Fintech partnerships help TD weather the pandemic
Like most banks, TD Bank Group has seen customers' usage of its digital channels grow during the pandemic. But because of pre-existing experiments with fintech partners, the Toronto-based bank was relatvely well positioned to take advantage of the shift in consumer preferences.
Maturing technologies — like TD's virtual assistant, money management tools and messages tailored to specific customers — are becoming more popular as many consumers avoid branches.
“In hindsight, I realize that we had laid a foundation well before that helped us respond to the pandemic in the way that we did,” said Rizwan Khalfan, chief digital and payments officer at TD.
Khalfan credits partnerships with fintechs, as well as a talented internal team skilled in using agile practices.
In one example, the TD team used software from SimpleApps to create web-based forms that customers could use to apply for relief. In another, it implemented a COVID-specific chatbot in the U.S. in three weeks.
As a result, TD Bank’s digital banking roadmap is two years ahead of where Khalfan thought it would be at this time, he said.
The bank now has 14.3 million active digital customers in North America, with a 20% increase in digital engagement over last year.
It has added a million new digital banking users in the last few months. And more than 57% of TD's customers in the U.S. and Canada are now using mobile and online banking.
Much of this growth in new users of digital channels can be attributed to the fact that people haven’t wanted to, or been able to, visit bank branches during the COVID-19 pandemic.
“They came from all demographics, but I was amazed by the senior demographics,” Khalfan said. “We received a lot of feedback to say, 'I'm in my home for the last three or four months, and never thought I would embrace online banking, but I've been forced to do that. And I love it. It's easy to use, I'm never going to go back to how I used to do banking, which was in the physical world.'” Older customers needed more handholding to start using mobile banking, he observed.
The bank has seen a big lift in the use of its chatbot during the pandemic.
TD partnered in 2017 with New York-based Kasisto to develop and later launch TD Clari, a virtual assistant.
During the pandemic, usage of TD Clari by Canadian customers has increased 120% over the same time period in 2019, Khalfan said.
“What we were able to do with TD Clari was push new content and provide new services on a very rapid basis in response to COVID,” he said. “So all kinds of information for our customers, all kinds of information about financial programs that could be available to them.”
In the U.S., TD Bank launched a COVID “skill” created by Kasisto in April, for the purpose of taking care of pandemic-related questions, and thus deflecting such queries from the bank's call center. It’s called TD Virtual Assistant.
“This was done in record time: it was up in three weeks,” through a collaboration of TD's team and engineers at Kasisto, Khalfan said.
So far, it’s deflected 1.7 million customer requests, he said.
Zor Gorelov, founder and CEO of Kasisto, has been tracking usage of his company’s virtual assistants around the world.
“When COVID-19 broke out, we were able to see questions related to the virus and banking in Asia,” he said. “Questions like: Is it safe to touch an ATM? Are branches closed due to COVID? Can I get payment deferral on my credit cards because of coronavirus? And many other related questions. And as the virus evolved quickly from a regional epidemic to a global pandemic, we saw similar requests surface across Europe and eventually North America.”
Kasisto responded by developing its COVID skill, which it made available without charge to all of its customers, he said.
On the bank’s side, TD tracks which mobile banking page users were visiting just before they tap “Contact us.”
“People would be searching for, say, the transit number or the routing number,” Khalfan said. “The team looked at all the data and said, 'Wait a second. We could address this before they call us.' So we enhanced the FAQs, but we also launched this chatbot. As soon as we found a customer hanging around a page, it would appear and say, 'Can I help you?'”
Kasisto and TD Bank integrated this COVID skill into TD’s digital banking interface to help respond to questions.
Chatbots are not new, Khalfan acknowledges. “But we’ve just seen a surge in acceptance with customers being able to interact with chatbots,” he said. “We worked collectively to launch this new virtual assistant, and the adoption and acceptance by our customers has just gone through the roof.”
Help with understanding spending
“In times of uncertainty in the economic environment, people want to understand their spending patterns,” Khalfan noted.
TD has had a partnership Moven, the New York-based neobank-turned-money management software provider to banks, since 2014. It offers Moven's money management tools, which it calls MySpend, to help customers categorize and track their spending. About 2.9 million TD customers have been actively using MySpend during the pandemic. MySpend is currently only available to TD's Canadian customers.
“We’ve seen a real increase in usage,” Khalfan said. “Customers are more cautious about their money, and those insights about where they're spending money become even more valuable on a real-time basis during a time of crisis. Lots of people who went on government subsidies wanted to understand what their cash flow position was. The MySpend capability gave them a very unique way of actually managing their cash flow, which became critical through this period.”
Moven has seen a bump in general user activity and in its pipeline during the pandemic, according to founder Brett King.
"TD was the first major North American bank that partnered with Moven," King said. "We both learned a great deal, but ultimately we proved that fintech/bank partnerships not only work, but provide strong benefits on both sides."
Another fintech partner, Toronto-based Flybits, analyzes customer data to create personalized recommendations for customers.
During the pandemic, the bank has been using this technology to nudge customers to self-serve. For instance, the Flybits software found a cohort of customers who were using direct deposit and online bill payment, but still going to into branches to deposit checks. Those customers received messages recommending that they start depositing checks through the mobile app. The messages linked to videos that show how to use mobile check deposit.
“That drove digital adoption significantly,” Khalfan said. “Flybits helped us deliver that content in a very personalized manner. And that draws the wave of digital adoption towards those self-serve capabilities.”
In the U.S., this capability is called TD for Me. It’s a portion of the mobile banking app that lets users apply for financial relief, offers schooling in security measures, links to the TD Learning Center (which provides tips on personal banking and credit) and provides guided tours of banking tasks.
“Flybits looks at the customer data we have, then contextualizes that experience for our customers,” Khalfan said. “We've seen a significant adoption of TD for Me.”
Its role is to understand where customers are in their digital journeys and provide them with the right prompts to help them embrace digital tools.
“What we're trying to avoid is sending mass communication to customers, but to make it very personalized,” Khalfan said.