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PegaWorld iNspire 2023: Some of the Most Valuable Lessons Learned Implementing the Pega Platform in Banking

Driving business transformation supported by Pega’s low code platform can result in faster customer onboarding time, more efficient card payment investigation, better mortgage conversions and better lending campaign hit rates. But it also comes with challenges. In this panel discussion, moderated by Gustaf Soderlund, Global VP of Digital Business Processes at Capgemini, with some of the leading banks in different geographies, we’ll hear about some of the great experiences with driving business transformation with Pega. However, we’ll also hear about some key learnings, so you can learn from them without having to experience it yourself.


- Hello, everyone. Great to have you here. I'm very happy to be here to have this panel discussion with Ralph and Ali from Rabobank and SAB. The session will be in English, so don't worry. I'm not gonna speak more Swedish, I'm not gonna speak more French, but I will start first a couple of minutes just bragging about Capgemini, and then I'm gonna go to the really interesting stuff. So, as you might know, Capgemini is a quite large system integrator. Worldwide, we have around 360,000 people, headquarters in Paris, France, where I'm also based, although I don't speak with very French accent. I am from Sweden originally. In Capgemini, Pega is one of our largest partners. Only in financial services, we have around 1,000 people working with Pega globally that I'm heading and more than 2,000 people globally working with Pega in all the sectors. Last year, we won the award for Best Pega Partner in Financial Services, and this year we won the award for Best Digital Transformation Partner of the Year, and it's interesting, and the reason why I'm mentioning that is that the purpose for this presentation is both of those areas, both financial services and digital transformation. So without further ado, I would like on stage Ralph van de Rijt from Rabobank first, tech lead, digital customer process in Rabobank, and Ali M Ainass, the technology development manager for retail banking technology and enterprise solutions at SAB Bank.

- Thanks.

- Welcome up. Thank you. Let's see if we can get this to work. So great to have you both here, and maybe Ralph, I'll start with you. Maybe if you can introduce yourself just a little bit and a tiny bit about the Rabobank as well, and then we'll go into the Pega specific stuff.

- Okay, nice. Well, I don't have as large of a title and function as you do, Gustaf. I'm an IT manager for Rabobank, mainly focusing on the digital customer processes that we do at the bank, and also, I just came over from our KYC area to do that, and I'm also in charge of the center of excellence within Rabobank is that we run. To give you a bit of a scale on that is we have, in total, around 350 engineers working on our Pega Cloud. Then also, on-prem, we have a couple of hundred, but mainly, I focus on the 300 people there. That's my focus.

- Thank you very much. And Ali, maybe you can introduce yourself and just tell us a little about SAB Bank.

- Certainly. Well, thank you very much for having me here. So honored to be with you. My name is Ali. I head the business automation and integration in SAB Bank. We are actually part of HSBC group, and SAB is one of the known banks in the region, and it is the leading bank in commercial banking in Saudi Arabia. Under the leadership of His Excellency Crown Prince, the Vision 2030 aims on expanding digital transformation under the National Transformation Program, and driven from that vision, SAB have set digital transformation and automation at the heart of the strategy. So the business challenge that has been given to us was to invent digital twins for our customer onboarding as well as for our customer onboarding and lending projects. This have allowed us to evaluate 12 good tools, and we've selected Pega at then. So what Pega have allowed us to do is to look at all the integrations and allow us to orchestrate all of that and integrate with all the internal layers, and we couldn't have done that without the help and partnership with CG. CG has been a great partner with us. It allows us to join forces, and with that, we were able to achieve a lot of success in the area.

- Thanks, Ali. So question over to you, Ralph. What kind of business challenges have you used the Pega platform as a platform to solve these business areas?

