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ISBN 978-1-9995762-2-6

Foreword

"T he fun for me in collaboration is, one, working with other people just makes you smarter; that’s proven!"  Lin-Manuel Miranda 

In business, the constant is change.  And successful change is complex.  One of my earlier bosses used to say, If change were easy to accomplish, everyone would be successful.  But it’s not, and everyone isn’t.   

That’s what set my partners and I off on a quest to find out what it is that organizations who are successful do vs others who are not.  We’ve spent more than a decade researching, working with clients and academics to uncover the foundations of success, measuring leaders and laggards, to develop some unique perspectives on innovation. 

What we’ve found is that an essential ingredient for success is collaboration.   

Often organizations hire consultants to assist.  Our job is to take complex issues and help to understand and simplify applying proven frameworks and critical thinking.  Consultants are good at telling a story, but experienced executives are often better at applying these principles in the real world.  Sharing that knowledge is what The Finnovate Show is all about. 

In this ongoing series, I’ve had conversations with executives from all over the financial services world about innovation.  I have spoken to bankers, technologists, risk managers, insurers, credit unions, FinTech, trade associations and governments alike, all expert hands in their various segments, about their views and their learnings as leaders. 

I’VE ORGANIZED THE book into four sections reflecting the key themes we’ve covered in the series thus far: 

Collaboration, the Key to Innovation – the importance of listening and working together towards an overall growth agenda 

Optimizing Digitization for Strategic Advantage – today’s thinking and insights into tomorrow’s digital foundation for the financial services world 

Laying the Groundwork for Change – setting a plan, getting it done, and capturing hearts and minds 

Innovation from a Business Perspective – insights from key segments of the financial services world on how to be successful 

It is important to note that discussions have typically not been about specific commercial solutions or tools, but the core of our conversations are about insight on the challenges of change.  Episodes look at a myriad of issues from strategy to execution, from liquidity through to risk management, from customer needs to operational excellence, and many of the considerations in between.   

What you’ll find in this book is a compilation of the thoughts from more than a dozen experienced executives regarding their views on generating a tangible impact, and how you can too.   

Thank you to all my guests for sharing your time with me, and enthusiastically sharing your advice with others. 

Gerry Purcell

Gerry Purcell,

Host of The Finnovate Show &

Principal, Innovation 360

Editor’s Note

The following transcripts from The Finnovate Show podcast, are edited versions of the conversations rather than a written verbatim account. Punctuation and grammar have been added to provide clarity. Every effort has been made to retain the accuracy of the conversation.

V.A. Purcell

Introduction

The Finnovate Show is a podcast about innovation in the financial services sector.

Our guests include executives who come from key segments of the industry. They share their views on the marketplace, industry culture, and the ideas and actions they’ve taken to capture results.

Collaboration is the Key to Innovation

Collaboration, the Key to Innovation – the importance of listening and working together towards an overall growth agenda 

How do you adapt and innovate in times of change?

Manulife Bank of Canada is one of the country’s first digital banks. They’ve been around since 1993 and they’ve never had any branches. Rick Lunny, CEO of Manulife shares his views on what’s made the bank successful and how they’ve continued to be a leader in the digital space, even as the industry adapts to the changing times.

How do you collaborate with your stakeholders to innovate your business model?

Michael LeBlanc is Chief Executive Officer of FCT. His focus is to invest in innovation and technology to provide better service to customers throughout the real estate lifecycle. Michael discusses how FCT works with stakeholders to overcome challenges and take advantage of opportunities in both the residential and commercial real estate market. FCT has been recognized by Canada’s Great Places to Work® for many years.

How to boldly grow the good in business and life

Mona Malone CHRO and Head People & Culture at BMO discusses the need for organizations to have a sense of purpose to guide what they do. Purpose sets the context for what is allowable and provides a lens for people to make decisions. People might forget what you’ve done, but they won’t forget how you made them feel.

The key to fostering customer centricity

Anil Sanwal is VP Business Initiatives Lead at RGAX, the transformation engine of RGA, one of the largest global reinsurance organizations. He discusses RGA’s rich history of innovation and RGAX’s unique approach to working with clients to develop ideas that put customers at the heart of the innovation process.  With a focus on eldercare and aging, Anil shares his thoughts on evolution and innovation in the insurance industry, and RGAX’s approach to engaging with a broad eco-system of clients and partners.

Creating Opportunities through Adaptability & Action

Ryan Stein, Executive Director of Automobile Insurance Policy and Innovation Team at IBC discusses the importance of being responsive and drawing on innovative approaches to remove barriers, adapt to rapid changes in the marketplace, and to anticipate customer needs.

How do you adapt and innovate in times of change?

With Rick Lunny

This conversation was recorded in September 2020

Episode description

Manulife Bank of Canada is one of the country’s first digital banks. They’ve been around since 1993 and they’ve never had any branches. Rick Lunny, CEO of Manulife shares his views on what’s made the bank successful and how they’ve continued to be a leader in the digital space, even as the industry adapts to the changing times.

