In a magnificent historic building on the Grand Place in Brussels, we were treated to the Go & See session at KBC we were given an insight into the digitalisation of Belgium's best-performing bank. With the best banking app in the world, an A.I.-powered digital assistant and a deeply rooted culture of innovation in all parts of the organisation, it should come as no surprise that we walked out inspired.
KBC is a digital pioneer in the banking sector: not in Belgium, not in Europe, but in the world. According to Erik Luts, Executive Director & Chief Innovation Officer, this success story starts with a good strategy. "At KBC, our strategy revolves around creating the ultimate Customer Experience," says Luts. "By bringing in the best UX people, we get the best product. The best product creates the most satisfied customers, and that's how we become the best company."
Starting without a strategy is obviously not advisable, but sticking too rigidly to the strategy you have formulated is also not a good idea. Strategies age: what was true two years ago may no longer be true today. "The realised strategy is always an interaction of your deliberate strategy and emergent strategies," explains Sigrid De Wever, General Manager Corporate Strategy & Innovation. After all, transformation does not stand still. "We closely monitor trends and summarise them in a trend matrix. On this basis, we determine which projects to roll out."
They are not only looking at immediate action, but also at exploratory projects. "Exploration is very important if we are to remain pioneers," says De Wever. "20% of our budget goes to projects that do not yield immediate profit, but that prepare us for the future. So that we have the technology and the solutions when the market is ready. For example, our digital assistant Kate, KBC's A.I. brain, grew out of experiments with speech technology."
To determine the trends, KBC does not measure itself against other banks. "When it comes to digitalisation, we look at other sectors. There you see what the users want. What about music? You want to look up the song and be able to listen to it immediately. Retail? You want to order something online and get it home as soon as possible," says Luts. "If you want to get ahead of your competitors, look at the transformations that other sectors are undergoing, and apply that to yourself."
"Look at the transformations other sectors are undergoing, and apply that to your own industry." - Erik Luts, Executive Director & Chief Innovation Officer KBC
"What do people find important? Simplicity, that something is easy. We responded to that by broadening our distribution. In the KBC app, you can do much more than just banking. For example, more train tickets are purchased through us every day than through the app of the NMBS/SNCB itself," says Luts. "So we can register 1.6 million daily active users on our banking app, accounting for 60 million transactions per day. And because our customers use KBC Mobile so often for so many things, we know they won't be leaving our bank any time soon. Our app glues our customers to our bank, so to speak."
"When KBC Mobile was voted the best banking app in the world by independent research firm Sia Partners, I knew: now the trouble starts," Luts says. "The danger is that you then think: we're there, we can relax. But you are never there. Complacency is the enemy of innovation; as soon as you think you have won the battle, you are overtaken. The VUCA world does not allow you to sit back and relax."
"Complacency is the enemy of innovation." - Erik Luts, Executive Director & Chief Innovation Officer KBC
Innovation is woven into the DNA of the company. There is an annual Innovation Day, and an Innovation Board every month. "That is why we launched the Dare campaign: dare to innovate, dare to change something. With us, it's okay to disagree with the boss," says Luts. "If they can argue it well and come up with a better proposal, our employees are welcome to say that certain processes or ideas are pointless. We even encourage that."
If you look at digital transformations at other companies, you see that you have to find a balance between your digital capabilities (the what) and your leadership capabilities (the how). "If you focus too much on the core of your business (conservatives), then you will never reach a high level in terms of digitalisation. If, on the other hand, you focus too much on digital gadgets (fashionistas) but forget about your core, you are wasting money," says Sigrid De Wever. "We see that companies that focus on both areas and get into the 'sweet spot' of the digital masters are 25% more profitable than companies that end up in the other quadrants."
"Companies that achieve digital mastery are 25% more profitable than others." - Sigrid De Wever, General Manager Corporate Strategy and Innovation KBC
"We stick to our core: we remain a bank-insurer, but the way we communicate with our customers changes completely. We are looking at digital, at A.I., at data. Hence our slogan: more of the same, but differently. The 'differently' is very important in our strategy and our culture.
Because as we know by now (it is a quote that recurs at almost every Go&See session): culture eats strategy for breakfast. "Empowerment and accountability are two very important aspects of our corporate culture, and the two go hand in hand," says Erik Luts. "We do not have a top-down culture. We don't tell people what to do and certainly not how to do it. We provide a framework - the strategy, the trends - and offer help, but that's as far as we go. Our motto: if you promise, you deliver. Not going to make it? We are happy to help, but we expect results after six months, without exception. So our people get a lot of autonomy, trust and decision-making power, but in return they are responsible for their own results. You notice that this creates a powerful dynamic in the organisation: people are proud and want to achieve good results.
"Empowerment and accountability are two important aspects of our corporate culture, and the two go hand in hand." - Erik Luts, Executive Director & Chief Innovation Officer KBC
Not only the tools, but also the skills are important to endorse a culture of innovation in the organisation. "Through our learning platform StiPPLE, all our employees can take training courses to acquire future skills and hot skills," says Sigrid De Wever. "We will never force anyone to take these courses. If they don't do it, they don't get bad marks. Everyone is responsible for his or her own future. We give them every opportunity, and they also get time for this. We see that our people really appreciate that, and that they actively participate in these courses without us forcing them to do so."
"We offer all kinds of training to our employees to train their future skills, but we never force anything. Everyone is responsible for his or her own future." - Sigrid De Wever, General Manager Corporate Strategy and Innovation KBC
Do you also want to be inspired by Belgian digital giants? Then come to one of our next Go & See sessions! Participation is free, inspiration guaranteed, but places are limited, so register early. You can find an overview of our next sessions here here.