A Tale of 2 Financial Institutions During COVID-19
My recent experiences with 2 financial institutions point the way to the digital technologies your company (or bank) needs today to help your bank customers cope with COVID 19.
A tale of two financial institutions
Today’s issue is based on the experiences of one person. For data people that’s an N=1. It is not scientific survey, but I’ll bet it is a representative experience.
As a newly appointed member of an organization’s board, I was tasked with changing the authorized signatures on the organization’s financial accounts. This includes money market accounts with a financial institution (aka FI-1) and local bank accounts with another financial institution (aka FI-2). I’m not using their names and other identifying features because I am willing to bet that this story is replicated daily at banks, credit unions, community banks everywhere. Some of them may be your customers.
I set out to find out how to change the signatures on the accounts at FI-1 and FI-2. I started at the websites of both financial institutions. Here is my story.
Financial Institution 1: Easy Flow Between Channels
Image by Claudio Silvano from Pixabay
I had a copy of the form that the organization used the last time to change authorized signatures on the accounts at FI-1. I searched for it on FI-1’s website but could not find it. I called FI-1. The customer service representative knew immediately what I was looking for. I gave him the identifying data and account numbers he asked for and verified my name and email address. The customer service rep said that he would email the form. I printed out & completed the form and took it to the post office along with an official document verifying the change.
A clean, clear process that I completed at home.
Financial Institution 2: Reign of Confusion
Image of New York City by Free-Photos from Pixabay
I moved on to FI-2. I had the business card of the branch manager at FI-2, so I called it. Instead of going to a specific person, it went to a general number that informed me the branch was closed. I tried the number a couple more times to make sure.
I went next to FI-2’s website, logged on and searched for the activity I wanted to perform. Nothing. Then, I clicked on a link to an offer to make a branch appointment. Because of these special times, the bank was allowing people to the branches by appointment only. I checked the list of branches to make sure the one I wanted to visit was open now. No note online that it was closed, so I made the appointment. I specified the reason for my appointment.
I arrived at the branch at the scheduled day & time. I found the front doors locked and no instructions regarding appointments or what to do next. I got into my car and went to the drive-through to talk with the teller. The teller knew nothing about my appointment but took my cell number and said the manager would call me. I drove back around the parking lot. I spoke with the manager. He knew nothing about the appointment I made online. In the branch parking lot, under a hot noon sun, he told me what the actual process was: I had to make another appointment with him at the branch. I had to bring all other authorized signers from the organization with me to sign all the forms.
In the middle of a pandemic.
No exceptions.
No way to do this online.
A 20 minute drive to and from the branch and 30 minutes explaining my pre-arranged appointment and business to a teller and manager. I drove home exhausted.
A week later, after I organized a time we were both available, I made another trip to the branch, mask in my bag of course, and met my colleague in the parking lot. I brought my own pen. During the course of our form signing, the manager discovered that the bank had not yet removed previously authorized signers from its records. A change request made 2 years before.
This experience was confusing, frustrating and annoying. If I could, I would move the organization’s accounts out of this FI.
A Summary of the Tale of Two FIs:
FI-1 provided a direct multichannel experience and path from website search to 1 phone call to forms via email to post office. One phone call. One required signature. No branch trip (if there was one) required.
FI-2 provided a maze of contradictory interactions with websites, phones, tellers, branch managers and branches that require multiple phone calls, branch visits and forms.
What does this mean for digital banking vendors?
A digital banking solution’s ability to cope with a rare but very stressful situation like a pandemic is a measure of its ability to enable banks to actually adapt to fast-paced change. The same goes, I would venture, for banks.
If your solution is marketed to or sold to banks in the US and it doesn’t have a PPP Loan Application or Forgiveness Application, get that up and running everywhere now. You are way behind. If you want to know how far, see what Jill Castilla/Mark Cuban have accomplished.
If your solution doesn’t support account opening and onboarding for all types of bank customers and for all digital and non-digital devices & presences, do that now. You – and your bank customers – are far, far behind. (PS: Bankers: if you’re evaluating digital banking solutions that don’t offer out-of-the-box digital account opening and onboarding at every possible channel & device, why are you evaluating them?)
Identify all the ways to enable contactless customer interactions – at the branch, at the ATM and point-of-sale - and implement the technologies in your solution.
Identify all of the processes that are still done at the branch but not offered in your solution. Do you know what they are? You must think beyond the standard set of transactions typically offered in your mobile and online banking. That’s a lot, right?
Many of those processes are performed in-branch for regulatory compliance reasons. Get busy identifying those digital technologies that achieve compliance in the branch or at home on a device: digital signature, government ID capture, biometric customer authentication.
Do not replicate branch-based processes for digital channels and devices.
Do not replicate paper-based processes for digital channels. Yes, this repeats the above bullet. Duplicating paper-based processes will not differentiate your digital banking solution. It will degrade it.
Is this an inclusive list? Of course not! I have to give you a reason to get in touch.
Yes, your bank customers are going to protest, squirm and otherwise offer up a multitude of reasons why they can’t or won’t change the way they do branch business. This is your opportunity to help them stay in business. This isn’t about getting rid of branches. It’s about infusing digital everywhere. The branch with digital will be more able to help banks - and their customers – respond rapidly not only in the next crisis, but also in the digital after.
Do your customers want to be FI-1 or FI-2?
What else I’m thinking about this week:
RVshare is a midwestern RV startup – It started out in 2013 as an RV sharing platform company – it’s easy to see the parallels to VRBO and Airbnb. Travel, of course, tanked with COVID 19 (and for those of us in the US, it’s still pretty tanked with international travel essentially banned, required quarantines for travel between states). What is interesting about this startup is that instead of folding, it pivoted:
In April, they worked with a group called RVs 4 MDs to place RVs outside doctors’ homes so they could see family but not cross-contaminate. They worked with utility companies to house infrastructure workers and did medical trips for immunocompromised patients.
RVshare is not headquartered in Silicon Valley or New York or Austin. It’s located in the US Midwest, in Akron Ohio. Akron is no stranger to disruption. The city grew rapidly in the 19th century due to an earlier disruptive force: canals. During the early 19th century, canals transformed inland transportation in the United States. It’s tempting to see only the startups and talent in the well-known centers, hubs with the biggest reputations and most people.
Will bankers learn lessons from the 2008 mortgage crisis? – Almost 10% of mortgages in the US went unpaid in June 2020; it’s likely higher now in July. This author suggests bankers avoid the reputational and operational costs by prioritizing mitigation over moral hazard.
Who publishes this newsletter?
I’m a former Gartner analyst. I’ve worked in and covered the banking industry for 27 years. I still think & write about digital banking — but also indulge my other interests, women in tech, startups - especially those in the US Midwest & South Eastern Europe), leadership & change, and AgTech.
I write this newsletter for people who are trying to differentiate their banking software in an increasingly competitive market. That could be people who work at software companies currently developing banking software or people at vendors that want to move vertically into the banking market. I think this focus will interest bankers and investors as well.
I publish weekly. Some ideas and thoughts may not be fully fleshed out. I may reject earlier ideas in future issues. I may expand one idea into a longer piece here or elsewhere. For now, this newsletter is free.
You can find & talk to me on twitter and LinkedIn — I look forward to our conversation.
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