Javelin Online and Mobile Awards Winners Panel

U.S. Bank’s concerted focus on revamping its mobile app has yielded results, elevating it onto the leaderboard in Javelin’s annual mobile banking scorecard for the first time. Join Javelin Digital Banking Director Mark Schwanhausser for a one-on-one conversation with Damian Warren, head of consumer digital channels, as they explore why innovations in financial fitness, personalization, search, and virtual assistants will separate the winners from the contenders in the years to come.

Transcription:

00:00:07:22 - 00:00:34:04
Mark Schwanhausser

Hello and thank you for joining us today. My name is Mark Schwanhausser. I'm a director of digital banking for Javelin Strategy and Research. Every year we put together digital banking scorecards that we think are the gold standard for what online and mobile banking should look like. And we've announced our winners in June. And today, we get a chance to talk with one of the key leaders who has been behind a strategic run up for U.S. bank.

00:00:34:04 - 00:01:02:11
Mark Schwanhausser

Damian Warren he is a senior vice president of the Consumer Digital Channels Experience based in Atlanta. Damian has been with the bank five years and he's been playing a key role in setting and executing the bank's digital vision and mobile mobile overall. And as you'll see in a moment, U.S. Bank has been moving steadily up the charts and ranks no lower than sixth place in all six categories of our scorecard.

00:01:03:08 - 00:01:23:14
Mark Schwanhausser

Before we get into the conversation, though, which I hope you'll find to be a productive discussion, that'll talk about how we set strategy, the tactics, maybe even a little bit about how you win the resources you need in the from the boardroom. We'll discover real quickly the what the scorecards are all about. So you have some sort of a framework.

00:01:23:22 - 00:01:53:04
Mark Schwanhausser

So as we go to slide two, you can see these scorecards come out every June. We have one for online, one for mobile. And our team owns 25 accounts. And as you can see on the next slide, we can show you that the data we look at six different categories of digital banking, ease of use, the money movement, security empowerment, financial fitness, customer service and account opening.

00:01:53:23 - 00:02:30:02
Mark Schwanhausser

We are using the accounts that we hold at each of these accounts. We evaluate a total of 400 criteria across online and mobile combined Many of these are being very closely linked together. We're basing the weighting in part on the voice of the consumer with the survey data from 11,000 consumers about their banks. And then our team goes to work and we, we look at the strategic value, the tactical necessity where things are going in the industry and that comes up with our scoring for the scorecards.

00:02:30:15 - 00:02:53:15
Mark Schwanhausser

Now behind all of this is a strategic goal Banks today are typically in stage two of the digital maturity path that you can see on slide four. And this is one that is focused rightfully so on track with transactional confidence, making sure money moves when it needs to move, making sure that money is safe, making sure that you can get your tasks done.

00:02:54:01 - 00:03:14:10
Mark Schwanhausser

But every bank out there, every digital banking strategist out there is saying we need more than to be a transactional bank. We need to be engaged with our consumers. We need to develop relationships with our consumers. We need to be seen as a partner and advice giver, a guide along the way. And that's the hard part especially in digital channels.

00:03:14:11 - 00:03:36:20
Mark Schwanhausser

And so we're seeing a lot of experimentation. And this is where you'll I think you'll be learning a lot today from U.S. Bank in terms of how they're building digital engagement and how they're aiming to succeed in that category. Our fifth phase, rather, which is about developing that digitally empowered relationship as we go to slide five, you can see what the U.S. Bank's been doing.

00:03:36:21 - 00:04:08:14
Mark Schwanhausser

I mentioned that there is a score. We score banks across all six categories and in the digital scoring. In the mobile scoring, rather, U.S. Bank was a leader in ease of use, which is the highest ranked drives the most satisfaction in digital banking. So it's a critical area and it is ranked second in both customer service and account opening and no lower than fifth in any of the other categories, including a category.

00:04:08:14 - 00:04:32:18
Mark Schwanhausser

We're going to talk a little bit more about in a bit financial fitness as we go to slide six. Let me show you a couple of the things that really has been impressed us about what U.S. Bank is doing. You know, from the start they're trying to build engagement with their customers right from the login and even before they're drawing you into the app, giving you a reason to come.

