As competition makes way for partnerships and collaboration across Fintechs and incumbents, American Banker and Monigle conducted a first of its kind study to establish the imperatives for a “humanized” customer experience that will reshape the customer relationship, increase satisfaction and loyalty.
In this opening session, Brian Elkins of Monigle and Janet King from American Banker unpack a new model for customer experience and key themes and examples to help shape the reimagined baking experience, including:
- The personalization and privacy tradeoff
- The role of identity, personal and societal values
- Banking in a mobile-first, social-driven world
- Moving from branch transformation to Digital customer journeys
00:00:07:10 - 00:00:39:18
Penny Crosman
Good morning and welcome to our first session this morning of the Digital Banking 2021 conference. I'm Penny Crosman, tech editor at American Banker and I am here with two very knowledgeable panelists. We have Janet King, who is vice president of research at Arizent, which is the publisher and parent company of American Banker. And we have Brian Elkins, who is senior director of strategy at Monigle, which he'll explain to you further, but it's a marketing branding firm that does a lot of interesting work with companies about promoting their brand and giving people a good feeling around their brand They have done some really interesting consumer research. They have surveyed thousands of consumers about their preferences around mobile banking, online banking and branch banking.
00:01:10:17 - 00:01:43:20
Penny Crosman
They have also surveyed bankers and they've also done their own work around where shifts are going, what people are expecting out of their financial services providers and where they see traditional banks, online banks like Ally Bank and challenger banks like Chime winning and losing and what types of areas where they are each succeeding and not doing as well.
00:01:44:16 - 00:02:12:08
Penny Crosman
They're also going to talk a little bit about personalization and the tradeoff between personalization and privacy. They're going to talk about how consumer preferences are changing, especially in the area of ethics, where a lot of people are becoming more concerned about how a company lives its life in terms of being a good corporate neighbor, a good corporate citizen, its reputation for ethical lending, ethical products, and they're going to share a little bit about what they've learned about where banks are shutting down branches, what types of banks are actually keeping their branch networks the same, and who's actually expanding on their branch networks. And so why don't I let each of you say a little bit about the kind of work that you have been doing.
00:02:45:22 - 00:02:46:28
Penny Crosman
And we'll start with you, Janet.
00:02:47:28 - 00:03:13:02
Janet King
Thanks, Penny. And hi, everybody. The research team at American Banker conducts a pretty broad mix of original research surveys throughout the year. The topics vary, but they're aligned with the issues and challenges that are on the minds of the leaders in the American Banker community and our writers and our editors. This year, we've covered subjects as diverse as data privacy and security, innovation readiness, the future of point-of-sale payments, ESG, the future of work, among others. And you can find all of those reports in the research section on American Banker on the home page. And data from the research is often featured in our Leaders channel and in the Teller’s Window section of American Banker Magazine. One of our most recent surveys was a collaboration with Monigle on humanizing customer experience, and it's that research that we’ll be using as the foundation for our discussion today.
00:03:43:01 - 00:03:46:00
Janet King
So with that, I'll let Brian tell you a little bit about himself and Monigle.
00:03:47:01 - 00:04:11:17
Brian Elkins
All right. Thanks, Dan. Thanks, Penny. Appreciate the welcome and thanks to all who have joined today. Really excited to be here. It's been really fantastic partnering with the team and American Banker. By way of intros, I head up our financial services work at Monigle, and that work spans sort of the entire space. So from retail banking payments, wealth management, fintech insurer, tech, you name it, we kind of touch it.
00:04:12:09 - 00:04:36:06
Brian Elkins
But most of the magic for us really comes from marrying that sort of category of depth with what we learn working with brands across different sectors. As Penny sort of alluded to, we're a creative experience agency based in Denver and New York, and our teams work really hard to deliver really powerful brand experiences to tap into and deliver on that customer experience across all the services you can imagine.
00:04:36:06 - 00:04:59:26
Brian Elkins
So the research that you're you're seeing today that we've partnered with American Banker on strategy and how you activate within within the context of the customer experience, culture transformation and of course, branded environments And I think one of the things I'll just say is I'm here representing the work, but we have a really amazing team and some of the smartest, most interesting inspired people out there.
