A Costly Problem Facing Banks

Bill pay is a central tool in digital banking suites — but most customers aren’t actively using it.

It’s counterintuitive: Banks play a central role in our financial lives, yet most consumers opt to pay billers directly, according to “How Americans Pay Their Bills: Sizing Bill Pay Channels and Methods,” a survey conducted by Aite Group. The online survey of more than 3,000 U.S. consumers was commissioned by the bill-pay platform BillGO.

Almost 60% of bills are paid online, according to the survey, which finds that the percentage of online bill payments paid directly via a biller’s website — already accounting for the vast majority — increased by 14 points since 2010. In that same time period, banks’ share declined by 16 points as third-party entrants entered the space.

The result is chaos for consumers seeking to pay their bills on time and a missed opportunity for their banks.

[For] many financial institutions, bill pay has been a fairly strategic component of the consumer relationship,” says David Albertazzi, Aite’s research director in the retail banking and payments practice. Along with automated loan payments and direct deposits, bill pay is viewed as a core element of the primary financial relationship.

There’s also the real cost associated with this problem: One bank recently shared with Bank Director that it built a bot just to deregister inactive bill-pay users sitting on its core system.

Bank Director’s 2020 Technology Survey finds that improving the customer experience is a top technology objective. Albertazzi says that bill pay should be part of that strategic consideration — and the experience needs to improve. Dramatically.

“The actual model and the experience have not changed for many years,” he says. “Today, it’s pretty prone to friction.” Payees must be added manually by the customer, and there’s a risk of mis-keying that information. Customers can’t choose how to pay, beyond their primary checking account. They aren’t notified by the bank when the bill is due. The payments lack information and context, and they don’t occur in real time.

These barriers limit the experience, driving more than three-quarters of the Americans who pay bills online to just go directly to their biller’s website.

Financial institutions need to shift from a transactional to a customer-centric mindset, says Albertazzi. “Once financial institutions do that, then there’s a great opportunity to recapture market share,” he says.

Banks should also consider how they can change customer behavior. Just a third of bills are scheduled to be paid on a recurring basis, according to survey respondents, which points to another gap where banks lose a bill-pay user, according to Albertazzi. Encouraging customers to enroll in automatic payments means they’re more likely to keep using their bank’s bill-pay capabilities.

Most customers trust their bank, but poor experiences have driven consumers to a decentralized model that benefits no one. With the massive adoption of digital channels that accompanied Covid-19, banks have a chance to change consumer behaviors.

“Providing that convenience to the consumer, the transparency in the process and addressing efficiencies to the entire consumer bill-pay experience will help drive change in consumer bill payment behavior over time,” says Albertazzi.

Eliminate Customer Friction to Unlock Your Bank’s Growth

Why don’t your target customers want to join your bank? Because they’re not impressed.

Banks often sabotage their own attempts at success through their siloed, disjointed, out-of-touch and unimpressive approaches to doing business that leave small-to-medium businesses, private wealth clients, upwardly mobile millennials and even commercial customers underwhelmed by their service delivery.

Eliminating customer friction must be your guiding policy
For 10 years, the rallying cry of the C-Suite has been “invest in technology to stay relevant.” The next 10 years must be defined by a singular, focused, and undeviating devotion to eliminating the friction of doing business with your institution.

Fixing customer friction will be challenging and expensive, but it will also offer the best return for your shareholders. Your bank must organize teams around this mission. Executives need to evaluate resource and budget requests against a simple criterion: How much friction will this reduce, compared to the cost of funding it? Every budget request should be accompanied by a detailed user story, a list of friction points, and a proposed solution that describes the customer experience. Every touchpoint is an opportunity to reinforce your brand as customer-friendly or customer-hostile. Your bank should move quickly through these three steps:

  1. Get aligned. Your bank needs support from your board, your C-suite and even your investors to pivot to this focus. Once you have the buy-in and mission statements crafted, it’s time to designate the priority projects.
  2. “Shovel-ready” projects come first. Rescore projects that were previously denied funding or resources because they were too difficult to execute or didn’t cross a financial hurdle on a simple 2×2 matrix that evaluates improvement in customer experience and reduced friction vs. cost and complexity to implement. The projects in the top-right corner should be your initial list of funded initiatives.
  3. Deliver quick wins and results that measurably drive customer engagement. This will define success for the next 10 years. Re-engineer how you extend customer offers and execute pricing for standard and relationship clients. Your investment in tech will pay off if you accelerate this function.

