Digital Experiences in Banking 2019

ANALYSIS REPORT Digital Experiences in Banking 2019

Table of Contents

01 Introduction 3 About Us

02 Trends and Insights 5 Extractable is the digital strategy and experience design partner for 03 Results and Findings 7 financial services firms committed Our Approach 8 to delivering exceptional customer User Experience 10 experience. We plan, design, build, and optimize digital channels to Analytics and SEO 12 drive increased brand awareness, Visual Design and Branding 14 acquisition, and share of wallet Key Functionality 16 while reducing support costs and Content 18 churn. Our experience working Digital Marketing 20 with over 100 banks, credit unions, investment management firms, 04 Future of Digital Banking 23 retirement services providers, Digitally. Intelligently. Forward. 23 brokerages, and transaction Conclusion 23 servicers gives us rare insight into the challenges you face and how to solve for them, while generating positive ROI.

EXTRACTABLE | 1 Extractable takes a deep dive 1 Home BancShares $14 B FORBES 2018 into the first 20 “Forbes 2018 2 Western Alliance Bancorp $20 B Top 100 Best Banks in America”1 3 Bank OZK $21 B 4 First Merchants $9 B BEST BANKS to analyze digital experiences 5 East West Bancorp $36 B across the industry. Find out 6 Community Bank System $11 B IN AMERICA what we learned. 7 Prosperity Bancshares $22 B 8 FCB Financial Holdings $10 B 9 First Hawaiian $21 B 10 Glacier Bancorp $10 B 11 Columbia Banking System $10 B 12 Cathay General Bancorp $16 B 13 Cullen/Frost Bankers $31 B 14 South State Bank $11 B 15 First Republic Bank $84 B 16 Bank of Hawaii $17 B 17 WesBanco $10 B 18 International Bancshares $12 B 19 Independent Bank Group $9 B 20 Hope Bancorp $14 B

1 The order of the list varies from what Forbes published originally. Our ranking skipped over banking institutions that did not have a retail banking experience. Forbes ranking criteria: “We ranked the banks based on 10 metrics related to growth, profitability, capital adequacy and asset quality. Metrics include return on average tangible equity, return on average assets, net interest margin, efficiency ratio and net charge-offs as a percent of total loans. Forbes also factored in nonperforming assets as a percent of assets, CET1 ratio, risk-based capital ratio and reserves as a percent of nonperforming assets. The final component is operating revenue growth.” —Forbes (January 10, 2018), “Full List: Ranking America’s 100 Largest Banks 2018.”

2 01 Introduction

Across every industry, the SUMMARY INSIDE THIS REPORT digital space continues As banking trends toward digital, our report acts as We compiled a snapshot of key industry trends, to shape customer a complement to the Forbes Top 100 Best Banks and also conducted our own heuristic review of the expectations for service report. Our assessment provides an in-depth user experience of the top 20 U.S. banks in these analysis of the digital performance of the top 20 areas: delivery. Our obsession highest-ranking banks. There is ample room for • User Experience with digital experiences improvement in the digital space — even amongst • Analytics and SEO in banking prompted our the best in banking. • Key Features and Functionality annual assessment of the In an era of digital self-service, 50 percent of • Visual Design and Branding digital maturity of financial the top 20 banks don’t offer an option to open services. Our goal is for an account online, and several lack a mobile- • Content innovators at every level optimized site. Fortunately, this experience gap • Digital Marketing creates an exciting new opportunity for financial of banking to find it to be institutions looking to stand out in the crowd. If you’d like to learn more about the methodology an informative resource We are on the cusp of a second inflection point in we used, the detailed results of your bank (if as they endeavor to shape modern banking. The first wave was marked by you’re one of the top 20), or chat about a specific their own digital strategies. fintech disruption, in the form of customer-centric score, please reach out to us at 415.426.3636 experiences for a narrow set of financial services. or email us at [email protected] to start the The second inflection point comes as the financial conversation. needs of a generation of digital natives mature. Those same fintech disruptors are now forced to add depth and breadth to their offering, focus on customer retention, and manage an expanded product line. Fortunately, incumbent banks are already in a position to meet the complex financial needs of this generation — but can they deliver their services digitally?

