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Westpac CDO Melissa Macfarlane: Mastering - and driving - digital transformation

Westpac CDO Melissa Macfarlane: Mastering - and driving - digital transformation

Westpac chief digital officer Melissa Macfarlane talks about how the bank is acting like a startup, working with the CIO, and preparing for the workplace of the future.

My role is being a customer advocate across the digital landscape

Melissa Macfarlane, Westpac NZ

Melissa Macfarlane pauses briefly when asked whether she works in business, marketing or technology.

“I would say, I work in customer experience,” says Macfarlane, who stepped up to the chief digital officer role at Westpac New Zealand nearly a year ago.

“Westpac has a vision to be the greatest service company and you can only do that if you focus on customer experience,” she says.

Startups are a model for this, she says.

Startups do some things really well, she says. “They have great agility into the organisation, are moving at a great pace, and are getting that customer feedback loop, acting on that really quickly.

“They are not constrained by their past and they have that relentless focus on customer experience.”

Thus, she says, Westpac is thinking and acting like a 200-year-old startup.

''We have invested in building that agility into our organisation,'' she says.

“The CPO (chief product officer), the CIO and myself are really focused on getting that clarity of the customer vision and the value we want to drive out and empower teams closest to the work to actually do the right things, at the right cadence and to deliver value to the customer really quickly,” she states.

“Gone are the days when we have really long project governance meetings and all very formal. Now it is how we are inspiring these teams to deliver the value to customers really quickly.

“It is a refreshing change.”

Rather than taking old application forms and digitising them, we actually start with a blank sheet of paper and say, ‘what does a great customer experience look like? How do we map that out under no constraints?

Melissa Macfarlane, Westpac NZ


Macfarlane works closely with CIO Dawie Olivier.

“We both have the same passion for cultural change and transformation.”

She says Olivier is a “fantastic advocate” on the goal to shift the culture at Westpac.

“You can’t do this alone at a bank,” she says.”You have got to have a team of people who really believe we can change that mindset.”

She says in the traditional sense of the world, she has a team of around 30.

But if you add all of the delivery team and the CX support team it is much bigger, she says. “Ultimately we have got the whole bank behind in the digital transformation.

Digital is not just a channel,” she adds. “It is a team that is driving transformation at the bank.

“We are really embedding digital in the bank so it is less about us, as just a team owning online banking.

“It is more about us really helping the rest of the organisation understand what digital transformation means for them and how that can create great customer experiences.

“We want to empower the teams closest to the work to actually do the right things at the right cadence, to deliver value to the customer really quickly.

“One of the biggest catalysts of the mindset shift for us has been the use of true design thinking,” she says.

Read more: Digital champions

“It means you are really fixated on watching your customers, empathising with them and putting yourself in their shoes before you understand the solution to the problem.”

“I like the concept of starting with a blank sheet of paper,” she says.

“Rather than taking old application forms and digitising them, we actually start with a blank sheet of paper and say, ‘what does a great customer experience look like? How do we map that out under no constraints?”

“That gives us a sense of what can be possible.”

Becoming a CDO

Macfarlane became chief digital officer from head of global transactional services at Westpac NZ.

She has always worked in the finance sector, starting with Citi in London.

''I started my career in London, and spent some time in New York,'' she says.

Ten years ago, Macfarlane moved to New Zealand and joined Westpac. “I am an adopted Kiwi now.”

She explains while she has held several portfolios in the banking sector, it was always “customer facing roles” and usually in the business space.

“It makes me a lot more aware of the whole ecosystem connecting business with consumers,” she says.

“That background really helped, because a lot of what we are doing is how to make payments as frictionless as possible.

''It is important to hear first-hand what customers are looking for,” she says.

To me the best piece of technology is one that really helps people in their day to day life; solving real staff and customer pain points.

Melissa Macfarlane, Westpac NZ

“Sometimes you can talk [about] technology. But if you do not have the customer lens, angles on how to solve their pain points, what is the value that you get to deliver at the end of it?

“And that is what my role really is, being a customer advocate across the digital landscape,” she says.

“Consumers are engaging with businesses all the time. It is all about having really seamless great customer experiences in the services element. And then, how do you then create great conversations?”

