Introduction
This week I’m joined by Sangy Vatsa who is the EVP and Chief Information Officer at Comerica Bank.
In our discussion, Sangy outlines how digital transformation came to a 178-year-old bank. As part of that transformation, Sangy shares the details of their Tech Vision 2020 initiative along with their two-in-a-box and ALEX models. Using these models, we discuss how Comerica went from 0 to 100 applications in the cloud in only 9 months. Sangy covers how they did this, what they learned along the way and what they now have planned for Digital 2025.
Speaker Profiles
Sangy Vatsa LinkedIn: https://www.linkedin.com/in/sangy-vatsa/
Comerica Bank: https://www.comerica.com
Audio File
Featured Hashtags
#CIO #Leadership #FinTech #FinServ #DigitalTransformation #CIOitk
Podcast Transcript
Tim Crawford 0:02
Tim, hello, and welcome to the CIO in the Know podcast, where I take a provocative but pragmatic look at the intersection between business and technology. I’m your host, Tim Crawford, a CIO and strategic advisor at AVOA. This week I’m joined by Sangy Vatsa, who is the EVP and Chief Information Officer at Comerica Bank. In our discussion, Senghy outlines how digital transformation came to a 178 year old bank. As part of that transformation, Sangy shares the details of their Tech Vision 2020 initiative, along with their two in the box and Alex models. Using these models, we discuss how Comerica Bank went from zero to 100 applications in the cloud in only nine months. Sangy covers how they did this, what they learned along the way, and what they now have planned for digital 2025 Sangy Vatsa, welcome to the program.
Sangy Vatsa 1:06
Thank you, Tim. Glad to be here.
Tim Crawford 1:08
Sangy, you’re the CIO for Comerica Bank. Maybe to set a little bit of a foundation for our conversation today, you could talk a little bit about who Comerica Bank is and your role in regards to transformation at the bank,
Sangy Vatsa 1:23
great Tim. First of all, I appreciate this opportunity to join the session and to be able to share my thoughts with your listeners. I would also welcome any feedback or any better ideas we can get from your listeners, as we all get to learn from each other. Comerica Bank is a financial services institution. It has business offerings of products and services, and commercial bank, retail bank, and wealth management. 170 year old bank headquartered in Dallas, Texas, and its technology headquarters are in Detroit, Michigan area. I’m the chief information officer of the bank, as you said, primarily responsible for technology and digital transformation of the bank, in addition, in addition to cyber security, information security, and technology risk management. Been in the industry for 30 years, spanning across financial services, automotive, travel, and tech industries. So I joined the bank in February of 2016 and then the ask from the C suite was to transform the technology and digital capabilities of the bank, and at that time we had a burning platform, as a bank’s financial results had fallen into the bottom quartile, as compared with the institutions that we benchmark. Our independence of the company was being questioned, and as I said, we are 170 year old bank with a rich heritage. The bank is known for cultivating and nurturing rich relationships with our colleagues and customers. The entire leadership of the bank rallied and teamed up and made a strong call for change. And then the call was to really uplift our revenues, optimize our cost structure, and to elevate customer delight, while staying highly secure and compliant, and the digital transformation was at the middle of that change that we undertook, and I was fortunate to co-envision, co-shape, and co-deliver this change, along with my peers. That was the genesis of that digital transformation journey. If I can expand just a little,
Tim Crawford 3:19
the
Sangy Vatsa 3:19
transformation journey that we undertook began in 2016 through transforming the bank’s product delivery approach, uplifting its technology assets, and most importantly, investing enough people to become a leading digital provider of choice for our colleagues and customers. A comprehensive technology strategy, Tech Vision 2020 was established at the time, and the road map was laid out that was executed with speed and agility over a two and a half year timeframe. The business outcomes of this transformation, which I’m sure your listeners care for, that I would feel were quite impactful. Our financial results moved from the bottom quartile to the top quite hard, and for many of the measures, like return on equity and efficiency ratio, we were best amongst the benchmark. Furthermore, the measures like customer satisfaction and net promoter score saw a significant rise. So overall, we felt good with that change.