EXTRACTABLE | 3 02 Trends and Insights TRENDS AND INSIGHTS

Despite 94% of banks surveyed in the recent possessing Digital Banking Report say that they can 94%currently only deliver basic levels or no significant personalization at all. customer data, several banks 32% of financial services executives surveyed confirmed exploring AI technologies such as predictive analytics, 32% 1 have yet to unlock and recommendation engines. a meaningful level of personalization. 93% of companies report having more success in converting prospects into customers when they personalize their 93% 2 marketing.

1 Source: Financial Brand 2 Source: Econsultancy, in partnership with Adobe, Dec 2017

EXTRACTABLE | 5 TRENDS AND INSIGHTS

Security, privacy 59% of consumers worry about the and transparency amount of personal information that 59%private and public sector organizations are growing have about them.1 concerns among Top 5 factors increasing trust in financial services companies:2 Top 51. Easily understood terms and conditions consumers amid 2. Reliable fraud protection 3. Easily found product/service info 4. Business convenience ongoing data 5. Access to real people breaches.

25% of consumers believe that their banking provider “ensures their transactions 25%are safe and secure” and “protects the privacy of their personal information.” However, one in four U.S. consumers said they would switch banking providers if/when they experience fraud.3

1 Source: https://www.ey.com/gl/en/industries/financial-services/banking---capital-markets/ey-trust- without-it-youre-just-another-bank 2 Source: 2018 Edelman Trust Barometer Financial Services Edition https://www.edelman.com/sites/g/files/ aatuss191/files/2018-10/Edelman_Trust_Barometer_Financial_Services_2018.pdf 3 Source: 2018 FIS PACE Findings

6 03 Results and Findings RESULTS

Our Approach

RATING SYSTEM

Inspired by the “Forbes 2018 Best Banks in America” list1, we A rating of 3 is considered good: the site is meeting set out to determine which of these banks had the best digital basic standards for best practices. 4s are extremely rare and reserved for sites that exceed expectations. experiences. We reviewed the public marketing websites of 5s are reserved for outstanding innovators. None of the top 20 from that list—omitting any that did not offer a retail the sites we evaluated reached that level. banking experience.

METHODOLOGY WHAT WE REVIEWED

In December 2018, Extractable See the individual sections for details on the criteria for each specialists in UX, Design, and category. 0 1 2 3 4 5 Analytics conducted a high-level Nothing to Poor Fair Good Exceptional Most review of each bank’s marketing • User Experience Evaluate Innovative site. We scored them according • Analytics and SEO to best practices in the categories • Key Features and Functionality listed below. These scores include both quantitative and qualitative • Visual Design and Branding criteria, and reflect our analysis of • Content the sites during a specific snapshot in time.2 In reviewing the sites, • Digital Marketing we aimed to be honest, fair, and consistent.

1 Forbes ranking criteria: “We ranked the banks based on 10 metrics related to growth, profitability, capital adequacy and asset quality. Metrics include return on average tangible equity, return on average assets, net interest margin, efficiency ratio and net charge-offs as a percent of total loans. Forbes also factored in nonperforming assets as a percent of assets, CET1 ratio, risk- based capital ratio and reserves as a percent of nonperforming assets. The final component is operating revenue growth.” —Forbes (January 10, 2018), “Full List: Ranking America’s 100 Largest Banks 2018.” 2 Other opinions may vary, and we understand that organizations continuously update their sites, and may have already evolved since our evaluation.

