Roy Aston, Global CIO at Barclaycard
With Barclaycard now in its 51st year having celebrated half a century in 2016 since it introduced the credit card to the UK in 1966, I met with Roy Aston the Global CIO to look at how Barclaycard are continuing to stay ahead of the game through innovation and reshaping their business model.
Roy: My role has developed quite significantly since I joined as the CIO of Consumer Finance Business in Europe, I then became the Group CIO role for Barclaycard, looking after all of our businesses. Effectively, Barclaycard operate in a number of key areas. In the B2B space we have a huge business looking after merchant acquiring - supporting all of the payments at a large number of UK retailers; just over £1 in every £3 of UK payments goes through our network. We also operate in corporate cards and corporate lending, for example if you go to an Apple store to finance a product it's likely to go through us. Plus we have the entire consumer issuing side of the business. So, that's what you would know as the customer on the street.
Whilst we are one of the most recognisable brands in the UK we also have the Barclays brand in Germany operating as Barclaycard. We've got deposits and loans business, and a US business. The US business is a big partnership business but also have the Barclaycard brand as well. The US business is now actually bigger than the UK. We've seen huge and massively encouraging growth in the US.
Tom: Is the US business largely white label? If so, is it going in a different direction to the UK?
Roy: It is a bit of both actually. While the 'white label' business is the biggest part of the business we are growing the Barclaycard brand as well. We partner with American Airlines, Jet Blue and many more big retailers, to be their card business; we've seen phenomenal growth in the US with this model. It has been a really progressive few years for us.
Tom: Is your new role more focused on operational efficiency or driving innovation through the business?
Roy: It's the whole thing. Just before we sat down for this interview, a team and I had a working session around fraud technology. If you look at fraud at a group level, each business unit is tackling the problem in the same way. A genuine transaction may impact a customer; for example, if a customer completes a transaction and they are in a store and they get declined for no reason this can be frustrating. We are already starting to target real fraud in a more effective and efficient way leveraging 'big data and machine learning' - it's a space that is really rich with possibility. When you think about the data that Barclays has, specifically in the UK with our retail network, our card network, other consumer card business and the point of sale transactions, we've got data set that nobody else has got by a long way. We can be of much more service and help for the customer with this data; we just need begin the drive to tap into it. I think the role that I've branched out into now at Group level is that. I'm still looking after the card business but with a strong focus on how we create leverage across the Group by thinking about how we better partner with the business and solve business problems that have previously sat in silos; this is a real exciting shift for us.
Tom: Do Barclaycard and Barclays work pretty closely together?
Roy: In the past the simple response would be 'somewhat', but that's been turned on its head over the past 12 months though and we're working more closely than ever. The integration with the business is now really tight. Historically, they have been naturally separate with the various businesses running separate operations and technology but we're really starting to bring that together and drive a "customer lens".
The whole organisation is really customer focussed, our role is how do we become frictionless and create real value for our customers. We then have to look at how we leverage the scale, looking at what we are creating so that we are not only giving the customer a great service in the UK but also giving us scale leverage as a global organisation. For example, we might want to create an offering for your Barclaycard which is linked to your UK current account and your loans and savings account. What we also want to do is find a solution for how we make sure that they're useable in the US, we've not built them separately because they are likely to be two different customers. If you start to think about running the operation more efficiently then that benefits the group, therefore benefitting the customer.
Tom: What have been the challenges from bringing in this new way of thinking?
Roy: I think the biggest challenge is one of alignment, whilst we are all in the same group and everyone has the same customer focus, the way that problems have been solved at all levels is very different. This has meant that technologies are different, the call centre applications for Barclaycard and call centre applications for a loan are not the same, the website application for a loan product across retail banking are again very different for the Barclays and Barclaycard brand because they have been historically different.
We are now moving these together; this is clearly everyone's aspiration. Doing this the right way, doing it at pace, doing it at low cost and at scale is tough because you have got to focus on what is truly important. How do we create value for the customer and how do we move towards a better model? My goal is to try and find the intersect between this.
If we can think like a fintech with the size and scale that we have, there's nothing stopping us in building the technology in the same way that a start-up would. We can build solutions in the Cloud, we already do in our US business we've launched a product this year that will use fully Cloud based microservices, it's very light weight, it's built on source technology - the kind of technology you would find in an Uber or in Netflix highly resilient. It's built the right way with open APIs and big data at the core, we are lifting that. What we've done is we've driven the transformation at a major scale, by thinking in the lightweight nimbleness of a fintech which should give us our USP. A market-leading, trusted bank adopting a fintech's mentality around technology, we've allowed the business to have this USP and believe it will really strengthen the business.
Tom: Is that a technology change or is that a culture change?
Roy: It's both. It has to be both. We are changing the cultural norm; we've got a lot of technology as with all big banks. We've got mainframes and old legacy systems and lots of stuff hosted in house. Culturally, the whole ecosystem of banking is it's setup for how you protect consumer assets because the threat of security is becoming bigger for us, as the threat increases the natural reaction is to lock everything down. We have to try and figure out how do we become more open, how do we think of hosting software in Cloud and how do we do this in a way that still creates the same level of security and trust is a cultural shift as much as it is a technology shift?