For a fast return on investment, examine how your bank prices on base versus relationship status and rewards customer behaviors. Segmenting customers into single-service households, small to medium-size businesses, commercial, or mass-market and tying rewards or pricing adjustments to their categories can mean the difference between retaining or losing target customers. One-size-fits-all pricing, or even pricing by geography, will leave customers feeling like they do today: you don’t understand them or price according to their life stage or needs.

Aim for high-frequency iterations so you can test and learn everything before you scale it. Imagine being able to execute 100 or more micro-campaigns and evergreen trigger-based offers annually, with multivariant testing. Drill down to specific customer personas, identify specific trigger events, and act on intelligence that demonstrates to your customers that your bank understands them.

Get in the habit of defining a user story, designing a process and executing an offer or pricing schema in a sprint. I was astounded how quickly banks moved on preparing their infrastructure to administer Paycheck Protection Program loans. Imagine being able to consistently move at that speed — without the associated late nights and headaches.

Lastly, installing an agile middleware layer will unshackle your bank from the months-long cycles required to code and test customer offers and fulfillment. High-speed, cloud-based offer management that crosses business lines and delivers omni-channel offer redemption will be a game changer for your institution.

Installing a high-speed offer and pricing engine may seem like science fiction for your bank, but it’s not. It will require investments of time and money, coordinated efforts and lots of caffeine. But the results will allow your financial institution to prove success, build a model and inspire your teams to get serious about bulldozing customer friction.

The financial rewards of executing better offers, engaging more customers and delivering relevant, optimized pricing will give your bank the financial resources to remain independent while your competitors shop for merger partners.

Exploring Customer Service in the Pandemic Age

Banks across the country are grappling with the right approach to branch banking as the Covid-19 pandemic lingers.

Management concerns surrounding logistics and safety must give way to longer-term considerations aimed squarely at the bottom line. Executives need to contemplate the future of their branch operations and  business model, incorporating the guidance that large-scale pandemics may persist in some shape or form in the future. Read on to explore key considerations relating to the long-term implication of pandemics on customer service delivery.

Will customers ever come back into our branches? How will that impact our bank?
Branch visits have irrevocably changed. A recent study asked consumers to rank their preference of seven different banking channels, before, during and post-pandemic. Six months after the start of the pandemic, branch banking has settled into sixth place. The study predicts “a rapid decrease in the importance of the physical branch as customers become more habituated to the use of digital, which is a behavior that will linger long term.”

Jimmy Ton, senior vice president and director of digital channels at Irvine, California-based First Foundation Bank, agrees. “For those who adopted digital services during this time, they’ll probably stick with them. It takes 60 days to form a habit and people have been reconditioned during the pandemic. There’s no reason to believe they will abandon these services,” said Ton.

Novantas highlights another concern. “The branch network’s competitive advantage for sales has been eliminated overnight, possibly forever. Although sales were already shifting away from branches, they will now need to be even more digital.”

Banks must prepare for a permanent, significant reduction of branch visits. They should discuss this impact on their business models and what changes, internally and customer-facing, will need to occur.

Highly personalized service is our hallmark. How can we possibly digitize that?
Many banks have long leveraged high-touch customer service as a differentiator when competing with national banks. This was often delivered through branch networks and sales teams — until now.

Bankers have witnessed pandemic-induced migration to digital channels. But this is no time to celebrate;  J. D. Power shows overall satisfaction has declined as customers transition from branch to digital channels. That’s because banks have so far been unable to replicate the personalized nature of in-branch experiences digitally.

But it can be done.

Think of it this way: branch staff can glance at a screen filled with information about the customer sitting in front of them to personalize the conversation. That same data can be used to craft a personalized conversation, delivered via email or text message instead. Both methods communicate to the customer that you know who they are, and can offer ways to help them.

Digital engagement platforms offering deep personalization delivered via individualized websites, text messages, video and online chats exist today. They deliver a positive, digital experience with minimal effort, even for data-challenged banks.

A significant chunk of interactions can move to digital. A great parallel is what we saw happen with telehealth, moving routine physical in-person appointments to virtual ones,” said John Philpott, a partner at FINTOP Capital. “It’s a great example of how professional conversations can be digital; banks can absolutely do the same.”

Banks should plan to shift all or a significant portion of sales and service delivery away from their branch networks and to digital engagement and sales platforms that are ideally powered by insightful data to hyper-personalize the experience.