8 RESULTS

Digital Experience Winners

Top 20 Average 1.90

The following banks achieved the highest South State average scores across categories, earning 1 Bank 2.72 their place as digital experience leaders. First Republic 2 Bank 2.48 Overall, they demonstrate a strong commitment to providing their customers with the experience, Cullen/Frost features, and aesthetic they deserve. While the 3 Bankers 2.43 banks we evaluated were chosen from Forbes’ 2018 Best 100 Banks in America, “best” does not always First Merchants translate to the best digital experience. 4 2.32 5 Hope Bancorp 2.24

6 Columbia Banking System 2.18 14 HomeBanc Shares 1.75 7 Bank of Hawaii 2.18 15 Cathay General Bancorp 1.75 8 Community Bank System 2.04 16 Western Alliance Bancorp 1.62 9 Bank OZK 1.98 17 Independendent Bank Group 1.61 10 East West Bancorp 1.85 18 FCB Financial Holdings 1.39 11 Glacier Bancorp 1.85 19 Prosperity Banshares .95 12 First Hawaiian 1.83 20 International Bancshares .90 13 WestBanco 1.83

EXTRACTABLE | 9 RESULTS

User Experience

Top 20 Average RANKING 2.14

• Calls to action / Customer journey

• Micro-interactions (bonus point)

10 RESULTS USER EXPERIENCE

User Experience

Top 20 Average RANKING 2.14 THE THIRD-PARTY PROBLEM RESPONSIVE DESIGN THE OAO JOURNEY

The user experience (UX) of the banking sites we South State Bank reviewed ran the gamut; from modern mobile-first 1 3.00 designs, to dated, non-responsive sites. First Republic Bank 2 2.86 We evaluated each site on the following criteria: Bank OZK • Responsive 3 2.63 • Site architecture Hope Bancorp • Navigation 4 2.57 • Friction Glacier Bancorp Speedbumps. Microsites. Third-party integrations. Mobile and Four of the top banks we reviewed The primary purpose of most • Scannability 5 2.43 OLB platforms. Banks rely on a constellation of third-party still have static pages. A surprising bank’s marketing sites is… • Layout and organization vendors for core functions. A fragmented digital strategy results fact, given the necessity of marketing! responsive design for today’s • Calls to action / Customer journey in a fragmented and frustrating experience for users. Many banks fail to provide a clear businesses. Static pages influence There wasn’t a single bank we reviewed that felt like a completely path to opening an account—50% of • Micro-interactions (bonus point) everything from how Google ranks cohesive experience. “You are now leaving our site…” messages the bank sites we reviewed lacked you in search results to how younger (AKA speedbumps) are a necessary evil, but often there was no Online Account Origination. Even if prospects view the credibility of warning when the user arrived on a blog or wealth management the only option is to visit a branch, your brand. microsite with its own domain, navigation, and design. OAO forms a visitor to a product page should were some of the worst offenders: too many non-responsive Three of the top 20 banks redesigned intuitively know the next step. pages with inconsistent branding from the main site. Banks that their sites since our last report, and Ideally, that next step should be to can reduce this fragmentation and seamlessly integrate their one of those converted from static. apply online. partners into their designs should see lower bounce rates and This is an encouraging sign, and we higher satisfaction. hope the rest will soon follow. Better yet, embrace Design Thinking and become market innovators instead of laggers.

10 EXTRACTABLE | 11 RESULTS

Analytics & SEO

Top 20 Average RANKING 2.85

All banks apply a combination of Google Analytics, Hope Bancorp ad tracking, retargeting tracking and more to gain 1 3.96 a complete understanding of user behavior. 2 Galcier Bancorp 3.82 This will not only guide improvements to the experience, but also Bank of Hawaii be the foundation for custom micro-segmentation. 3 3.50 We evaluated each site on the following criteria: Community Bank • Onsite search 4 System 3.48 • Domain authority FCB Financial Holdings • Page load times 5 3.38 • Personalization

• Geo targeting

• Keyphrase targeting

• WCAG accessibility

12 ANALYTICS AND SEO

LIGHTENING THE LOAD LET DATA DRIVE DOMAIN DRAIN

Average load time of 2.5 s bank homepages on mobile 1.9 s 10 of the best banks have a load time of >2.5 s 20 11 GOOGLE FACEBOOK ANALYTICS ANALYTICS

4.2 s The slowest performer The Top 2 of homepages took over 4 s to load took 1.2 s or faster to load 4 ADOBE 5 1.2 s ANALYTICS OTHER