00:04:33:01 - 00:05:01:04
Mark Schwanhausser

And when you come to the app, you're immediately going to see things that you can start to do. They're trying to engage you to get you to do more than just check your balance or hunt for that transaction, which is what an awful lot of consumers do. And consider the basic necessity of of a mobile banking. They've got a strong set of customer service contact methods, which really came to be important as we saw during the pandemic, as people were forced to digital channels.

00:05:01:04 - 00:05:22:13
Mark Schwanhausser

They still had questions. They still have a need to try to solve things on their own, but sometimes it doesn't. Is it enough to just try to do it all in your own? You need to reach customer service. And U.S. banks got a full range of ways to meet with chat, the virtual assistant with the phone service, scheduling appointments, etc.

00:05:23:12 - 00:05:43:27
Mark Schwanhausser

Also, you know, one of the things that is setting the leaders apart in ease of use is the use of search and the virtual assistant. We'll talk about this during our conversation, I'm sure. But the whole idea about every time we improve digital banking, we make it harder to find what we need. So search is going to play an important role.

00:05:43:28 - 00:06:08:22
Mark Schwanhausser

Every bank needs to be thinking about this. In addition, there are things related to financial fitness, such as personalized insights, which is harder to do than it sounds. An approach to savings, automating savings that runs counter to what most banks do today and is the right way to do that, frankly. There's also onboarding from the minute you're in the app.

00:06:09:02 - 00:06:28:14
Mark Schwanhausser

And one of the key things they've been doing is improving the one of the main spots you go inside the app, which is looking at the transactional ledger we may come back to this slide to show you some examples, but why don't we go ahead and just jump right straight into the conversation with Damian. Damian, thank you for joining us today.

00:06:29:01 - 00:06:58:02
Mark Schwanhausser

Congratulations on moving up the ranks and being a leader in the mobile banking scorecard. Let me start with a broad question. U.S. Bank has made a significant investment in mobile banking in recent years. You've been there for five years. You've helped set this. It's evident in your charge up the rankings in our scorecard. What was the catalyst that made the bank decide to make mobile that the top priority or a top priority, rather?

00:06:59:01 - 00:07:30:12
Damian Warren

Yeah, it's a great question Mark, I think for context. Right. Our consumer banking strategy is really focused on how can U.S. Bank be central to the financial lives of our customers? And as we reflected on that from a digital perspective, nothing is more central than how consumers engage with their smartphone. If you just think about the sheer usage of the different features on your smartphone, including on social media, it's exploded over the last several years.

00:07:30:13 - 00:07:56:24
Damian Warren

So in order to remain relevant as a bank, we needed to have a best in class mobile app that drove that level of engagement that we want to have with our customers in order to meet all of their financial needs. So for us, that was the primary catalyst, was how do we connect our mobile banking strategy directly to our consumer strategy of wanting to drive centrality with our customers.

00:07:58:11 - 00:08:33:04
Damian Warren

So that really prompted us to completely reimagine our mobile banking app that we launched into the market. It needed to be both highly functional, but also highly personalized and all built on an efficient and reusable technology stack. So as we think about, you know, digital capabilities expanding beyond what we call DIY, and to do it together with a banker or a service representative, we're doing that in the most efficient way possible with reusable platforms and digital capabilities.

00:08:34:14 - 00:09:03:16
Damian Warren

We did extensive research, as you would imagine, and customers told us that their experience really needs to go way beyond simply the transactional table stakes as they referred to it. They believe those things should just be handled proactively. But what they're really looking for is the bank to harness the power of the data that it has access to, to personalize the experience and help them achieve goals that they want to achieve in their life.

00:09:04:03 - 00:09:20:17
Damian Warren

And so how do we do that in such a way that customers feel like their needs are being met, which will also increase the trust relationship between the banks? And their customers. And for us, this translates right into growth and loyalty and engagement.

00:09:21:11 - 00:09:44:17
Mark Schwanhausser

Something you said there's been an evolution that U.S. Bank where you had a really strong online user base and here you are saying mobile is the future. Can you talk a little bit about how you moved or decided to move against that, the current of what you have today to get to where you wanted to be tomorrow?

