumes

Business challenges

PwC

PwC

Customer interaction shifting to digital channels

PwC

Changes in customer behaviour, that

might otherwise have taken years, have

occurred in a matter of weeks as a result of

COVID-19.

We have seen a rapid acceleration in the

shift to digital channels, such as mobile

and contact centres, because of social

distancing and lockdowns. Even customers

who had previously resisted change have

adjusted their habits.

Banks that deliver the most complete and

effective digital experience, and support

their customers through this transition, will

be the biggest winners.

This new reality requires a fundamental

change in the role of the contact centre.

...accelerated by the impact of COVID-19

An evolution of Retail Banking distribution...

Changes in customer engagement channels during COVID-19 lockdown

(% of UK bank customers, April 2020)

Declining cost to serve

Increasing personalisation

● Initial branch reformatting

● Rise of self-service

● Digitisation of existing servicing

journeys

● Customers given choice on best

interaction

● Branch roles re-purposed

● Multiple contact points, including

via APIs

● Customers routed to best

interaction driven by AI

● Traditional branches

● No self-service

● Limited digital channels and

functionality

● Customer choice restricted

Branch at the heart of the customer

relationship, with call centre support

OmnichannelBranch first Digital first

Customers switch between channels

to access the right option available

The right channel for the right

interaction for a given customer

PwC

Improving the customer experience and outcomes requires a joined-up approach across people, process and technology that come together to transform performance and oversight of customer outcomes.

Technology

suitability

● Banks are undertaking technology suitability assessments to identify solutions required to achieve their target state including:

○ cloud technology contact centre solutions that are agile, can be easily customised to deal with change in customer behaviour and are integrated with key

authoritative data sources (e.g. CRM)

○ conversation analytic solutions that augment front-line staff and analyse customer intent and are able to classify conversations (e.g. complaints, vulnerable

customer) improving efficiency and customer outcomes

Staff

productivity

and

performance

● A number of banks have kicked off initiatives to improve ways of working by creating consistency in agent behaviour, reducing handoffs and risk of errors whilst

improving the customer experience

● As part of these programmes, their focus is on embedding clear and transparent KPIs to visualise and monitor performance at all levels, creating accountability

for performance and results

● Inflight programmes also focus on improving morale and problem solving within the front-line teams and establishing a culture of continuous improvement

● To deal with a potential lack of capacity, banks are assessing whether other staff (e.g. branch staff) can be re-skilled and re-deployed within key paint point areas

● They are implementing an operating model which allows them to improve capacity and operational efficiency by having access to third party skilled resources

for some areas that are non-standard or complex cases

● Banks are establishing clear guidelines of when front-line teams need support from relevant back-office teams (e.g. complaints, collections) to speed up

resolution time and customer experience

Augmenting

capacity

Strategy

review

● Banks have started assessing their channel strategy and delivery plans to ensure they are able to respond to this change in customer channel shift by having

the correct technology and capability in place and a delivery plan that is fit for purpose

● A key focus following the strategy review has been to commence work to redesign customer journeys to enable more self-service and reserving contact centre

agent support for high value customers / interactions (e.g. vulnerable customers)

What banks are doing in response to the challenges being faced

PwC

Contact centre transformation

Enabling channel

strategy

Given the current economic environment

and imperative to take out costs,

businesses need to update their channel

strategy to drive customer engagement

through digital self-serve channels as the

default and reserve human support for high

value interactions.

This channel strategy can be enabled

through a transformation of the contact

centre that encompasses:

● Creating a culture that focuses on agility and innovation

● Redesigning the operating model to streamline processes, rethink resourcing and talent management, and enable effective remote working

● Updating technology to adapt to changing customer habits quickly, create seamless customer journeys, and leverage valuable data sources for insights and real-time actions

Enabling a channel strategy through contact transformation across foundational areas...