Simply-put, slow loading pages turn customers off. Those Visitor tracking continues to be a Only 4 banks have acquired a few seconds of load time are crucial. According to Google, the vital resource in banking. Knowl- Domain Authority ranking above bounce rate increases 93% when a page load time grows from edge on your customer base drives 50. These scores are low when 1 to 5 seconds. decision making. Currently, Google compared to SEO powerhouses Analytics dominates in tracking. such as Bank of America, Wells Fast loading sites are also better optimized for search, leading to Adobe and IBM Analytics (Unica/ Fargo, and Chase —which all have a higher placement on search engine result pages. There are a Core-Metrics) followed closely a domain authority higher than 75. multitude of ways to increase page load speed; from conducting behind. Domain authority is a powerful signal compression audits, to minimizing HTTP requests. The takeaway in determining placement on search is that increasing your page load speed is integral to improving Social marketing is another useful engine result pages. The search your customer experience. tool on the rise. Several banks uti- relevancy algorithims at Google lize Facebook pixel tracking, and x might have changed, but domain use remarketing tags (i.e. Google authority remains a big help. Organic Remarketing). We found several ad search visitors complete applications tags across the 20 banks analyzed. such as deposit account at a rate DoubleClick and Floodlight were 20% greater than through other the most popular networks. traffic channels, such as paid and social marketing.

* Domain Authority is a SEO scoring method developed by MOZ. Source: Pingdom, Google PageSpeed

EXTRACTABLE | 13 RESULTS

Visual Design & Branding

Top 20 Average RANKING 1.89

As expected from the best banks, the visual design First Republic Bank quality was overall high. 1 3.70 First Merchants However, there is still room for improvement, especially when it 2 3.08 comes to a consistent design system across digital channels and beyond. The ubiquitous use of stock imagery has led to a “sea of Bank OZK sameness” in financial communications. 3 3.00

We evaluated each site on the following criteria: South State Bank • Brand • Color palette 4 2.83 • Consistency • Illustration / Infographic Cullen/Frost Bankers • Relevance • Iconography 5 2.75

• Design system • Imagery

• Marketing • Interactivity

• Typography • Animation / Video

14 RESULTS VISUAL DESIGN AND BRANDING

Visual Design & Branding

Top 20 Average RANKING DON’T SETTLE FOR STOCK ADA COMPLIANCE MICRO MOMENTS 1.89 OF DELIGHT As expected from the best banks, the visual design First Republic Bank quality was overall high. 1 3.70 First Merchants However, there is still room for improvement, especially when it 2 3.08 comes to a consistent design system across digital channels and beyond. The ubiquitous use of stock imagery has led to a “sea of Bank OZK sameness” in financial communications. 3 3.00

We evaluated each site on the following criteria: South State Bank • Brand • Color palette 4 2.83 Across various industries, an essential effort in humanizing the digital What is ADA Compliance? Only 4 out of 20 banks used mi- • Consistency • Illustration / Infographic Cullen/Frost Bankers space comes in the form of well-utilized photography. Selecting the cro-interactions in their design, Standards for Accessible Design 5 2.75 right photographs for your bank’s site is a vital part of the creative and even that usage tended to re- • Relevance • Iconography state that all electronic and process. flect only a few spots of subtle an- • Design system • Imagery information technology must imation that feel like afterthoughts The careful selection of stock photography is essential in a design be accessible to people with • Marketing • Interactivity rather than part of a cohesive de- process. Today’s consumers want diversity in age, sex, race, and disabilities. sign system. • Typography • Animation / Video relationships. Along with subject material, it’s crucial to identify the Color, font size, and clickable appropriate resolution for featured photography imagery. Micro-interactions use subtle links should be designed with all animation effects that communicate Traditionally, photography for websites needed to be at least 72 DPI. consumers in mind. Being mindful status or provide instant feedback However, the ubiquity of retina display screens for smartphones, about creating accessible design — about a user action. They create tablets, computers, and 4k televisions has rendered 72 DPI obsolete. whether it’s a new logo, website or moments of surprise and delight Higher-resolution images carry heftier price tags, but the prominence marketing material — is paramount. while simultaneously conveying of stock photography sites like Stocksy have allowed for budget-friendly useful information about the photography without sacrificing resolution. experience.