Tom: Consumer expectations on tech are increasing daily how are you able to keep pace or even stay ahead of these expectations?
Roy: We want to get to get to a position where we are leveraging software that's built in the Cloud. We want migrate away from thinking about infrastructure and thinking about writing infrastructure as code, with a full end to end DevOps mind-set. Automation is critical for our future not just for speed and quality, but it also gives us repeatability and high levels of control which are undoubtedly an essential element for a bank to possess.
Actually, the world of pace and agility is at the heart of the bank's core beliefs. It doesn't matter if you are going to release 1, 2, 3 or 4 times a day, if you can do it in a way that is stable and has zero down time, gives you a better customer outcome and you do it in a way that is highly controlled. The strategy is revolution but the execution is evolution. We're taking small chunks and saying 'look we've got a lot to do internally to transform 50 years of Barclaycards legacy into this new way of thinking' so we can't just automatically deploy all of your mainframe apps or your old middleware components, we've got to layer this stuff up properly and we take small slices and start to move in the right way. We have to ensure we build up confidence in the organisation and build up our own learning and our own experience, retrain and also obtain the ideal talent, it's an evolutionary approach but we're going to get there pretty quickly.
Tom: Looking at talent, have you been able to retrain people effectively or have you had to recruit?
Roy: Both. We've had some really phenomenal hires this year where we've brought in talent from a lot of big global organisations; we have looked at the journey that Barclays is embarking on and we want to go on that journey together. We've hired some exceptional talent from West Coast America, recruits from some really forward thinking organisations that have come and joined the team and we are coupling that with retraining and investing in our people internally and giving them opportunities. We think this will really make the shift from where we've been to where we want to be. It's a two way strategy because you can't take an organisation of our size and scale to where we want to be over night. We are a bank at the end of the day, so our reputation can be blown in an instant; we've got to do things in the right way.
Tom: How have you seen the role of CIO within the organisation change?
Roy: Well, I think the scope is ever increasing, the expectation on what would be the more traditional elements of the role are still there. For us, if the CIO is in control of service and stability of the core business, then you get that permission to have a greater influence. The CIO has to be on "the front foot" in terms of driving and helping the business to actively take advantage of opportunities in what is an ever more demanding technology landscape externally. The technology industry grows rapidly, and we need to ensure we keep up-to-speed.
The knowledge that the business has and what technology can do has become ever more demanding. I think many of the popular buzz words at the moment 'Big Data' and 'APIs' are really powerful in terms for engaging stakeholders and also understanding how technology can unlock value for their business. This comes with high expectation on technology delivering value. I believe the CIO thinking is becoming more strategic and business engagement is even more critical. Becoming more commercially minded is evident and necessary. I also think that more than ever the role of talent management is critical. Technology is moving at pace, the need for the CIO to continue to think about how he or she is going to evolve their work force to stay up to speed with current trends, how to retrain, grow careers, bring in new talent at cost revaluation so that work force doesn't become stale has become more and more important.
Tom: Looking at previous Harvey Nash CIO surveys, traditionally the CIO has reported into the CFO and value from technology has potentially be measured cost, you don't see this as part of the Barclays structure and values?
Roy: Yeah, definitely within Barclays the organisational structure doesn't create barriers. Access to the commercial teams and the CEOs is there, the dialog is very frequent. The engagement with technology, in terms of what it can do for the business, is apparent. Technology is expected to be taking an active role in commercial discussions on how we evolve product strategy. Because of the opportunities that technologies can bring and solve business problems we've got to be engaged in the issues in the business helping shape the strategy.
When you are talking to either a big vendor or a small fintech, you need very quickly to figure out whether there is an opportunity to work with that company to create engagement. I think the role of the CIO is being one now of integration and facilitation across the Group. We're talking to fintechs that can solve problems for us. For example, we are speaking with lots of organisations that are looking at big data and machine learning in the US, some of the tools and algorithms they have developed we'd never think about building now. We want to go and partner with organisations. To make sure we pick the right organisation, we need to understand implicitly the business problems and opportunities.
Tom: Is that a partnership or is that an acquisition?
Roy: It could be either. We remain open to the right approach to deliver value for Barclays customers. We try and figure out what can be done internally, how we innovate and also how do we partner with the right organisations. Then, going back to your question about the challenge, how does the CIO stay relevant, is a really tough task. Because technology moves at such a pace, options around what technology can do become so fast moving, whether at conference or networking with your peer groups you integrate with, try and get your antenna working to pick up all the possibilities is a key to your success because otherwise you become outdated.
Tom: The CIO, Chief Data Officer, Chief Digital Officer all have seemingly similar remits are there clear lines of demarcation within Barclays?
