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Brian Stone
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Gaining and retaining customers and members is a priority for all financial institutions (FIs). One of the important ways to do this is to ensure your digital account opening process is flawless.
Unsurprisingly, a Harris Poll found that 51% of surveyed respondents named convenience, defined as being able to do anything digitally that can be done in the branch, as “the most important quality in a digital banking experience.” As such, FIs need to make it just as easy for digital visitors to find information, research options, and open new accounts as branch visitors. Yet, this is often easier said than done—the application abandonment rate is 60% after just 5 minutes.
Making this issue more urgent is the fact that some generations will not just abandon an application if the process is too cumbersome, but they will also switch FIs. BAI research has found that the percentage of Gen Zers likely to switch their primary financial institution if offered a better digital banking experience elsewhere grew to 73% from 60% last year. Millennials showed similar numbers and switching Gen Xers increased to 60% from 42%. With this in mind, making digital account openings seamless is critical, and having the right interaction tools is the key.
When your customer service representatives can see what digital users are viewing and how long they stay on certain pages, they can proactively offer help, before abandonment. Offering just-in-time assistance in a consumer’s preferred channels, like live chat and video, enables you to engage and guide them through their online journey more easily. Live Observation and CoBrowsing provide reps with valuable context so that the online visitor doesn’t need to explain what they are doing, shortening overall engagement time and increasing the likelihood of application completion.
Along with real-time live assistance, setting up automated business rules and digital routing can help direct visitors to the right location on your digital property or a specific representative from the start so the account opening can be as smooth as possible. With concise business rules to identify signs of struggle coupled with effective digital routing, FIs can proactively engage with the applicant and better steer them on their digital path to avoid abandonment. Once these are set up to work automatically, only periodic reviews are needed to ascertain their continued effectiveness. This makes opportunities for online conversions more consistent.
At the end of the day, digital users want effortless interactions, including seamless transitions from one communication channel to another. While today many banking customers still call in for assistance, as digital adoption continues, that number will decrease. Having a Digital Customer Service solution that is flexible enough to shift from one channel to another allows FIs to support their digital account openers on whichever channel they use. When applicants can start with live chat and seamlessly upgrade to audio or video as their intent increases, FIs reduce dropoff and drive conversion. Having a platform that can accommodate one seamless, ChannelLess™ engagement makes account opening, along with any other digital banking activities, effortless and more likely to cross the finish line.
As the race continues for market growth, digital account opening is an essential process to optimize. Don’t get left behind when the right digital tools are available to keep you at the front of the pack.
For more information on how to use Glia’s Digital Customer Service solution for a greater number of digital account openings and total conversions, view this infographic.
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Glia
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Whitney McDonald
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Whitney McDonald
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When ChatGPT seemingly burst on the scene late last year, everyone from college students to CEOs took notice. For financial institutions, ChatGPT is just one tool in their digital transformation toolkit. It can refine and complement existing digital banking solutions, but when it comes to improving digital customer service and engagement, it still has a long way to go.
To build out digital customer experience tools, it’s better to go with digital assistants or chatbots that are more refined and specifically trained for banking services. But first, let’s take a look at what everyone’s talking about.
ChatGPT is a chatbot trained on a massive amount of data. It models the person it is talking to and can engage in a contextual conversation, much like speaking with another person. In certain situations, it would be difficult to distinguish between ChatGPT and another person.
The technology is based on large language models (LLMs), specifically GPT-3.5. A large language model is a tool that can predictively compose text based on patterns it has learned from massive amounts of text data, usually drawn from publicly available sources, such as the internet. GPT, or generative pretrained transformer, is a framework for large language models based on the Transformer architecture for deep neural networks.
These neural networks can track sequence and relationship data — such as words in a sentence — to learn context and, ultimately, meaning. GPT itself has been making headlines since the release of GPT-3 in June 2020.
ChatGPT is like nothing most of us have seen before. It seems knowledgeable and creative, it can write code and poetry, and even create games. More importantly, it is more likely to align its output to the user’s specific goals and much less likely to produce inappropriate or toxic output than previous LLMs.
But for today’s financial institutions, ChatGPT and other similar technologies are still in the early stages of development and, as such, come with a bit of baggage. Here’s why:
Current banking customers are comfortable with using a chatbot. According to a Cornerstone Advisors study: “Among consumers whose bank or credit union has deployed a chatbot, 70% have used it at least once, with about three in 10 having used it three or more times.”
The study also showed consumers’ satisfaction with their digital assistants’ interactions is strong, with half being “very” satisfied and 43% reported as “somewhat” satisfied.
Yet for banks looking to build out their digital banking solutions with a chatbot, or its more robust cousin, an intelligent digital assistant (IDA), ChatGPT is just not ready for prime time. It’s a more basic and generic chatbot that’s not exclusively built for customer service.