Tim Crawford 4:18
Now that’s great, and it’s a lot of work, and one of the things you and I have talked a little bit about in the past, you know, that often comes up when we talk about transformation is this isn’t a one man show, it’s not one person that that does all of this, it takes a village, and you’ve done that at your with your work at Co America Bank, where you’ve brought in other stakeholders and other players into the mix. Maybe take a minute and share with the audience what you’ve done from the perspective of bringing in that village into the transformation effort,
Sangy Vatsa 4:54
and that’s a great question, and I would say not only was I fortunate to be surround. By a lot of very knowledgeable, smart people, the word of mouth also worked on a favor, and we were able to have people within the bank who came together to work on this cause, and then we were also able to attract some talent from outside, and as the first steps in 2016 we rolled out Twin A Box product co-creation model. This is something that we created inside Comerica, something that has received good recognition in the industry. There’s been a publication on this model as well, but two in a box fundamentally changed how digital capabilities were delivered to our employees and to our customers. Both the technology teams and the business teams had joint accountability and shared goals. This approach essentially ensured that for every critical product that was launched, there was a technology savvy business product leader and a business savvy technology leader co-shaping and co-creating these products. So, even though this could have been perceived to prolong the development process. It was in fact a strong illustration of how, through building partnerships and timely collaboration, we can raise performance expectations and facilitate innovative business outcomes. Two in a box to me is both an art and science, and is now part of banks’ product and services development operating model. While at the core, this model is grounded in collaboration and relationship, it is comprised of four major industry strength components that essentially codify what to in a box model means. Maybe I get a chance later, I’ll expand on those four components of two in a box model, but as you said at the beginning, it takes a village to drive a change of this kind. We were absolutely very fortunate for the leadership across the bank to come together and be able to change the vocabulary at the bank with this approach, and everybody strongly received it well, and became a strong follower, enhanced outcomes that we were able to get to.
Tim Crawford 7:06
No, that’s great. And I do want to jump into two in a box and talk a little more, a little bit more about that, but before I do, one thing that you mentioned is how you brought in both the technology teams as well as the business leaders, as well. How did you do that? Because I could see some folks listening to this, going, “Okay, that sounds easy to do, but we don’t necessarily have those relationships in place. How did you find success in doing that?
Sangy Vatsa 7:36
Yeah, you know, I would say a lot of that goes back to the fundamentals of when you step into the shoes of your peers and other colleagues, and you really take the time to understand what are their goals, what are the pain points, what are the drivers driving their priorities. Then you not only internalize what are the things that you have within your background that you could bring it to the forefront to help them meet those goals, but you’re also building a very, very strong support structure, and then people are really reaching out to each other in a very unconditional way to help out the broader cause, and to me that was at the root of when I joined the bank, whether it was the chief marketing officer, whether it was the head of retail, whether it was the health of wealth management, held the head of Treasury to really take the time to understand what their needs were, and I was in many situations able to go and shadow our contact center professionals, our relationship managers. Once you see the world from there, you’re able to really rally your own team to create products and services that really cater to the needs of our colleagues and customers, and when those things came together, there were days when we were working really long days and nights on launching some products, but at the same time, there was no issue of asking for help. Help us flowing in a very seamless way, and to me that was one of the real foundational blocks of creating those kind of handshakes to co-deliver value that we had made it part of our shared goals,
Tim Crawford 9:09
right, but you also talk about how you’ve stepped into their shoes, it’s more than just a handshake in a relationship, you’re putting yourself in their perspective and understanding where they’re coming from,
Sangy Vatsa 9:21
that’s absolutely the case, and you know, as I said, it just takes that sincere effort on both sides, and we’ve had examples where the chief marketing officer of the company in a town hall, in my town hall, has presented the tech strategy, and I have presented the marketing strategy to our colleagues, and I think we both were able to do it reasonably well, just because we took the time to understand what important aspects. No,
Tim Crawford 9:46
that’s great, and it’s great to hear that that kind of collaborative effort between both it and those outside of it. But let’s maybe talk a little bit about it specifically, and some of the change. Changes that were required within your own organization. How did that come about, and how did what were some of the changes that you saw and kind of went through as you developed and then started to execute on this transformation journey within your own team?