00:09:45:17 - 00:10:26:14
Damian Warren

Yeah, I mean, I think that's the growing reality, right, of how the customer mindset is shifting. And as you see generations growing up, we're not losing our focus by any stretch on online banking For us, as we continue to want to attract those younger generations and remain relevant and in that consideration, set when consumers are considering who to bank with, we need to have a best in class mobile app to to be in that in that awareness set.

00:10:27:16 - 00:10:49:14
Damian Warren

So as we think about it, right, we have to deliver all of our digital experiences, best in class regardless of, you know, the interaction point, whether it's online banking, whether it's the mobile app or whether it's an interaction with a human being. A banker or service agent. All of those interactions are fueled by our digital capabilities.

00:10:50:05 - 00:11:16:14
Mark Schwanhausser

Yeah. That brings up an interesting connection between all the different channels You know, traditionally banking has been about branch banking and branch banking, frankly, in many banks holds back digital banking. But there is a growing realization that, you know, these things have to work together. Can you talk about that point when every bank or credit union has to reassess and rebalance the roles?

00:11:17:25 - 00:11:29:12
Mark Schwanhausser

How would you describe what U.S. Bank has decided is the right role for digital with branch still being a critical means for consumers to engage with you?

00:11:30:17 - 00:11:57:17
Damian Warren

Yeah, I mean, certainly our branches, right. And the bankers that reside within the branches are excellent at establishing relationships. And that's something that we can learn from on the digital side and something we're very focused on is how do you achieve that same level of relationship through a digital device? And it's hard to do. But as we build and deliver excellent experiences, we don't just do that in the digital domain.

00:11:57:17 - 00:12:30:06
Damian Warren

We also believe in a human led experience that comes to life through digital capabilities, so common in capabilities that our bankers service representatives can leverage. So we often talk about this in terms about DIY and [inaudible] meaning customers should have a consistent, digitally enabled experience regardless of whether they're interacting through their digital device or whether they're having a conversation, you know, through video or in-person with a branch or a service representative.

00:12:30:25 - 00:13:03:17
Damian Warren

And I think a good example where digital capabilities are powering that, that human interaction is co-browse and I know that's that's part of the Javelin scorecard, but it's it's a capability that has allowed us, particularly through the pandemic, to provide our our customers with the ability to talk to a human being, albeit remotely, to build that relationship and get their jobs done that they're trying to get done.

00:13:05:10 - 00:13:36:04
Damian Warren

It's generated about 1.5 million sessions since we launched it. You can schedule an appointment remotely and leverage co-browse either one way video or twoway video to interact with a service representative or a branch banker. So it's been a powerful capability for us when, you know, customers can’t physically get into a branch because, you know, either the branch is not available as we think about what happened through the pandemic or for other reasons.

00:13:37:29 - 00:14:05:05
Mark Schwanhausser

How would you compare that to and it seems like co-browse is a way to guide somebody through the right spot in the app to fix a problem, to show them where to put their cursor, their finger, etc. Whereas video is more one to one potentially more advisory relationship. Can you talk about what you've seen in terms of video versus co-browsing in terms of the kind of problems or solving?

00:14:05:25 - 00:14:34:21
Damian Warren

Yeah, I mean, I think they work nicely in unison so as you think about the ability to have a video remote conversation between customer and banker, but then also leverage co-browse to either show somebody how to do something that they have a question about or just to communicate with somebody who may be looking at their financial plan on, you know, what does the next year, two years, three years look like?

00:14:35:13 - 00:14:43:23
Damian Warren

Having that ability to sort of co browse and share information in real time really seems to power a better conversation.

00:14:45:14 - 00:15:14:02
Mark Schwanhausser

Just a couple of weeks ago, we noticed that U.S. Bank had an ad job wanted ad that was going to try to bring a digital expertise to the branch. Banks have tried for years to show people coming into the branch how to use online and mobile banking and what your thinking behind this. How is it going to be different in your mind from other attempts to train customers about digital banking?