It’s better to look for chatbots or IDAs that can address member queries, provide personalized and detailed financial information, help consumers make smarter financial decisions and act as the first encounter with your brand.
There are a number of chatbots out there. But no matter which solution banks choose, a chatbot or digital assistant can be a forward-facing, bank-savvy digital solution that speaks the unique language of their financial institution.
Smart, personable chatbots can do that. ChatGPT? Not quite yet.
Sasha Caskey is the chief technology officer for Kasisto, which makes conversational AI-powered digital assistants for financial institutions.
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Sasha Caskey
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Amanda Harris
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Amanda Harris
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Whitney McDonald
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Brian Stone
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The swift collapse of Silicon Valley Bank has shaken the banking industry during the past two weeks. SVB engaged in risky lending practices and did not have the necessary safeguards in place, leading to a run on deposits that eventually sent the bank into receivership, Mike Sekits, co-founder and managing director of community bank partnership […]
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Brian Stone
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Conversational AI can assist banks with customer needs while providing savings for the banks that use the technology. It allows financial institutions to better know and service customers via existing data, Erin Wynn, director of product management at technology company NCR Corp., told Bank Automation News. “There are the things that [banks] could learn or […]
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Brian Stone
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Envestnet is rushing to release a product Monday that is designed to help financial institutions avoid a “Silicon Valley Bank situation.” The wealth tech giant’s new Bank Deposit Index will allow bank treasury executives to track inflows or outflows of deposits and segment them by “big, regional or small banks,” as well as consumer segments […]
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Brian Stone
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LONDON — HSBC acquired Silicon Valley Bank UK earlier this week, but will those tech clients stay with HSBC or will they turn to neobanks? That was a question from Chris Skinner, chief executive of The Finanser, on Tuesday at the FinovateEurope event in London. “HSBC got a very good deal in my opinion as […]
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Neil Ainger
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LONDON — Consumers continue to utilize embedded payment options regularly— from Amazon purchases to digital wallets and even the Starbucks app. “It’s predicted that 74% of digital consumer payments globally will be conducted by platforms (from) nonfinancial institutions by 2030,” Martin Hyde, EMEA partnerships lead at JPMorgan Chase payments, said Wednesday at the FinovateEurope event […]
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Whitney McDonald
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Southern Bancorp’s innovation division is looking to gain a competitive edge against larger financial institutions by developing products specifically for the communities it serves. The $2.5 billion Arkansas-based bank decided “we better get focused,” Vance Smiley, chief of operations and systems integration at Southern Bancorp, told Bank Automation News, noting the bank will “have real […]
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Whitney McDonald
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Michigan State University Federal Credit Union saves 2,000 employees hours each month via its AI-driven, internal chatbot Gene. The $7.3 billion, East Lansing, Mich.-based credit union launched its internal bot Gene through its innovation lab, which was stood up in 2021, Ami Iceman-Haueter, chief research and digital experience officer at MSUFCU, said Friday at the […]
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Whitney McDonald
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Royal Bank of Canada’s (RBC) discretionary and tech-related expenses jumped 22% year over year to $190 million during the first quarter as the bank focused on improving its technology and infrastructure “in support of business growth and product innovation,” according to its earnings presentation Wednesday. WHY IT MATTERS: The $1.4 trillion bank is upgrading its […]
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Brian Stone
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For community banks, marketing often points to finding ways to educate, support and grow community, as well as customer knowledge and awareness.
True relationships withstand the test of time, and such is the case with the community bank/customer connection. It’s not unusual to hear about a community bank having served a family or a business for generations, and that’s a testament to the strength of the relationship.
As we consider marketing in this month’s issue, I took time to reflect on exactly what differentiates the community banker and how marketing can help in growing and retaining business. I kept coming back to the fact that for community banks, marketing often points to finding ways to educate, support and grow community, as well as customer knowledge and awareness. By extension, these promotional efforts assume a natural role in a community bank’s journey, just enhancing what are already mission-critical initiatives.
I’ll be connecting with community bankers from around the country at ICBA LIVE in Honolulu, Hawaii, from March 12–16. I hope to see you there!
For example, consider ICBA chairman Brad Bolton’s Community Spirit Bank in Red Bay, Ala., and its work to share tips for financial resolutions in the local paper. Offering that information to the community helps individuals strengthen their financial savvy and supports a broader story of community bank leadership.
Or look to ICBA past chairman Bob Fisher’s bank, Tioga State Bank in Spencer, N.Y., and how it teams up with local television stations to support cause-related activities, like the No Shave November Cure the Blue 5K. Not only does this event help raise funds for an important program, it also demonstrates the bank’s commitment to its community.