Sangy Vatsa 10:16
Yeah, Tim, I would say I think one of the things we did right at the beginning and 16 2016 was to establish a guiding principle for the technology organization of the bank. A guiding principle are not sometimes seen as most flashy or modern things to do. We felt once we have some foundational things in place where everybody can rally behind the guiding principle, that could become a foundational block for the transformation that was to follow, so we laid that out in 2016 right before we undertook this digital transformation, and that guiding principle essentially focuses on delivering customer-centric products and services with speed and agility, and with embedded security and architecture at an optimal cost by developing and leveraging our talent ecosystem. So there are basically five components to this guiding principle: customer centricity, speed, and agility, security, and architecture as a built-in construct, not as a bold talk, that usually becomes very expensive. And then optimal cost, not least cost, and what you pay is what you get. And finally, leveraging your ecosystem, which is comprised of not just your employees, but your industry partners you work with the suppliers, you work with universities, you work with, so that was at the core of the transformation. And then during this time, you know, we launched a new methodology called Alex, that’s Agile Lean Execution, what it stands for. Okay, and this new technology delivery methodology essentially codifies the two and a box principle that I talked about earlier, and it kind of cultivates digital dexterity across product teams. So, Alex is comprised of four industry best practices in our design thinking that essentially drive empathy, lean startup, the number two, that essentially drive appropriate modularity, number three, agile, which drives the speed and agility practices across the product and services teams, and finally, DevSecOps, which drives required level of accountability. So that was the construct that we kind of launched. So the Alex is our now current digital delivery methodology at the bank, and then the new digital technology introductions and the Alex methodology that we launched drove this fast fail learn fast approach, much like any startup, and we kind of talk about it’s okay to fail fast, learn fast, and don’t repeat the same issue. And teams began delivering proof of concepts and minimal viable products instead of full product product rollouts, so that they could learn swiftly, address critical issues upfront, and kind of provide value quickly. This was to me a significant change moment for the organization. Both the technology and the business teams kind of had to learn to deliver products in smaller chunks, challenge the processes that may have become status quo, test those ideas frequently, and then go back to the drawing board if needed. And then I would maybe highlight one of the other aspects of, you know, what had to be done in the technology team that I felt was very transformational for the bank was this major effort we undertook from Comedica’s cloud first strategy, and you know, being a financial services institution, you might have to be well prepared for undertaking any of these opportunities. So, migrating the majority of our applications and services to the cloud disrupted actually traditional ways of thinking and transform the way we kind of viewed applications and infrastructure, we’ve been recognized in the industry for building a unique, scalable cloud computing model. In the past, we were limited by each application’s architecture, and it was challenging to manage, scale, and integrate with other applications. Through moving to secure and integrated cloud computing, we have now improved our speed, agility, and efficiency. So, overall, this has been the bank’s much-needed capability to enable agility and on-demand scalability, and it has given us a way and a mechanism and a platform to deploy a number of business value capabilities in a very short timeframe. In addition to moving number of our applications to the cloud,
Tim Crawford 14:00
and that I want to maybe double click on that a little bit, because I think this is this is an area that some might say, okay, wait a second, hold on, you’re talking about a bank here, you’re talking about a heavily regulated, heavily compliant required industry, how in the heck did you get around the regulators and the requirements and still ensure you know the highest level of cybersecurity, while still bringing in things like agile, things like cloud into the mix. I mean, it’s great to hear that you’ve been able to do it. I think it’d be important to maybe expose as much as you can. I obviously don’t want you to expose things that are privileged, but maybe share with the audience a little bit about how you were able to do this, because I think that is just absolutely fascinating.
Sangy Vatsa 14:50
Yeah, you know what, so we did not have to go around any of the key stakeholders. This goes back to the foundational aspects of our collaborative approach I mentioned about. Stepping into the shoes of various stakeholders and understanding what their strategic needs are, or making security and architecture as a core part of your guiding principle, so it has to be embedded, not as a bolt-on, and those two aspects really helped us out. So, if I think about from the standpoint of the regulators, before we went to the C-suite, or before we went to the board, we actually reviewed our approach of how do we build a secure cloud platform with the regulators, and we really built a strong understanding on both sides. We understood what the needs were, we under, we were able to articulate how we will ensure that the offering that people put forward will provide a better security than what we had in place, and then also ensuring that the security at every level of that architecture was well articulated and understood by the both the engineers and the people who would be deploying and operating those in production. So we did put an extra layer of security in this architecture. We were also able to articulate the security offerings from the public cloud providers, and how collectively it became a very strong construct. Now, once that happened, we also classified all our tech assets that were to migrate to the cloud in three categories of high, medium, and low risk, and then we actually did the disposition of every asset against that security prescription of high, medium, and low risk relatively easy for us. So it was a lot of hard work that when we went from zero apps to 100 apps in the cloud in about nine months, that was basically kind of a foundational block that we had the right level of classification and disposition and the right level of alignment with stakeholders in order to get to that outcome.
Tim Crawford 16:38
Wow, and one of the things that that I’m really kind of getting from this is when you talked earlier about the ecosystem and thinking about all of the different players in that ecosystem, it sounds like to you regulators are part of that ecosystem,
Sangy Vatsa 16:54
yeah, but they’re very important part of the ecosystem, and you know they are there to really do the right things for the for the environment, you know, once we understand what their drivers are, we can not only satisfy the drivers, we can also anticipate what are some of their emerging needs. Now, the design for those needs early on can then be very helpful.
Tim Crawford 17:12
That’s great, and I love the way that that you’re kind of bringing things together, and maybe I’ve just had a little bit of the benefit of some past conversations that you and I have had to understand this in more depth, but I love the way that you’ve approached this problem, because it is a problem that that everyone is trying to grapple with, but struggling in different kinds of ways. Is we kind of maybe shift gears a little bit into what you’ve learned through this process, you’ve, you’re now a few years into the process, there must have been some things that you’ve picked up along the way that you look back on and go, you know, if I were to do this all over again, this is what I would do differently, or here’s something that I’ve learned from this experience. What are some of those nuggets, some of those takeaways that you’ve picked up along the way?