14 EXTRACTABLE | 15 RESULTS

Key Functionality

Top 20 Average RANKING 1.66

Banking customers today have high South State Bank expectations for the tools they use online. 1 2.50 Glacier Bancorp We see more and more banks offering digital payment 2 2.33 services to compete with emerging FinTechs like Venmo for wallet share. For this evaluation, we focused on what we Community Bank System believe to be the most important features for users on both 3 2.10 desktop and mobile. First Hawaiian We evaluated each site on the following criteria: 4 2.10 • Online Account Origination Home BancShares • Mobile check deposit 5 2.10

• Live chat

• Find a branch / ATM

• Search

• Calculators

• Peer-to-peer payments

• Product comparison

16 KEY FUNCTIONALITY

CARD MANAGEMENT PERSONAL FINANCIAL PEER-TO-PEER MANAGEMENT

To Cheech From Chong $20 $20

CONFIRM SEND

As dependence on electronic payments and digital wallets From Mint to Excel, nearly all 65% of the banks we surveyed increases, people are more sophisticated about managing Americans tell us that they use offer peer-to-peer payment op- their credit and debit cards online. 10% of the banks in our tools to manage their money. tions, reflecting the increasing review allow customers to enable and disable their credit popularity of this feature. 25% of the banks offered some and/or debit cards from the mobile app. One bank surveyed form of PFM tools within online In addition, 65% of the banks also offered a full suite of credit management tools, such as setting banking, though only 15% (2 few- offer some form of digital wal- spending limits and location-based alerts. er) made these tools available on let, with the most common being the mobile app. Apple Pay (65%), Samsung Pay (55%) and Google Pay (30%).

EXTRACTABLE | 17 RESULTS

Content

Top 20 Average RANKING 1.59

One of the primary reasons users visit any website South State Bank is to engage with its content. 1 3.00 Columbia Banking System This is an opportunity for banks to really shine and engage 2 2.91 customers, or suffer from a lack of distinction. First Republic Bank We evaluated each site on the following criteria: 3 2.90 • Home page content quality and key tasks represented Cullen/Frost Bankers • Product pages content quality, integration and cross-promotion 4 2.60 • Original financial education content First Merchants • Content hub 5 2.30 • Content density

• Content freshness

• Content variety

• Supporting content

• Blog

18 CONTENT

TELL YOUR STORY CONTENT IS KING

The biggest differentiation when it comes to home pages is Seven out of the ten highest scoring banks still missed out on an integrating your brand content. integrated content hub.

Find a way to tell the story of your bank that relates to your A content hub acts like a magnet for media on your site. A content customer, showing the value and meaning you can bring to their hub can be thought of as a branded resource center for your lives. A majority of banks surveyed promote their products front customers. The value of a well-stocked content hub is not only in and center, followed by their rates, news, and lastly a blog with creating engagement and leads, it provides your customer with original content. Integrating product pages and original content genuine insight and establishes your bank as an authoritative voice lets potential customers know how you’re different, and why it in the industry. Publishing useful content benefits both the bank matters. Be it financial education, or local news: a blog is your and the customer. bank’s way to communicate your personal story and interact with your community.

EXTRACTABLE | 19 RESULTS

Digital Marketing

Top 20 Average RANKING 1.24

Most banks are lagging behind in personalization— Columbia Banking System which should no longer be considered an 1 2.25 emerging feature or trend, but an essential part of South State Bank any digital marketing strategy. 2 2.00

This report focuses on the public marketing sites for major U.S. First Merchants banks. Therefore, we took a look at how well they addressed 3 2.00 their target audiences. Many sites were structured by their key Bank of Hawaii audiences: personal, business, and wealth management—but 4 2.00 did little to cross-market related products.

Although we found little evidence of personalization on the sites Cullen/Frost Bankers we reviewed, it’s possible the banks surveyed are engaging in 5 1.80 personalization within their online banking platforms.