GERRY: Our guest today is Rick Lunny, the CEO of Manulife Bank of Canada. As a much sought after change agent, Rick knows how to use his experience to leverage technology and transform businesses in the financial services industry. He brings a consistent record of achieving high levels of customer and employee satisfaction and getting the most out of his people in roles across several of Canada's largest financial institutions. As the CEO of Manulife Bank of Canada, Rick is focused on driving change and innovation, and today we'll talk about financial services and explore some learnings drawn from a long and successful career. Rick, welcome to the show.

RICK: Thank you, Gerry.

GERRY: So, for those who don't know much about Manulife Bank of Canada, maybe you can tell me a little bit about it.

RICK: I'll give you a little background. You know I've been involved in banking for about thirty years, and I've seen the industry evolve significantly along with the needs of Canadians. What attracted me to Manulife Bank about six years ago, was because it was so different than other banks. It may be the first digital bank in Canada. It's never had any branches and it's been around since 1993. It has evolved, and today we're a full service digital bank offering everything from everyday bank accounts to mortgages and more.

What is key about Manulife Bank is that it offers an alternative to the traditional banks. We do this through product innovation and customer experience. We've done this because all of our digital products and tools and services are designed to align to our customers’ needs in the best interests of our customers. As an example of that, we recently unveiled a digital banking package that provides unlimited transactions as long as you save a hundred dollars a month. What’s innovative about that, is the fact that we provide an insight card that appears every time you go on your mobile banking App. It shows you how close you are to reaching the hundred dollars, so you don't have to pay the ten dollar fee.

GERRY:  So, I guess talking about innovation is right up your alley.

RICK: Hopefully, yes.

GERRY: So for your bank, I guess one could imagine that the pivots into the new environment might have been easier, but perhaps there were some challenges in changing into this new crisis environment that we're entering into. What sort of implications did it have for your bank?

RICK: We were fortunate that as being part of the global financial services group of Manulife, we had a well-developed pandemic plan, but of course we didn't plan for everything. Throughout the whole pandemic, our priority has been the health and safety of our customers and our employees, but you know things happen that you don't anticipate. We have a number of support people offshore and we had to scramble really quickly when we received short notice that the roads and the transportation systems were shutting down in a number of hours. We had to rent local hotels near our operations center because our employees didn't have laptops at the time, just to ensure that our staff would be available to service our clients' needs.

On a more personal basis, I was up north at our cabin on St Patrick's Day weekend and the following Monday was set up as a test from everybody for working from home in North America. It worked so well that virtually nobody returned to the office after that. I stayed at my cabin for as long as the quality of the Internet would hold up, which was several months.

GERRY: Your sales force is virtual, but it's also physical. You deal through your advisors. How has it affected the advisors that you sell through? 

RICK: We deal with both the independent advisor network and the mortgage broker network and an industry that is geared toward face-to-face businesses in terms of things like wet signatures in the mortgage business. We have to deal with appraisers, title insurers, lawyers and notaries, and all of those types of procedures. We acted quickly to adjust how we were delivering our business. I would say one of the big surprises was how quickly the various regulators agreed to digital and virtual processes that they had resisted for so long.  I do hope that those procedures stay in place from the regulators’ point of view.

We were fortunate that being a digital bank, we had products on the shelf that we could enable for better customer experiences. For example, we have an artificial intelligence chatbot. We basically amended our bank App to provide an in-App experience for customers that had any COVID-19 related questions in terms of debt relief and other questions.

GERRY: I remember talking about this before. The chatbot sort of learns from conversations and then can actually have a conversation that perhaps, might even feel like it's a real person at the other end. Tell me a little bit more about it.

RICK: We don't hide the fact that you’re talking to a virtual assistant. You’re right, we learn from the questions asked. As a result, we can start responding to customers in terms of their spending habits, where they're spending their money and in what categories they're spending their money in. Then this was a whole new level up when we introduced the COVID type questions. It resonated well with the customers and it took a lot of pressure off the call centers at the same time.

GERRY: I know one of the important metrics you use is your customer satisfaction and your NPS scores. How has the change in business impacted your customer experience scores and things?

RICK: Well, I think we were fortunate. At first when there was a load on the call centers across the business and people were asking questions, we did see sort of a brief dip. But most of our customers appreciated the circumstances that we're in, with virtually everybody working from home and responding to those questions. Then as we implemented more and more digital processes, such as we digitized the application process for people who are looking for debt or mortgage relief, we saw the pressure reduced on our call centers. Then we saw our NPS and satisfaction scores return to normal.

GERRY: Very interesting. I've been following Manulife for a while. It’s a very innovative place. You mention your all-in-one banking package.  Are there innovations that you think are noteworthy at Manulife?

