Building a customer magnet: Insights from PwC's 2023 consumer research

Get a sneak peak at PwC's 2023 consumer research, along with insights on how you can respond quickly when the stakes are high.

Transcript:

Musi Qureshi (00:04):

All right. I think we're just going to get started and I know they'll be serving food, so hopefully we can talk over the den. Thank you everyone for joining us here today. I'm Musi Qureshi with PWC, along with my colleagues here at Adele and Greta, as I mentioned, we're really excited to have all of you here today. We have a clever name for our talk building a customer magnet, but what we're really excited to share are the results of our 2023 consumer survey. This is hot off the presses not yet publicly available, so a lot of the data, all of the data you'll see here today is still being crunched. We're still drawing the insights out, but we're excited to share the first of it today. We'll talk a lot about what that means, what we see about consumers, what they expect, what they'd like to see, but we will also then talk a lot about what responses we've started to see and what we might expect to see from banks and credit unions. So it'll be a little bit of a tail in two parts. What we will plan to do is go through a few of the themes right up front so you'll know what to expect, and then we'll dive right into the data. We'll talk a little bit about the responses, as I mentioned, and particularly given it's 2023 with everything that's just happened in March and April with all the bank stress bank crisis, I think we'll be interested to see the impacts of that on the industry. So without further ado, I think we'll dive right in. As you can see, oh, a lot of what we've seen in this year's survey, and frankly in other prior years too, is that the customer is really up for grabs. So there's a lot to be done still. I would say in our industry there are a lot of headwinds, inflation, frankly, the rising rates and what's happened recently has caused a lot of uncertainty for consumers, and I'm using that term kind of loosely. We'll talk a little bit more about who was in the survey and the population and what's in there in a moment. But essentially as we look ahead, what you'll see is that there are some things that are new perhaps, but many of the old tales are still here. So a lot of the trends from prior years have carried through a lot of what we see on the borrowers and the depositor, the depositors and the borrowers. A lot of those things will be consistent. So lot consumers are telling us what they want. It's up to us to listen and to respond. With that, I think I'll turn it over to Greta and if talk a little bit about our survey and what we've done, how long we've done it and what we see.

Greta Lovenheim (02:58):

Absolutely. Thanks Musi and thanks everyone for joining. I know I, joining us over lunch to see data is always fun and exciting. I mean, even as a data geek, I know that that can be the highlight of your day, but we will try to keep it interesting. So we terms of what we're looking at. So as Musi said, we're sharing insights today from two of our most recent consumer surveys. So these fielded, as Musi said also right, they fielded over the course of late April and the month of May. So this is up to the minute it is hot off the presses. It does take into account consumer's reactions and thoughts and mindsets given some of the turmoil we've seen given certainly the macroeconomic environment we're seeing and sort of how they're thinking about both from an interest-bearing deposit holder perspective, their deposit experience, what they're looking for, what their expectations are, what trade-offs willing to make. And then similarly, the companion survey on the lending side. We call both of these our experience radars because we're looking for trade-offs around how important is rate, how important are fees relative to other aspects of the experience for these products and their relationship as a whole. So not only what's most important, but what is the ranking of that full list and what do they need when they're looking for new relationships and how many of them are looking for new relationships out in the market. So with that, let's dive in. We're going to share today insights from these surveys, but also what we're seeing is implications and potential actions that banks and credit unions could take as a result. So to start with are the three key themes that we're seeing and these three themes, are based on when we're out in the market talk, talking to our banking and credit union clients, what are some key questions that we're getting all the time right now?