- Well, I just given a presentation with also also the timelines of how Rabobank invested also in Pega, and basically, where we started was in the early 2000s in Smart Investigate. That was still on Pega 5, I believe even. So that's pretty old. I wasn't even involved. So it's also hearsay is that I get that information, but there are basically two major dates for Rabobank is where we leverage a new, yeah, how do you say that? A new platform, basically, and the first one is 2013, and in 2013 is within business lending of our bank is we wanted to make sure is that we could offer our products and especially this products for companies on our digital channels, so online sales, online services also for companies. That was one of the major things. That was, at the time, on premise, yeah? Also, the collections framework from housing is we started to use, so that's also a part. Also our partners from DLL, De Lage Landen, is they use it for their leasing propositions. So that's also something that we do. We use a bit of CRM within our subsidiary in Australia and New Zealand, so not in the Netherlands, but we do use that in Australia, and after that, basically, should come up to the point of 2018. So that's now already also five years ago, but five years ago, so we started leveraging next to the on-premise version of Pega, which we had. We started leveraging the Pega Cloud. So in 2018 is we were one of the early adopters also of Pega Cloud, and actually, the experience has been actually great. They're really helpful also is to help our features there. But to answer your question on what did we do? So next to business lending, et cetera, is we started our real digital revolution within the bank. So a lot of our digital customer processes is we started really to put online, so new channels is we started leveraging also the DXI and the API for all that matters is we use that for our customer-facing applications and for our employee-facing applications is we still use Pega out of the box or Pega Native as much as possible. So our digital customer processes are also integrated into the app. So if you go to the Rabobank app and would open up the self-service processes is you would end up in Pega basically, so a real example also of how it helps us to digitize our bank as in itself, and you heard this morning maybe Finnbar on the main stage also state is that like 90-plus percent of our interactions with our customers are digitally. And that really is based on cost saving and also the error tolerances that we have is that's really good because you can really control those processes. In 2019 is we also started with KYC, so Know Your Customer, which we call FEC, financial economic crime at the moment, where the latest and the greatest, what we're doing there now is also transaction monitoring or actually the case management for transaction monitoring is that's what we're doing, and that's basically it, what we leverage with Pega at the moment.

- I mean, you talked then a lot about the digital transformation that using Pega as a vehicle for the digital transformation basically in the bank, and that's awesome to hear that, but I think that it's great to start with a platform, a technology platform. But what kind of outcomes have you seen of this? You don't spend millions of dollars or euros, in your case, to just have a cool platform. Like can you mention a bit more about the kind of business outcomes that you're seeing from this?

- Yeah, so this is also multiple fold. So, of course, when you start online sales is you want customers to also interact mostly digitally, and that's one of the most important factors. So you would get a more competitive rate because, A, doing it online is a bit cheaper, so you can also lower your rates a bit. So that's definitely one of the business outcomes, more sales or more market share in the Netherlands, because we're not a very big country, for all that matters, but we still have nine million customers, which is roughly half of the population of the Netherlands. So that's pretty good, or they have an account at least; let's say it like that. Also one of the outcomes really is speed and really speed of delivering new processes for our business, basically, be it in business lending, be it in one of the moving journeys or disease or when you, for instance, get a child and you want to start saving money. Those are all online journeys, and that really creates a bit more speed, and especially on the cloud platform itself is we have 40 squads working there, and they create a lot of components. One major rule is that the first team that builds a component also owns a component, and based on that principle is we see that we now created 40-plus components also, which are basically all of the integrations that teams would need to connect backend systems or system of records, right? And if you would see is that every process would basically need customer information, right? Or most of the processes at least do. And if you create components and build it once and reuse it many times is that really is where the speed comes in, right? So it's not just speed of deployment or anything, but it's the entire journey that we're picking up is we can really rapidly implement journeys and create journeys there, so I think that's one of the major things that we-

- It's also like speed to market, being able to quickly adapt to the changing world that we all live.

- Yeah, definitely.

- So Ali, did you spend all those millions of euro, millions of dollars, or millions of Saudi, I don't know the currency.

- Saudi riyals, yeah.

