Executive roundtable IV: Branches are here to stay, and digital is an imperative

This roundtable session discusses the synchronization of people, process and systems to optimize around hybrid service delivery. Blend offers their point of view - join us to share yours, hear your peers' and learn what composable origination can power for next generation banker, call center agent, and consumer digital omni channel experiences.

• How to synchronize people, processes, and systems
• The power of Composable Origination
• Optimization of hybrid service delivery

Transcript:

Brian Knight (00:07):

Good Afternoon, So thank you for joining our round table session today. Well, everybody's still getting seated. We figured we'd start with some introductions. And again, thank you for taking time out of your afternoon to spend a few minutes with us. My name is Brian Knight and I lead our solutions engineering team at a company called Blend prior to joining Blend. I've been with Blend now for about six years, but many of you, I've been in the financial services industry pretty much my whole life. So I've been a banker. I have worked in for all the major fintechs, a lot of the higher end technology companies like Accenture over the last 27 years. And so today I'm joined by my colleague Peter Shot and I'll let him introduce himself.

Peter Shot (00:58):

Hi everyone. My name's Peter Shot. I lead our customer success managers for our key accounts, which are our largest bank accounts with Blend. I like buying. I've been with Blend about five and a half years, been in the mortgage and financial services business for the last 25 for 30 years. So today we're going to talk about digital banking and branches, which coming from a company like Blend, which is a digital application, it may seem weird for, we're here to talk about the branch network, but I think Blends philosophy has always been that we want to meet the customer where they want to be and we want to enable the customer in a digital way as well as enable the bankers in a digital way. So today we're going to talk a little bit about those two areas and how they converge together and where some of the challenges are, which probably most of you in this room already know about. But we're going to be using mentee here just to kind of gather some audience participation. You might have to bear with us a little. This is the first time using mentee, so hopefully it goes off as planned, just like all technology when you start using it the first time. So Brian, if you want to do any more further introductions?

Brian Knight (02:15):

Yeah, no. So we'll jump into it here in just a minute. But to kind of give you guys a lay of the land, essentially, as Peter mentioned, we're a digital origination technology provider. And so when we think about digital origination, that's not just one particular channel. So many of you may know us from our mortgage solutions where we offer an online consumer experience, but recently, several years ago we launched into a full digital origination experience spanning across all verticals within the financial institution and all parties that serves. So it's not just consumer, but also any of the folks in the back office as well. So we saw success with creating that best in class consumer experience and again, have started that process for all parties within the, so the format for our session today, obviously we'll be a little biased. We are going to have a point of view that we'll share with you, but that point of view is not necessarily driven just from my experience or Peter's experience, but rather from the experiences we've taken from working with 400 plus clients of all shapes and sizes throughout the financial services industry. As Peter also mentioned, we're going to invite you all to share your feedback on our perspective. And so we'll do that using this tool mentee. And again, the code will remain up here throughout the session. With that being said, we've got four or five different topics that we are planning to cover with you guys today, but depending on interaction, we may only get to one or two. So the purpose of this is let you guys enjoy some good food. If you're taking time away from the beach, we want to make sure it's valuable for you. And so with that being said, we can go ahead and get started.

Peter Shot (03:58):

Sure. Again, as we said, we'll, I'll ask Brian some questions, we'll have some interaction and then look for everybody's point of view. So first one we want to talk about is that, Brian, what are you seeing in some of the priorities in the market today? I think as it relates to brand strategies and how are banks and credit unions, other financial institutions using the branch networks to improve customer experience or how is that working, especially in conjunction with digital?