(05:02)

And so the first foremost is how do I engage depositors and grow our deposits? That's a hot topic obviously in this current environment. And we'll be sharing, we are seeing in the rising rate environment that consumers are as a whole more rate sensitive, more sense, more willing to switch and more willing to open a new account given a higher rate. But I would say while we're seeing that as a whole, there are segments of consumers where that is not the most important thing, where they are looking for other experiential attributes and experiences that differentiate that fit their needs. And so we'll talk in more detail about who those segments are and what we're seeing that they're looking for. We're seeing about one in three interest-bearing depositors in the market for a new deposit account. So whether it's switching overall or whether it's just adding, that's about a third. Moving to the second theme, customer primacy. So how do we drive that? How do we grow the number of relationships that we have as a bank or credit union who consider us to be their primary bank and we know what we've seen those that say you're my primary bank, are more willing to consider you or consider that bank for the next product, for the next relationship, for a deeper overall engagement and interaction sort of journey. So how do we drive that and what does that even mean? We are seeing a generational shift in terms of how consumers even define who their primary bank is. And it's moving a little bit away from the traditional paradigm of primary checking account that if you look at the average boomer, you look at the average Gen Xer like myself, it's primary checking. It's where I direct deposit my paycheck. When you look at some of the younger generations, that's starting to change. We're seeing some other things around experiences, around advice, around shared values really emerge as being sort of what's driving them toward thinking this bank or this provider is my primary, so we'll talk about that. And by the way, those are also the segments that are most in the market to switch their primary bank. So it's not just like, oh, by the way, isn't that interesting? What are you going to do about it? Because those are the ones who are likely to switch. And then the third theme here is what experiences matter when it comes to new customer acquisition, new customer attraction, hint, experiences do matter. In case that was a question, but we'll talk about beyond rate and fees. What experiences are critical and what are they looking for as they think about what's going to meet my needs specifically in my new and or existing provider? So let's dive right in. So first and foremost, when we talk about engaging depositors growing deposits, we're seeing a couple things interesting, especially in this current macro environment. One is about one in four interest-bearing deposit holders are saving more than they did a year ago, and those who are skew younger, you see about 46% of Gen Z in that bucket versus a quarter overall, and they tend to be slightly more rate sensitive. So those that are saving more are looking for that return or starting to look for that return more so than they did even a year ago. On the right hand side, what you see here is, and this is a theme that really popped out about half across all generations of depositors are looking worried and they're looking to save for emergencies and save to prepare for financial uncertainty. This compares with about 30% even a year ago. So it's now about half. So it is on the minds given everything that we've seen, the turmoil, the inflation, rising rates, people are concerned and they're putting their money where their mouth is on that concern. And you also see kind of counterintuitively a little bit, but you see that the people who are worried about safety and soundness who may be looking or planning to switch financial institutions due to those types of concerns also skew younger. It's not necessarily just the people who have over the FDIC insurance limit at a single bank, you're looking at 36% of Gen Zers and 23% of millennials are thinking about or planning to switch providers due to safety and soundness concerns.

Musi Qureshi (10:07):

I do think it's interesting, Greta, the risk of interrupting you. I think that there's a lot here where folks have said there's sort of older people do X and younger people do y, and I think the data sort of disproves those kinds of blanket statements. Yes, there a lot of activity in the Gen Z and millennials that frankly res maybe reflects what we would've thought would be more visible in the boomers on the far right.

Greta Lovenheim (10:32):

Yes.

Adele Wentzel (10:33):

And almost shockingly because I was not expecting to see that consistency in the data.

Greta Lovenheim (10:38):

Exactly.

Adele Wentzel (10:39):

Yeah.

Greta Lovenheim (10:40):

Yes. And so across the board people are worried, yes, we're seeing that and that is a goal in their savings. That doesn't mean aren't also savings, saving for a traditional sort of mix of traditional goals saving for retirement. Certainly depending on life stage, that's either more or less important to you. And we're seeing that come out very consistently in the data. In addition, shorter term types of goals, saving for a house or saving to start a business or something of that nature or a vacation, again, depending on your life stage, you're going to see a mix of younger people in some of that bucket a little bit more. So those goals haven't gone away. It's just sort of adding to the goal in terms of preparing for emergencies, preparing for financial uncertainty. The consistent theme here though is not just that there are these traditional end and emerging goals, but it's that consistently we're being told by consumers across the board that they want help in tracking progress towards achieving those goals and in a way that resonates with them in a way that matches the kind of goals, whether it's midterm long-term that they have.