Roy: Yes, we have those roles within our group. At a Barclays group level, data is a strategic asset so it's important that we get a consistent strategy across all areas to focus on how we maximise value for our customers? I could not do that alone, it's just too big. And when you think about the various different data technologies I think it's helpful to have individuals whose role it is to focus in different domains. I think then the role of the CIO for me is very similar to working with external organisations. I trust the CDO and their role is to make sure we've got the right data assets capability that can help drive value into the business, their job is to then drive value, and my job is to help facilitate that into the business. In an organisation like ours there is work aplenty; I have massive ambition. I think we've embraced the fact that having more people that think differently and want to drive transformation and change is a good thing.
Tom: How have you gone about attracting the right talent?
Roy: We are very lucky; the CEO has got a very crisp strategy for Barclaycard which is believable and very engaging and one that really is starting to have a positive impact on the market. It is very clear where he wants to take Barclaycard and where he sees the competitive world as a threat as well as a huge opportunity for us too. I think that really helps. Having a real purpose and vision helps an organisation attract the best talent because people want to work for someone who is not just doing 'cool tech' but for an organisation that is going somewhere and that wants to drive transformation.
We've got investment which is one of the big advantages of us over a fintech. We get frequently asked 'why don't people go and work for a fintech because that's really cool', essentially we've got much more capital, we've got a very large customer base, we've got big ambition and we have a strategy which is to be a lot more aligned.
We've started the year by having a US business where we've got real tangible products, fully DevOps enabled, in the Cloud, leveraging open source technology that is built very differently to how we have traditionally done it. I think once you've attracted a few people it becomes viral. They attract other great people because words got out that Barclays are really transforming the way that they think, new hire's personal networks have become really helpful.
Tom: Have you been able to buck the industry trend and attract stronger gender diversity into the DevOps and technology teams
Roy: I think we've still got some work to do there: we still have the opportunity to balance the workforce a lot better - it is still very male dominated. I think technology has such a vast array of opportunity for us to attract talent in a very diverse way. We are proactively working to balance this and things are definitely changing but there is still a long way to go.
Tom: Looking at the disrupters in a number of sectors what would you see as the potential biggest disrupters to the banking sector?
Roy: The world of invisible payments is changing things as a rapid pace, and will increasingly do so with the rise in conversation interfaces such as Amazon Echo. It's a change to the shopping journey that is, in effect, removing the purchase process - or at least seeing it subsumed into a much smaller step. You use Uber and you book your ride and your payment is already programmed into the app so you don't think about which card the payment is taken from - it's already stored. Our role is to think about how we respond to this in a way that adds value to merchants and consumers.
Tom: Do you see yourself as underpinning the infrastructure of this evolution towards a frictionless life?
Roy: I think we absolutely do. That requires the actual product to work well; you've got to ensure you're operating payments in the right way. The revolution is being driven in some ways by regulations, so PSD2 is going to force banks to open their APIs and that's going to drive a very different opportunity, it is going to force the aggregators to become more powerful with their product offerings. I think we're going to see a new level of disruption where the aggregators that pull together all of a consumer's financials drive different business models and thinking.
Tom: What keeps you awake at night?
Roy: Cyber threats we need to continuously develop our understanding around how we protect the bank and our customers in the right way. The world of sophisticated cyber criminals is becoming internally and externally more threatening and it's a threat that we take very seriously.
Another worry of mine is how do we transform our organisation at pace and stay ahead of the emerging trends because, for all the trust we have and the strength of the brand, we're not a fintech and can't operate as they do. However, we're not starting from a blank sheet of paper, we're actually trying to build new technology backing 50 years of banking in the UK and that's tough. Our business wants to evolve so we want to look at new technology and how we can enable the business. We want to stay as far ahead as we possibly can, so we look at emerging trends and make sure that we don't just build something today that is already out of date by the time it's completed.
It's like you are moving to a world where constant evolution and constant upgrades and how we think about designing for obsolescence because, sooner or later, everything is going to be obsolete. You have to think about design, in a world where you can plug something in or unplug it, you create the ability for the business to be a lot more agile, and of course there will always be the risk to try something and it can fail. So, how do we transform the legacy and transform to a world that can transform fast or keep up and stay ahead, I think is one of the things that keeps me awake at night. We don't know how to do that completely.
Tom: What advice would you give to an aspirational CIO?
Roy: CIO is an exciting role. I think the CIO role is very similar whether you are running a 20 or 30 person team or 4000 technologists across Barclaycard I think the challenges are very similar. I find that the role is never the same on a day to day basis. The challenges are never the same as the world of technology is moving at such pace that you've got have an appetite to learn and want to be inquisitive around what's out there and how you can leverage technology. So my advice would be to focus on the key emerging areas of technology that will have the largest impact for your customers and business. For me the ability to leverage elastic scaling in the cloud, coupled with rich integration through API's and the power of big data and machine learning create an amazing platform to create consumer value.
Tom: And you actually get to see what you have done.
Roy: Yeah, you get to build things and solve complex problems. You create something from either lots of different parts or from nothing. Like, when you see teams build things that create value and you get real satisfaction, like any consumer business, you get to see where the customers engage with the product, and keep refining it. That's quite a unique role.