Weekly Wrap: Banks tackle crisis CX and stand-alone brands

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Rick Morgan 0:01

All right. Hi, everyone. Welcome to this week’s edition of the weekly wrap. I’m a news editor of bank innovation Rick Morgan, and I’m joined by my colleague Bianca Chan, also a news editor at Bank innovation. Here to talk about the week’s biggest events. This will also be posted as a podcast on our FinTech unfiltered brand. First, before we get started, I want to give a big thanks to our sponsors Mambu, Infogroup and Q2 ebanking. And yeah, let’s launch into the biggest stories of the week. Yeah, I know you did a story about banks and how they are being ranked on their crisis yaks.

Bianca Chan 0:38

Yeah, yeah, it was super interesting. So we looked at this report by Verint, which surveyed nearly like 4000 consumers across the US just to see how their banks customer service stacked up during the pandemic. I mean, we we reported on stories, but we saw banks make radical changes to their existing processes and when COVID hit like moving their call centers and Seemed like chatbot volume spike and the branch closures. And so it was interesting that some banks actually improve their customer experience during all this market disruption. Citibank and Bank of America are to that improve their standings, and we looked into a few pivots and tools that help their city invested in these how to videos to help alleviate the call center volume. Well, Bank of America also made some heavy investments in moving their like for 14,000 member call center to work from home, which involved surveying the tech demands of each employees home and rerouting call volume and adding new controls. So I think getting a jump on that really helped with the bank scores. Some banks that didn’t do so hot regions and TD scores felt the most. And while the scores themselves are still high, because they had great customer service scores prior to COVID. It seems like the difference between which banks improve customer service during the pandemic kind of came down to size spoke with somebody Current research researchers who said that national banks are typically better equipped to handle these like large shifts in consumer behavior. And it seems like the regional ones kind of struggled to maintain their their service offerings, which apparently is an important element that gained influence during the pandemic. So pretty interesting to see that some banks were actually able to take advantage of everything that was going on and improve their customer experience.

Rick Morgan 2:26

Yeah. Was this for retail banking?

Bianca Chan 2:27

Yes.

Rick Morgan 2:28

Yeah. That’s interesting. Yeah. It’s kind of a contrast as we’ve done stories about how the small community regional banks have actually done better with the, on the commercial side with the PPP loans. And how big banks have kind of failed to step up as much as some of the the regional and community banks when it comes to processing those loans. Well, actually addressing this either winning this side of the fence,

Bianca Chan 2:50

I should make the distinction that this was just looking at the top 15 biggest banks. I know.

Rick Morgan 2:56
I mean, some of the some of those. What do you get out Yeah, I get That’s good point. But still, I mean, some of those sort of mid size, I guess regional banks also still processed a lot more PPP volume, then, you know, the top three.

Bianca Chan 3:07
Mm hmm. Yeah. I feel like a lot of our reporting has kind of been looking at how smaller regional community banks stack up to the big banks. I know you wrote your feature this week on on that

Rick Morgan 3:20
particular Yeah, I worked on the feature this week, basically looking at how smaller banks are kind of aggressively pursuing standalone brands, or digital options, whatever you want to call them. Especially given how a lot of the bigger banks have had to kind of shut their forays into that down. We had JPMorgan Chase shut down thin RBS shutter Bo in May. I believe, and Wells Fargo is still on a seven day pilot with greenhouse. So you know, these brands, these bigger banks are you know, they’re they’re trying this out and they’re not they’re kind of realizing that maybe it’s not the best way for them to upgrade their digital channels. By Creating a standalone brand. And they’re probably just instead folding that tech into their their main offering. But what’s interesting is that a lot of these community banks, these regional banks are still pursuing that strategy. And they’re kind of getting into it. Now. There’s a host of small banks doing this Midwest bank center with its rising bank brand, Pacific National Bank with fasil. Senior bank with a thing called bill an arrow, which is like a savings app that’s sort of gamified. And then trans Pecos bank, which is in Texas has 233 million in assets, which is obviously pretty small, has launched like a bank targeting physicians, called bank MD. And that’s just like a few of the ones that our research has come across, you know, and it’s these. There’s a lot of vendors that are sort of realizing that these community banks want to give this a shot. And so they’re all sort of launching their like digital bank in a box kind of offerings that will let you stand up a standalone brand. In only 90 days. FiOS has something called core on demand. jack Henry has an offering as well. Nimbus has this thing called Smart launch terminals has a way of doing it. So it’s becoming a pretty competitive field. And it’ll be interesting to see, you know, the community banks think that they have an edge because they’re a little bit more nimble. And they don’t really have to worry about cannibalizing as much. Because if you have this smaller geographical footprint, you can launch a standalone brand and getting customers in different markets. So they don’t have that risk as much. It’ll be interesting to see whether or not they can continue, you know, continue momentum and see success with us in the long term, since there are a lot of these are just kind of getting off the ground now.