Culture and ways of working

• Creating and promoting a culture that

embraces agility and innovation

• Breaking down silos with a clear

strategy and end-state to unite the

organisation

• Building a workforce of employees with

attitudes of next generation workers and

talent to deliver rapid change with fewer

dependencies

• Developing and investing in advanced

data analytics to empower employees

Technology

• A move to agile, scalable cloud native

customer contact platform solutions

• Enabling the right channel for the right

interaction for a given customer

• Seamlessly integrating new digital

channels, such as video

• Creating an ecosystem that integrates

key data sources to deliver a

personalised, high-quality customer

experience throughout the end-to-end

journey

Operating model & capabilities

• Updating or designing a target operating

model for the impact of COVID-19

• Enabling a hybrid office-remote working

model with the right balance of

permanent and contingent workers

• Creating small, agile multi-disciplined

contact centre teams that act as a

second line to digital, and are focussed

on high value and complex

conversations

• Recruiting and/or developing capabilities

aligned to digital enablement

...will result in cost efficiencies and improved experience for your customers

Cost reduction and productivity

• Cost takeout with a move away from monolithic platforms

that are expensive to maintain and operate

• Elimination of charges to access and gain additional value

from your data with implementation of open architecture

• Savings through contact centre location rationalisation and

a hybrid office-remote working model

• Increased opportunities to cross sell products by supporting

contact centre colleagues through agent prompts and next

best actions

• Reduction in staff costs through flexible resourcing models

that enable greater use of contingent workers

Improved customer experience

• Seamless, personalised customer experience across

multiple channels

• Improved customer outcomes through enablement of real

time insights into conversations

• Convenient, self-service options of engagement

• Customer needs met in the channel of preference

• Human support used to spend more time on the moments

that matter (e.g. supporting vulnerable customers)

PwC

Maximising value of technology – the human element

Given the context of the market, the performance bar for customer experience will be set significantly higher over the coming months. There is a way to address this challenge through a dedicated programme that sets out to improve ways of working, productivity and team morale.

Performance Imperatives

● Productivity: Create capacity to manage expected increases in

demand and improve team morale through standardised ways of

working

● Customer satisfaction: Improve ‘operational grip’ to effectively

manage vulnerable customers segments

● Consistent customer outcomes: With enhanced insights on

customers (e.g. through conversation analytics solutions), process

consistency and execution quality is critical to apply those insights

Typical challenges

● High degrees of process variability, which leads to inconsistent

customer experience

● Managers promoted due to technical competence, not critical

leadership skills

● Lack of effective management operating system: goal setting,

problem solving, and effective capacity planning

Increased service

level adherence

Enhanced

leadership

capability

Reduced

operating costs

Optimised

processes

Better customer

satisfaction &

consistent

service

Better staff

engagement &

retention

Improved

performance and

productivity

Reduced variation

in performance

What banks are doing to improve performance and

productivity

● Coaching team leaders and empowering team members

● Visualising performance management to drive focussed

conversations

● Standardising ways of working before implementing large tech or

process change

Benefits that are being realised by banks

PwC

Technology that enables transformation

Legacy technology, non-integrated systems and a lack of a conversation and data analytics solution significantly impacts the ability of a bank to effectively deal with customers and reach the desired customer outcomes.

CRM + Cloud Contact Centre Solutions + Conversation and Data Analytics Solution

API

AGENT DESKTOP

(INTELLIGENT ROUTING LIVE CALL TRANSCRIPTS)

EXISTING SYSTEMS NEW / EXISTING SERVICES

(E.G. DATA ENRICHMENT)

CLOUD STORAGE ADVANCED ANALYTICS

PROACTIVE SERVICE SELF SERVICE CHAT BOT / AI HUMAN SUPPORT

Banks are undertaking initiatives such as technology suitability assessments to identify solutions that will help them provide a connected and

seamless multi-channel service offering to their customers. Their focus is on identifying relevant options and implementing the below solutions:

CRM solutions

● Customer centric architecture with CRM as core

backbone

● Multi-channel support with comprehensive agent

dashboard and guidance for quick case resolution

(inc. knowledge base)

EMAIL SMS SOCIAL

ONLINE

COMMUNITY DESKTOP & MOBILE

NATURAL

LANGUAGE CALL STEERING

IQT COMPANY WEBSITE SMS SOCIAL MESSAGING LIVE CHAT EMAIL PHONE SMS SOCIAL MESSAGING

Cloud contact centre solutions

● Seamless experience for customers across channels

(voice, chat, email, video etc.)

● Customer profile based intelligent routing to match

customer to most appropriate agent

● Single contact centre solution available across all

customer facing colleagues

Conversation and data analytics solution

● Machine learning analytics solution that is capable of

analysing conversations in real-time and provide

guidance, prompts and next best actions related to

complaints

● Deep analysis of complaints data, customer feedback

as well as agent performance

PwC

Looking forward Whilst banks have started undertaking initiatives to address the spike in customer contact, moving to the future state still requires considerable investment.

