FinTech Connects… with Stephen Scott, Chief Digital Officer, Avios

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Digital transformation is driving a generational paradigm shift within financial services. Within commercial banking and payments the race is on to adapt to consumer behaviour, and millennial demands for a strong User Experience.

A central part of this is consumer loyalty; finding that digital hook and getting your consumer sucked in.

A digital leader who has proved to be a true expert in achieving this is, Stephen Scott, Chief Digital Officer at Avios. This is the global currency rewards programme run and owned by International Airlines Group. They have been driving innovation across the board.

We hear from Stephen on his opinions on digital transformation, GAFA and how they continue to innovate.


 Firstly can you tell us a little bit about what Avios do?

 Avios is the centre of excellence for loyalty within International Airlines Group. (IAG). We design loyalty programmes and run the loyalty currency for the British Airways Executive Club, Iberia Plus, Aer Lingus' AerClub and Vueling Club, as well as working with multiple partners across the Financial Services, Retail and Travel sectors to issue Avios. We're a data and tech company with our primary assets being a digital currency, loyalty software solutions and data. Hence we're championing a digital transformation, introducing product-centred ways of working and putting a much greater emphasis on working with start-ups to build relevant products for our customers.


You have been championing digital transformation; what have you as an organisation been doing in this space?

Most companies have been through many eras of digital transformation in recent years and Avios is no different. But what started as product innovation, labs and accelerators for many corporates has matured a lot over the last five years. At Avios we decided that digital wasn't just a transformation programme in the corner, it was a new target operating model for our business. We literally re-thought everything. From our funding processes, our ways of working and behaviours, our culture, our procurement of services, our technology and most importantly our decision making processes. This has allowed us to create a much faster speed to market and a higher level of empowerment for our teams to deliver. As a result we've moved our delivery velocity for customer change from about 100 changes per year to several thousand and we believe that there is still a lot more to come.


How do you see data changing the way financial institutions operate?

Data is already changing the way all companies create value for their customers - real-time transaction notifications, automatic spending insights, relevant merchant offers and recommendations to name a few.  However I think the real future of data is about customers’ understanding of the value of their data, shifting the paradigm so that customers choose and control which organisations they give their data to and for what purposes. Financial institutions have a certain level of trust that they can build on with consumers in order to play a part in that. If they can demonstrate the value they create with this, it could be a powerful competitive advantage.


What more can be done to make open banking a success?

I think the biggest challenge is the building of trust for emerging brands. We know that despite strong customer experiences, it is still a huge investment challenge to acquire customers and encourage a switch for emerging companies. Those building on top of open banking need to do more to instil trust through their advertising and product credentials.  We see a lot of ads on the experience new entrants offer for example but, in my view, not enough on why they're trust worthy and why I am protected as a consumer of their products.


How else do you see your UX evolving?

We will continue to provide new ways in which customers can collect and spend Avios that are relevant to them. The expectations of our customers get higher each year and we will work hard to continue to offer experiences that match their expectations.

Our British Airways Executive Club rewards app launched last year is a great example of this. It makes collecting and spending Avios day to day much easier than before and we continue to create new features in line with customer feedback.


Over the past few years,  Avios have been continually looking to build partnerships with innovative fintechs, what can you tell us about the work you have done with Monese?

Avios’s parent company IAG made a series B investment in Monese in Q3 last year due to its strategic alignment with Avios. As a result, Monese and Avios have both been able to allocate resources to build products together that help customers make the best use of their money and reward currency in one place. We are continually evolving those products based on customer feedback so that they can collect and spend Avios inside their banking app in simple, relevant ways.


Financial Institution’s seem to be taking a build, buy or partner model to fintech – where do you think they should be focusing?

This is a model that institutions have in many parts of their business strategy and each method has advantages and disadvantages. The most important thing to establish is which one is best for the problem or use case that you are trying to solve. If there’s nothing in market that does what you need, and that need is core to your future competitive advantage, you may consider build. If your primary goal is speed to market and the tech already exists, buy or partner are both great options. 


What do you think the role of the tech giants (GAFA) will be in finance?

The tech giants already play a large role in finance given their customer base and customer financial data that they hold. 

We're already seeing the GAFA move into this space. Apple is venturing into credit cards and have been in payments for some time. Facebook is attempting to create new global currency and Amazon is already stretched far into the payment space to fulfil the wider needs of its global customers in retail. This has the potential to compete with the larger institutional banking brands and will definitely change the competitive landscape over time.


Which location leads in innovation; are you looking at London or further afield?

I think London is a buoyant and growing Fintech hub and we certainly look there for innovation. However, we don't limit our searches only to London. We look globally at where venture capital money is going, and how that relates to our areas of interest. That leads us to scout for companies in many markets including the US, Israel and many parts of Europe and Asia.


Register for FinTech Connect on 3–4 December at ExCeL, London.