Strategically speaking, what else should we consider?
With branch-based account opening limited and most banks flush with cash, the pressure for new deposits has lessened. Now is an opportune time to focus on the existing customer base to minimize attrition and boost profitability of those relationships.

Ted Brown, CEO of Digital Onboarding, founded the company based on the idea that opening a new account does not mean you’ve established a relationship.

“[The ] number of new checking accounts is the wrong metric to obsess over,” Brown said. “Are your customers fully utilizing the products and services they’ve signed up for? Are they turning to your bank to satisfy additional needs? Starting with Day One, successful onboarding — and continuous engagement thereafter — increases product usage, cross-sell success and ultimately drives profits.”

Zeroing in on customer engagement and retention, instead of new customer growth, may be a smart, strategic and profitable move in the current environment. Responsible bank leadership must contemplate what changes and investments they will need to make to stay relevant with customers post-COVID 19.

Three Steps to Mastering Digital Connection

Before the coronavirus crisis, I heard bank leaders talk about “becoming digital,” but less than 15% considered themselves digital transformation leaders.

The pandemic has pushed banks to close the digital experience gap. Executives must take a hard look at what their customers expect and what digital tools (and products) they need to weather this crisis.

Digital transformation can’t happen without mastering the art of digital connection, which requires both technology and authentic human connection. To do this, banks must harness the power of data, technology, and their people to create customers for life. Here are three steps to help your bank master the art of digital connection.

Maximize Customers Data to Transform the Experience
If a customer walked into a branch for a typical transaction, the teller would have immediate visibility into their entire relationship and recent interactions — and would be empowered to recommend additional, relevant bank products or services. They would feel known and well-served by your teller.

Your digital infrastructure should provide the same humanized experience through email, customer service and other interactions with your bank. But unorganized, siloed data causes problems and impedes creating this experience. To maximize your customers’ data, you’ll need to:

  • Consolidate your view of each customer.
  • Ensure that teams have access to a high-level view of customer data and activity, from marketing to customer service.
  • Group them by segments in order to deliver relevant information about products and services. This step requires a solid understanding of your customer, their financial needs and their goals.

Invest in Technology That Reaches Customers Today
To inform, educate and engage your customers during this time of transition, you need sophisticated, best-in-class banking technology. Many banks have already come to this conclusion and are looking for help modernizing their banking experience.

A key component in meeting your customers where they are is quite literal. While some of your customers are well-versed in online banking, others have exclusively used their branch for their financial needs. The information these two audiences will need during this transition will look different, based on their previous interactions. Compared to customers who are already familiar with digital banking, those who have never done it before will need more specific, useful instructions to help them navigate their financial options and a clear pathway to 1-on-1 assistance. This kind of segmentation requires modern marketing technology that works in tandem with banking and lending tools.

Amplify Human Connections to Build Trust
Many banks have trouble letting go of the branch experience; customers have had the same reservations. In an Accenture survey of financial services, 59% of customers said it was important to have a real person available to give in-person advice about more complex products.

Now that going into a branch is not an option, your bank must find a way to use technology to amplify the human connections between your customers and staff. Especially now, sending meaningful, humanized communications will position your bank as a trusted financial partner. To transform your digital experience, and keep people at the center of every interaction, you must:

  • Personalize your messages — beyond just putting a customer’s name in the salutation. Data allows emails to be very specific to segments or even individuals. Don’t send out generic emails that contain irrelevant product offers.
  • Humanize your customer experience. Communicate that you know who you’re talking to each time a customer picks up the phone or contacts your help line.
  • Support a seamless omnichannel experience. Provide customers with clear avenues to get advice from your staff, whether that’s by email, phone or text.

Investment in innovation comes from the top down. Your bank must buy into this opportunity to transform your customer experience from leadership to all lines of your business. The opportunity is here now; this shift toward digital interactions is here to stay.

There’s no longer a question of whether a fully digital banking experience is necessary. Banks must leverage modern technology and the human connections their customers know them for to improve their overall customer experience. Excellent customer experience comes from delivering value at every touchpoint. This is the new bar all banks must meet.

Coronavirus Ushers Banks Into New Digital Banking Era

The Covid-19 pandemic has forced dramatic changes in the U.S. economy at a breakneck speed that seemed impossible only a few short months ago.