- On something useless, or have you seen any business outcome? I mean, you're earlier on. Maybe you haven't done Pega for the last 15, 20 years, but have you started like, what was it, two, three years ago?

- Yeah, it's less than that. Probably, we are on the 18 month of implementation. So for us, there is two aspects to it, so, first of all, technical enablement. So for us, we started with an ambition that we want to have real time processing, and we were able to achieve it in a lean implementation within less than a year. So we followed an approach that is not followed in the region and probably worldwide. So we have embedded our Pega API within our digital channels, and that allows us to orchestrate and orchestrate the requests. What it helped us with is we were able to run all of the government identification. We were able to run the credit check and do the policy check, et cetera, and we were able to give, you know, a real-time response to customer request. On the business aspect, what we were able to is we enabled our customer to apply for our products and services from the comfort from the homes and offices. And what that allows us is it allows the customer to obtain the service as well as to complete the legal binding completely digitally, and this is one of the things that we probably won't have, you won't see it in other banks in Saudi because the digital signature is a fairly new technology. And in Saudi, you know, by law, you cannot really start any relationship for any product unless you actually sign an agreement on paper, and they've recently replaced it with a technology called digital signature where it actually embeds an SSL certificate within the PDF, and if you tamper with that PDF, it will void that SSL certificate. So with Pega, we were able to embed that digital signature, allows the customer to complete the product or service, sign it digitally, and then doesn't have to visit the branch at all. And we've done that for personal finance, for credit card, and we're doing it now for mortgage. We've done it for customer boarding for large and medium corporates, which kind of big deal for us. Some of the numbers that I can share is, so far, we've created 185,000 application on Pega itself in less than a year, and, you know, one of the really interesting facts is it takes you four hours from the first to click until you get the loan dispersed, four hours. This is compared to a full week, you know, before Pega. For credit card existing to bank customers, it takes seven minutes. It takes you seven minutes in an STB. So this is amazing. This is compared with four days of work, and you have to visit the branch, and if the application is rejected by ops, you have to come to the branch again and fill it again. Now we can do it in seven minutes. For new to bank customers, for credit card for the new to bank customer, we've kind of looked at it from a different perspective. We kind of had some learning, and we've designed it differently. So what we did is we set a goal, and we said, "This is the ambition, and we wanna achieve it." So what we did is we said, "We wanna complete the journey in less than four minutes."

- Okay.

- Yeah? So that allows us to kind of go back, challenge the policy, you know, review the risk appetite, and then we were able to trim down the initial journey from 60 clicks to 18, yeah? And that product will be put in the market very soon, hopefully next two months, yeah? For the corporate, you can open an account in less than a day, and you're talking about, you know, several weeks in the past, and for us now with the corporate, this is a big deal because, you know, and probably you heard Ralph. He said it's very difficult to do it because of the complexity of the corporation, and we were able to do it on Pega, and, you know, the beauty about that, it was completely Pega, you know, the interface as well as the back office, yeah? So these are some of the outcomes we've gotten.

- That's really impressive, but what I take out from this is also that, when you do these kind of digital transformations, when you do this kind of technology changes, you also need to do changes within the business. I mean, you said that you have to challenge the policies that happen.

- Absolutely.

- So let me ask Ralph. Have you been in situations where you need to challenge the business on how they conduct their business as a part of the transformation product that you've done digitally with Pega?

- Yep, definitely, and we are still doing that on an active basis. And keeping it also on the Pega side, right? Is we're using a lot of process mining also there. So you really see that sometimes processes that a business thinks of or we transition a manual process into a digital process and 90% of the process is basically the same is you really get a fact-based result stating that, well, it could be something different, right? So that's really what you then take along or take back and start optimizing together. So to see what also the adoption rate or what we want the adoption rate of the changing process to actually be, so yeah. That's how we challenge also the processes itself, but not only that, also, we challenge our business also in a lot of things because it's nine times out of 10 a discussion regarding do we want something fast or do we want something which is good or here to stay basically. So those are also challenges that we put out there also for our business, and, yeah, those are slightly different processes, but still, yeah, it's definitely a good interaction always.

