In our new series of CapConversations, we sit down with Capco leaders to explore their business vision, strategic priorities and wider industry insights. Our first interview is with Gary Teelucksingh, Partner and CEO of Capco Canada, who discusses issues including challenges and opportunities for Canadian financial services, hyper-personalization as a key customer focus, the importance of an entrepreneurial and diverse culture to continues business success, and balancing regulation and innovation in the Canadian market.
Gary, it’s been just over a year since you took over as CEO of Capco Canada. Do you have a sense that your mission has evolved over that period when it comes delivering transformational solutions and advisory services to your FS clients? Have your, and the business’, priorities shifted to any significant degree?
Our basic mission remains the same – strengthening both the bond between us and our clients and our ability to enable their success through trusted relationships. However, the way we achieve that mission has evolved. With COVID the world changed dramatically, our industry changed, our clients changed – and we changed.
We evolved our business to ensure we could deliver high-quality, value-added services without face-to-face contact. And that is actually really difficult. Our business is based on relationships and on trust – and the convention is that such intimacy and trust is built up through many, many in-person interactions. COVID posed the question: how we do evolve our business in terms of building a relationship, delivering a project, collaborating with our colleagues? So, in that sense it is how we deliver our mission that has really changed.
What do you see as the critical factor when it came to ‘holding the line’ these past couple of years?
Our ability to continue to deliver excellent outcomes for our clients came down to our people’s gumption, their can-do attitudes. We take huge pride in what we do, and it is on the back of that pride that we all muscled through.
We focused on improved processes, better forms of collaboration, and a higher acuity around communication in particular due to the loss of physical interactions.
All good organizations will say ‘our people are our business’ – but living up to that is a monumental task. At Capco our job is to hire and retain great people and deliver great work. And we’ve grown our Canadian business dramatically over the last year, by 50% actually. That's phenomenal but it's also been challenging, because we're doing that predominantly in a remote working environment, in the face of the Great Resignation and a world that is less happy and more frustrated. So our priorities have accordingly also shifted even more emphatically onto the retention and engagement of our people.
Financial services is a broad church, but what would you highlight as the three key challenges or opportunities within the Canadian industry as we emerge from the disruption and uncertainty of the past two years?
Our business in Canada has long been a leader in digitization and process automation, so while our clients initially struggled when COVID hit, they found it easier to embrace remote work and remote customers because they had already spent time moving forward on that journey. However, those organizations that never considered digitization and process automation as priorities were left in catch-up mode. And it doesn't matter how many dollars you have. “Here's a billion dollars, please help me automate faster”? Unfortunately we can’t dramatically shorten the necessary adoption timeline because it requires base level work and a certain maturity.
Coming out of COVID, institutions need to stay true and committed to that journey of improved client experience and more efficient delivery of services, in many instances enabled by technology. That's the priority because business has permanently changed. No organization, certainly in the financial sector, is going back to how it was before COVID. That said, the new normal isn't fully enabled yet, companies are to a degree still brute forcing solutions to get where they need to be.
In addition, employees’ expectations and satisfaction have changed so dramatically. Our clients have to rethink everything – office space and the number of seats, remote versus on-site working, the structure of the working week, the nature of collaboration, remuneration. A lot has to change to adapt to society's new, preferred choices around working. So businesses need to figure out a workforce plan. How will your employees want to work? How will you let them work? Where will you let them work? How will you give them the right tools? What are the rules of engagement for all of these things? We don't have those yet.
Looking beyond all that to our clients’ customers, there is the transference of wealth between the generations, specifically from the Baby Boomers to Gen X and Gen Y….
We've talked about that for 10 or 15 years at this point – but it is particularly relevant now because, as ways of working have changed, so have society's priorities changed. There is a recognition that different client experiences are needed – but post-COVID that now applies right across the age spectrum, not just for younger generations. The different generations’ needs and expectations are converging.
Where the older generation has traditionally wanted the regular in-person meeting, the handshake, to build a relationship, the 20-something generation could not care less. They just want a comprehensive online service that they can self-serve - it's all digital for them. The pandemic has seen that gulf eroded.
Banks need to be on the front edge of the curve and pick ecosystem partners early, so that going forward they can have a holistic approach to the customer. And as a customer, if my bank can offer equivalent service to other providers, I'm probably going to go with what I already know.