The banking industry has risen to the challenge, managing more than a million applications for the Small Business Administration’s Paycheck Protection Program, modifying countless loan terms, deferring payments and redesigning the customer experience to minimize in-branch foot traffic — all while shifting a significant portion of operations to employees’ home offices.   

We are in uncharted territory. The business decisions your bank is making now impact your institution’s ability to meet customers where they are today, but also where they expect you to be in the future. The digital bridge you build for online account opening can help take you there.

Even before most of us learned the term “coronavirus,” few banks would have disagreed with the need to automate digital account opening and invest in systems to support the online customer experience. Your institution may have already identified this as a strategic objective for 2020. And even if you already offer the service, shutdowns and closures stemming from Covid-19 may have highlighted friction in the account opening experience that either previously lacked visibility or was considered acceptable for the limited number of customers who took advantage of it. With customers now primarily directed toward a digital channel, you should reconsider the metrics used to define a satisfactory user experience.

The right channel. Online account opening may have been one of several customer channels your bank offered, but it may not have been marketed as the primary or best channel — especially when compared to the high-touch experience of in-person banking. It’s become clear, though, that a digital model that complements, and works cohesively with, a branch model is necessary to meet customers where they are. The steps you take to cultivate online account opening as the right channel for your bank should also establish the hallmarks of a preferred user experience.

An end-to-end strategy. Do your customers need to visit a branch or make a phone call to complete application paperwork? Does your solution provide for safe digital identity verification? Does it support electronic signing? Are your account opening documents optimized for viewing on mobile devices? An online account opening strategy that does not consider these questions will likely reduce efficiency, resulting in a poor user experience that may cause customers to abandon the account opening process before completing it.

Continuing the relationship. Online service must be full service and seamlessly dovetail with your in-person customer model. Offering an online account opening experience that then requires a phone call or a branch trip to manage name or address changes is the sort of partial digital transformation that unnecessarily complicates customer service. Online account maintenance must have the option to be fully driven by customers as an embedded component of your online account experience. Fully embracing a well-conceived online strategy will include opportunities for marketing and cross-selling as part of the digital maintenance experience. If your bank cannot fully service customer needs remotely, they may seek institutions that better address their banking usability preferences.

Continuing the investment. Investment priorities for your organization have undoubtedly been revisited two, potentially three, times in the last few months. Use these opportunities to reevaluate your digital delivery model and the technology that supports it. Technology that speeds up identity verification processes and solutions that support the digital signing of mobile-optimized documents are critical components of your digital architecture that will reduce friction for your customers as they move through the online process.

You have already made vast changes to your operating model to meet the needs of your customers during very trying times. Now is the time to maximize your return on those changes and continue developing your digital strategy.

Customer Experience: The Freedom to Experiment

NYMBUS.pngSurety Bank faces the same geographic limits to growth that other small community banks do. The $137 million bank operates four branches in Daytona Beach, Pierson, Lake Mary and DeLand, Florida, its headquarters. These are, at most, no more than 45 miles from one another.

But CEO Ryan James believes the bank can fuel deposit growth nationwide through the launch of a digital brand, booyah!, which targets college students and young graduates with fee-free deposit accounts. The bank’s relationship with its core is enabling him to make this bet.

Surety converted from a legacy core provider to the Nymbus SmartCore in 2018. It launched booyah! a year later using Nymbus SmartLaunch, a bank-in-a-box product designed to help banks quickly and inexpensively stand up a digital branch under an existing charter.

Nymbus SmartLaunch received the award for the Best Solution for Customer Experience at Bank Director’s 2020 Best of FinXTech Awards in May. Backbase, a digital banking provider, and Pinkaloo, a white-labeled charitable giving platform, were also finalists in the category. (Read more about how Pinkaloo worked with a Massachusetts community bank here.)

Bigger banks have reported mixed results from their efforts to establish digital brands. Wyomissing, Pennsylvania-based Customers Bancorp was one of the first to do so when it established its BankMobile division in 2015, targeting millennials. The $12 billion bank partnered with T-Mobile US three years later to offer accounts to the cell phone carrier’s 86 million customers. Meanwhile, JPMorgan Chase & Co. closed its digital bank, Finn, last year.

Growth costs money. Opening a freestanding branch can cost anywhere from $500,000 to $4.5 million, according to a 2019 Bancography survey. And unlike bigger banks, small institutions face significant obstacles in opening a separate digital brand to differentiate themselves nationwide — they don’t have capital to spend on experiments.