- So where do you land between fast and good?

- Well, yeah, mostly it's we land on the area of good, but we, for instance, also have our KYC department, right? So you have laws and regulations which start at a certain date, and so, yeah, you can't just say, "Well, we didn't make the date, so can you extend the law or can you?" That doesn't work like that. So sometimes, we also need to choose there, and, yeah, that's just a fact of life also there, and that's really good is to just do that in open discussions, right? To be transparent, and then we'll figure out what to do.

- So, Ralph, a question to you. I mean, you've been doing Pega for quite long time, and usually, Pega is a joy to work with, great platform, wonderful people, all of that, right? But if you look back to when you came into these kind of Pega implementation and you think about what you wish that you knew about Pega before you embarked on journey that you realized later.

- Yeah. Well, the thing that at least was a learning for myself and also the organization and also a lot of engineers, architects, business, basically, everybody is when we set off with Pega is we were relying on the Pega engineers to basically do all of the internal architecture within the box that we call Pega, right? And there wasn't really a governance or anything surrounding that. So we ended up with a number of Frankenstein applications, basically. So if there's one learning, it's definitely that, is you need to control what you're creating, right? And Pega also states is that the componentized way of working really is something to leverage, and you should really also, from an architectural perspective, think about what a component should do or what should be a component actually. So if you reuse it many times in your digital processes, then really build a component or a business service out of that. I think those are the biggest learnings that we have within Rabobank, so to also not create monolithical applications, keep them small, like I stated. A lot of components is better than one big chunk of application because if you need to change that, that's difficult, yeah?

- Ali, what about you? I mean, you're fairly new on your journey. Has there already now come up some things that you wish that you knew before you embarked on the journey?

- Yeah, definitely. So let's start with the personal finance. So in personal finance, I know that we've created the end-to-end journey now, and we are proud of what we made, but when it become in practice, we realized that it could have been better ROI for us if we have started with the branch journey because of the customs there. People are more, you know, when they wanna make an investment, when they want money, they will come to the branch. You know, they're not used to do it online. So what happens is, you know, people apply, okay, you know, get rates and then go complete it at branch. So initially, this is not that we didn't know about it. It was just the business priority at the time, and we were kind of following a digital first approach, and this was the ambition to do it on digital channel first, then on branch. The other thing I would say that, you know, we would know about before is that Pega is very expensive. Yeah? So-

- [Gustaf] I've never heard of that before.

- Yeah, so this is, you know, just to put a caveat in on it around is it is expensive, but it's also valuable, yeah? So the return of investment is huge for us, and we can see the value of it right from the start. You know, it's the value realization is happening very soon. Yeah, and the third on the technical aspect is, you know, we found out that self service, when we built the self service and the back office, they actually shared the same executable and database, and when we found that, that it created a problem for us. It was flagged by our security team, and they said, "You guys have to find a solution." The bank follows a multi-tier network, so you have to zone your networks and making sure that whatever exposed the customers sits on the network zone, whatever internal has to be also kept internal. So we have to come with workarounds. So if we knew before that, we would have built the architecture differently, yeah? So this is one of, you know, the lessons that we have learned so far, and as you said, we're brand new to the experience, but we're kind of growing with it.

- Yeah. Have you at Rabobank overcome the aspect of Pega being a bit expensive, or how did you go about with doing the ROI and the investment?