She says Westpac has a two-pronged approach to a business model, which is: “How do you have really simple seamless customer experiences and how do you use digital to create great quality conversations with customers?

“All businesses are facing that and ultimately that is the new model that everyone is going to be embracing,” she states.

When Macfarlane moved to Westpac, the role of chief digital officer did not exist.

But she says she was drawn to how digital has enabled great customer experiences and interactions with their customers.

She says a survey early this year done by Westpac Australia, stated how eight out of 10 customers indicated that their preference was to engage with the bank digitally.

As well, she says customers are asking for simple and seamless ways to engage with the bank.

“Customers are telling us they are engaging more and more with the digital channel,” she says. “We have got to respond to this...it is a customer driven need.”

 ‘You can’t do this alone at a bank...You have got to have a team of people who really believe we can change that mindset’, says Melissa Macfarlane on working with CIO Dawie  Olivier (in photo) as Westpac acts like a 200 year old startup. (CIO NZ photo by Sean Gillespie)
‘You can’t do this alone at a bank...You have got to have a team of people who really believe we can change that mindset’, says Melissa Macfarlane on working with CIO Dawie Olivier (in photo) as Westpac acts like a 200 year old startup. (CIO NZ photo by Sean Gillespie)

'Disruptive prototyping'

She says Westpac has a digital ventures team that looks at trends across the globe.

“They are part of my team and they are very focused on what is next in banking. When I talk about innovation, we take the 60-30-10 approach.''

Sixty per cent is around solving customer pain points and making sure you are delivering value with day to day stuff, Macfarlane says.

“We spend 30 per cent architecting what is next in banking,” she says “We are thinking of all of the various buildings blocks like data, AI and virtual reality.”

The 10 per cent is on experimentation, she says. “For instance, what are the implications of biometrics and other trends that are happening?

One of the biggest catalysts of the mindset shift for us has been the use of true design thinking.

Melissa Macfarlane, Westpac NZ

“We may not know the answer to them now, but we are constantly playing with [these technologies],” she says.

“We are learning, we are figuring out user cases to make sure we are on the cutting edge of what is next. It is about keeping that forward looking vision.”

As part of this vision, Westpac will soon be launching a prototype branch near its headquarters on Takutai Square, in the Auckland CBD.

“It is based on the premise that more and more we want to test and learn with customers. We want to observe them interacting with channels and we want their regular feedback.

She says the customer experience team will ensure customers who participate in the focus group are diverse. “We want to learn from a whole subsection of customers, including our staff as well.”

“They will help us figure out how to design the space,” she says.

“It will all be modular so we can move things around quickly and we can watch how they interact with a piece of technology, or some signage. And then, we can change it and say, 'right, how does this feel?' Does this generate a better result?” she states.

“It is, again, about disruptive prototyping.”

She says her team will integrate the feedback and constantly refine whatever they are testing.

“So we will constantly be iterating.”

The human dimension is important, as they work on the digital space, Macfarlane says.

“You can develop the most amazing piece of technology. But unless people are actually drawn to using it and are advocates for it, the technology is never going to be as effective as you want it to be.

“To me the best piece of technology is one that really helps people in their day to day life; solving real staff and customer pain points.”

She says this view is also espoused by Westpac CIO Dawie Olivier.

In an earlier interview with CIO New Zealand, Olivier said the killer app for today’s CIOs and their teams, “is the ability to build a culture and for the team to learn to experiment and iterate forward...When this happens, 'Any technology can be your oyster'.”

“So it is not just one thing,” Macfarlane says, “it is a combination of a couple of different technologies.”

For instance, among the technologies that excite her are the combination of algorithms and new communication technologies to have “proactive and helpful conversations with customers”.

“We can have great proactive conversations with them,” she says.

“You can have an experience that says what we can tell that you are likely to go overdrawn,” Macfarlane says, as an example.

So their message with the customer would be, “At this point let us help you by clicking here to transfer your savings, so it does not create a bad experience and you are not get caught at the end of the month.”

How they deliver this will be depend on each customer’s needs.

“Be passionate about the customer,” she concludes. “Always have them front of mind and the rest generally follows.”

Next: A new way to work in the digital world

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