Follow the customer. That’s the driving sentiment behind WSFS Financial Corp.’s digital transformation initiative.
“We want to have a digital product offering that allows us to be very flexible, [so] when new products and services come along that our customers want, we can move quickly,” says WSFS Chairman and CEO Rodger Levenson. “We’re marrying it with the traditional community bank model of access to decision-making [and] local market knowledge.”
With the evolution of digital banking, technology now plays a preeminent role in serving the customer and creating a more efficient organization. This ranking seeks to understand which of our high-performing banks go beyond the basics. We looked at employee and board-level expertise, including the use of innovation labs and similar initiatives. We also explored how each bank deploys tech-forward solutions and works with innovative providers. Since the ranking derives from publicly available information, it tacitly awards banks that are more transparent about their technology initiatives.
Covid-19 accelerated the need for technology — both to serve customers and shift operations when the pandemic forced employees to work from home — making these banks’ proactive approach appear prescient and positioning them to handle a rapidly changing environment.
Hiring the right people for the right job is critical to these banks’ success, says Rick Childs, a partner at Crowe. And it’s the result of an iterative approach. “You have to think about technology in bite-sized chunks,” he says.
With its focus on digital transformation, WSFS ranks first. Its multi-year digital strategy focuses on enterprise-wide customer relationship management, advanced analytics, digital account opening and infrastructure upgrades. For customers, this has resulted in myWSFS, a mobile app that connects customers to a live banker, and WSFS IQ, which delivers interactive financial education, among other offerings.
Outside of retail banking, its WSFS Institutional Services division announced in January 2020 that it would use Speedboat, a cloud-based product offered by SDA Solutions, to streamline its tax lien business. A month later, it announced that the division would deploy blockchain technology developed by Intain to automate transactions.
WSFS boasts in-house expertise in digital banking and customer experience, and its recruiting efforts and internship program focus on bringing in developers, analysts and data scientists. In addition, six board members have a technology background.
“When we got started on this [journey], we had almost nobody focused on this in the company,” says Levenson. WSFS would bring in third parties for specific projects, but found over time that this was becoming less efficient as the bank had to essentially reinvent the wheel for each new initiative. “We realized for us to be as effective as we felt we needed to be, we needed to have some teams that were fully involved in this as a day-to-day job,” he adds. Strategic hires in the bank’s technology and operations group help support WSFS’ digital evolution.
Coming in a close second, Bank OZK’s internal expertise focuses on data and digital banking, and the board features two directors with a technology background.
OZK Labs serves as another source of expertise, with the unit’s leadership focused on customer experience, agile risk management, product delivery and software engineering. It built a custom application for the bank’s Paycheck Protection Program loans, and several technology applications have been developed or are in the works to address customer and employee needs.
“Technology may be on a par with asset quality as far as having [the] core ingredients to build for a successful future,” says Chairman and CEO George Gleason. OZK deploys a “buy and build strategy,” with a focus on differentiating through a strong customer experience.
“I think we’re going to see another massive consolidation [of banks] over the next 10 to 15 years,” predicts Gleason. “The banks that are going to survive and thrive are going to be banks that differentiate themselves in a positive way in regard to technology.”
In third place, Independent Bank Corp. has data scientists and analysts on staff; it has also used an artificial intelligence tool developed by Mediastruction to tailor online marketing campaigns. Its “Rockland Connects” online community allows customers to provide feedback, helping it identify where to invest in technology.
Meta Financial Group’s focus on payments requires an eye to innovation, powering it to a fourth-place finish. Its internal expertise focuses on payments, product delivery and data; the board includes a director with a technology background. Its venture capital arm, Meta Ventures, is headed by Jeremy Kuiper, who also oversees the innovation process at the bank. Meta launched a faster payments platform in 2019.
Finally, Horizon Bancorp has staff focused on data and digital lending, as well as a director with technology expertise. It launched online chat capabilities in 2020.
How They Ranked: Best Technology Strategy
|SCORE||NO. OF DIRECTORS
|RETURN ON ASSETS
|CATEGORY WINNER: WSFS Financial Corp.||1.25||6||1.30%|
|3||Independent Bank Corp.||3.00||–||1.52%|
|4||Meta Financial Group||3.25||1||1.63%|
|6||Hingham Institution for Savings||7.50||2||1.55%|
|7||Lakeland Financial Corp.||7.75||1||1.76%|
|8||Stock Yards Bancorp||8.50||–||1.90%|
|11||Community Bank System||10.67||–||1.53%|
|12||Eagle Bancorp Montana||11.00||1||1.38%|
|13||Southern Missouri Bancorp||11.33||–||1.17%|
|14||First Financial Bankshares||12.67||1||2.09%|
|15||Auburn National Bancorp.||13.00||–||1.16%|
|18||City Holding Co.||17.33||–||1.81%|
|19||The First Bancorp||17.67||1||1.32%|
|20||Greene County Bancorp||19.33||–||1.36%|
SOURCE: S&P Global Market Intelligence, bank websites, filings and other public information