These examples offer only a snapshot of what community banks all over the country do to support their communities from a mission-based approach. In many cases, the added promotion these efforts deliver is a side benefit to serving the community.
That’s precisely why these efforts are successful: They garner attention because they are the right things to do. These stories create a value proposition around why banking with a community bank is so vital, and the differentiation from megabanks and credit unions happens by leading with the community bank relationship model front and center.
So, as you think about your bank’s planned storytelling this year, know that ICBA is standing by to help. In fact, stay tuned for a very exciting announcement that we’ll be making during ICBA LIVE, which will shine a light on what differentiates community banking. And our work won’t stop there. We invite to you join us as we continue to tell the community banking story.
Because beyond marketing, what you do matters to the customers and communities you serve. You are and will remain a partner through your customers’ lives and financial journeys. From a marketing perspective, that’s an ideal place to be.
Rebeca Romero Rainey
President and CEO, ICBA
Connect with Rebeca @romerorainey
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Lauri Loveridge
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Photo by Ismail Rajo/iStock
The time has come for the long-awaited FedNow launch. As community banks navigate this process, there are plenty of resources available to answer questions and provide guidance.
By Colleen Morrison
Between May and July of this year, non-pilot instant payment transactions will be live on FedNow, the first new Federal Reserve payment rail in more than 40 years. After much strategy, planning and discussion, the implementation phase has arrived.
“As we near launch, I’m reminded of where we started,” says Nick Stanescu, senior vice president and business executive of the FedNow Service. “The decision to build the FedNow Service was the result of a multiyear initiative of collaborating with the industry to explore ways to modernize the U.S. payment system.”
He notes that the launch of FedNow will represent a major landmark in modernizing and improving the U.S. payment system. “Importantly, this will level the playing field by allowing financial institutions of every size to benefit from safe and efficient instant payments,” he adds.
As community banks look to take advantage of this new opportunity, they seek resources to help them navigate the journey. With that in mind, industry experts agree there are three key sources of information to support banks in honing their instant payments plans.
The Federal Reserve launched the FedNow Explorer to help financial institutions establish their individual evaluation and implementation needs. Offering a guided journey, a self-explore option and a quick link to resources, this site incorporates the latest news and information from the Fed about FedNow. In particular, the Service Readiness Guide and the Service Provider Showcase provide insights into preparation requirements and available solutions.
“You have to educate yourself; you have to educate your employees and your management team. So, starting off with the FedNow Explorer has a lot of great resources,” says Sherri Reagin, chief financial officer at FedNow pilot participant North Salem State Bank, a $590 million-asset community bank in North Salem, Ind. “We even showed one of the videos at our annual training to all of our employees. They’ve heard me talking about FedNow for a couple of years now, but they didn’t fully understand it until there was a visual. There are so many great resources on that website where people can really get started.”
The Federal Reserve account executive stands as a valuable resource for asking bank-specific questions about the FedNow Service and can benefit community banks that want to be early adopters. For example, Stanescu points out that there are four core capabilities of instant payments readiness that a community bank’s Federal Reserve account representative can help evaluate:
Each area creates important decisions for the bank, and the Fed account executive can help financial institutions navigate the pros and cons.
“Your Fed account executives are great places to start, as well as your technology solution providers, based on the product lines you think are going to use FedNow,” says Kari Mitchum, vice president of payments policy at ICBA.
To that point, solution providers will play a crucial role in implementation from the core system to downstream customer-facing applications. Community banks will need to decide their required functionality in receive-only or a send-and-receive scenarios and work with their providers accordingly. For most, that process starts with talking to their cores.
“My advice: Build a plan, understand what partners must be involved and do a lot of exploring with vendors,” says Debra Matthews, chief of deposit operations at $2.1 billion-asset Texas First Bank in Texas City, Texas, a FedNow pilot participant. “Explore what your core has available and plans to do in the future and determine if any additional third parties are needed for implementation.”
Reagin agrees, emphasizing the enhanced role that core providers will play to accommodate FedNow. “Everything we do, all the fintechs that we use—if you’re going to settle a payment, it has to go through your core provider to get through your system,” she says. “So, they’re going to have to be involved, regardless of who you use to interface between the Federal Reserve and your financial institution.”
While the FedNow Service will launch in just a few months, the wide-scale rollout will take some time, and customer adoption will follow suit. However, if market history bears any indication, instant payments will be a critical part of payment processes in the future.
“Keep in mind Apple Pay has been out for almost 14 years, and QR codes were created in 1994. FedNow coming out is not going to be some overnight change,” Mitchum says. “There’s that story from [FedEx founder] Fred Smith that he had the idea for FedEx in the 1960s, and the paper got a ‘C’ on it. They said, ‘Nobody wants stuff next day; there’s no need for this.’