But if a small bank can establish a new digital brand at a reasonable cost, the experiment becomes more feasible.

“Why can’t you start a digital bank cheap?” says James. Surety’s legacy customers and booyah!’s new customers share the same user experience — SmartLaunch offers online applications for deposit and loan accounts, along with remote deposit capture, payment options, bill pay and debit card management. Bank customers can also set custom alerts and take advantage of personal financial management tools. Creating booyah! was really just a matter of adding a new logo and color scheme.

“It’s the same thing [we] already have,” he says. “Why does it have to be hundreds of millions of dollars in investments?”

That was the story from his old core provider, he says. But Nymbus didn’t leverage hefty fees to make booyah! a reality. What’s more, Surety isn’t locked into its experiment.

“What I love about them is you test, you pivot, and you do what makes sense” for your bank, James says. “You don’t have to give away years of your profits to try something new.”

Whether or not booyah! is a success, Nymbus provides Surety with the flexibility to quickly and easily spin up other brands that focus on specific customer segments, or shutter anything that doesn’t work, like Chase did with Finn.

If its digital brand works, Surety has a lot to gain. With the industry squeezed for profits in a prolonged low-rate environment, cheaply expanding its footprint to draw more deposits could help the bank maintain its high level of profitability in an increasingly challenging environment. The bank maintains a high return on equity (15.11% as of Dec. 31, 2019), return on assets (1.68%) and net interest margin (4.05%), according to the Federal Deposit Insurance Corp.

In a world populated with countless First National Banks, Farmers Banks and the like, booyah! certainly doesn’t sound like a typical bank. So, why booyah? Curious, I asked James. “Why not?” he replies. 

The name, frankly, isn’t the point.

Ultimately, Chase didn’t need Finn; it was already a nationwide bank with an established, well-recognized brand and millions of customers using its mobile app. But for Surety Bank, booyah! represents the potential to gain deposits outside its Florida footprint — without putting the bank’s bottom line at risk.

Coronavirus Underlines Digital Transformation Urgency

The passage of the Coronavirus Aid, Relief, and Economic Security (CARES) Act means up to $350 billion in loans guaranteed by the Small Business Administration is set to flow to small businesses by the June 30 funding deadline.

Community and regional institutions are, of course, the logical partners for distribution of this capital. But a challenge remains: How will those financial institutions reach out to the market when their lobbies may not be open, and businesses may not be comfortable with face-to-face interactions?

Banks have done little to change the way they interact with their business customers in the digital age. In good times, this lack of transformation allowed large technology companies like Amazon.com, PayPal Holdings and Square to siphon customers away. The current environment complicates efforts for banks that have not already transformed to be responsive to their customers immediate needs.

Customers prioritized convenience — now banks will be forced to. Even prior to social distancing, consumers prioritized speed and convenience, whether it came to new technology or where they banked.

Winning at business banking was always going to require banks to offer business customers a frictionless experience. But the ability to operate business banking functions digitally has taken on new meaning — from defining quality service to becoming a necessity during a pandemic.

Three Critical Points of Friction in Business Banking
Now more than ever, it should be every institution’s goal to make working with businesses as easy as possible, especially when distribution of SBA dollars is at stake.

To meet this moment, banks need to remove three critical friction points from their business banking experience:

  • The Application: Paper applications are long and tedious, and the process is even more difficult for SBA 7(a) loans. To remove friction, institutions need to focus on data and access. They should use available data and technology to pre-fill applications as much as possible, and provide them digitally either for self-service or with banker assistance.
  • The Decisioning: Underwriting loans is a labor-intensive process that can delay decisions for weeks. An influx of Paycheck Protection Program loan applications will only compound the inefficiencies of the underwriting process. Banks need to automate as much of the underwriting and decisioning process as possible, while keeping their risk exposure in mind. It’s critical that banks select companies that allow them to use their own, unique credit policies.
  • The Account Opening: Banks also need to think about long-term relationships with the businesses they serve during this time. That means eliminating common obstacles associated with opening a business deposit account. For example: If a business has already completed a loan application, their bank should have all the information they need for a new account application and shouldn’t ask for it twice. They need to ensure businesses can complete as much of this process remotely as possible.

At Numerated, the sense of urgency we hear from bank leaders is palpable. Our team has been working overtime — remotely — to provide banks with a quick-to-implement CARES Act Lending Automation solution. Banks have been working just as fast to understand the current environment and build strategies that will help them meet their customers’ rapidly shifting needs.

