Payments Remain Key to BANK of the WEST's CUSTOMER SERVICE STRATEGY
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Payments Remain Key TO BANK OF THE WEST'S CUSTOMER SERVICE STRATEGY FEATURE STORY NEWS & TRENDS DEEP DIVE An FI’s quest for customer Apple, Goldman Sachs create new Creating frictionless engagement06 in a saturated credit card09 experiences14 for impatient mobile banking landscape banking customers M A Y 2019 © 2019 PYMNTS.com All Rights Reserved 1 DIGITAL BANKINGTRACKER™ TABLE OF CONTENTS What’s Inside 03 The latest on how banks are employing digital tools to build frictionless customer experiences Feature Story Executive vice president and head of digital channels Hisham Salama on how Bank of the West is 06 focusing on payments, data and tailored customer personas to better engage customers News and Trends 09 How FIs are working to improve account opening processes and other mobile and online banking features Deep Dive: An exploration of the challenges banks and FIs face as they work to create seamless digital customer 14 experiences Top 10 Rankings 18 The highest-ranking B2B and B2C digital banking providers Watch List 19 Four additions to the Digital Banking Tracker™ provider directory Scorecard 20 The results are in See this month’s top scorers and a directory featuring more than 250 digital banking players About 155 Information about PYMNTS.com and Feedzai ACKNOWLEDGMENT The Digital Banking Tracker™ was done in collaboration with Feedzai, and PYMNTS is grateful for the company’s support and insight. PYMNTS.com retains full editorial control over the findings presented, as well as the methodology and data analysis. © 2019 PYMNTS.com All Rights Reserved 2 What's Inside Digital banking may no longer be a differentiator Customer acquisition isn’t easy, but it is the main when customers decide which financial institution reason banks must provide today’s impatient (FI) to join, but friction is. Consumers expect their consumers with effortless, frictionless digital expe- financial transactions to take less time and require riences — whether on desktop or mobile. fewer steps, whether they’re opening new accounts or making payments. Around the digital banking world FIs need to focus on having the fastest and most Mobile and contactless payments have started to seamless processes available if they want to acquire pick up in the United Kingdom, and the country’s new customers. Social media sites, technology firms Lloyds Bank is upgrading its mobile apps to give it a and eCommerce companies are all experimenting competitive edge over others in the market. The app with banking tools of their own, meaning FIs looking will feature typical bill and spend tracking offerings to create perfect digital experiences have plenty of and, in an appeal to financial literacy, enable users competition. to round their purchases up and save the difference. Banks and other FIs are ready to rise to the challenge, While Lloyds focuses on updating its existing app, and are utilizing their larger budgets and industry U.S. Bank is scrapping its mobile banking system reach to partner with providers that can build out entirely and starting fresh. The FI’s completely new appealing experiences for customers spoiled with solution will utilize artificial intelligence (AI) to pro- choices. One example of this comes from U.S.-based vide insights and spending suggestions, and allow Goldman Sachs, which significantly upgraded its in- users to make larger transactions and decisions — frastructure to appeal to younger customers. The FI like completing mortgage or small business loan recently partnered with Apple on a mobile-enabled applications — through their smartphones. credit card, the Apple Card, set to launch this summer. For more on these stories and the latest headlines China’s Bank of Beijing is also looking to remove fric- from the digital banking world, read the Tracker’s tions from its banking experience by pairing with ING News and Trends section (p. 9). to create a digital bank. The former received a $447 million investment which it will use, in combination Payments Remain Key To Bank Of The West’s with help from the latter, to create the new platform. Customer Service Strategy This move also speaks to a larger industry trend that Consumers are expecting quick and seamless mo- sees FIs connecting with other platforms to best bile and digital services, and that means banks may capture customers. have more difficulty differentiating their apps from © 2019 PYMNTS.com All Rights Reserved 3 WHAT'S INSIDE the crowd. As such, FIs are now employing a number of strategies to better engage customers and onboard EXECUTIVE INSIGHT users to their platforms. In this month’s feature (p. 6), Hisham Salama, executive vice president and head of digital channels for Bank of the West, explains why it’s How can FIs use mobile and other time for FIs to stop thinking like banks when it comes technologies to