Bianca Chan 5:35
Yeah, I’d be curious to know, like, if it really is just a different kind of competitive landscape, or if the bigger banks know something that the smaller banks don’t, and it’s just that the smaller banks are, like a year or a few months behind.

Rick Morgan 5:51

Yeah, I think that’s one of those things that will times just gonna tell.

I don’t I don’t have an answer. I don’t know if anyone really does yet. It’ll be interesting. To see I mean, they, some of the community banks are focusing more on like specialized things like the trans Pecos. Bank with bank MD. It’s a little bit more specialized geared at like physicians specifically. And not just like a general sort of PFM money management tool like like greenhouse and fin. And you also have the bill and arrow thing is kind of cool. It’s this like, you basically enter, you get entered into a raffle, essentially, depending on how much money you put away into the savings account to win like $1,000 or $10,000, depending on if it’s a monthly or the quarterly drawing. So it’s a little bit these products are a little bit more niche, then, you know, just like a differently branded challenger bank, yeah, essentially, it’s not just like Wells Fargo rolling out its own version of chime, it’s something a little bit different. So they’re trying something different. And you know, it’s early on, and, you know, the issue of scaling is a lot different at this point. Community Bank then visit something like like JPMorgan Chase, which is the biggest bank in the country. So it is a completely different business model in a way. So it’s gonna be interesting to see whether or not it works out for them in ways that it hasn’t worked out for the big banks.

Bianca Chan 7:16

Mm hmm. Right. And then also our colleague, Vaidik Trivedi also wrote a story on upgrade. Can you tell us a little bit about that, since he’s not able to join us here?

Rick Morgan 7:26

Yeah, upgrade is a pretty, you know, interesting company, they have this credit card variation. It’s kind of a weird credit card hybrid with an installment loan aspect to it where your purchases get rolled into an installment loan. So instead of like, if you buy something for $1,000, instead of having to pay $1,000, at the end of the month, it automatically gets split into a an installment loan over the course of I think it’s 12 or 36 months, however long and they also do personal loans, but they are launching a bank account and they want to get into the challenger bank, sort of Thanks space. And even despite all of the sort of the the cooling factor, I guess that’s happening with challenger banks. And the fact that they’re losing a lot of their valuation, and people are kind of starting to think that, you know, maybe there’s these, these business models aren’t the most sustainable in the long term. What upgrade is saying is basically, like, we started with credit products, and now we’re getting into bank accounts and not the other way around. So we have a monetizing model to begin with, we’re not just going to rely on interchange and you know, whatever we’re going to, we have a loan product to start that has gotten us gotten us this far. And so we don’t have to worry as much about profitability because we started that way. And now we’re getting into bank accounts and some of the other way around.

Bianca Chan 8:43

Right. It’ll be interesting to see if they’re able to kind of tap that customer acquisition pipeline, like the other going the other way than all these. Yeah.

Rick Morgan 8:51

Yeah, exactly. I mean, we see it so often from the other side, like starting with a bank account, figuring out how you can like get a credit card in there. This is kind of the exact opposite. So it’ll be interesting to the founder is Renata planche, who also founded Lending Club.

Before he had sort of an exit there that was, you know, he had his problems with the SEC, obviously. But he clearly knows how to create a business that that they can get off the ground. I mean, Lending Club is now publicly traded. So this isn’t his first rodeo. This is not this is not as I say, a guy with a hoodie in his garage, you know, just creating something. This is someone with some pretty serious business chops. So we’ll have to watch and see.

Bianca Chan 9:35

Yeah, it’ll be super interesting.

Rick Morgan 9:37

I know, next week, you’re working out some some payment stories as well. So looking ahead, kind of what can we expect next week?

Bianca Chan 9:46

Yeah, it’s interesting. I feel like an overall trend in our reporting that we’re seeing is just this kind of demand or this need for like alternative payment methods. I mean, I agree. It’s a testament to that, but we’ll be looking at point of sale financing and also, look at at Wells Fargo’s commercial payment strategy as well. And then new, what can we see from you next week?

Rick Morgan 10:06

We’re going to be looking at some some different big banks and their mobile strategies and sorts of new things are getting into and how they, if it’s perfect for some of the banks that are seeing a spike, how do they plan to continue that? And for some other banks, you know, what, what are they changing about their their mobile strategy moving forward, so it’ll be an interesting week. Awesome. Can’t wait.

All right.

Well, thanks, everyone for joining and we will see you next week. And we’ll also see you on banking innovation dotnet As always, thanks.