In many ways, the COVID-19 pandemic has forced banks to consider digital transformation as a solution to this problem. Still, many firms have held off for any number of reasons. Institutions that have focused on digital transformation will be the most successful in improving the business banking customer experience and will lead the way during this pandemic as a result.

From Eastern Bank Corp. in Boston that used digital lending to become the No. 1 small to midsized business lender in their competitive market, to First Federal Lakewood, in Lakewood, Ohio, that is using digital experiences to retain and grow strategic relationships, institutions of all sizes have launched new digital capabilities, better positioning them to face what’s ahead.

As the nation’s businesses grapple with this new reality, these financial institutions are examples for others exploring how to serve business customers when they can’t see them face to face. Doing so will require a reimagining of the way we do business banking.

Artificial Intelligence: Exploring What’s Possible

Banks are exploring artificial intelligence to bolster regulatory compliance processes and better understand customers. This technology promises to expand over the next several years, says Sultan Meghji, CEO of Neocova. As AI emerges, it’s vital that bank leaders explore its possibilities. He shares how banks should consider and move forward with these solutions. 

  • Common Uses of AI Today
  • Near-Term Perspective
  • Evaluating & Implementing Solutions

 

One Bank’s Approach to Improving Its Culture

Merriam-Webster defines culture as “the set of shared attitudes, values, goals, and practices that characterizes an institution or organization.” These attributes are central to a company’s success.

Corporations with strong cultures tend to have financial performance that matches, according to studies that have investigated the relationship. The corporate review website Glassdoor found in 2015 that the companies on its “Best Places to Work” list, as well as Fortune’s “Best Companies to Work For” list, outperformed the S&P 500 from 2009 to 2014 by as much as 122%. In contrast, Glassdoor’s lowest-rated public companies underperformed the broader market over the same period.

Unlike the financial metrics banks rely on to measure their performance, culture is harder to measure and describe in a meaningful way. How can a bank’s leadership team — particularly its board, which operates outside the organization — properly oversee their institution’s cultural health?

“A lot of boards talk about the board being the center of cultural influence within the bank, and that’s absolutely true,” says Jim McAlpin, a partner at the law firm Bryan Cave Leighton Paisner and leader of its banking practice group. As a result, they should “be mindful of the important role [they] serve [in] modeling the culture and forming the culture and overseeing the culture of the institution.”

Winter Haven, Florida-based CenterState Bank Corp., with $17.1 billion in assets, values culture so highly that the board created a culture-focused committee, leveraging its directors’ expertise.

CenterState wants “to create an incredible culture for their employees to enjoy and their customers to enjoy,” says David Salyers, a former Chick-fil-A executive who joined CenterState’s board in 2017. He’s also the author of a book on corporate culture, “Remarkable!: Maximizing Results through Value Creation.”

Salyers knew he could help the bank fulfill this mission. “I want to recreate for others what Truett Cathy created for me,” he says, referring to the founder of Chick-fil-A. “I love to see cultures where people love what they do, they love who they do it with, they love the mission that they’re on, and they love who they’re becoming in the process of accomplishing that mission.”

Few banks have a board-level culture committee. Boston-based Berkshire Hills Bancorp, with $13.2 billion in assets, established a similar corporate responsibility and culture committee in early 2019 to oversee the company’s corporate social responsibility, diversity and inclusion, and other cultural initiatives. Citigroup established its ethics, conduct and culture committee in 2014, which focuses on ethical decision-making and the global bank’s conduct risk management program — not the experience of its various stakeholders.

CenterState’s board culture committee, established in 2018, stands out for its focus on the bank’s values and employees. Among the 14 responsibilities outlined in its charter, the committee is tasked with promoting the bank’s vision and values to its employees, customers and other stakeholders; overseeing talent development, including new hire orientation; advising management on employee engagement initiatives; and monitoring CenterState’s diversity initiatives.  

The committee was Salyers’ suggestion, and he offered to chair it. “I said, ‘What we need to do, if you want to create the kind of culture you’re talking about, [is] we ought to elevate it to a board level. It needs to get top priority,’” he says. “We’re trying to cultivate and develop the things that will take that culture to the next level.”

As a result of the committee’s focus over the past year, CenterState has surveyed staff to understand how to make their lives better. It also created a program to develop employees. These initiatives are having a positive impact on the employee experience at the bank, says Salyers.