Adele Wentzel (11:55):

And I would say Greta too, in addition to just tracking progress against those goals, it's also being able to visualize and see it and interact in a personal way. That's another piece that's coming out, especially with the younger generations and millennials, the Gen Zs instant is also a baseline expectation. Exactly. So when you think about that, the more real time data that they have, the better. And it really makes sense because when you see the top priority, something like buying a house that's going to happen in a faster timeframe than say saving for retirement. So the data and the timeframe that they need to see that data change is much shorter and convenient. Things like switching easily from an iPad to a smartphone to a desktop and even a human interaction, they expect that to happen in a very seamless way and it can actually be something that drives the decision on who they do business with that you are able to provide that experience for them. So when we step back and look at that, prioritizing investments in creating that kind of experience is going to be one of the biggest growth drivers going forward. So we've talked a lot about the generational goals and the key considerations around that. Greta with when we have so many choices around what to prioritize and what is important, are there any insights that can surface up the priorities for these customers?

Greta Lovenheim (13:19):

Absolutely. Of course there are. Yeah. And so when we think about what's most important and what's least important to consumers to sound like a consultant a little bit, it depends on who you're talking about and it depends on who they are. And we're finding actually in terms of there are some mindsets, especially when you think about from a deposits perspective, when you think about for whom is rate the end all be all, and that is the only thing that matters to them who we would traditionally call hot money. That's a mindset that is not what we have found. It is not correlated with age. It is not just by focusing on the boomer who has over a certain amount of assets, you're not necessarily going to identify, oh, these are all your hot money people. It is a mindset that does not correlate with some of those demographic types of data points. And so you see as we look here, we're seeing about 7% of interest bearing deposit holders are hot money. That is a lot of banks that we talk to are worried that, oh my gosh, if I offer this particular rate, all I'm going to attract is hot money. And depending on what you're offering and to whom, that may well be the case, but it's not the majority of people who are likely to move deposit relationships. You also see sort of on the flip side what we are calling the experience seeker and that's 42% of interest-bearing deposit holders and those folks, it's not that rate doesn't matter at all to them, but relative to what their full relationship and the things they're looking for, experiences are the most important. And so they're willing to let, if they find the right experience that trumps rate to them, that's not to say they don't appreciate a fair rate, but isn't what they are out there looking for. So let's dig into that 42% of experience of experience seeker because that is a very attractive group as people are thinking about who should I should target, who should I seek to grow with in terms of go focusing on going and focusing on who's in the market. So these experience seekers, and we will not kind of drain everything here. I know it's a lot of small, a little bit of an eye chart, so apologies there. But basically this group, again, they're defined by experiences are most important relative to things like rate related factors. I would say we do see this group as fee avoidant. They about half of them are looking to avoid fees and that is something that's on their minds. That being said, when they are with a bank, they build strong relationships with their bank and in most cases the first thought as they're thinking about a new product, if they're happy with their bank is they're thinking about the banks they already do business with in their consideration set first. So that doesn't mean they aren't willing to entertain or think through a new provider if there's an experience that they can hear about and or be marketed to about that is really compelling to them. But they do build, have that attachment to the relationships that they've built that they're happy with, which is an important add on. In addition, they about a quarter of them do want that convenient branch location. They do want that physical network. And in fact two of out of every three want sort of extended in branch advice, advice. So advice is critical here to being able as part of that experience, to being able to attract and retain these relationships.

Adele Wentzel (17:11):

And Greta, that one I think is really important because that's a shift. What was the branch experience before? If you go way back to transact, it's to complete tasks, to deposit, I want to be there to deposit this check, but now what's drawing the customers into that branch is that advice factor, right? So I want to talk to somebody and still have that human interaction, which if you look at the digital trends, you would almost say, well the millennials and Gen Zs don't care about that. They just want to do everything on the phone. But they actually do still require that interaction, that advice with the human touch.

Greta Lovenheim (17:41):

And it's not just the in person, So a key switching driver here is the digital tools is the mobile and digital tool. So it's not one or the other, it's both.