00:04:59:26 - 00:05:01:12
Brian Elkins
So excited to share some of the work today.
00:05:03:00 - 00:05:11:01
Penny Crosman
So Brian, the title for our session today is From Competition to Convergence. What does that mean? What does convergence mean to you in this case?
00:05:11:18 - 00:05:34:29
Brian Elkins
Yeah, it's an interesting topic for us. I think traditionally when we've talked about convergence in the financial services sector, it's really been talked about in terms of kind of the subsectors of the category coming together. So suppliers meeting that demand across financial service products, for example, thinking about conglomerations of banking, insurance and investment services are coming together.
00:05:35:10 - 00:05:59:27
Brian Elkins
But in our case, we're really focused on the experience level because that's where so much of the innovation and the evolution that we're seeing is taking place across the industry today. So what we're seeing is, when you think about the last ten years, there's been a real strong movement in the space towards disaggregation. So driven by a lot of the innovation in technology, a lot of the venture capital that's been out there coming off the sidelines.
00:06:00:15 - 00:06:25:16
Brian Elkins
And really what we have found and seen and customers are experiencing every day is that these fintechs have found a great deal of success with sort of pointed, targeted solutions that really resolve specific kinds of points of friction or better address underlying customer needs. And so that matter of focus is really important.
00:06:25:25 - 00:06:53:27
Brian Elkins
And the benefit of that focus is that they're really kind of chipping away at sort of the core business. But I think what we're seeing in more recent years, and particularly this last year, is this dynamic emerged where that competition was ratcheted up in terms of not just mindshare, but the real estate on people's phones, word of mouth, perceptual scale, all those kinds of things, creating a really hyper competitive atmosphere.
00:06:54:10 - 00:07:15:04
Brian Elkins
And I think what we're seeing in our research is that we're probably at a bit of a tipping point relative to that idea of choice. And we kind of, I think it's been coined a couple different ways, but that sort of idea of a paradox of choice that with all of these choices, we're probably doing a disservice to consumers, and consumers are starting to feel that pain a bit.
00:07:15:19 - 00:07:36:27
Brian Elkins
And so I think that this is a real opportunity in the financial services space to start to think about collaboration. So through joint venture partnerships or building out our own tech, how does this sort of divergence that we've seen in the last ten years start to yield a sense of convergence around the tools that are going to drive customer satisfaction?
00:07:37:06 - 00:08:04:22
Brian Elkins
And so what we think is taking that focus on the human experience, how do people navigate what are those unmet needs that the fintechs really addressed should underpin the planning. And we think of the model that we've worked on with Janet and the team at American Banker over the last year. It starts to really get both at a framework for decision making in that context, but also kind of helps organizations better understand where to partner and how to deliver more humanized experiences.
00:08:05:28 - 00:08:46:19
Penny Crosman
Yeah, that's a great point. We actually saw two interesting mergers yesterday where two tech companies, one was called BM Technologies, which used to be Bank Mobile, which was a division of Customers Bank, and bought a small community bank in Seattle. And in another merger, Patriot Bank and American Challenger Bank, a tech company that was trying to create a challenger bank, merged. In both cases they're trying to do just what you were talking about, trying to put the resources and ingenuity of a tech company together with a traditional community bank.
00:08:46:19 - 00:09:17:01
Penny Crosman
And hoping to get the best of both worlds: a digital bank that can operate nationally and provide low-cost products to people around the country, but still keep that local presence, that local human experience we're going to be talking about later and trying to have the best of both worlds. So, Janet, you tell us a little bit about this research that you did on humanizing the customer experience.
00:09:17:17 - 00:09:50:21
Janet King
Yeah, excuse me. Certainly. In the first half of this year, American Banker, in partnership with Monigle, fielded two large-scale surveys among a nationally representative sample of financial consumers. So each survey was designed to evaluate a particular aspect of the customer experience in banking, and it allowed us to get at both a market-level view on trends that are shaping expectations in the future as well as a customer-level view on how financial institutions are delivering today and where they have the greatest opportunities going forward.
