The Path to Better Digital Channels: Fiserv's Ginger Schmeltzer

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At SunTrust Bank, Ginger Schmeltzer drove several pioneering mobile banking projects. She was lured over to Fiserv last year to fill a new role of senior vice president of emerging payments. In this interview with sister publication PaymentsSource, Schmeltzer offers her take on how banks can improve their digital offerings.

PaymentsSource: Banks sometimes struggle to meet customers' expectations for a cross-channel experience. Are these problems solved by implementing new technology or finding better ways to use existing technology?

Schmeltzer: It's a combination of both, depending on where the bank is in its technology lifecycle. There are banks out there that have a much more nimble and modern technology they can work with, while others are really out of date. And there's everything in between.

The banking industry is shifting toward a customer-first mentality. The banks were historically not customer-centric, but there's a big movement to build processes around customers to make their experience seamless and let them accomplish everything they want to do in the fewest number of steps and amount of time. I think it's a mix of people, processes and technology to make that happen and banks have to move all those levers to make that happen.

PaymentsSource: Where does a bank start when it's trying to design a more seamless customer experience? Does it start with the core banking system and move out to ancillary platforms? Or is it an outside-in approach?

Schmeltzer: It's a difficult question and every bank has a different way to approach it. But it can't be one or the other. You can't afford to wait to start with fixing your core and building out from there, while doing nothing else with the rest of the technology. That will take too long. Conversely, you can't just start working on the stuff on the surface without fixing the core because eventually you're going to have too much spaghetti. There's got to be a parallel path.

You have to make incremental improvements on your channels and your products that are served through those channels, while you're also fixing the underlying infrastructure. The analogy that we like to use is that you're changing the tires while you're driving 55 miles-per-hour on the highway. You have to do a combination because you can't afford to not have customer-facing improvements, but you also can't afford to build too much on top of an unstable infrastructure.

PaymentsSource: What's the business justification for these investments? Can banks rationalize dedicating the resources that are required to bring their technology to the level that their customers want?

Schmeltzer: One of the biggest justifications for investing in the digital channels is that channel interactions are declining at the branch. They're flat-to-down at the ATM and call center, but they're skyrocketing in the digital space.

The shift in channel interactions means there's a fundamental shift in the cost to serve a client. If you get more of those transactions on the digital channels and fewer of them happening in the teller line or at the call center, your cost per transaction does go down. It's hard to tie that back into real numbers, but it is a very good case to be made.

Also, the more interactions the bank has with customers, the more opportunities it has to cross-sell additional services to the bank's customers. If I've got somebody going into a branch once a month, but they're going online 10 times a month and are using mobile 15 or 20 times a month, that's a lot more opportunities to cross-sell them something in a very targeted way that's relevant to their situation. The other justification used for investing in digital products is the retention benefit. You're stickier with bill pay, you're stickier once you use P2P or add mobile, which then increases the customer's lifetime value.

To see more of our Q&A with Ginger Schmeltzer, visit our sister site PaymentsSource.

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