- Yeah, well, first of all, I think it is awesome also to hear is that also, Ali, is that you have a similar thing also with architecture, right? So that's also a thing that you would like to know from the start. So the cost of Pega is pretty substantial. Let's call it that. The thing is, everything can be a business case, right? So also like you state, it is maybe a heavier investment, but if it's a good product to use, then eventually, you would also see the benefits, really the return on investment there. We don't do a business case per application is that we're creating now on the Pega Cloud because it's such a vast system is that we basically, on an enterprise level, make that decision. But that still is sometimes a difficult discussion, especially if you're in contract renewals or something like that is that's, yeah, that sometimes it's tough, definitely. Yeah, up till now is we always got out of that discussion on a good level also with Pega and also with our partners. So yeah, I think that that's mainly how we push through that is we basically also have sort of a lock in, right? Is if you have such large or so many applications which you build on Pega is, yeah, you basically create your own lock in there because you don't want to transition that in the next couple of five years or so to a different technology just for this. So that's also a substantial investment that you're then making without ultimately having a lot of business benefits then. So yeah, but it is definitely expensive.

- Yeah, but I think that you also need to do those big bets. I mean, when you go into Pega, when you adopt the whole Pega kind of concept of being an enterprise-wide support for some of your banking core processes, I think that it's important to have that clear in your head that you're probably not going to change technology every other year.

- No, exactly, and it is definitely a strategic discussion and a decision is to onboard a platform like Pega, right? So yeah.

- You might want to share some experience from the experienced Pega client to the newer Pega client about hard works with licenses and how to build those business cases. I wanted to ask you, Ralph. I mean, you've had Pega now for many, many years. Have you changed anything in your setup in how you implement Pega methodology, COE, whatever, architectural? Like have you changed the setup in any way in how you work with Pega since then?

- Yeah, definitely. It's a couple of big changes also over the years. So 2013, that was like already 10 years ago, we started on premise, and in 2018 is we moved towards the cloud, but we did that really in a green field way. So we kept everything that was on-prem, we kept that on-prem, and we really started again in the cloud also with a couple of new methodologies, being a bit more agile, also having a good scaled agile implementation in place, all of these kind of things. So that really is a big transition, and it's also, I think, one of, at least for us, a very good way to do that because you don't get into the problem of migrating all of your sort of legacy or older applications towards the Pega Cloud, right? So that will be holding you back in really adding value on a new cloud system that you then just bought. So that's something that we definitely did and also changed in our organization and changing the way that we work also, yeah.

- So what about you, Ali? I mean, you're earlier on in your journey. Are you thinking about changing something in the setup and how you work with Pega?

- Well, as a start, you know, once we've launched Pega in production, we start realizing that Pega generates a lot of data, and a lot of it is good, yeah? And generates inside and data that we want to use, and having it locked in Pega created a problem for us. We want to move it, and we wanna push it to our MI team so they can understand what went good and what went wrong and create opportunity out of this data. So what we did, we implemented BICS plugin, which allows us to kind of convert the data in Pega from the blob format and push it to our enterprise data warehouse, and we had to, you know, do that setup within Pega. So that kind of changed a little bit in our setup, but now we complete it. And, you know, the data stopped flowing automatically to our enterprise data warehouse, yeah? So this is one of the things that we have changed in Pega. The other thing is, which is not technical, is, you know, we are still maturing in our operating model, and we are setting our center of excellence with the help of Pega, and we are actually maturing with the help of CG, you know? We are seeking help on how we can optimize our local team as well as optimize our relationship with CG in order to create value and create a sustainable operating model because Pega can grow up very fast, and the architecture becomes big and big, and as soon as business and other IT departments sees the value of it, everyone wants, you know, to take a piece, yeah? So this is some of what we've changed so far, yeah? And one more point, you know, I think on the cloud, this is something that, you know, maybe will be restricted for us. We won't be able to go in cloud for obvious reasons in the region. There are laws in Saudi where you cannot really ship your customer data overseas, and you cannot even use technology where there's a possibility of your data leaving the country. So there is always the tendency of us that we want to grab into this cloud, you know, enablers, but you know, at the end, we have to either localize it or just forget about it.