00:09:50:26 - 00:10:18:29
Janet King
So I think that's really important that we were able to get both sides of that coin. So again, it was two surveys, one fielded among 3,500 individuals to understand what some of the trends and attitudes shaping consumer expectation and behaviors in banking are. And then a second survey to just under 6,000 customers which asked them to evaluate their experience at their banks on factors that are proven to drive satisfaction in advocacy.
00:10:19:09 - 00:10:49:16
Janet King
So that's that framework that Brian alluded to and that's what really gets you to the customer-level view of the experience. And it actually allowed us to rank order the top 50 financial institutions delivering the best humanized customer experience in banking. Again, I think what's really exciting about these findings is our ability to marry those two perspectives to help financial institutions regardless of their type, to understand why consumers choose to bank with one financial institution over another.
00:10:50:06 - 00:11:35:17
Janet King
And I think also by partnering with Monigle, we were able to tap into their humanizing customer experience framework, which allowed us to help banks and FIs, regardless again of type, understand how to really apply those insights to drive tangible improvements in customer satisfaction and net promoter scores. So we were really excited to work on this because I think at the end we we have a very comprehensive research initiative that provides banks and fintechs with a lot of data and I hope a lot of useful insights into customer behavior, but also provides learnings that are critical to, I think, understanding how banks and other FIs can adjust that customer experience to drive better business outcomes.
00:11:37:20 - 00:11:51:19
Penny Crosman
Thank you. So, Brian, you and the team at Monigle, I believe, created kind of a framework around what you mean by humanizing the customer experience. Can you kind of walk us through the four parts of that framework?
00:11:52:03 - 00:12:23:17
Brian Elkins
Yeah, you bet. You know, I think it's really important first that we answer that first question, which is, why are we talking about humanizing brands and customer experiences? Our whole ethos really centers around this idea that humanizing brands moves people to action. And what that really means is that in today's world, our work has to be about sort of blending empathy, meeting people where they are, and understanding the dimensions that shape their lives and the decisionmaking with creativity.
00:12:23:17 - 00:12:48:29
Brian Elkins
So not just understanding it, but ultimately designing for that understanding, not just creating monolithic brands with big reputational programs, but really creating actionable insights that can actually move people to take on the behaviors that are going to be beneficial to both the consumer and your organization. So when we do that, we deliver real outcomes in the form of acquisition, loyalty and advocacy.
00:12:48:29 - 00:13:09:20
Brian Elkins
And that's really what the model shapes around us understanding how we can connect the dots to those outcomes. So we take this discipline of understanding really seriously, and it's a model that's based on social sciences frameworks for uncovering that sort of core decision making. So if you don't mind, I'd love it if we can pull up slide one, I can walk through the four dimensions.
00:13:09:20 - 00:13:28:01
Brian Elkins
It's a bit of an eye chart, so I apologize, but I think it's a good table set so that we all kind of understand what we're looking at. So the four dimensions, the first one is the intellectual dimension, and that covers the functional benefits, the rates, specific services, the way that people think about the brand.
00:13:28:09 - 00:13:50:27
Brian Elkins
And it's usually a foundational component of other customer satisfaction. So it gives you that sort of core. The emotional dimension covers the feelings-based motivations that drive customer action. So it's not usually evaluated in the traditional satisfaction models, but these emotional drivers demonstrate the really powerful connections and associations people form the attachment that they form with their FI.
00:13:51:17 - 00:14:16:15
Brian Elkins
It becomes really important. That kind of covers what you see more traditionally in market research, where we've kind of evolved to a space of really talking about the emotional and the intellectual. But we've had two dimensions here that we think are really important and beneficial, particularly for the financial services space. The first is the visual dimension that covers the interactions that customers have with financial institutions.
00:14:16:15 - 00:14:37:26
Brian Elkins
It's what customers do with your Fi and examines that kind of two-way relationship between customers and their banks and why that's important. We talk about sort of the privacy tradeoff that Penny you alluded to in terms of what does that participatory personal finance relationship really look like. The last is that sensorial dimension.
