Delaware bank's tech overhaul shifts into higher gear
WSFS Financial in Wilmington, Del., has a greater sense of urgency for upgrading its digital platform.
The $12.3 billion-asset company was one of the first banks to vow to funnel cost savings from a large acquisition into technology upgrades when it announced an agreement to buy Beneficial Bancorp in August 2018. That deal closed last March.
While it was a novel concept at the time, other merging banks have followed with similar plans. For instance, tech upgrades were a big rationale for the megamerger of BB&T and SunTrust Banks that created Truist Financial.
WSFS, as a result, has expedited the timeline for its overhaul from five years to three years. And it plans to spend nearly half of the $32.5 million it earmaked for digital upgrades this year.
“The pace of technology is moving very quickly and we want to be in a position where we can continue to respond and innovate and provide what our customers are looking for,” Chief Technology Officer Lisa Brubaker said during the company’s recent earnings call.
WSFS spent much of 2019 laying the groundwork for its tech strategy.
The company closed or sold 25 of the 30 branches it planned to shutter, freeing up funds. It hired its first chief digital officer and worked with PricewaterhouseCoopers to assess the tech landscape and how the bank might fit in.
“People want their experience with their bank to be like when they're shopping on Amazon or using Uber," Rodger Levenson, the company’s chairman, president and CEO, said in a recent interview. “We had a great digital product offering, but things are changing rapidly."
The assessment found several areas where WSFS needed to improve, including its platform for letting new clients open accounts online. An upgrade is planned, keeping in mind that customers want a sign-up process to take five steps or less.
“It takes a lot more than five taps for our online account opening," Levenson said.
WSFS has also found more supporters since announcing its approach to tech.
The company’s initiative will accelerate its investments in technology and infrastructure, targeting the customer experience with peer-to-peer payments and personal financial management, said Russell Gunther, an analyst at D.A. Davidson.
“In today’s environment, banks need to try, and yes fail, at implementing many technologies to learn what their customers want and what will drive future growth,” said Jeff Marsico, an executive vice president at the bank advisory firm Kafafian Group.
Such endeavors require open-minded leadership and a long-term vision. Marsico noted that many banks make strategic investments only if they can recoup the costs quickly.
WSFS looked outside the company for leadership, hiring Corynn Ciber in August as its chief digital officer. Ciber, who is working with Brubaker, was the lead infrastructure project manager for Barclaycard US.
Community banks must avoid the temptation of taking on too many projects or being too aggressive in their efforts to keep up with fintechs and bigger banks, said Jim Adkins, managing partner at Artisan Advisors. Smaller banks must be selective and remember that branches still provide a marketing advantage, he said.
While accelerating its upfront investment, WSFS is content to sit back and let fintechs spend more money on research, Levenson said.
"We're not trying to replicate everything they're doing," he said.
Having strong ties to local markets should help WSFS hold its own against national banks as it works on its online and mobile offerings, industry observers said.
“Banks will figure out how to keep up” with tech, Marsico said. ”The advantage is knowing that most WSFS deposits will be deployed in Wilmington and Philadelphia and the surrounding area.”
The idea to revamp the tech platform originated in 2016 when Mark Turner, Levenson’s predecessor, returned from a three-month tour or visiting financial institutions, fintech firms, traditional retailers and medical device companies.
Along the way, WSFS determined that it needed to make some changes.
WSFS, for instance, realized that WSFS Everyday Pay, its own payment app, had lost favor among people who preferred Venmo or Zelle. The company signed on with Zelle last fall.
The company plans to incorporate integrated architecture into its data and workflow platforms, focusing on areas such as enterprise document imaging and back office automation. Cyber security, fraud oversight and integrated internal control monitoring also need a closer look.
Other new programs include myWSFS, a highly personalized messaging app that securely connects customers to personal bankers, and WSFS iQ, an interactive mobile platform focused on financial education.
WSFS also plans to improve its online and mobile account opening processes later this year.
“We've got customers to serve and others to attract, and we're ready to execute,” Brubaker said during the quarterly call.