- I think that's not unique to Saudi Arabia, I can say. So, I mean, we've been very positive now about things, good things you've done, but a question then to Ralph. What's your biggest mistake that you've done that everyone can learn from this so they don't have to do the same mistake?

- Yeah, yeah, yeah. So we made quite some mistakes in the years that we've been working also with Pega. We've done a lot of good things and great things even but also made a couple of mistakes, right? And I think the most, yeah, the most difficult one for me to also get over was to cut up monolithical applications into components. So when you start creating, when we started creating in 2013 applications, and we didn't focus that much on the architecturing of the application itself is we ended up with an application where we build on top of feature and on top of that feature a feature and et cetera, et cetera. So you really come into a sort of a spaghetti code even also in Pega. And we never thought that that would happen, but it did because we just didn't know, but that was really a difficult moment, and that's something that I always want to share with a lot of people because it took us like 3/4 of a year, basically, with not really adding value for our business to really start cutting data, which is crazily expensive, right? If you look at that because you could've or we could've basically made sure is that we didn't fall into that trap, but we did. So yeah, that's also one of the learnings that we have. So now we also have some organizational ways of working is to make sure that we don't do that anymore. So we definitely learned, but there are definitely some difficult things which we wanted to have known from the start also and which were difficult to overcome, yeah.

- So, Ali, question to you then. You mentioned that Pega is expensive. I would kind of agree with that, or at least high threshold, I would say, in your case. So obviously, you need to think about things like return on investment. How are you thinking along those terms?

- Well, for us, customer experience and customer satisfaction is considered one of the biggest non-dollar return on investment. We are now known to be a digitally enabled bank. It allows us to outreach to as many customer as we can digitally enable. We also, you know, proud to announce that we have win some of the awards globally in SME as well as on other areas because we provided excellent customer service. Some of the ROI probably won't be able to share with you exact numbers for obvious reasons, but I can share some indication that can allow our audience to understand the value of our achievement. So today, 50% of our credit cards are actually issued digitally, and this is from probably three, four months of operation. So that means 50% reduction in our, you know, staff at the branch. The other thing is we have an increase of 400% of account application for SME.

- Wow.

- 400%, and out of it, 300% increase in actual app account opened, and that turns into a 333% in revenue for account opening itself. So these are big numbers in a year to say. In term of operation efficiency, we've reduced our operation overhead by 60% for account opening only. So you see those numbers, and if you can apply them in other areas in the business, I think the overall collective ROI is significant, yeah? And I think we cannot just take that credit to ourself only. You know, our preferred partner CG has helped us actually to achieve that, and we are so thank you for all of that, yeah?

- We are super happy to support you on your journey. I think that we have only like two, three minutes left, so Sharon, maybe we could take one or two questions from the audience if there's anyone that wants to ask any question. Otherwise, I can come up with a tough one.

- Doesn't seem to be any questions. Oh, there's one here.

- Okay.

- Hi. I have a question for Ali about what you said about customer satisfaction and how it's really a non-monetary metric. I'm wondering if you've looked at the correlation between higher satisfaction scores and higher revenue or lower cost to serve that you could plug into a customer lifetime value model.

- Yeah, well, that's an excellent question. You see, the correlation is there definitely, but I think I need to check with business if they have created any correlation model between, you know, the value that has been created and the customer satisfaction. But definitely, you know, me as a customer, if I can get a credit card from my cell phone probably between traffic, that's a huge advantage. My wife, you know, tried to apply for a credit card three times, and this is my bank, and she couldn't get it because every time she tried to fill out the application, it gets filed and somehow never gets approved. So this is a huge for us. So us customers, we can see the value right away.

- Okay. I think that that's all we have time for today. So Ralph and Ali, thank you very much for participating in this. A round applause.

- Thank you. Thank you for having us.

- And with that, we conclude. Thank you.

- Thanks.

- Thank you.


Industry: Financial Services Product Area: Platform Topic: Digital Transformation Topic: Low-Code Development Topic: PegaWorld

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