Adele Wentzel (17:51):

And then I would all say with that their customer expectations on that experience have never been higher. So you've got these rising expectations, they're constantly evolving and the fact is most people will tell you after one bad experience, they're going to switch to a competitor. So it gone are the days of being able to have that 3, 4, 5, and I'm just going to deal with it. The switch factors there, but what really makes a good experience? So if you ask customers, they're going to say, well, I want to feel understood, I want to feel heard and I want to feel appreciated. So what are the five things that they would comment on that would deliver on that experience? The top five that came up was speed, convenience, consistency, help and friendly service. So think friendliness and a human touch. So delivering on that expectation. If you think about those things, there's a direct link between what that customer is experiencing and then enabling the employees to deliver that. So customer experience link with employee experience has never been more connected. And for years we've been focusing on that customer experience in that front office doing things like digitizing processes, automating workflows, mobile tools, fancy websites. And although those are usually successful projects, when you look at the return or the impact on that uplift for experience, often there's a disconnect. And that's actually become a term now that we refer to as the experience disconnect. And this is the gap between that digital experience and the front office and then the often manual and disconnected middle to back office processes which actually are required to then close that loop and fulfill the experience expectation. So when we look at the frontline roles and empowering those roles to really show the customer they know them, understand the need quickly, but then seamlessly pass that information through to the downstream processes that have to execute in order to complete the action as keeping the customer informed and involved along the way, that's really the differentiator and that's the shift that we're seeing with companies is going from this, I'm in the front office doing a front office transformation piece of work to something more lean and end to end workflow where they take it from beginning to end and how can I use my technology to create that link and deliver a differentiated experience. And when you think about when you're able to achieve that, now all of a sudden your customer facing banker can provide relevant and timely information and create the experience that's convenient and consistent and all of that will allow them to provide more proactive advice to their client, which is what they're looking for in the branch.

Greta Lovenheim (20:41):

And actually back to the advice topic, speaking of advice, and you're going to hear that word a lot if you haven't already, but it's not just advice is going to help me get the secondary savings account of this customer. It is becoming more and more critical when you think about driving that primary relationship. So we are seeing, as I mentioned earlier, we are seeing a generational shift here around how the consumer thinks about their primary bank. And what you'll see here, the traditional paradigm of primary checking account has the account I transact the most with where I have my direct deposit paycheck going to that is that traditional paradigm. You see, that is definitely still the case with boomers and to an extent Gen Xers. But as you go down the generation spectrum, you see some things emerging. You see credit cards when you think about transactional relationships in a Gen Z mindset, the one I'm transacting with the most is my credit card. When you look at things like advice, as we talked about when you look at things like shared values, if you think about all that's happened in the last few years around social justice, around environment, around all things ESG related, that is a big deal, particularly in the mindsets of both Gen Z and millennials. And we're seeing that emerge as a choice driver for somebody's not only bank in general, but primary bank. And it's interesting because those are the generations that are in the market to switch their primary bank. We see overall about 10% of interest-bearing deposit holders say they are thinking about switching their primary bank that for Gen Z that bumps up to 23% almost a quarter. For millennials it's about 16%. So those are the customers that are thinking about or actively looking to switch their primary bank. And these are some of the things that are popping around how they think about that. And so the question is how are banks doing with these younger generations today, as any consultant would say, it depends. So if it's a top four bank or you're a direct or online bank, you are getting more than your share of Gen Z or millennial primary bank customers relative to your share in the overall market. So you're getting more than your fair share if you're a regional bank or a credit union or community bank as a whole, you're getting less than your fair share. You're not the experiences you're offering. The types of attributes we were just looking at in terms of advice, in terms of advice, experiences, in terms of shared values, in terms of how you're attracting them as their primary bank is less than your fair share in the market. And when you think about what are those switching drivers, what makes somebody open their first account with their primary bank? When you think about Gen Z and millennials, it's a couple of things. One is referrals. Referrals from a friend or family member is important. Having experiences that are so exciting to somebody that they're going to tell their friends and family members, Hey, I just had this experience and it was great, is important. The mobile and digital tools and functionality is also critical for these two segments. And then also rates certainly are an issue and they are something that these consumers are looking for. But again, it's not just rate.

