A guide to build and leverage experimentation culture inside core bank sectors

Visagio's methodology of growth and innovation

Visagio's approach to innovation and growth emphasises a structured cycle of experimentation applied to both incremental and disruptive ideas: experiments with existing data and innovative ones with new data sources. The core of this approach is three pillars: governance, people development, and technological advancement.

Key Components

Experimentation Cycle

• Guidelines and Levers: Establish guidelines and identify key drivers to ensure experiments are aligned with strategic goals.
  
• Ideation, Pipeline and Prioritisation: Generating new ideas through dynamic and engaging activities, building a structured funnel for ideas to be evaluated and prioritised, and using the ICE Score (Impact, Confidence, Effort) to prioritise initiatives.
  
• Experimentation: Implementing and testing ideas in controlled environments.
• ‍Analysis: Evaluating results and iterating based on data.

Pillars

• Governance
  
  • Ensure strong governance with a clear framework to support dynamic operations and alignment towards results.
    
  • Utilise agile methodologies, including regular sprints and meetings to maintain progress and address any impediments.
    
  • Incorporate stakeholder feedback and ensure continuous improvement.
    
    
• People Development
  
  • Build a multidisciplinary team with strong technical capabilities and continuous training.
    
  • Promote a culture of collaboration and knowledge sharing within the team.
    
  • Develop leadership through hands-on experience and structured training programs.
    
    
• Technology
  
  • Develop tools to automate the tracking of results and ensure consistency across experiments.
    
  • Implement dashboards for real-time monitoring and analysis of experiments.
  • Ensure robust data management practices to support informed decision-making.

Proven Success

Visagio's methodology has been successfully implemented in various core banking areas in Brazil, showcasing significant financial results:

Case Study: Credit and Collections Lab

The application of this methodology in a medium-sized financial institution in Brazil resulted not only in clear and measurable financial benefits but also in a mindset change within both the credit and collections divisions. This highlighted the necessity of applying the correct procedures when analysing and executing A/B experiments (split testing consisted of two randomised groups, test and control) in order to guarantee accurate takeaways, while also showing the benefit of building a team that can become a reference in terms of best practices and innovation in experiment conduction.

• Results:
  
  • AUD 0.9 MM/month in collections improvement within 12 months.
  • AUD 1.9 MM/month in new credit production within 8 months.
  • AUD 0.7 MM/month in granted credit limits within 2 months.
• Approach:
  
  • Agile and multidisciplinary teams focused on generating insights through structured experimentation.
  • A data-driven culture ensuring robust experimentation pipelines supported by analytics and data models.
  • Incremental and disruptive innovation through new policies and ecosystem partnerships.
  • Development of automated tools for management and scalability of experiments.
  • Strong governance to prioritise, execute, and monitor tests with an internal training program.

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Conclusion

Incorporating an experimentation culture within core banking sectors is essential for staying competitive and responsive to market changes. This methodology provides an illustrative framework for implementing such a culture, ensuring that banks can systematically explore new ideas, validate their potential, and scale successful innovations. By focusing on governance, people development, and technological advancement, banks can create a resilient and adaptable organisation poised for long-term growth and success.

Would you like to build and leverage an experimentation culture inside your organisation? Get in touch at contact@visagio.com.

References
Building a culture of experimentation

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About the authors

Matheus Sierra is a Visagio consultant with experience in Banking Credit Risk Management and Data Analysis. He comes from a background in Mechanical Engineering, having studied at the University of Campinas, Brazil. He has worked on various projects in the Brazilian banking industry, one of them being the implementation of a Credit Innovation team in a medium-sized financial institution.