00:14:37:26 - 00:15:06:10
Brian Elkins
And so this covers the visual auditory olfactory brand cues that customers pick up in the eyes that they work with. So these sensory experiences are built up over time. So you're building that base through physical and digital worlds. And that's a really important piece that we'll talk a bit about more. I think each of the four dimensions, it's a critical piece of my insights team would tell me if I didn't bring this up, is that each of these dimensions play a really important role in coloring the customer's experience.
00:15:06:10 - 00:15:35:11
Brian Elkins
So it's not about picking and choosing which ones, but it's about orchestration and understanding what are the right levers to pull. So we ultimately provide this roadmap of sorts for banks who want to understand what levers to adjust to optimize that experience, how do they allocate investment, that's a really important predictive tool. And so we really think that it does more than just estimate customer sentiment and gets that customer satisfaction advocacy scores, which is a really valuable tool.
00:15:36:02 - 00:15:42:22
Brian Elkins
But I think what you'll see here, we start to look at leaders and laggards in those kinds of things, it really starts to paint a picture of where we can go.
00:15:44:17 - 00:16:08:01
Penny Crosman
I think the the olfactory part is really fascinating. The idea that each brand actually has an odor to it, you know, and some smell a lot better than others. I wonder what American Banker’s smell is. Maybe I don't want to know. It's interesting So, Brian, why do you think all this matters at this time?
00:16:10:26 - 00:16:36:16
Brian Elkins
Yeah, I think it's always been true. But I think that what we find is that the last couple of years have been particularly jarring in the tropes of the pandemic. But I do think that there's a lot of shifts that have been underway that everybody's been paying attention to. So I think even in our trends piece, there's nothing earth shattering from a trend perspective, I think it's the pace of change that's really hastened.
00:16:37:10 - 00:17:01:25
Brian Elkins
And so there's really been this sort of acceleration beyond what we anticipated. And so at its core, I think we're seeing just like other categories kind of come to terms with the evolving and changing consumer behaviors and expectations. And that is really kind of a poignant time, I think, to address the inertia that exists across different moments in our customers.
00:17:05:11 - 00:17:10:04
Penny Crosman
Great. So, Janet, anything, anything you want to add to that?
00:17:11:13 - 00:17:29:11
Janet King
I would just say that the research really confirms that leaders in the banking industry expect that the events of the past 18 months to two years will drive dramatic change in the utilization of digital tools. And it's going to lead to either permanent change in business models or at least an acceleration of that change by three to four years.
00:17:29:12 - 00:17:50:29
Janet King
And at the same time, I think we're finding in our research that banking leaders are also telling us it's become harder than ever to acquire new customers and maintain customer profitability. And they acknowledged they found gaps in their digital strategy and technology stack. So I think the bottom line is that, well, big banks have spent billions building out online and mobile banking and trying to reinvent their branches and ATMs.
00:17:50:29 - 00:17:58:29
Janet King
They're discovering some customer apathy in their portfolios. And facing a lot of new pressures from community banks and credit unions, as well as challenger and online banks.
00:18:00:24 - 00:18:21:12
Penny Crosman
So you mentioned earlier that you guys actually did a ranking of 50 financial institutions, according to, I think, sort of their overall customer experience level. And so I think that will be really interesting to this audience. Do you want to bring that up and tell us a little bit about that.
00:18:21:26 - 00:18:44:09
Janet King
Yeah. If we can advance to slide two, we actually saw some pretty interesting results here, Penny. And what you can see here is that from all the individual ratings of the banking experience that we collected in that customer survey of nearly 6,000 consumers, we found that when it comes to delivering on customer needs, there's a pretty wide disparity in the experiences delivered.
00:18:44:21 - 00:19:14:07
Janet King
So among the 50 financial institutions evaluated, which included a mix of retail banks, credit unions, challenger banks, and online-only banks, our customer ratings resulted in scores ranging from a low of 13 to a high of 75.
00:19:15:05 - 00:19:47:06
Janet King
Yet when you look at that top scoring bank, New York Community Bank, it also demonstrates that with the right insights and strategy, it's possible to be almost twice as good as that industry average of 40. So what can we learn from those rankings overall in the category level? First, I think that these rankings reflect the fact that what it means to be a bank in the mind of the consumers changing among the top ten is rated as delivering the best customer experience we had for credit unions with four leading regional banks.