Musi Qureshi (24:34):

So I was just going to say, I know it sounds very dire and especially we get this question a lot, but we do, we can't change rate. What else could we do? And I think, so what you just described is really important, right? Rate is important, but that's not the only thing. So if you're unable to change rates sitting here in this room at your institution, I think the things Greta just touched on, I would say referrals. One other thing I would add a couple of nuggets there is friends and family, very important, but you'd be shocked at how many people use Reddit to make decisions. Things like what credit card am I getting? Where am I banking? What's going to be my next checking account? Where should I open a cd? Reddit is something many people have never heard of and something others live by. So I think we just being open to what are the thought processes of our Gen Z and millennial prospects I think is really important. Yesterday we heard about the ally financial story about, hey, I want to save for Beyonce tickets. And guess what? That story went viral on Twitter. And you can bet people who had never heard about Ally were suddenly like, oh, this sounds like an interesting institution.

Greta Lovenheim (25:45):

And in their minds it's a referral.

Musi Qureshi (25:46):

It's a referral that someone used. It went to Coachella, it sounds great. So I think just thinking about it more expansively than maybe how we've always done it is important and not for nothing. That experience, and I think Adele touched on this, right, is I was able to open a savings account with Ally. What are the tools there? It wasn't a savings account called Beyonce tickets, but it was flexible enough the product, the service features were there. So if that's the second part that you touched on, Greta, I think very important to be able to say, we have the digital tools to compliment the referral that got you in the door in the first place. So please stay with us.

Adele Wentzel (26:26):

And it's personalizing it right back to that earlier point that it's not just a one size fits all. You have to make these experiences personal. And even if the overall offering is standardized, like relating that to the different groups goes a long way. And that Beyonce story was perfect for them.

Greta Lovenheim (26:45):

Agreed. So we've spent a lot of time talking about depositors and deposits and so we're not ignoring the borrowers. The fact is that the story's the same. What we're seeing, it's two separate groups of 6,000 people each, right? Depositors on one, borrowers on another, and they're telling us the same things and oftentimes they're likely similar people. So what we're seeing from borrowers is that they value experiences. The types of lending products we're talking about are traditionally, and again the assumption is the paradigm is, oh my gosh, they're so rate sensitive and they are mortgages, HELOCs, auto loans, those are very rate sensitive products generally speaking. But what we're seeing is that 41% of these loan holders for those products are saying that experience trumps rate. It's not that rate isn't important, it's that there are experience aspects of those relationships that are more important in their minds. And even beyond that 41% who basically are seeing for all borrowers that there are experience aspects that are non-price related, that are high up on their minds, even if in some cases rates more important or less important. Not that experience don't matter to some and I'm just going where the rate is and I could care less. And so what they're looking for from a lender perspective, 63% of them say that digital experience is the most important. So that is critical how they think about how can I, all the way along the journey of researching to figure out what I even want all the way through application, all the way through decision, all the way through funding, all the way through making payments and servicing in addition to that flexible products and being transparent around those terms is also significant here. Quick credit decisions, not surprising, but that is in the top three here. And then back to our favorite word advice, that's a very fast follower to the top three.

Adele Wentzel (29:08):

So basically what you're saying is that the depositors and borrowers are actually not that different.

Greta Lovenheim (29:12):

They're not that different.

Adele Wentzel (29:14):

And also when you look from the depositor or borrower's point of view, big surprise, the same five top must-haves are popping up to the list. So what were those again? Speed, convenience, consistency, friendly service and a human touch. Exactly the same with this group as well. So okay.

Musi Qureshi (29:35):