RICK: Well, you know sometimes Gerry, you don't feel you're as innovative as you are. You mentioned the all-in-one banking package that we have at Manulife. One product is an offset mortgage—you know, the kind that sort of originated in Australia. We saw the versatility and flexibility of that product through the height of the COVID-19 crisis. This allowed our customers to fluctuate their payments in terms of their ability to pay. As a result of that, we saw a small fraction of our customers requiring payment relief compared to the numbers that were publicized in the banking industry.

GERRY: What was your biggest surprise, do you think, from the events of the last little bit or in terms of thinking about the future? What sort of things do you think that you hadn't counted on, or hadn't planned for?

RICK: Well, we did see a rapid decline in the use of cash in society. There's been a long term trend, but it fell off the cliff from my perspective. I took out some money from an ATM in February and last month was the first time in six months that I took out more. We saw that, so it was good to be in a digital place.

I think one of the biggest outcomes of this was, at our bank, we're very focused on health and wealth in terms of managing your debt and your cash flow. But in the current crisis we quickly realized that this is not a time for our customers to be managing their debt. Its cash flow that's key. We could provide them advice either through our independent advisor network or digital advice on how to better manage their cash flow. This is where we felt we could help significantly on that front.

GERRY: We’ve spoken before about planning and some of the things that you've been anticipating in terms of your business. Tell us about how some of the things that you were working toward actually became much more important than you’d expected.

RICK: Well, I guess from the digital front in particular, we were in a good spot, but also from an employee engagement point of view. Fortunately, about thirty percent of our employees were already working from home, so when that morphed into almost everybody people adjusted well. It really underscored the need for constant communication. You just can't communicate enough to your customers and your employees. It was very important for everyone to realize that we were in this together and that we would work through it together. We would constantly communicate with our customers and our employees. We don't have all the answers, and we admitted that we didn't have the answers. Then in preserving the humanity of it, we provided some regular videos from our cabin indicating how the relationship with my wife and I was evolving over our period in the wilderness. It shows your humanity overall. It also gives you time to think about the future.

GERRY: What is the future of financial services and how has it changed?

RICK: I think, there's a tremendous opportunity to disrupt or gain market share in this industry, but it's not as easy as it looks. We saw in the UK recently, the challenges faced by some of the high profile Finntechs. Being digital is just not enough.

It does pay to be a well-capitalized and profitable company. Those doing it successfully know how to focus on the customer in terms of the total experience—and I think that's one of the keys coming out of this. You know, we all adapted our practices and our buying habits through this. I did a lot of online purchasing because we were doing home repairs we’d put off for a long period of time. Sometimes I'd get my package the same day, and then I had this big box store experience where it was on the shelf and it took them four days to get it from the shelf to the customer pickup area. Customers see how businesses respond differently in the current environment and they will gravitate to those that are meeting their needs.

GERRY: Do you think customers’ needs are changing, or do you think that they'll just go back to the way it was before, once the crisis has abated?

RICK: No, I think we're seeing a wholesale change here in the marketplace. Some people will go back to the old habits that they had before, but I think we've seen across the board the advantages of digital and how consumers don't have to go out to the stores and buy their heavy boxes of Tide and other things like that. Maybe they'll still want to go out and see the furniture they're buying and kick the tires so to speak, but I think it's important that businesses recognize that. From that point of view, it's important that the financial service company, or the company they're dealing with, understands customers’ needs and meets their needs in the way that they want to be served.

GERRY: One of the things I've noticed, because I have grey hair too, is that we go through these crises and they tend to be all consuming. People get focused on today and the things that are going on and the issues. How do you keep yourself and your team focused enough on looking forward to plan for some of the innovations that are coming, or that you'll introduce into the market?

RICK: Well, I think one thing we saw across the board was that in a crisis environment you had to make quick decisions and you didn't necessarily have the time to assess all of the information that you wanted to be able to make that decision. There was a great delegation of authority just because it had to be done in the current environment. Well, we saw how quickly we could get to market. Everybody saw that. The key is how do we preserve that? How do we preserve the fact that more delegated authority and trusting people to do the right thing actually gets you to market faster and it allows you to compete more effectively, and you end up with more engaged employees along the way.

GERRY: How are your employees weathering the storm, so to speak?

RICK: They're doing very well. We were fortunate that we were well equipped for that. You talked about innovation. There were some innovative actions we took toward our employees at Manulife. Nobody was going to school. Everybody was stuck at home. One of the cool things was we had a Manulife camp for employees' children—a virtual camp. It involved singing songs, and craft making, and everything else. People were mailed T-shirts. It was a great of showing how you could be innovative in a somewhat restrictive environment.

Now people are looking at the current situation. It’s been six months or so, and people are wondering about when they return to work what's the environment going to be like? I think it's really important that anyone in this situation considers the regional differences in the environment as well as the