Increased service

level adherence

Enhanced

leadership

capability

Reduced

operating costs

Optimised

processes

Banks are trying to deal with an exceptionally challenging period of demand

peaks, whilst working remotely. This has identified some key areas of

improvements that need to be addressed.

The opportunity is to now invest in new technology, operations and

people to maximise efficiency and improve customer experience and

outcomes.

...Continued focus required across 3 clear areas:

Improving digital contact and self-service: creating effective digital journeys

for customers to interact with banks as a default channel, whilst establishing a

profile of contact centre agents that are skilled to handle high value / high

complex interactions with customers

Deployment of next gen contact centre technology: implementing a contact

centre solution that is fully integrated with key authoritative sources of data (e.g.

CRM) and augment call handlers with real-time conversation analytics

Performance and culture: increasing capacity and reducing risk by continuing or

developing programme of operational excellence and through strategic

resource redeployment and augmentation.

Customers – Deliver consistent high quality customer outcomes more

efficiently and in a joined up manner;

Colleagues – Enable more focus on higher skilled value add tasks through

improved ways of working, platform and tools;

The business – Unlock cost reductions, and build resilience and flexibility

into the operating model to cope with future volatility.

...Delivering tangible benefits for:

From Current State To Future State

Strategy and

vision

Technology

and digital

enablement

Human

performance

Providing human support

to all customers for all

needs

Providing self-serve digital

journeys that are supported

by human support for

moments that matter

Limited integration of

systems and lack of real-

time data analytics

solutions

A de-centralised and less

mature operating model

Fully integrated customer

contact digital solutions

with real-time analytics in

place

A dynamic and agile

operating rhythm

supporting high performing

teams

Covid-19 Risk ManagementAn Operational Risk lens on Covid-19 business continuity management in Nordea

Johan Hjelm, Deputy Head of Group Operational Risk

24 September, 2020

Covid-19 crisis management

• Nordea has managed the COVID-19 crisis in an appropriate and

effective manner – no material Operational Risk incidents have

been observed

• Despite a large number of employees working remotely, countries

locked-down and the infection rate increasing …

…we have still been able to continue to serve our customers

within our defined Operational Risk limits

13

Covid-19 crisis management governance

• Already in January an enterprise wide Crisis Management

Team was formed, to address the crisis

• In March the Global Crisis Management Team (GCMT),

headed by the CRO, was convened

• Country focused CMTs were formed to manage country

specific situations

• These CMTs have been the hub for information sharing and

decision making throughout the crisis

14

Remote working

• A high percentage of our front office staff, as well as

central units, have worked from home from March/April

until today

• We have increased the capacity of our technical remote

working capabilities by up to 10 times, to address the

significantly higher demand

• All processes and systems, where there was a need for

remote working capabilities, have been evaluated based

on our risk appetite

• As a result we have been able to decided which

processes and systems could be fully or partially

performed remotely i.e. outside the normal office

environment

• A security awareness programme was created, and

continues to be maintained, to support staff with working

remotely, safely

15

Where are we today

• The Fraud and Information Security incident

numbers are still below the levels observed prior to

COVID-19

• IT production capacity, out of our off shore centres

in India, remains stable

• A significant percentage of our staff in all countries,

are still, primarily working from home

• However the pace of return to office varies from

country-to-country in our home markets

• We closely follow the health authorities

recommendations and implement these on a

country dimension

16

What is next

• The COVID crisis has highlighted that it is possible

to change the way we work, even in a non-COVID

environment

• Nordea, as many other organisations, are now re-

evaluating the balance between office based, and

non-office based work

PwC 17

Closing remarks and key takeaways

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Customer interaction shifting rapidly to digital channels such as mobile and contact centres, because of social distancing and lockdowns.

Review of central operating model elements like people, process and technology with focus on transforming performance and oversight of customer outcomes.

When looking ahead the opportunity is to now invest in new technology, operations and people to maximise efficiency and improve customer experience and outcomes.

Nordea was able to continue to serve its customers within the defined Operational Risk limits despite a large number of employees working remotely due to countries locked-down.

Nordea are re-evaluating the balance between office based, and non-office based work.

www.pwc.dk

Thank you!

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Together we succeed…

Helle Dreyer

Partner

M: +45 6155 5181E: helle.dreyer@pwc.com

Nicolai Wassermann

Senior Manager

M: +45 6155 8971E: nicolai.wassermann@pwc.com

If you have any questions related to the topic, you are more than welcome to reach out to us.