Scotiabank Reshapes for Commodity Business of Banking

Retail customers have been trained to search for price, and to expect outstanding service. Those are difficult expectations for banks to meet. But Scotiabank has a plan.

Every advantage counts in the competitive banking marketplace. "We've commoditized a lot of our products, and we've trained our customers to search for price," says Peggy Mulligan, executive vice-president, systems and operations, Scotiabank (Toronto). "At the same time, myself and my colleagues sitting around in the CIO jobs have continually delivered more functionality, through more channels, with higher availability -- so we've trained our customers quite methodically to expect absolutely outstanding service."

Adds Mulligan, "Those two things are great from the consumer's perspective but they start to collide in banks' ability to continue to improve and to differentiate themselves."

Scotiabank's strategic response: a new branch architecture that uses a server farm from Citrix Systems, terminal server software from Microsoft, and integration from IBM Global Services. "In essence, we've changed all of our branch machines to a thin-client model," says Mulligan. "We can now get functionality shoved out to our 1100 branches, virtually instantaneously."

This type of front-office flexibility has been a much-anticipated dividend of the bank's decision to outsource its technology infrastructure to IBM. Even before it did so, Scotiabank enjoyed "outstanding productivity ratios and superb availability," says Mulligan.

With the thin-client branch initiative described above, Scotiabank supports the sales force on the "people part" of the transaction. Then, for the transactional side, the bank supports a full menu of self-service options, including paying bills, reordering checks, and buying mutual funds from the ATM. "We have very substantial functionality on our ATMs right now, very similar to what we have on our other channels," says Mulligan.

Stemming from its overall banking philosophy, Scotiabank recognizes a commodity business when it sees one. "We're exploring some software options that will enable us to buy any ATM box we want," says Mulligan. "There are some new software enhancements that will let you buy whatever box happens to be best at the time."