Sangy Vatsa 17:58
Tim, I would say, in a while we feel very good about a number of transformational outcomes, I mean, if I think about, you know, launching 40 new digital technologies in a period of two and a half years, or from a technical standpoint, building that level of dexterity to be having these modern platforms for all aspects of what we do as a business, whether it’s for a core loan management business, customer relationship management, treasury management, fraud prevention, case management, all of these capabilities that our business relies on day in, day out, or really enabling real-time payments into our portfolio, or really transforming our contact centers, where some of the best in class AI automation has been put in place where our net promoter scores are rising significantly, and voice biometric capabilities are now becoming part of standard adoption model. You know, those things make us feel really good, but any change of this level is never easy, and they all these changes kind of teach many lessons, as you said, they drive new improvements, but they also teach us lessons, and I would say, while the two transformation principles that we followed, you know, excellence over perfection, and as I said, fast, fair, and learn fast, the fast pace of change that we went through, and that was needed to launch these capabilities, you know, based on the burning platform that we were facing, and was required to reduce our operational risk, it actually also caused fatigue and pockets of user experience issues, and I would say admittedly we could have been more sensitive to change management and the rollout of new approaches. The team, however, worked extremely hard collaboratively with various stakeholders, including technology suppliers, to undertake several improvements. Now these actions have been implemented in many cases with a long-term focus to sustain progress in the coming years, and with the I would say with proper planning, active use of the Twin Abox co-creation model, and regular communications, we aspire to continue to deliver on significant growth opportunities for the bank.
Tim Crawford 19:58
That’s great. So, as we kind of look forward here, you know, Tech Vision 2020 has been a key part of your strategy, and and strategy for Comerica Bank. Where are you today with that strategy, and what’s coming next?
Sangy Vatsa 20:13
Yeah, so Tech Vision 2020 being a tech strategy for the bank, which was established in 2016 and you know we had two key pillars of Tech Vigion 2021 was to strengthen the core and second was to transform our future, so while strengthening a core had key priorities such as high systems integrity, industrial strength, cyber security, competitive talent management, and transforming a future had some of the priorities, like enterprise scale, omni-channel architecture, secure cloud computing, and advanced analytics. So, while this strategy has enabled the bank’s digital transformation journey, we are further evolving with an eye on 2025 and there are three major factors we have considered as we develop our next evolution of the strategy. The first is elevated digital expectations. So, this is when you look at today’s customers and colleagues are expecting the same experience as they have with technology in their personal lives, things that they use day in day out, whether they’re commuting, they are doing other kind of digital bombers. Secondly, the cybersecurity threats and the changing aspect of cyber landscape requires us to stay ahead by continuously evolving cyber threat trends and increase data privacy and compliance regulations, and the third step is the emerging technologies and the consequential impact of these technologies on banking. Now we want to be ready to seize the opportunities that these new emerging technologies, like what’s happening with blockchain, what’s happening with AI and machine learning, what’s even starting to trend with quantum computing, and I will present and usher a new era of innovation at the time.
Tim Crawford 21:53
No, that’s great, and I think this represents a great case study of transformation, especially within a highly regulated industry over the past four years, going from 2016 to 2020 and then also what you’re looking for now going into 2025 As we kind of wrap on this episode, what excites you most from the role of the CIO, being a CIO, what excites you most as you kind of look at where you are today, and what’s coming down the path.
Sangy Vatsa 22:22
Yeah, I know what excites me is to be a core member of a company’s executive leadership team, and to be able to envision and deliver bold and big transformational changes, which are powered by technology and delivered in partnership with all the major stakeholders. You know, to me, technology and digital transformation are enabled by this role, and I’ve been fortunate to do so, and kind of strong partnership, and with strong support from my people, and I did want to kind of also add to that, is that in order to kind of realize our vision of becoming a fully digitally enabled, a kind of a data driven relationship bank, we are now introducing a third mode of our digital delivery. I’ve talked about two modes of strengthening the core and transforming the future. The third mode that we are introducing is called constructive disrupt. Now, this mode will allow us to look at ways to constructively disrupt and replace stale business models that we have in place with innovative models, and then reflecting on the Tech Vision 2020 performance, our kind of tri-modal pillars, these three modes that I talked about, and kind of the digital centricity of a new strategic goal of being digitally enabled and data driven. We’ve named the evolving technology strategy of the bank Digital 2025 and we plan to launch it in 2020
Tim Crawford 23:39
That’s great, Sangye. Thanks so much for taking part in the program today.
Sangy Vatsa 23:44
And thank you for your time, and wish you all the best.
Tim Crawford 23:50
For more information on the CIO in the No podcast series, visit us online at CIO itk.com or you can find us on iTunes, Google Play, and SoundCloud, don’t forget to subscribe, and thank you for listening, thank.
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