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How NS&I Transformed its Digital Banking Customer Experience

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NelsonHall recently hosted a webinar in which U.K.’s National Savings and Investments (NS&I) discussed how it has transformed its customer experience and operations delivery, and in so doing increased the value of assets managed by 245% and annual contact volumes by 660% while reducing delivery staff by 76% and cost of operations, calculated on a per assets under management basis, by 24 bps.

NS&I’s Mark Keene, who manages the operation’s outsourcing relationship with Atos, described four key initiatives which have enabled it to transform its delivery into a very low-cost digital business with rapidly growing revenues.

NS&I’s business model is a self-funding process of reinvention where operational savings generated from digitizing its operations allows NS&I to generate additional revenue streams from new channels, offerings, or customer demographics. The strategy was implemented using four key initiatives:

  • Business reinvention: modernize the platform and business model to shift distribution to digital channels 
  • Customer experience: improve CX by implementing channel interfaces, which were created using design thinking to improve delivery of CRM services
  • Operational Excellence: change supporting operations infrastructure from physical to digital to takeout ~70% of delivery costs
  • Trust and compliance: mitigate cybercrime and data loss risks inherent in the new digital infrastructure.

Each of these initiatives required close coordination with Atos. Key components of each initiative are covered below.

Business reinvention

Business reinvention consisted of two components:

  • Platform modernization
  • Ability to pursue B2B business with other government agencies.

Platform modernization delivered functionality including:

  • Transfer to a new operating platform of ~1Bn Premium Bond records
  • Consolidation and virtualization of the IT infrastructure
  • Retiring of legacy infrastructure and applications
  • Implementation of a training and competence framework
  • Implementation of a new evaluation tool to drive improved call center operator performance and gather real time feedback from NS&I customers
  • Automation of ‘Evidence of Identity’ checking regime for initial sales
  • Technology to support the shift to online and telephone channels for customers to manage their NS&I products.

The new banking platform made it faster to develop and bring new offerings to market, and remove offerings when sales targets are reached.

B2B business with other government agencies has been pursued with three agencies delivering payments services. In 2014, NS&I and Atos created NS&I GPS (Government Payment Services) to deliver payment services. The offering reduces NS&I’s overhead costs, and at the same time it reduces the cost of payments for the other agencies. Currently there are contracts with the Ministry of Justice, the Home Office, HMRC, and the Department for Education.

Customer experience

Prior to the customer experience initiative, NS&I was a paper-based institution. NS&I increased channel access and captured CX to improve overall customer satisfaction. To implement these changes, NS&I set up a CX directorate, which coordinates teams including: 

  • Customer Insight Team: to generate an understanding of customer requirements and current performance, and move from a product-centric view to a customer-centric view
  • Digital Engagement Team: to build a CX lab based in Glasgow for clients and NS&I to shape, prototype and test business concepts
  • Customer Communications Team: to change contact management culture at NS&I to improve CX and ensure deployment of a mobile optimized website and apps, web chat and co-browsing that will support customers.

NS&I now sells 100% of its offerings direct to customer via digital channels. It offers customers an online experience that has been designed and tested with its customer base, with 3.7m customers registered to use online services.  

Operational Excellence

Operational excellence consists of two components:

  • Workforce management: reduction of operational headcount from 4.2k to 1.2k in a heavily unionized environment, without the need for any compulsory redundancies
  • Real estate consolidation: replaced the entire operational estate portfolio with economically modern real estate, including highly efficient buildings with low carbon footprint and inbuilt sustainability. Reduced the legacy footprint of 1.2m sq. ft. by ~85%. Released £13m of real estate capital receipts. Reduced real estate running costs by 50%.

Funds released have been reinvested into the three other NS&I initiatives discussed here.

Trust and compliance

The move to virtual operations delivery and digital channel sales only means that NS&I is more vulnerable to cyberattack. Atos upgraded the core banking platform to mitigate existing and emerging vulnerabilities as security threats become more sophisticated. To align incentives between vendor and client, NS&I contracted with Atos for them to ensure compliance with all current and future FCA regulations. Atos carries the risk for all losses associated with fraud, error or data loss.


Growing a business is tough. Growing a business while reducing costs and increasing profits is even tougher. NS&I has succeeded in accomplishing this goal by realistically assessing its capabilities and strengths, then partnering to access capabilities and disciplines which it did not have internally. Disciplined partnering has led to a long-term journey which has built strong competitive differentiation of offerings, customer experience, and cost structure.

The build-up of differentiated capabilities and brand promise over a long period of time creates proprietary IP and customer goodwill which is very hard for a competitor to challenge over the long term and impossible to challenge in the short run. To date, NS&I has relied on government sponsored investment products to create its own differentiation. By changing its delivery to reduce cost and increase channel offerings, NS&I is creating a new set of differentiators. Established competitors will find it difficult to challenge the new cost structure, and Fintech start-ups will find it difficult to challenge the brand promise in any reasonable timeframe. While any such competitor tries to make such a challenge, NS&I will continue work on its operations roadmap development with Atos to build additional capabilities. Over the next three years, NS&I will be creating:

  • Offerings for mass market customers, which require even lower cost operational delivery
  • B2B digital engagement offerings for its government clients, which can eventually be productized for sale to private sector B2B clients.

Critical to NS&I’s ability to adapt to the changing marketplace is the ability to consider and experiment with new technologies. NS&I and Atos are currently exploring the possibilities of blockchain and encryption technologies, artificial intelligence, platforms, prescriptive analytics, and accessing wider innovation through open API connectivity. We will update you on the results of these initiatives as they are known. 


NelsonHall runs regular webinars for buy-side sourcing practitioners. To find out more, contact Vicki Jenkins.

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