I mean we've talked a lot about the data and what we see. I think we should spend a little bit of time as promised, talking about how do we get to those five things that Adele just talked about. So what's the action? What can we as banks and credit unions do? I think there's, as I said earlier, it's not all dire. There are very specific things that I think we can look at as we think about how do we engage customers and grow deposits. That must have been every conversation between, I feel like January and May was around growing deposits. So there are some things we touched on them. The data actually tells us who is looking for what. So instead of just driving into the market and sort of saying, okay, we're going to push products and push offerings, what we would suggest is use the data to target the right people, to find the right prospects and match them up with the offerings, but then create something that's a bit more personalized. So as Adele mentioned, it could be the same customizable savings, but when we market it, how do you make it feel personalized? How does it make it, how do we make that offer feel like it's tailored to me and my offer is different than Adele and that each person gets that, I'll call it experience for one. I think that's really important than just relying on the pricing and promotions. I think the second one around sort of driving primacy, you mentioned this, right? We can't just fall back on is your direct deposit with us or not? I think this is where advice making experiences that feel embedded. So how can we go outside of the traditional banking footprint to create offers in places where I might be doing my day-to-day living, whether it's embedded finance, I mean that could be sort of a broad term, but just thinking about it as often people will say meeting customers where they want to be met. I think the more, just the simplest way of thinking about that is if you want to be that person, that institution, then we have to be where they are. And that could be an embedded experience when shopping, I'm buying flights, how do I get in front of that experience? I'm buying vacations, I'm buying a boat, whatever it may be. I don't have a boat but one day. And then the last one around experiences matter to attract customers. I think those digital experiences, that's probably the heavier investment candidly. So making sure online, mobile contact centers, those experiences are really moving quickly in the industry and frankly in other industries. So investing to make those choices, investing to make those experiences better, and then making sure that if someone's talking to someone in the branch that they're experiences, they shouldn't be the same, but that they're consistent across all those channels. I think the product feature, experience combo there is really important and often that's the most expensive. So a of shortcuts are taken. But I would say that that's definitely where we would suggest investing heavily because that is what customers will see at the end of the day. So many people are making their choices based on those digital experiences and those, I hate to use the word omnichannel, but those cross-channel experiences really do matter.

Adele Wentzel (32:59):

And one thing I would just say though is don't hear investing in that as I need the fanciest website ever out there with all the flashy bells and whistles. It's okay just to have an okay website. The key that is, is that you're pulling that information through, you're taking from the interaction point, you're able to process that quickly. So when I mentioned earlier that we're seeing people shift initiatives from being, I want all the fancy requirements and the bells and whistles for just this one component to being more of a lean and horizontal view of once I capture that experience, how am I actually delivering on it? Thinking about that differently is going to drive more return on that investment.

Musi Qureshi (33:39):

I think that's absolutely fair. And thinking about if resources are constrained, picking and choosing, yes, not everyone can do everything. Every bank, every credit union doesn't have unlimited resources. So we always say yes, it's important, but pick the three things that matter the most to your bank, to your prospects, to your customers, and go deep on those. So I think that there is an investment to be made, but we can be smart about that. I know we're going to run up on time and we did want to save a little bit of time for questions, but I think that there's one other piece which is we've been hearing a lot and I promise you this is not a pitch to sell a product. We're not trying to get in a product business, we're not selling anything here. But what we've built in our sandbox at PWC is an example. I'll call it just like a showcase to show how you can do those things and how we can piece together sort of digital experiences, whether it be a servicing experience, an account opening, et cetera, connected into a modern core. And that sort of sandbox experience helps us often talk through what is the journey that you want to deliver, what are the use cases you want to deliver? Not to be copied, not to be exactly imported into a bank's environment, but just to get thinking about the art of the possible and how quickly can we do it? How difficult or not difficult is it? So one of the things that we would say is thinking of this and if folks are interested, please stop by the booth. We're happy to do demos, but the idea is that it's been done, it can be done quickly and it doesn't have to be this huge lift for each institution. Think of it more as here's a model system that we can emulate. We can take pieces and parts, we can take the lessons learned. So we're happy to show that to folks if it helps to get the creative juices going. I would say it's not meant to be a bank in a box that we're going to sell anyone but a bank in a box to show you the art of the possible.

Adele Wentzel (35:43):

And let you interact and actually see and test and back to the experience point, right? Yeah, come try it out. And it's a starting point so it's not going to be perfect to your needs, but yeah.

Musi Qureshi (35:52):

It's just meant to show. Yeah, I would say we have a few minutes, we could take some questions whether it's about the survey data or the responses. I already see a hand up, are there microphones that we could use?

Audience Member 1 (36:09):

So this is a little bit outside of the box, but wondering if the responses and the survey questions you ask gave you a perspective on outside of bank depository products, especially for probably the two younger cohorts, what drives a decision on an interest pairing bank product versus something like a Roth.

