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Marketing Week (MW): Before moving to Citigroup, you spent 10 years in the online travel industry, first by starting Site59 and then at Travelocity. How does the banking industry compare?
Michelle Peluso (MP): There’s a lot that’s different but some the same. One thing they have in common is that both have gone through incredibly transformational and a challenging times. When I started in travel, it was the first industry that was taking off on the internet. Before then, consumers had very little control over their holiday. You went to a travel agent and hoped for the best. Online travel has revolutionised it.
The same thing is happening now in banking – this is a very transformational time for banking, born from the financial crisis in large part but also from a really rapidly moving technology scene and digitisation.
The second thing they both have in common, and which I am really passionate about, is asking where the intersection of fast-moving technology and consumer need is and what is the best way to approach things from a customer experience perspective. At Citi we have been doing an enormous amount of work – never enough and never fast enough for my taste – on how we simplify. How do we make the everyday decisions easier; how do we make complicated things more streamlined?
MW: Has the current speed of technological development always been part of Citi’s approach?
MP: No, I think it is a relatively new strategy, but I think it’s a recognition by Citi that how customers are experiencing marketing and how they are experiencing digital are moving fast. Within two years we have gone from very few of our credit card customers being acquired online to, in some markets, almost a majority being acquired online.
That means we can really say: “OK, great, we’re not just going to look at what we’re going to say on TV. We’re going to figure out our search optimisation, we’re going to create the landing pages, we’re going to optimise clickthroughs, we’re going to look at every step where people are dropping off and figure out how to improve that path.”
Being able to give the credit card team a full picture of that so we can work out how we go from 10 per cent of our customers acquired online to 40 or 50 per cent, is invaluable.
MW: How customer-focused do you think financial services companies are in general?
MP: As an industry we clearly have not lived up to the highest expectations of customers. I don’t know anybody who could argue differently. That doesn’t mean there’s not an enormous amount of energy and commitment and passion around doing better. There is. But I don’t think anybody would say this is an industry that has been outstandingly customer-centric. This is, in part, because there are switching costs in banking, there is inertia and there is complacency, unlike industries that I have been associated with [such as online travel] where there are zero switching costs and if you’re not excellent in that moment, then people will go and find somebody else.
MW: Citi’s consumer bank has moved from ‘waterfall’ development to ‘agile’ development. Can you explain what this means?
MP: The typical process of ‘waterfall’ is that the business writes requirements, they hand it to architecture, they hand it to scoping, they hand it to development, to quality assurance, and to user testing. That cycle can be 18-plus months.
About eight years ago, the vast majorityof digital companies moved to ‘agile’, meaning that they have co-located business and tech teams – or at least they’re partnered – and they have got to get together every two weeks.
The teams work together – not in a waterfall, sequential way but having to get stuff out the door every two weeks. It fundamentally changes how you work because business can’t blame tech and tech can’t blame business. We’re all in the room together, and it allows us to be much more adaptive to the marketplace because we don’t have to phrase requirements and then wait 18 months for delivery.
MW: How easy has it been to change the culture around technological innovation?
MP: You can tell people you want to be agile, but a lot has to change to make it happen. For example, what is the legal review process in an agile development cycle? The legal review cycle has been created to be as sequential as the development cycle. There are all these gates at every step.
We have been able to be much more entrepreneurial within the bank, but having said that, being eminently respectful of the regulatory environment and constraints.
What I’ve learned, which I didn’t know at first and probably still haven’t quite mastered, is when ‘no’ is ‘no’ and when ‘no’ is ‘ask again later’. It’s easy in big companies and highly regulated industries to say no, but if there are things you are passionate about and you believe in, you can find a path.
Sometimes, they’ll say: “Michelle, no. No is no and on this one you are pushing too far.” And they’re right.
My job is about establishing trust and bringing persistence, passion and energy, but also listening.