Creating a culture committee could be a valuable practice for some boards, particularly for regional banks that are weighing transformative deals, says McAlpin. CenterState has closed 11 transactions since 2011. In January, it announced it will merge with $15.9 billion asset South State Corp., based in Columbia, South Carolina. The merger of equals will create a $34 billion organization.  

“At the board level, there’s a focus on making sure there is a common culture [within] the now very large, combined institution,” says McAlpin, referencing CenterState. “And that’s not easy to accomplish, so the board should be congratulated for that … to form a [culture] committee is a very good step.”

CenterState’s culture committee leverages the passion and expertise of its directors. Both Salyers and fellow director Jody Dreyer, a retired Disney executive, possess strong backgrounds in customer service and employee satisfaction at companies well-regarded for their corporate culture. While this expertise can be found on the boards of Starbucks Corp. and luxury retailer Nordstrom, few bank boards possess these traits.

Focusing on culture and the employee experience from the top down is vital to create loyal customers.

“The best companies know that culture trumps everything else, so they are intentional about crafting engaging and compelling environments,” Salyers wrote in his book. “A company’s culture is its greatest competitive advantage, and it will either multiply a company’s efforts, or divide both its performance and its people.”

Embracing Frictionless Loans by Eliminating Touch Points


lending-9-13-19.pngTo create a meaningful customer relationship, banks should drive to simplify and streamline the operational process to book a loan.

Automated touchpoints are a natural component of the 21st century customer experience. When properly implemented, technology can create a touch-free, self-service model that simplifies the effort required by both customer and bank to complete transactions. One area ripe for technological innovation is the lending process. Banks should consider how they can remove touch points from these operations as a way to better both customer service and resource allocation.

Frictionless loans can move from origination to fulfillment without requiring human intervention, which can help build or enhance relationships with clients. Your institution may already be working on decreasing touches and increasing automation. But as you long as your bank has an area of tactile, not strategic, contact between your staff and your customer, your bank — and customers — will still have friction.

Bankers looking to decrease this friction and make lending a smooth and seamless process for borrowers and originators alike should ask themselves these four questions:

How many human touchpoints does your bank still have in play to originate and fulfill a loan? Many banks allow customers to start a loan application online and manage their payments in the cloud, but what kind of tactile processes persist between that initial application and the payment? Executives should identify how many steps in their lending process require trained staff to help your customers complete that gap. Knowing where those touchpoints are means your digital strategy can address them.

What value can your bank achieve by reducing and ultimately eliminating the number of touches needed to originate a loan? Every touch has the potential to slow a loan through the application process and potentially introduce human error into the flow. But not all touchpoints are created equal.

Bankers should consider the value of digital data collection, or automating credit score and loan criteria review. They may be able to eliminate the manual review of applications, titles and appraisals, among other things. They could also automate compliant document creation and selection. Banks should assess if their technology enablement efforts produce a faster, simpler customer experience, and what areas they can identify for improvement.

Do you have the right technology in place to reduce those touchpoints? Executives should determine if their bank’s origination systems have the capabilities to support the digital strategy and provide the ideal customer experience. Does the bank’s current solution deliver an integrated data workflow, or is it a collection of separate tools that depend on the manual re-entry of data to push loans through the pipeline?

Does your bank have an organizational culture that supports change management? Does your bank typically plan for change, or does it wait to react after change becomes inevitable? Executives should identify what needs to happen today so they can capitalize quickly on opportunity and minimize disruptions to operations.

Siloed functional areas are prone to operational entrenchment, and well-intentioned staff can inadvertently slow or disrupt change adoption. These factors can be difficult to change, but bankers can moderate their influences by cultivating horizontal communication channels that thread organizational disciplines together, support transparency and allow two-way knowledge exchanges.

For banks, a human touch can be one of the most valuable assets. It can help build long lasting and meaningful relationships with clients and enable mutual success over time. This is precisely why banks should reserve it for business activities that have the greatest potential to add value to a client’s experience. Technology can free your bank’s staff from high-risk, low-return tasks that are done more efficiently through automation while increasing their opportunities to interact with customers, understand their challenges and cross-sell products.

Frictionless loan planning should intersect cleanly with your bank’s overall digital strategy. It could also be an opportunity for your bank to scale up planning efforts, to encompass a wider set of business objectives. In either case, the work you do today to identify and eliminate touch points will establish the foundation necessary to extend your bank’s digital reach and offer a competitive customer experience.