Greta Lovenheim (36:30):

And so that's in our data to come. We actually do ask questions about that around, okay, given that you are thinking about earning a return and what you're looking for, what kinds of institutions are you thinking about? What kinds of providers are you thinking about? So we do actually have, or we will I should say, have some insights around that. But again, hot off the presses. So we don't have that today, but certainly reach out afterwards and we're happy to share when it gets published for sure.

Audience Member 2 (37:03):

You said you've got a package for what? What's specific functionality is?

Musi Qureshi (37:13):

Just to be clear, so the question was we have a package to stand up a digital bank. Yeah, no, that's okay. So I think everyone heard the question. So just to be clear, so we are not selling a package to stand up a digital bank, but what we've done is we've stood up a sandbox in a sandbox environment, what you would have for a typical bank, for example, a mobile account in which I can see my balances, I can move money between accounts, I can buy a new account, add an account, et cetera. So it has a front end that looks like maybe my mobile app does for a bank and it's connected to an integration layer that allows you to connect it to a GL. It allows you to connect to other features that you might have in your bank. And it has some, well, we've actually built it with multiple next gen cores. So think Finsac, thought machine, Technis, et cetera. And the idea is not that we would give it to you to stand up a digital bank, but that we would showcase some journeys that show, oh, if you want to do a money movement or a bundled, a relationship based bundled product offering, we can show how that can be done really quickly and easily in our sandbox. So that was the intent.

Adele Wentzel (38:31):

It includes, so think of it too, all the front end work that you have to do when you're working to figure out the requirements, the use cases, the journeys, the personas, like all the thinking around that. We've taken all our work in the industry as well as industry best practices, kind of standardized that, brought that in and then simulated it in this model environment so that you can see when I say this persona is that actually what I'm talking about is this, what they actually do or how much of that is relevant to what I need to do? 50%, 80%. And it becomes that starting point. So instead of going into a room and starting with an Excel spreadsheet or a whiteboard to start listing requirements, you actually have a system that you can view, see, not tell, and then be able to experience how much of this is accurate. So that's why we say it's not something you could just lift off the shelf and then plug into your bank and you're done. But it really does accelerate, especially that front end of the process. So you get to that 80% quickly and then you tweak your 20% for your unique component.

Audience Member 3 (39:31):

Hope you are not selling.

Adele Wentzel (39:32):

Well, it comes with our services. So we say it's not a product because it's not a thing because it's not a thing that we could license to you, but if you were to work with us then that's the tool. Our team works as well.

Greta Lovenheim (39:44):

As an accelerator.

Adele Wentzel (39:45):

As an accelerator or you stop by the conference and just take a look.

Musi Qureshi (39:50):

I think you had a question. Go ahead.

Audience Member 4 (39:52):

Can you hear me all right? Yeah, thank you. This is great. One question I have, do you have a sense for how much of the difference is on the responses is generational versus sort of life stage? I am actually in the wealth management industry, so the trend towards banking being sort of a primary for advice is interesting, but I don't know if it's a stage of life or generationally thinking about it differently.

Greta Lovenheim (40:19):

I think it's both. I what you see in the generational data is sort of a proxy for life stage. I think you generally see concentrations of life stage by generation. So it's a great question. I think I would say in terms of primacy, we also do probably a dozen surveys a year and have for the past 12 plus years sort of looking for evolution in these mindsets. And I would say one of the ones that we've done recently is around the high net worth segment as a whole and looking at how they think about their primary wealth provider and what other services they are looking to do with that wealth provider versus are they really trying to separate their banking, for example, or certain banking services from their wealth provider. And we see an interesting mix and it also kind of breaks out by life stage in terms of those that are, we do see a large portion, I don't have the number off the top of my head, but we do see a large portion of folks who are very willing to do, to have, move their banking to their primary wealth provider if that's offered. And it differs by, it could be on the business side, business banking, it could be their mortgage, it could be a whole host of things. And we look at those things kind of distinctly. But it is really interesting to think about for a wealth provider who may or may not have a robust offering in that space and really trying to build, if they're building that banking capability, building it for the people for whom they might actually have a chance to win, who are open to that.