00:15:15:00 - 00:15:48:15
Damian Warren

Yeah, I mean, I think it starts with, you know, we need to make sure that all of our bankers, all of our service representatives are very familiar with all of the digital capabilities our customers use, that they feel like they can advocate for how it helps a customer. You know, whether that is providing a more convenient option for them, i.e. saving them time, or whether there's an opportunity to help them actually grow their money through things like savings or investment opportunities or giving them access to credit.

00:15:49:28 - 00:16:10:02
Damian Warren

So we want to make sure our bankers, our service representatives, want to understand all the digital capabilities. And then there's a level of digital fluency that we are interjecting into those conversations so they are viewed as digital experts and our customers can rely on for advice and guidance.

00:16:10:27 - 00:16:30:28
Mark Schwanhausser

Let me take you back in the Wayback Machine. When you joined U.S. Bank five years ago, I'm sure you came in armed with a notepad, maybe a legal pad, maybe multiple pages of things you wanted to fix but as you started thinking about mobile, what were the three things that you said, we got to fix this first.

00:16:32:17 - 00:17:02:16
Damian Warren

Yeah, absolutely. It's a great question. I think even as we approached our mobile app vision two years ago, you know, we were careful not to sort of skate ahead of our customers too far, but we fully recognize that we needed to expand beyond simply offering them a convenient alternative to get their transactions done. Those things are very, very important for customers, and they're still some of the most heavily used features digitally.

00:17:02:27 - 00:17:45:19
Damian Warren

Things like money movement, right? Paying your bills, transferring money, sending somebody money, etc.. So we did focus on reimagining those experiences. So they were very, very simple and intuitive. But we also took another step, which was how can we leverage data to anticipate customer needs in a more personal way so that we're flagging things for them, proactive internally and either giving them an opportunity, you know, through something like savings or, you know, highlighting something that, you know, could result in a fee as an example in a more proactive way.

00:17:46:16 - 00:18:20:07
Damian Warren

And I think a good example of that is around subscriptions so, you know, subscriptions nowadays make up a significant portion of people's spend, and we all sign up for many of them. And we lose track. And when those things come up for renewal or providers raise their rates, customers lose sight of that and it impacts their budgets so introduce more of a proactive monitor around subscriptions that give customers the ability to see when things are going up.

00:18:21:13 - 00:18:28:23
Damian Warren

Track those subscriptions just as a way to help customers avoid things that they may not be aware of.

00:18:29:15 - 00:18:50:16
Mark Schwanhausser

So it's really around making sure you can do all transactional things that you need to do, as well as trying to think like a kitchen table CFO. What do I need to pay attention to? How to do the basic math, how to anticipate things that are easy to forget. Frankly, these, in my mind are like some of the critical things that many banks are missing.

00:18:52:07 - 00:19:25:17
Damian Warren

And I think advice and guidance comes to different people in different ways, even advice on you can save a little bit more here. People want to achieve things, right? And so every little bit counts. And then I think also delivering these more personal, proactive bits of information really build trust between the bank and the customer as well because it places the bank on a different footing in terms of being an advocate for the customer.

00:19:26:15 - 00:19:59:12
Mark Schwanhausser

Yeah. As opposed to being just a conduit of message to move things. It's actually somebody who's helping you look out every day. That is a big challenge. we looked at the maturity path. It's ultimately where we need to go. We need to show consumers that we can act like a fiduciary. It's not easy to do you're talking about little things you can do to sort of build momentum, you know, random act of kindness, kind of thinking you know, building it day by day.

00:20:00:28 - 00:20:20:11
Mark Schwanhausser

But before we get into some of the financial fitness features that can help drive that, can you also we talked a moment ago about some of the tactical things that you wanted to fix right away. But there are many things that you can't fix overnight either because the bank's technology isn't there technology, period, in the industry isn't there.

00:20:20:21 - 00:20:42:12
Mark Schwanhausser

The data is available maybe, but maybe it isn't pulled in yet. You know, customers maybe, like you said, don't want to get out too far ahead of your customers at the same time. What kind of things are you building now that are pushing that envelope? But where you've got you can't get too far out ahead, you got to build in stages.

00:20:42:25 - 00:20:49:09
Mark Schwanhausser

You know, what kind of investments are you making now that you really want to see the big payoff for them until down the line?