00:19:47:06 - 00:20:06:23
Janet King
But we also see two high performing challengers in that mix. And we had a third challenger ranking among the top 20. I think notably you see most of the national retail banks sit in the middle and none really ranked higher than 12th, but also none ranked lower than 38th. So those biggest banks have clearly developed a recipe for success.
00:20:07:03 - 00:20:30:00
Janet King
But those kind of middling scores, I think show room for improvement, particularly with new challengers coming into the market and credit unions continuing to show strength. And finally, we see that the online banks are trailing fully half of those banks that we ranked are in the bottom ten overall. And the highest ranked online bank is 23rd among the 50 financial institutions ranked.
00:20:30:01 - 00:20:51:11
Janet King
So there's a number of factors contributing to those rankings. But one that I found especially interesting is that, well, secure digital tools and mobile apps are table stakes for most financial institutions. Challenger and online banks who have those capabilities really at the core of their value proposition didn't generally outperform and in fact often trailed traditional banks on those aspects of the customer experience .
00:20:51:11 - 00:21:25:08
Penny Crosman
That's really interesting. I think people used to think of this world as a rate war. You know, whoever offered the lowest interest rates online won. But since interest rates are still so low, it does seem like the human aspect of the experience and some of the trust elements and the customer service elements, things like that, have risen more to the surface.
00:21:25:17 - 00:21:27:29
Penny Crosman
Brian, what are some of your takeaways from this.
00:21:28:26 - 00:21:48:10
Brian Elkins
Is similar in some regards. What we find really surprising, I think Janet spoke to this, is just the mix of who comprises the top 50 in both the leaders and the laggards. And so I think at the composite level, it demonstrates that there's no kind of single silver bullet for designing the optimal experience.
00:21:48:10 - 00:22:08:00
Brian Elkins
But rather, as I mentioned with the framework, there's a number of different levers that are working well for particular audience needs. And so it's really when you get to that category level that you start to see what's working well when the gaps exist.
00:22:09:01 - 00:22:31:00
Brian Elkins
That said, seeing the amount of credit unions and community banks and challengers performing as well as they are begs the question of what levers they're pulling. When we see that sort of middling going on, what is it that they're doing? Well, and I think credit unions, by way of example, are bringing a lot to the table, to the experience that's worth paying attention to.
00:22:31:00 - 00:23:02:29
Brian Elkins
They really tap into those emotional drivers quite well, more effectively than others, and they deliver on these sort of desires around affinity and connection and belonging, which we'll talk quite a bit about beyond the member idea. It's a bit more powerful than that. And I think one of the things that we're seeing is as they strive towards parity with some of these digital tools and products and solutions, they're going to continue to punch up and really broaden their appeal to consumers.
00:23:03:06 - 00:23:27:02
Brian Elkins
And you're seeing this as they start to expand their fields of membership, move into some of these markets and lending spaces like cannabis lending or alternative currencies. And so I think that piece, along with developing and delivering better money management tools and resources for members, is a great kind of explanation. When you start to unpack, why are they performing so well at the top of this, the sort of top 50?
00:23:27:14 - 00:23:43:27
Brian Elkins
I think when you look at those larger national players, it speaks to their capacity to invest across all the levers, right? So I think that there's, you mentioned this notion of focus at the outset, but there is something to be said for being able to spread capital across some of the things that matter across the experience.
00:23:44:22 - 00:24:05:24
Brian Elkins
And so I think what they've done is they've definitely invested across that experience, holistic Janet mentioned sort of the amount of investment that's gone towards the customer experience the last couple of years, but probably not creating enough distinction within those moments. As Hallmark moments across the consumer journey to particularly stand out when it comes to their customer experience.
00:24:06:17 - 00:24:27:00
Brian Elkins
So I think it really could come down to that tradeoff in terms of where people are investing, what that level of investment is versus how focused that level of investment is. Think of the challenger neobanks. I think they're gaining ground in some respect. I think ease and simplicity are obviously a core driver of some of the behaviors and the consumer expectations in that space.
