Prior to this innovation, UKEF had been making good progress in refining and simplifying its processes for approving support for short-term deals and had reduced turnaround times by more than 30% in one year alone. However, the processes remained manual and duplicated many of the banks’ procedures, particularly ‘know your customer’ and credit due to the diligence process. The improvements were also not scalable. If UKEF wanted to serve an increased number of customers, it would need to recruit additional staff to perform these time-intensive processes with all of the costs that that would entail. To achieve any significant enhancement to capability a more fundamental innovation was needed.

The change to UKEF’s existing model of approving transactions was in itself a significant departure from the status quo and the uniqueness of the innovation was further bolstered by UKEF adopting external facing digital technology for the first time and introducing a digital workflow to enhance case management, case workflow, and customer relationship management in a way that integrated with its core banking and underwriting systems. The innovation was complex, multi-stranded and was implemented using agile project methodology that had hitherto not been used by UKEF.

In response to the global credit crisis in 2007-8, UKEF re-introduced its short-term product suite after a 20-year absence in order to provide support to smaller and medium-sized businesses that were missing in the private market. As a result of UKEF’s prolonged absence from this segment of the market, a number of its processes were geared to supporting the export of capital and semi-capital goods and related services. The very nature of these types of transactions meant that they often required considerable periods of gestation and were supported on a bespoke basis. They were relatively small in number but often very large in value. The provision of short-term products was the reverse, of lower value, but higher volumes.

As UKEF provided support to greater numbers of UK exporters year on year, it began to find itself constrained by its existing processes, technology, and operating model. If it wanted to achieve scale and provide a true ‘retail’ service it had to find a different way of doing business. Initial work to simplify processes and improve turnaround times delivered noticeable improvements, but also provided insight into what the barriers to scalability were. UKEF also looked at the operating models of export credit agencies in other countries to understand what worked in their circumstances. A small number of other export credit agencies had models that included some form of delegation or accreditation of banks. UKEF then developed that concept to identify how it might work within the UK banking context. A feasibility study was commissioned to fully explore options for bank delegations which recommended that UKEF pursue the widest possible form of bank delegation.

Around the same time, a number of other concepts were being developed and proven to address other issues that UKEF faced, namely, the absence of a digital means by which a bank or customer could submit an application, and the potential efficiencies that digitization could lend to mid and back-office functions. Digital companies were commissioned for their expertise in these areas to design workable proofs of concept. In line with the Government Digital Services’ standards for delivering customer serving digital projects, UKEF adopted an agile project methodology to develop minimum viable products and to further enhance these products iteratively.

Each of these three strands (bank delegation, a digital portal, and digital workflow) were initially developed as separate projects delivering distinct enhancements in capability. Given the level of mutual dependencies between projects, those delivering those projects worked closely together underneath an overarching program. Once minimum viable products have developed the projects were more closely integrated into one in order to maximize the impact of each strand and really focus on holistic customer experience.

This innovation required UKEF to work with existing partners (UK banks) to deliver something that improved the way they drew on UKEF’s guarantees, while also benefiting UK businesses and providing efficiencies and scalability for UKEF. Without the banks’ assent to the innovation, this fundamental change could not be achieved. Where UKEF’s assumptions met the hard reality of a bank’s expectations, policies, and requirements, it had to work quickly and collaboratively to reach a solution that pleased the user.

The collaboration was also essential in drawing in outside expertise and building capacity internally to continuously enhance the innovation. This required working with the UK’s Government Digital Service to make sure that best practice was applied to the design of the innovation. It also required working closely with digital specialists to understand what the best solutions were for providing a digital interface with the customer and a digitized workflow tool.

The innovation is being implemented with five of the UK’s major banks. It has been proven to work but it is yet too early to evaluate the benefits of the innovation.

When doing something new, ‘unknowns’ are always a challenge. There is usually a strong desire to map out and understand every single step that needs to be taken to successfully deliver innovation, but change itself creates new demands. The agile project methodology that UKEF adopted helped it to be as responsive as it could throughout the process. An example of which was that the financial and legal terminology that UKEF used in relation to the transactions that it supported did not always accord with that commonly used by partner banks.

This got in the way of accurate and efficient communication and sharing of information, particularly when you are looking to scale up volumes. If our desire was to make things easier for banks, we could not let language get in the way. This was a challenge outside of the main focus of technological and process solutions. It required UKEF and the banks to revisit legal agreements and agree on a common position for all parties.

To successfully push through the innovation of this scale, there needs to be a shared acceptance of the need for change, a commitment to the effort, resources and disruption involved and agreed expectations of the benefits for all parties. Leadership is required from the top of the organization to communicate the priority of the innovation and ensure it is thoroughly integrated into the organization’s plans and commitments.

While innovation, as a whole, addresses a unique issue that faced UKEF as an export credit agency and government department, this innovation may have wider applicability. It provides a model for providing government financial support or guarantees in partnership with banks, respecting the role of the private market while allowing the government to benefit from the extent of banks’ reach among a country’s citizens.

UKEF learned that it is vital to constantly speak to the end beneficiary of the innovation (in this case banks). UKEF discovered that all assumptions need to be validated very quickly otherwise they can disrupt the innovation. The main learning is that UKEF had to look at its business from a customer’s perspective. The customer is not interested in our processes or our organizational structures, they care about the length of time it takes to get a decision. This forced us to fundamentally look at our business on an end to end basis and make the customer journey the priority. Lastly, where there are complex and multiple moving parts and dependencies, it becomes essential to have a solid understanding of the benefits of the innovation to guide decision making. Good communication throughout is essential, both talking about the issues faced and listening to everyone involved.