“Now we’re in the time of Amazon same-day delivery, two-hour delivery. But that doesn’t mean that we got rid of USPS. It doesn’t mean we got rid of two-day shipping. There are multiple choices for moving goods; there’s going to be multiple choices for moving money.”
But with the rate of change in today’s digital space and this immediate gratification environment, it won’t take long for demand for instant payments to accelerate.
“I think FedNow is going to transform the way that we do business, and the way that businesses operate in the future.”
—Sherri Reagin, North Salem State Bank
Use cases like early wage access, P2P payments and insurance disbursement have already emerged, and others will continue to develop. Community banks that don’t begin exploring instant payments may find themselves at a competitive disadvantage more quickly than they might think.
“Financial institutions need to really learn the benefits of FedNow to be able to accelerate the services that we can offer to our customers. I think FedNow is going to transform the way that we do business, and the way that businesses operate in the future,” Reagin says. “The sooner we can get our customers and our employees acclimated to it, it’s just going to skyrocket.”
Community bankers benefit from education tailored directly to their needs, so ICBA has developed customized education to complement available resources.
For example, ICBA Bancard ran a five-part webinar series called Ramping Up for the FedNow Launch, which includes the following sessions:
ICBA is planning more events as the FedNow go-live date nears.
“We’re looking to put together a robust 2023, and it’s going to be dynamic,” says Kari Mitchum, ICBA’s vice president of payments policy. “So, as we get closer to launch, make sure you’re always reading NewsWatch Today. We’re going to make sure there are frequent webinars and lots of education out there.”
Currently, more than 180 financial institutions belong to The Clearing House’s Real Time Payments Network (RTP), and 80% of network participants are community institutions with less than $10 billion in assets. It became an attractive option for banks that wanted to get an early jump on instant payments.
“We do think that there’s value in being set up to receive on both the RTP Network and FedNow,” said Nick Denning, senior vice president of payments industry relations at ICBA Bancard. “For a bank that is still trying to figure out what its broad instant payments and FedNow strategy will be, getting set up on RTP to receive now is one thing it can do to get moving forward while they figure out the nuances of their plans and approach.”
Many third-party providers will use the same instant payments solution to hook into FedNow and RTP, so setting up to receive RTP transactions will help banks prepare for FedNow.
Colleen Morrison is a writer in Maryland.
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Lauri Loveridge
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I am grateful to have had the opportunity to serve as chairman. I will continue to advocate for community banking, and for the rest of my career, stand side by side with you to fight our future battles.
Serving as ICBA chairman has been one of the highest honors of my life. It’s hard to put into words how special this experience is. The work you’re doing every day puts real faces and names to the communities we’re fighting for, and it has been a privilege to be your representative at the national level.
Yet, it takes the voices of many to make a true impact. That’s why I’ve asked community bankers to sacrifice a few minutes every day to advocate for our industry. We are what stands between our customers and an overreaching federal government and regulatory system. We hold the line for Main Street America, which needs us.
Reflections on community banking:
In today’s environment, that vigilance is critical to staying ahead of emerging threats. Each day brings forward new concerns, and we have to stay focused on who we are and who we represent. So, keep pressing forward in defending this great industry we get the opportunity to serve.
For example, every community banker has a primary focus on how they can better serve their customers. It isn’t about making more money, but how we respond to community needs. We should also remind policymakers that community bankers are small business owners, too. And even though we have fiduciary and regulatory responsibilities to remain profitable and provide a return to our shareholders, our focus always comes back to how we can serve our customers better. In maintaining that focus on our relationship-centric mission, we will continue to thrive.
That’s why it’s vital for community banks to remain independent, and a big theme for me has been encouraging bank executives to identify their next generation of leaders. There are those within your institution who share your vision and passion. Support their development and groom them to take the reins. Without your bank, your communities are at risk. So, make a succession plan to ensure your bank remains the lifeblood of the community.
With that in mind, I implore you to keep fighting for Main Street. Keep raising your voices to advocate for your customers. Keep engaging with innovative companies to grow, evolve and better serve. Keep identifying future leaders to ensure the longevity of your institution, because your communities need you in their corner.
I want to close by saying I am grateful to have had the opportunity to serve as chairman. I will continue to advocate for community banking, and for the rest of my career, stand side by side with you to fight our future battles. With that passion leading, I’m confident we’ll witness the continued growth and success of our beloved industry.
Brad Bolton, Chairman, ICBA
Brad Bolton is president and CEO of Community Spirit Bank in Red Bay, Ala.
Connect with Brad @BradMBolton
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Lauri Loveridge
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