Audience Member 5 (41:57):

Rob. Thank you for this. I'm assuming that all of this is experience and surveys for retail consumer banking.

Greta Lovenheim (42:07):

So these two surveys for sure. Yes.

Audience Member 5 (42:10):

A lot of my bank's customers and community customers focus on small business. What insight might you draw from this about small businesses and where they in relation to their consumer offering?

Greta Lovenheim (42:23):

You would think I had seeded all of these questions, just so you know because a great question. So we actually right now have a survey fielding that are, that's focused on business banking and it's focused on businesses that are small and medium sized businesses to try to understand some of the mindsets from a business perspective. The other piece, and I think the core of your question is looking at that, especially for small businesses, being able to tie some of these insights to the small business owner and understand their decision making, both from a personal perspective and the business perspective. And so not to go too deeply here, but we intentionally, part of part of our interest in doing these surveys is certainly for forums like this to share insights, but part of it is to do it in such a way that we can map, we can attach this data and model this data to the 280 million US adults and the 40 plus million business location and 26 plus million US businesses so that we can not only identify the owner, how do they make decisions on the personal side, but then also understand their mindset of how they make decisions from a business perspective. So looking at, we saw here and we identified within some of these surveys and it's will be published shortly around who of these respondents we intentionally looked to identify business owners or people who had the goal of starting a business to be able to understand are they different in terms of the types of experiences they're looking for? How do they think about what tools they need, what goal tracking they need? Do they think about that in a different way? So that is absolutely in the plan, but not in this material yet.

Adele Wentzel (44:11):

Well, and if I was a vetting person, I'm going to say that those five things we talked about, speed, convenience, consistency, correct. Human touch and friendliness are all going to be important to those same, that same segment. Yes. The difference is how they come to be and what they get applied to. So the product suite will change what they need. Speed on will be different, but the core elements, if I was to bet your data's going to tell us that when we see it. It was very consistent.

Greta Lovenheim (44:40):

I wouldn't bet against you.

Musi Qureshi (44:44):

I do think that sort of both those last two questions around the wealth customers and prospects as well as small business and business banking, I think sort of highlight that this is just a tiny tip of the iceberg portion. Tip of the iceberg. Thank you. And thinking about all of these surveys holistically and what we see and how we can map across of the surveys is really important and that's a lot of the work that the team does. So we do have that. For those who are interested, I know there's a question about if it's wealth then bleeding over, then we should talk about that separately because there's a ton of data that we have, and we didn't get into this at the outset, but these surveys have been running for a decade plus, so there's also longitudinal impact that you could take a look at. What's happening now versus before. So happy to have those conversations. I don't want to extend longer than we have here, but we're happy to take a few more questions. Otherwise we are open to outreach and sort of talking about the data and the impacts.

Audience Member 6 (45:46):

Speaking of, so a decade work of data of the, have you seen any tectonic shifts over that decade or is it you?

Greta Lovenheim (45:57):

Yes, and some of them are very intuitive. So we're seeing, we're currently looking at the results from that lending survey for example, and we're looking at sort of segmenting that group of respondents to see what interesting groups and how they're different really pop out for the first time. When we've done this, like I said, for over a decade for the first time there is, everyone sees the full set of digital experience as important and there really isn't differentiation in people seeing it as more or less important. I mean it couldn't be more consistent. I would say even a year ago, even two years ago, that helped sort of distinguish between the different interesting segments. And there were still, even during Covid, there were still holdouts who were like, no, I want my in-person and that is much more important to me than digital now it's an and versus an or. Right. The other thing, and I know we mentioned this a little bit at the beginning on the deposit side, when we look at those savings goals, the degree to which people are worried about financial uncertainty is stark compared to where it was even a year ago. It went from about a third to about half in a year. And I mean given what's all happened and that this was literally late April to end through the end of May where we're asking these questions and given what was going on at that time, not surprising, but a huge shift. So things like that. Yep.

Musi Qureshi (47:45):

Thank you everyone for joining us. Thank you.