00:24:27:10 - 00:24:49:01
Brian Elkins
So that can be difficult to develop that emotional bond when so much is about simplicity and ease of use, but it's not impossible. The old expectation that consumers will be inclined to use payment providers and banking services from a brand that is not a chartered bank I think is evolving, and it's something that's really worth paying attention to.
00:24:49:13 - 00:25:10:10
Brian Elkins
And what we see in the research is that it's not that it's not important that a bank sits somewhere on that chain of custody and that they know that their money is insured, but that the experience is starting, to take a more central role beyond just rates, beyond security and trust. And really that there's an assumption that those things have to be satisfied.
00:25:11:02 - 00:25:17:18
Brian Elkins
And so, you know, it's becoming more of a saturated message that maybe people don't care about as much of a need to focus on that experience.
00:25:18:23 - 00:25:45:01
Penny Crosman
Yeah, that makes sense. I'm also seeing that some of the product features the challenger banks offer, like the way a lot of them have no overdraft fees and have early wage access and very tiny short term loans that are free, that has drawn some people as well. So a little bit is becoming a product competition.
00:25:46:04 - 00:26:18:04
Penny Crosman
So we said we're going to talk about personalization. So a lot of banks have been trying to get at a more personalized experience now that they're interacting with people remotely. They don't have that greeting of the teller in the branch the person who's another parent in you're on your little league team or in your PTA, you know, you're trying to recreate some of that personal relationship online.
00:26:19:13 - 00:26:39:12
Penny Crosman
And you guys focused some of your research on this. Janet, tell us a little bit about what you have found in your research around personalization and around privacy as well. So you don't have that big brother-ish feeling that somebody is being watched and their transactions are being watched too closely?
00:26:39:28 - 00:27:08:07
Janet King
Yeah, absolutely. If we can go to the next slide, please. Slide three, we can see that we gathered some pretty interesting insights in the market survey that we did on this topic. So overall, it confirmed that many, if not a majority of consumers are looking to their banks and their financial institutions for personalization of services. And more specifically, you can see from this chart that personalization around advice, rewards and products really resonate strongly with customers.
00:27:08:26 - 00:27:48:08
Janet King
Notably, age was the biggest determinant of what consumers are seeking. So older consumers generally want better rates and rewards, and younger consumers, especially those who are just starting out on their financial journey, want more advice on savings and spending and investment. But what are they willing to give in exchange for more personalized experiences? Because you talked about that kind of tradeoff between personalization and privacy so if we move to the next slide, you can see that we found that an overwhelming majority of consumers, about nine out of ten across all generations, are willing to share some personal data in order to receive those personalized benefits.
00:27:48:22 - 00:28:12:06
Janet King
The specific type of data they might be willing to share is diverse, and it changes a little bit based on where they are on the generational spectrum. So willingness to share spending and lifestyle information, for example, is higher among younger generations. Well, demographics and geolocation is something that older generations are more likely to be interested in.
00:28:12:28 - 00:28:33:24
Penny Crosman
Kind of an oversharing generation in Gen Z and millennials, I would say. So, Brian, where do you see the opportunity for banks, financial services companies to kind of tap into this interest in personalization and really lack of qualms about privacy?
00:28:34:12 - 00:29:03:27
Brian Elkins
Yeah, I think it's going to be really important to get it right the next couple of years. I think the reality is for many, when it comes to personal finance, particularly the younger generations, but I think across the board, it's already overwhelming and intimidating to a lot of the folks that we research. And I think with the sort of onslaught of alternative currencies, the news around inflation, the pandemic, the recovery, all of that's been exacerbated to a great extent.
00:29:03:27 - 00:29:36:18
Brian Elkins
And so I think consumers are looking for ways to provide them with financial education, resources and tools to help them access not just kind of the best offer, the best rates. I think that there's some level of expectation around that. But help me take action. So it's not just articles that tell me, you can retire by 40 if you drink less lattes, but really relevant tools and insights that enable them to plan that secure financial future and in the future may be defined in several different ways.
00:30:01:15 - 00:30:23:14
Brian Elkins
I think the NerdWallet IPO is kind of indicative of the power of content and information in helping people take action going forward. But it's really all to say that I think that we're moving towards more from a one size fits all to this size fits you.
