Technology in Finance: Banking on tech know-how

By Daniel Parton
June 10, 2003

Andrew Robinson

For Andrew Robinson, director of e-commerce at A&L, it was the vindication of a simple, focused approach to e-commerce and the Internet. "We've been focusing our efforts on delivering a good quality service and instant gratification for customers buying products online," he said.

The Your Mortgage judges were impressed by the new technology used on the Website, the easily navigable design and the speed of downloading. "A&L has really embraced new technology," said Paula John, Your Mortgage editor. "We were extremely impressed with the Website, which looks good and works well. We would like to offer our congratulations to A&L for offering such a borrower-friendly online service that has clearly been designed with the customer in mind."

It also dispelled the myth that customers do not want to buy mortgages online. Critics have said that while customers may look online for a mortgage, they will want to buy after speaking to someone at a branch. But Robinson has found this is not true. "If you have a decent product, and a well-tuned means of applying for it, people will go for it," he said.

Research found A&L's customers wanted simplicity, especially with online application forms. Instead of using a downloadable Applet or Javascript form, which are disliked by many users, A&L built its mortgage application in HTML format. "We know some people are averse to having anything downloaded to their machine," he said. "We found consumers would click Œapply now' and get this page saying Œdownload now' and they would switch away."

Having to answer irrelevant questions in an application form is another customer turn-off, especially in a long form like a mortgage application, according to Robinson. "If the customer wants an endowment mortgage, then they get questions relating to an endowment mortgage, in addition to the standard ones that relate to their property and their occupation," he said.

Nevertheless, in a mortgage application many questions have to be asked, such as details on the applicant, the property, the valuation and the insurance products preferred. But Robinson is looking to address this. "One thing we're constantly doing is looking for opportunities to shorten the form, so the customer can come on, complete the application in the shortest possible time and proceed. We do that on all of our forms to try and make the experience as positive as possible," he said.

The demand for the mortgage site has surprised Robinson. "When we implemented the mortgage site last July we did no on or offline promotion," he said. "What we exposed was the pent-up demand that exists on the Internet. We get a lot of visitors to our homepage; about 400-500,000 unique visits per month. We saw some astonishing results after we launched the site from people turning up, having a look at our price and going for it."

The Website is in keeping with A&L's core brand values. As a group with assets of over £30 billion and holding more than 5.5 million personal accounts, it was important the Website reflected the company in a positive way. "That's where the work on overall IT architecture and particularly the work I'm leading on e-commerce comes into play," Robinson said. "We've been focusing on delivering a good quality service, with as close to instant gratification in terms of customers buying our products online. It was out of that work in addition to online sales of credit cards, loans and current accounts that we built our Internet consumer mortgages capability."

Customer is king

A client-orientated user-friendly approach is paramount to Robinson's e-commerce strategy, with all of A&L's Web-based applications designed to be easily used, rather than impress people with the technology it has. "We've learnt that just because we think something is a cool piece of functionality, doesn't mean the consumer will think that," Robinson said.

So rather than have a technologically impressive site, A&L's e-commerce team has made sure the site offers what the customer wants. "We implemented scrolling news, but people aren't interested, so we're taking it off," Robinson said. "When they arrive at a retail banking site they have something in mind — to borrow or save money.

"We believe it's really important for us to make it as easy as possible for the consumer to arrive at the homepage and get where they want to go as quickly as they can," he said. "It's in their interests to do that. Otherwise they get bored and can click away to a competitor and it's in our interests to get them as quickly as possible to the Œapply now' button."

A&L has put a lot of effort into finding out what consumers like and dislike about the site, including undertaking regular research and tests. "We have price tests periodically, but with the Internet we can change something and see instantly whether it is having a positive or negative effect," Robinson said.

Security guards

Online security is a worry for customers, but Robinson said it is something that A&L has planned for. "Our security policy is very thorough, we have a degree of paranoia about it," he said. "We do penetration testing [and] we're audited on it by our internal auditors to make sure we're keeping as far ahead of the hacking industry as we can."