00:20:50:02 - 00:21:14:16
Damian Warren

Yeah. Yeah. I think one of those things for us is the U.S. Bank Smart assistant. We do believe the conversation experiences are core to the digital experience. And I think, you know, given the amount of engagement that we are seeing with that, we've answered about 6 million plus customer questions through U.S. Bank's Smart Assistant since we launched it.

00:21:15:05 - 00:21:49:11
Damian Warren

So there is a level of engagement there and a level of simplicity that customers appreciate. So for us, that's not just a channel or an interface that customers can interact with. We also get a lot of learnings out of that in terms of what our customer is actually asking for and I think Smart Assistant also serves another purpose as you think about just the growing feature complexity that exists, hundreds and hundreds of features that are available through online banking and in the mobile app.

00:21:50:20 - 00:22:21:10
Damian Warren

It can serve as a fast path to get something done right to reduce navigational complexity of finding things across those digital channels. So I think, one, there will be a growing need to engage conversationally with your voice through different mediums, cars, TVs, whatever. So I think it's important for that reason. It's important because we learn from what customers are asking it, so we get insight into their needs.

00:22:22:00 - 00:22:30:19
Damian Warren

And then three so it's ability to solve for some of the more navigational complexity in search issues.

00:22:31:19 - 00:22:52:27
Mark Schwanhausser

You know, it just seems like one of the challenges we have with search, virtual assistants, chat, is consumers aren't sure that banks would have the capability to answer a question in that manner. You know, there's a they know they can talk to a person, they can explain it, but it takes time to learn and build trust in these different methods.

00:22:53:20 - 00:23:06:25
Mark Schwanhausser

Is there a phasing in your thinking in terms of like what kind of questions you try to answer first before you go on to the next ones? Can you talk a little bit about that, that evolution as you see it unfolding?

00:23:07:16 - 00:23:44:22
Damian Warren

Yeah, yeah. It's actually the same evolution, right, that's been within digital banking for some time, which is let's start with some of the more frequently asked for transactional things. And that's where a lot of the engagement has come from. But as we also think about more of the sort of personalized financial insights and how can we unlock that through the U.S. Bank's Smart Assistant that's where we see it evolving and we actually see through what we're learning because customers are asking different questions of our smart assistant.

00:23:46:01 - 00:24:00:12
Damian Warren

That becomes a source of data that gives us insight to those needs that then gives us the ability to further personalize the experience across the board. So harnessing the power of the conversation is part of the evolution.

00:24:00:27 - 00:24:18:19
Mark Schwanhausser

It seems that one of the challenges would be, I imagine, you know, standing in if I was the bank representative who gets to staff the door and somebody comes in and you say, how can I help you today? And they just said, routing number and you're exactly what to do with them. You know, that's a challenge with this tech.

00:24:18:22 - 00:24:23:19
Damian Warren

It's the Google search bar equivalent of your digital banking engagement. Yeah, right.

00:24:24:15 - 00:24:51:19
Mark Schwanhausser

So let's move to Financial Fitness, which is my favorite topic. It's the thing that gets my tail wagging the most in my mind. It's essential if banks want to develop long term advice driven relationships. One hot area of innovation is automated savings that most FIs taking an approach that really is built on budgeting and spending, round up to change algorithms to help customers save what's left after they pay their bills.

00:24:52:09 - 00:25:16:26
Mark Schwanhausser

The problem with that approach is that it's basically a way to find loose change in the sofa cushions, and it doesn't pay attention to one of the most powerful if not the most powerful principle and personal finance. Pay yourself first. You've got a whole program called Pay Yourself First. Talk about why you decided that that approach is better than the traditional spending, budgeting based approach to savings.

00:25:17:07 - 00:25:23:09
Mark Schwanhausser

How is it paying off for customers and the bank and how are you measuring if it's working?

00:25:24:15 - 00:25:59:06
Damian Warren

Yeah, it's a great question. I love this topic. So I think for for us, as we lean in against those consumers, right, that place a priority on achieving goals, growing their money through our research, their mental model is help me understand how to allocate what is coming in to those goals first, because those are the priorities for me as an individual and then help me manage the rest of what is left over against some of the more discretionary things.