00:30:23:23 - 00:30:49:28
Brian Elkins
And so you can see this when you look across the broader financial sector, you can see it in terms of payment models that are starting, new merchant payment models, peer to peer lending networks, financial literacy platforms. All of these are what we call situation appropriate banking platforms that demonstrate that potential of individualization. I think they aimed to fit into consumers’ lifestyles and financial limitations.
00:30:50:22 - 00:31:12:15
Brian Elkins
And they compensate where traditional financial tools that are otherwise inflexible or inaccessible, they kind of fill that void. And I think that shapes a different kind of relationship that people have with their FI. I think one of the easiest ways to look at it is you look at millennials and their aversion to credit, based on their nightmares of the recession.
00:31:12:15 - 00:31:39:12
Brian Elkins
And you think about from the time they left graduate school, let's say, or college, you know, what they've dealt with in the financial space. They're gravitating towards these payment platforms that enable them to buy now, pay later like Affirm. So I think that's indicative of where we're headed. I think beyond the traditional product you're offering, there's a broader role for the FI to play in building that relationship around content and for payment.
00:31:39:12 - 00:32:10:13
Brian Elkins
But as I said, actual tools help me make decisions, help me see and visualize where I'm headed and what those outcomes will be. So I think a lot of this comes from the broader development and the technology around it, from API banking services and decision support networks. But the heart of the matter is really that the desire for consumer experience is really about hitting this sweet spot of being both self-directed and ultimately personalized.
00:32:12:03 - 00:32:45:08
Penny Crosman
Yeah, great points. Personally, I don't drink lattes and I'll probably never be able to retire, so I relate to that. There’s a lack of rigor in that kind of advice. So another thing that I know that you both looked at in this research was this shift in consumers banking more according to their ethical values than they have in the past, which I think is a really interesting shift, and it's true for shareholders as well.
00:32:46:02 - 00:33:01:06
Penny Crosman
Janet, what are some of the things that you found when you looked at where customers are trying to kind of follow their core values in the companies that they choose in financial services?
00:33:01:21 - 00:33:23:06
Janet King
It's a really important point, Penny, and I'll let Brian speak to it mostly, but I'll just say that the importance of that value is measured in the intellectual dimension of the framework. So again, that part of the model really measures those functional benefits that are offered by financial institutions. It's sort of that mental checklist we all go through and it's in that part of the model.
00:33:23:06 - 00:33:47:23
Janet King
We explore things like how well banks and FIs are delivering on things like diversity and commitment to the community and the environment and ethical business practices. And what we found is that commitment to ethical business practices was among their top five intellectual needs. So it was number five among 20 different attributes that were measured, trailing only attributes like safety, trust, customer care and ease of banking.
00:33:49:01 - 00:34:02:12
Janet King
And again, I think being known as an institution with a commitment to ethical business practices is an area where we saw retail banks and credit unions generally outperformed challenger and online banks. So, Brian, did you have additional thoughts on that?
00:34:03:09 - 00:34:37:08
Brian Elkins
Yeah, this was an interesting one to dive into, especially since it rose where it did in terms of the intellectual dimension. But I think one of the things that we've been talking a lot about, Janet and our team, is really that customers want to put their money where their hearts are and that sounds very fuzzy. But when you trace it back to this intellectual dimension, I think we're beyond sort of the greenwashing days around this, that this case for doing well by doing good has been proven possible and desirable across a number of sectors that people interact with in their day-to-day lives.
00:34:37:22 - 00:34:56:25
Brian Elkins
And so I think that people want something even closer at hand than just investing in ESG assets, green bonds and the like. I think those are great and those are good tools in the toolbox. But I also think they want to see real-world outcomes and they want direct line of sight to their banking and what they care about personally.
00:34:57:21 - 00:35:15:11
Brian Elkins
Which is why you see retail banks and credit unions seemingly have a bit of a leg in terms of that relationship that they have, because they're so focused on the community that people are a part of. But I think that just because they've done well in the past, that's where and they've had a bit of a head start.