To keep ahead of the hackers, A&L works closely with its Internet host providers. A&L has two primary hosts, Cable & Wireless for its Internet banking capability and Ioko365, which hosts the main Website and its intermediary site for the mortgage market. A&L's Internet security is leading edge.

"It's some of the best computer security in the UK," Robinson said. "We understand Cable & Wireless host some of the government's capabilities as well, so I guess that's pretty foolproof."

Nevertheless, it is not just customers that are worried about online fraud and security; bogus customers pose a large threat to companies. Because the customer is not present when, for example, applying for a loan, A&L cannot use the normal identity verification methods used in branches, such as a driving licence or recent utility bill.

A&L uses VML (virtual money laundering protection) in conjunction with credit reference agency Experian. VML can run through an applicant's data and give a validation of whether the customer is genuine. "We have to be sure the customer is genuine," Robinson said. "We do need to spot the perpetrators of money laundering practices."

In-house pays dividends

While hosting is outsourced to third parties, Robinson's technical team handles the contentmanagement and development. A&L's Smarter Motoring car buying site has also been brought in-house in the past few months.

"We've done that for a number of reasons," Robinson said. "The prime one is that we've found it far more cost-effective to manage it ourselves. My team is 25-strong and has been for two years and we haven't had to increase head count by bringing it in-house."

This is a move that many companies would not make because of a lack of technical knowhow. "Usually if an IT department says they can do it rather than a third party I'm a bit sceptical, but my team has done a fantastic job," Robinson said.

Bringing functions in-house has helped to keep A&L's e-commerce budget down. "A&L does things in a focused way," Robinson said. "I've found we can do a lot without having a massive budget. I'm looking to lower the budget we spend each year on the sales part of our e-commerce ability. If we can lower the budgets and increase the sales volume, then our acquisition costs reduce."

Coming of age

The e-commerce channel has come of age in the past year, according to Robinson and has brought many advantages to A&L and its customers. "It makes us more accessible," he said. "It gives us an ability through selfservice of reducing the volume of calls to our call centres, for example from customers asking if a transaction had gone through, or to check their balance, because they can do it self-service.

"Two years ago there was a lot of scepticism, the dot.com bubble was on the way down. Now we've seen we can generate significant volumes of business online."

Robinson is looking to build on the success of the site and grow A&L's e-commerce facilities and the number of people using them. The online facilities will be promoted offline for the first time, with Robinson targeting at least 200,000 registered users by the year's end. "We've seen massive growth in the take-up of our Internet banking capability," he said. "It's a fantastic win-win."

Golden solution It is not just customer-facing technology that is important to A&L, the back office applications are just as vital to the company's success. For example, when A&L needed the capability to allow suppliers to attach their own ATMs to its networks, it needed a solution that would allow the exchange of data while preserving the integrity of that data, and without impact to live processing performance. After evaluating two integration products, A&L selected the GoldenGate Global Data Synchronisation programme. As A&L's ATM network is powered by BASE24 from ACI, which drives ATM devices, the GoldenGate product was selected as it is the preferred data integration solution for BASE24. A&L implemented GoldenGate as a replacement to the existing tape archive backup in May 2000. The software was installed on a second Compaq NonStop Himalaya mainframe as backup to the live machine. The configuration allows every link in the machine to be switched to the hot-site backup should the live machine become unavailable for any reason. The GoldenGate platform ensures the integrity of the data on the backup machine. "Initially the software seemed complex, yet it was impressively configurable," said Martin Hart from A&L's BASE24 support and development. "The issues in the beginning were ironed out. The time invested in the installation has paid off as the engine of the product, running continuously in the background, is robust and reliable." The GoldenGate Data Synchronisation platform handles an average of one million file updates per day ­ equivalent to 600 megabytes using compressed updates. "With plans to continue expansion, we're confident of the GoldenGate Solution's scalability to accommodate this growth without impact to system performance," Hart said.

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