provide seamless to mobile innovations. customer experiences? Deep Dive: How banks can overcome challenges and provide seamless digital experiences “The financial industry used to look at internet and FIs looking to retain customers in the increasingly mobile banking as one more channel [through which] competitive digital banking space need to meet us- they would interact with customers between physical ers’ convenience needs, which are typically moving branch visits. In 2019, it’s clear that the future of targets. Reducing online banking frictions and sav- banking is a digital-first strategy. It’s projected that in the next three years, nearly 90 percent of all banking ing customers time are good places to start, but this interactions will be digital only. [That's] not just for is often easier said than done. In addition to keeping checking balances or depositing checks, but for every up with the competition, banks have several issues to aspect of a consumer’s financial life, including a address before they can offer tools that count as "con- whole suite of services that take advantage of tailored venient." In this Tracker’s Deep Dive (p. 14), PYMNTS personal experiences. explores how seamless omnichannel experiences, re- One area where this is increasingly important duced document handling time and the introduction is account opening, where consumers demand of biometrics can help FIs upgrade their platforms frictionless set up and onboarding, regardless of and retain their customers. the risks banks are facing [from] … account opening fraud. But, these things don’t have to be at odds. We have the tools to keep customers safe, allow for easy Digital Banking TrackerTM updates account opening and instant access to services and This edition of the Digital Banking Tracker™ includes to surgically weed out bad actors. Machine learning profiles of more than 250 financial players inside its account opening tools that provide granular profiles provider directory, including five new additions: ABC and robust risk scores — even with limited initial data on the applicant — are extremely successful at Tech Group, Albo, Fast Budget and Motusbank. threading this needle. In the end, it’s a win for everyone. Customers get less friction and better products, and banks can seamlessly onboard more customers: a win for everyone except the fraudsters.” JIM PRIESTLEY chief revenue officer atFeedzai © 2019 PYMNTS.com All Rights Reserved 4 WHAT'S INSIDE 5Five Fast Facts 73% 68% 88% Portion of Share of Share of banking consumer consumers in interactions that banking Hong Kong who will be purely interactions that check their bank mobile by 2022 are digital in 59% accounts via 86% nature smartphones and tablets once per week Segment of Portion of consumers who consumers who would share more would switch personal data with FIs if their online banks in exchange accounts were for lower prices difficult to access © 2019 PYMNTS.com All Rights Reserved 5 PAYMENTS REMAIN KEY TO BANK OF THE WEST'S CUSTOMER SERVICE STRATEGY © 2019 PYMNTS.com All Rights Reserved 6 "When you actually start breaking down why people are using banks today, my belief is that it’s centered around the payment experience." HISHAM SALAMA executive vice president and head of digital channels at Bank of the West Most consumers consider banking to be a time- Customer service and the importance of consuming chore. They have many options from payments which to choose and their loyalty can be fickle, Crafting detailed, insight-driven, customer-facing making onboarding and engagement all the more services in the age of mobile banking means accept- challenging. ing that customer satisfaction doesn’t always come That’s why Bank of the West is not trying to think like from new capabilities, Salama said. This doesn’t a bank at all, according to its executive vice presi- mean banks can afford to be complacent, however, dent and head of digital channels, Hisham Salama. as many customers are used to seeing the same fea- Instead, the FI is using data and a focus on payments tures in every digital banking app. to craft an experience centered around what con- “When we start looking at banks as a whole, the sumers really want: simplicity. products are commoditized — everyone has Zelle, “Banks are trying to mimic other banks [on mobile],” everyone’s got a checking account, everyone’s got Salama said in a recent interview with PYMNTS. “We credit cards and loans,” he expained. had this realization, from a digital perspective … that The trick to standing out is not to focus on the prod- in three years, if we’re being compared to banking ucts, but rather on how customers are using those apps and we’re comparing ourselves to other bank- solutions, Salama noted. One prime example is pay- ing apps, we’ve taken a wrong turn somewhere.” ments, a space that has seen customer behavior The bank is using data and tailored consumer perso- change drastically over the last decade.