00:25:59:10 - 00:26:27:07
Damian Warren

Right? So they place a higher priority on goal achievement, whether that's saving for something, investing for something, buying a home, whatever those needs and goals are they want to allocate their income to those things first, then they want to meet their obligations, right? So help me allocate dollars towards paying my bills. And then they want to deliver on the rest from a, you know, what is discretionary.

00:26:28:04 - 00:26:53:27
Damian Warren

And if you build that structure into the experience, it aligns well with those customers mental model and helps them achieve what they want to achieve and turns budgeting into something that becomes sort of a monitoring activity versus, you know, I'm breaking out my spreadsheet because customers have told us that there's way too much heavy lifting as you think about more traditional budgeting techniques.

00:26:54:28 - 00:27:18:27
Mark Schwanhausser

You know, one of the things I like about this approach is that it doesn't force all the work onto the consumer. Too much of banking to this stage has been about compiling tools. And so you have to have a self-aware customer base who understands how banking works, how to move money to, you know, sort of have a sense of what is, you know, how personal finance works.

00:27:19:08 - 00:27:43:09
Mark Schwanhausser

And then they use the bank's set of tools accordingly. You're taking an approach to basically we can tell you a principle. It's personal finance is complicated. We'll tell you a principle. We'll tell you why it's good for you. We'll help you grow with it. We'll keep you on the right track. We'll help you course correct This seems to be something that neobanks are trying.

00:27:44:02 - 00:28:11:27
Mark Schwanhausser

We were talking the other day about the neobanks threat and how they don't have the breadth of things that U.S. Bank has or any bank has, frankly, and yet they're doing a very good job of trying people's interest. Can you talk a little bit about especially in the context of things like savings about that neobank threat and how U.S. Bank hopes to counter that threat by marshaling all the other things that you can bring for the consumer's benefit?

00:28:13:07 - 00:28:39:03
Damian Warren

Yeah, I mean, I think it's a question of how do we integrate all the experiences in a much more simple way for customers? And then we have the breadth of financial products solutions that we can bring to bear as well. So, you know, if, if somebody is looking to save, we can not only help them save, but we can also give them access to credit through borrow our own tools Right.

00:28:39:03 - 00:29:05:16
Damian Warren

So, you know, bringing all of those things to bear from an ecosystem perspective and making it very simple. So customers understand, you know, what they're ultimately trying to achieve and what are the different options that we have for them to help them realize that goal. I think that's going to be where the secret sauce is. So it's the combination of the digital experience.

00:29:05:16 - 00:29:15:08
Damian Warren

Yes. But also, how does that coincide with the financial product offerings? So customers have choice and options about how to achieve the things they want to achieve.

00:29:16:06 - 00:29:32:26
Mark Schwanhausser

And do you think there's still time Speaking of time, I realize we're coming up against the 60 second warning here. So just a very quick question. Do you think there's still time to counter the neobank threat with young consumers? Or do you feel like we're at that, do it now or we missed that boat?

00:29:33:21 - 00:29:56:17
Damian Warren

Yeah, no, I absolutely think there is. But I think the strategy has to be one in which banks need to think about customers in more discrete segments and really go deep to understand what those segments needs are and then translate those needs into sort of integrated value propositions that resonate with those segments. I think that is the strategy.

00:29:56:27 - 00:30:01:16
Damian Warren

So it becomes less product centric and more segment need based.

00:30:02:22 - 00:30:22:28
Mark Schwanhausser

Well, as I said, we are running up against time. It was a fun conversation. I hope this was helpful for bankers out there who are going through some of the same questions. You are trying to understand how to weigh that, the overwhelming number of priorities and try to make things the best they can for their customers. So I want to thank you again, Damian.

00:30:22:29 - 00:30:39:17
Mark Schwanhausser

This has been Damian Warren, senior vice president of the Consumer Digital Channels Experience for U.S. Bank. My name is Mark Schwanhausser, director of digital banking at Javelin. Folks have a good rest of the conference. Have a happy Wednesday.

00:30:40:24 - 00:30:41:09
Damian Warren

Thanks.