We evaluated each site on the following criteria:

• Effective cross-sell/up-sell of products and services

• Key customer segments are addressed

• Evidence of personalization

• Social media used to drive campaigns

• Special offers

20 DIGITAL MARKETING

ZOMBIE CAROUSELS CHANNEL SURFING WITH SOCIAL MEDIA

Despite research that shows carousels kill user engagement, The biggest change since last year was the news that Google+ carousels are the zombie module that refuses to die. 8 out would be shutting down due to the exposure of user data. of 20 (40%) of banks in our study use a carousel on their It never had a large adoption rate among the banks we surveyed, homepage marquee. and now it’s disappeared completely from site footers and social Carousels, also known as slide shows, continue to be popular share tools. However, Google Plus serves as a cautionary tale with marketing teams because they can fit multiple messages that organizations that rely heavily on third-party services have within a fixed vertical space. With homepage real estate at a additional security and privacy risks to consider. premium, they’re better at solving internal turf wars than user needs. Research from the Nielsen/Norman group and others has demonstrated that carousels get low engagement, which drops off progressively with each additional slide. Ironically, if something is important enough to put in a homepage carousel, then it’s too important to hide in one.

EXTRACTABLE | 21 04 Future of Digital Banking FUTURE

Digitally. Intelligently. Forward.

With all the inherent benefits of digital—scale, Without better customer intelligence, legacy speed, accuracy, automation, and reach—it’s clear organizations can’t deliver better experiences in a that organizations that apply digital strategies will timely manner. In terms of customer satisfaction, accelerate their growth plans. A comprehensive NPS and VOC are only part of the picture. These digital strategy addresses three functional trailing indicators are explicit statements of layers of the organization: the business layer via satisfaction — not necessarily an accurate improved insight, the execution layer in the form of assessment. operational effectiveness, and the delivery layer via A more holistic approach seeks to complement the customer experience. what customers say with what they do. It’s likely Tech cycles continue to drive the pace of that organizations are tracking some level of innovation. New technical capabilities being customer behavior across digital channels, but it’s “Real-time digital customer marketed today rapidly set the customer’s less likely that they’ve got the capacity or know- engagement will continue to expectations of tomorrow. Financial institutions how to do anything meaningful with that data. be a key focus for financial have been playing catch-up to challenger banks Truly valuable insight comes when the business organizations in 2019.” for several years now. When incumbent banks are can predict issues and therby shortcut the NPS- merely capable of executing their digital strategies correction curve. This is where machine learning CRAIG MCLAUGHLIN CEO, EXTRACTABLE at a pace that simply reaches parity to startup comes into play. AI is no longer fantasy. The tools challengers; it becomes clear that some wisdom already exist for non-data scientists to deploy Craig McLaughlin is the Co-Founder, President, would be a valuable asset. To paraphrase an oft- predictive models of customer satisfaction via a and CEO of Extractable, an award-winning overused quote by hockey giant, Wayne Gretzky, drag-and-drop interface. digital consultancy dedicated to helping it’s time that banks develop a sophisticated level Organizations that monitor multiple indicators, financial service organizations achieve lasting of customer intelligence that enables them to such as social sentiment, channel behaviors, success. His expertise in Digital Banking and “play where the puck is going to be, rather than contact center reports, VOC surveys, as well as Digital Business Strategy has earned him a play where the puck already is”. This is where this NPS will be well positioned to leverage AI for the reputation as an innovative leader in Silicon wisdom comes to bear. delivery of service excellence at scale. Valley’s ever-evolving FinTech space. Craig holds a BSBA from San Diego State University and an M.S. in Information Systems & Web Technology from Hawaii Pacific University.

EXTRACTABLE | 23 Conclusion

Predicting what the future of banking will look like may be Call us 415.426.3636 impossible, but there’s no doubt it will be digital. The only safe bet is to invest in developing a fluid organization — able Email us to react quickly and intelligently to technological, economic, [email protected] and cultural change. Evaluate your digital strategy to ensure Download the digital version it gives you continuous insight, operational effectiveness, https://www.extractable.com/deb19 and allows you to deliver value to your customers in any way they engage with you.

If you have any questions about this report, or would like to discuss how we might work together, please reach out to us.

ANALYSIS REPORT Digital Experiences in Banking 2019