00:35:15:16 - 00:35:43:06
Brian Elkins
I think what you're seeing with the fintechs and again, going back to the idea of focus is that they're really increasingly banking, taking that into the experience itself. So I think like an Aspiration bank is a perfect example of that, a digital banking platform. You know, they give 10% of their earnings to environmental organizations to give customers an environmental impact score for their purchases and offers they'll offset their carbon emissions for gas purchases.
00:35:43:13 - 00:36:10:02
Brian Elkins
Anyways, it's really what's nice about that is it’s a targeted solution, but it gives people that line of sight to how they're creating impact on something that they care about. You also see this in terms of more sort of affinity groups where we're addressing things like financial inclusion. So for LGBTQ in other spaces, I look at the Daylight and Passbooks of the world are really good examples.
00:36:10:15 - 00:36:35:12
Brian Elkins
Ultimately, it's really about how we use this data, right? I think that the trade off we saw is there's permission here, but the power of the data is really about consumers becoming increasingly savvy and wanting to know how their FIs line up with their values and the things that they care about. And so really, we need to be prepared to not just show them the data in an annual report, but really put it to action.
00:36:35:16 - 00:36:41:18
Brian Elkins
And again, this participatory notion of making sure that the customers themselves feel part of that story.
00:36:42:29 - 00:37:10:01
Penny Crosman
Yeah, great points. So in a few minutes, we're going to be talking to Michelle Moore and Sandra Nudelman at one of the largest banks, Wells Fargo, about some of the new digital tools they're building to kind of incorporate some of the findings you guys have been talking about. Janet, where do you see traditional banks doing really well with their digital tools?
00:37:10:01 - 00:37:14:10
Penny Crosman
And where do you see online banks or challenger banks really leading?
00:37:15:28 - 00:37:36:06
Janet King
Yeah, thanks, Penny. If we can advance the next slide, slide five, we found some interesting things here so we can see that when you compare customer ratings on attributes that are key to banking in more of a mobile-first social world, you see there's not really a clear category winner on many of those attributes that are central to that digital customer experience. So in fact, our data shows that retail banks and credit unions are outperforming challenger and online banks in a number of areas, like having the best online banking experience, creating buzz around their brand in their products, and winning on the number of customers saying they often see others using their debit or credit cards or mobile apps, mobile wallets.
00:37:57:09 - 00:38:14:00
Janet King
What we saw was challenger banks really led for having really useful digital tools, the best mobile banking experience in creating a sense of belonging as well as empowering customers to achieve their financial goals. But notably online-only banks really trailed on most attributes on this chart.
00:38:18:26 - 00:38:33:26
Penny Crosman
Okay, great. So I Brian, do you have any thoughts on some of what we've seen in this?
00:38:34:08 - 00:38:52:25
Brian Elkins
Yeah, I think that what we're seeing is, especially with the younger generations, one thing to pay attention to is it's not just about taking the analog world and applying that to the mobile-first world.
00:38:53:03 - 00:39:11:08
Brian Elkins
These messages and features, the incentives that spur consumers to kind of socially engage in this space is a really interesting one. And I think we have something to learn from that movement. It's not just about voyeurism, but what I think you're starting to see is a rising expectation that banks are fluent in multiple languages of transaction.
00:39:11:08 - 00:39:32:14
Brian Elkins
There's a social currency at play here. And so I think if you can tap into that and get it right there, you create a sort of cascading instead of benefits. That creates that sense of belonging. And that's the thing that I would really pay attention to. In the end, the experience, I think these kind of do two things, they yield that utility in terms of being simple and seamless to transact.
00:39:32:23 - 00:39:41:19
Brian Elkins
But I also think we need to pay attention to the desire for that social currency that comes along with brand affinity and more of the experience that you have on these digital platforms.
00:39:43:08 - 00:40:13:26
Penny Crosman
All right. Well, unfortunately, we are out of time, but I thought this was really interesting. And I want to thank you, Janet and Brian, for sharing your research and your thoughts with us. And I want to thank all of you for joining us for this session this morning. And I hope you will stay tuned for the fireside chat we're going to have with Michelle Moore and Sandra Nudelman at Wells Fargo in just a few minutes.
00:40:13:27 - 00:40:15:09
Penny Crosman
So thank you all for joining.
00:40:15:27 - 00:40:16:13
Janet King
Thank you.