While Open Banking is great for consumers, it is perhaps not so great for banks. Their goal has always been to be integrated across the entire customer lifecycle, but Open Banking obviously allows other providers to insert themselves into parts of that relationship. There are clearly decisions for banks to make around strategy – for example, as part of the customer journey, do I want to be involved in their home buying decisions? If so, I need to select the right fintech partner in that space – because if I don't, they're just going to ask me for the customer data. I’ll have to provide it, and then they're going to be advising my client, independent of me.
Technology and regulatory imperatives have often proved to be uncomfortable bedfellows, with regulators playing catch up as innovation races ahead to create both new opportunities and new risks. The acceleration of cryptocurrencies into the mainstream is arguably one such example, burgeoning concerns around data privacy and security being another manifestation. To what degree does that friction/tension exist currently in the Canadian market?
Regulation and technology have undoubtedly created more complexity, but that also means more opportunity in the market – and as things evolve, smart organizations take advantage of that change. But any tension that does exist is more between the market imperative to innovate and the ability to regulate that innovation – technology just happens to be the tool or facilitator.
Canada's a relatively conservative, well-regulated financial market – some might say too regulated. Going back a decade or so, Canada came through the 2008 financial crisis pretty well, primarily because our capitalization requirements were stringent. But again, there are a lot of grey areas right now. How to regulate blockchain, what are the rules around crypto, where do those innovations sit within a bank’s own regulatory and risk infrastructure structure.
Looking specifically at crypto, will a major Canadian bank offer any form of crypto? Perhaps an account or wallet to hold stablecoins? Right now, the answer appears to be ‘hell no’, not least because its reputationally risky and also disintermediates them from foreign exchange.
Inevitably there will always be a lag when it comes to regulating new innovations, and we shouldn't criticize the regulators for that.
The challenge is that someone in the industry will always be looking for ways to get from A to B faster than the regulators can figure out how to catch up. To counter that, the Canadian Ontario Securities Commission has created a tech incubator and invited certain providers to play in that sandbox. They're doing their best to understand the evolution that's taking place, how new technologies work and from there be thoughtful about potential regulation and the necessary boundaries.
The threat of potential disruption from external or even as yet-unrecognized forces clearly remains a factor...
Certainly, I’ve no doubt our clients lie awake at night thinking about who might eat their lunch tomorrow. How can they offer better products and services to customers? How can they be more efficient and drive more margin while reducing their costs? That’s business-as-usual stuff. The art versus the science is what are they going to do if it is Google that arrives to eat their lunch?
They recognize the need for a data analytics strategy – but where do they stand if that data is being driven from platforms owned by Google or Microsoft? They want to put their data and services in the cloud, but maybe those cloud providers are now their competitors. As I mentioned, will Open Banking allow third-party providers to use their data to help their competitors?
Those are the real hard questions. How to figure out a strategy when you don't even know exactly who your competitors are going to be. Should you partner with potential threats? Compete more fiercely with them to box them out? Should you set higher barriers to entry? It’s a fascinating time.
An entrepreneurial, inclusive culture that champions diversity as the engine of creativity is central to Capco’s ethos. Financial institutions are sharpening their focus on talent acquisition and retention in today’s over-heated jobs market – a task further complicated by current inflationary/cost of living pressures and employees’ embrace of hybrid working– and are also looking to explore new and more impactful ways of working to enhance their offerings to customers. What insights might you share to help them navigate that journey?
Culture is the core of everything – but in the last couple of years culture’s been a difficult thing to demonstrate. Employees have to experience workplace culture, not just be told about it – its visceral. Some 50% of our people at Capco Canada joined during COVID – we had a townhall two weeks ago, hundreds of people showed up, and for half of them it was their very first time at such an event.
At the end of the day, my view is that business growth equals opportunity and career progression for our employees. You join for that opportunity, for the interesting work and to grow your career – but you stay for the culture. So it is key to understand what your culture actually is, and then to work hard at making it a more ‘lived’ experience. Ask yourself how will your people engage with your culture, what is their exposure to it, how do they experience it? Especially now when you don't see them – or they don't see each other – as often as before.
Every day, do you as an employee get to be yourself at work – absolutely, genuinely, truthfully, viscerally be yourself? That doesn't make you different, it makes you empowered, and our experience is that our clients embrace that quality and all the benefits that flow from it in terms of energy and creativity.
The biggest single obstacle often isn't tech, it is culture. There is an imperative to be open to change - but that doesn't mean there's a change culture in your organisation.