Inside KeyBank's tech turnaround
KeyBank is deploying new technology designed to improve the online and mobile banking experience as well as better guide the conversations branch staff are having with customers. The move comes on top of steps to modernize its IT infrastructure to support its tech revamp.
“We wanted to build a digital framework that would allow us to test and grow inexpensively and with speed,” said Stephanie Gillespie, senior vice president and head of digital technology at the Cleveland bank.
It’s the latest phase of a broad digital transformation that was started in 2014 by Amy Brady, the bank's chief information officer.
Digital channels first
The current project started with the online and mobile channels. The bank has 1.5 million interactions a day with customers online.
“We have grown up over mergers and acquisitions over 192 years and we've had a lot of legacy systems in the online and mobile space that were very slow, costly and risky to change,” Gillespie said. “And then we had an outage that took us almost a day to fully resolve because of the complexity of the systems. And we knew where the fintechs and the big banks were competing within the online and mobile space, so that's when we started our digitization journey.”
The bank improved remote deposit capture, person-to-person payments, alerts and messaging, enrollment and login capabilities in its online and mobile channels. It also improved the overall simplicity and intuitiveness of the navigation and layout. It added the ability for clients to provide real-time feedback in the online and mobile channels.
That feedback is examined by staff every day and fed back into the bank's agile teams to take action based on priority.
"This is critical in helping us ensure focus on the things that our clients care about,” Gillespie said. “Our net promoter scores are the highest they've ever been. Our active users continue to increase month over month, 6% to 10%. We wouldn't be where we're at today if we hadn't shifted based on client feedback.”
The new online site and mobile app include faster payments enabled through application programming interfaces and straight-through processing. Because the bank runs batch processing, a payment sent on a Friday used to take several days to show up at its destination.
“We were able to architect things and leverage APIs to where now, you’re seeing those transactions reflected immediately once you submit that payment,” Gillespie said.
The bank is also building new financial wellness capabilities like budget setting, insights and alerts.
To modernize the digital channels, the bank effectively redesigned its IT infrastructure.
“We got away from monolithic applications where everything is commingled and we broke it up into a three tiered architecture, which really helped,” Gillespie said.
The first tier is a user experience layer that was developed by staff.
Second is an integration layer made up of internally developed APIs, including for logging in; calling up client, account and transaction information; making bill payments; submitting new product applications; device detection; fraud detection; and card management functions.
The third layer is enterprise workflow and orchestration, where the bank uses the Oracle Banking Platform and a few other products from vendors.
The new architecture lets Gillespie’s team make changes to the user experience without affecting the core software behind it, and vice versa. For instance, as the bank migrates to a new loan servicing platform, it won’t have to change anything on the digital experience side.
The bank is gradually taking components from its legacy core systems and moving them into Oracle. For example, it's migrating loan servicing from the advanced lending solutions software it uses now to Oracle Banking Platform Loans; this is scheduled to be completed in September. The Oracle software is an API-enabled, online, real-time loan servicing platform.
Also in September, collections will be migrated to the Oracle Banking Collections. This will allow digital self-service collections via the APIs in Oracle Banking Collections and a custom user interface that KeyBank is developing. KeyBank's collections agents will also use the software if the customer doesn't "self-heal" or is interested in talking with an agent.
The hope is to be able to collect on nonperforming loans, cards and mortgages in a more humane way than harassing phone calls. The old-school method of collecting by calling people during dinnertime no longer works because many people no longer have a home phone and it’s easy to block numbers on a cellphone.
It can also be embarrassing for customers, said Aubrey Hawes, senior director of the financial services global business unit at Oracle.
“It’s not a proud moment” for most people, he said.
He said it's preferable to send a text message or email to customers. The message can give them the opportunity to pay off the debt, make a promise to pay or restructure a payment plan.
This should save the bank money, according to Gillespie.
“From an efficiency perspective, you're not making phone calls to clients, you're not sending direct mail," she said. "There's other areas of efficiencies you get out of the bank by leveraging touch points in a way where you're not harassing and you're not bombarding.”
Other software modules will be moved over to the Oracle system over time.
“We will probably be on this journey for the next two to four years,” Gillespie said.
Guided conversations in the branches
The branches are also part of the digital transformation.
“We are spending just as much time in our branches trying to digitize and bring software and data to amplify and inform that human interaction,” Gillespie said. “Every time a client walks into a branch, we see that as a gift. We don’t want to send them to a kiosk. We want to take full advantage of that interaction.”
In the past, branch bankers used a piece of paper called a financial wellness review guide.
“The client would come in and the banker might or might not ask questions on the paper and the banker might or might not write down the answers and the banker might or might not put those into the system,” Gillespie said.
“So those are rich, powerful conversations that we were missing a lot of value around.”
The software replaces the old paper form with software that runs on touchscreen monitors that bankers and clients can use together. Some data is prepopulated — for instance, client profile data is drawn from KeyBank’s customer relationship management program (Oracle Siebel) and recommendations are pulled from an IBM Interact recommendation engine.
The system drives better, more informed and more relevant conversations with clients, Gillespie said.
“We have heard huge, positive feedback from bankers and from clients on this experience and how much more informed and relevant it has become,” she said. “The data we're getting from these interactions is extremely powerful as well.”
For example, the system tracks whether customers are ready to act on the recommendations they’re given.
“We can potentially use that data to inform an online and mobile experience six to 12 months down the road,” Gillespie said.
KeyBank has hired data scientists to track the value of the guided conversations.
“Do those interactions lead to a healthier, more financial stable relationship, and what does that mean for Key?” Gillespie said. “We aren’t going to try to sell a credit card to someone if their goal is to reduce their debt.”
The bank began piloting its guided conversations system in the fourth quarter of last year and is now expanding it out to the whole branch network.
KeyBank has adopted agile development methods, where developers work in short bursts rather than in long, waterfall project planning cycles.
“We went from two project teams to nine agile squads,” Gillespie noted. “And each of those squads were focused on specific capabilities that they owned for the online and mobile experience. We're working to make that very independent and autonomous, driving down the decision ownership to those teams, which helps bring speed and agility.”
The move to agile was a significant change, Gillespie said.
“We actually had to change the way we did the technology investment planning and funding around it,” Gillespie said. The bank introduced the concept of idea of minimum viable product that can be sent out to clients for their feedback and quickly revised.
One benefit: Quicker, smaller changes to applications means less need to train people in the branches.
The digital transformation also reawakened the bank’s interest in data quality.
“We're not seeing as much traffic in the branches as we used to; clients want the convenience of online and mobile,” Gillespie said. “But how do you still create a relationship and personalized experience for that person in a self-service environment or if they're walking into the branches. It comes down to data and how do we organize our data. Data used to be an afterthought — what report do you want out of this particular investment?”
KeyBank is doing logging and tracking behind the scenes and acquiring data from third parties to get a better understanding of its customers.
“We're a relationship bank and we really want to meet the client with one-to-one perspective even though we're large,” Gillespie said.
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