Brian Knight (04:27):

Yeah, for sure. I mean, I think if I go back to 2019 and 2020, everybody was all about how can I do this consumer experience where I don't have to involve a human? And I think all of us have realized that that was a great little fix for the time being. But what we're actually seeing it blend is, again, digital is a great experience, but it's never going to replace the human in general. If I think about just my own personal experience using something like American Express, you can self-serve, do pretty much everything you want on their application, but there has to come a point in time where you have to interact with a human. And so that service and that type of interaction that I have with them only helps solidify the relationship that I have with that financial institution. And we're seeing that in our branches today. In addition, some of the things that we are seeing quite often from a lot of our customers is that how can the technology actually improve or support the branch interactions with clients? And if I go back to one of the first jobs I ever had working as a platform associate for one of the largest financial institutions in the country, I remember I had to use 25 systems just to be able to go in and open an account for a consumer. And that was on top of all the other responsibilities that I had. Getting to know them and being able to recommend financial products that met their needs or their services in addition to you making sure that I was upselling them or being able to, like I said, deepen that relationship. So I think one of the biggest challenges that we have tried to help overcome is how do we simplify that technology so that it's not just another bolt on something that the branch bankers have to swivel to, and it's something that's easy and intuitive for them to be able to use in their daily lives.

Peter Shot (06:22):

So we do have some rankings of some the opportunities to maximize the value of the branch network over the next couple of years. I think no surprise is the hybrid service delivery in terms of managing omnichannel interactions where I think that's one of the things that we've seen across and we've tried, blend has tried to solve for as well as other companies. When a consumer may start an interaction with you in a digital channel and then go into a branch or vice versa and want to complete that transaction to be able to sync those together. I think if anybody remembers the original days of e-commerce, you think about when you would go into a store or you'd go online and the inventories would not match, and the product trying to find products in different channels never matched. I think we're seeing that across the that. So for Blend, that's one of the things we've tried to do and I think that that's a solve across the networks that we see is trying to manage that, those multi-channels.

Brian Knight (07:28):

Yeah, and it's funny because I remember even going back, like I said to that very first job I ever had working in the retail side, I had no way to see what a customer did online. That's so weird. And then we flash forward to 2023, 27 years later, and that still seems to be a big problem where a lot of the folks in branch are asking questions at the consumer to try to replicate the experience of where they are, but they have no real way of having true visibility into that consumer's experience or even taking over the application and being able to assist them with that. And so I think as technology begins to evolve or as you begin to evolve your technology stack, rather looking for solutions that you can implement that will help alleviate those particular needs are going to become not just a nice to have, but it's going to become an imperative.

Peter Shot (08:20):

And feel free, I mean, I think, I know everyone's eating lunch, so feel free to speak up. We can't really see very well out there. So if anybody just wants to raise their hand, stand up, whoever has the other in here, I mean, if you have an opinion on that, again, we're here to not tell you what's right or wrong. I think we would love to hear some feedback if you're up for it

Brian Knight (08:45):

And don't feel compelled either. I know how it is, whatever you're eating and trying to talk through food.

Peter Shot (08:53):

Some of the other ones up here. The second one is consumer centricity over product centricity

Brian Knight (08:58):

For sure, because that's one of the things that really differentiates you all right? Because if you think about a checking account, it's a checking account, but it's that relationship that you have with that particular customer and making sure that you're providing them the right products that meet their needs so they don't feel like that you are selling them something or God forbid, take advantage of them, right? It's funny, I'm sure all of you who live in the truest footprint have probably seen that commercial, their recent round that they just released with, it's a mother and a daughter and they're talking to their banker and they're talking about the lifecycle that they've had with that particular banker at Truist. She started out being her parents' banker and then became her banker, and now she's her daughter's banker. So it's all about, again, how do they develop those relationships and again, present those products or whatever that are specific to that consumer.

Peter Shot (09:55):

If there's no other questions or comments, we'll kind of move on. So obviously we've talked about some of the challenges. What are some of the current constraints? So where are you seeing positives? Where are you seeing some of the challenges that are in the marketplace today?

Brian Knight (10:13):

Yeah, I mean, I think going back to what we said just a moment ago with just the dependencies on other systems and not having connected tooling within the FI so that I can see what a consumer's done online, I can pick that up for them, help complete that for them. In addition to having dependencies on back office channels, one of the things that we're privy to at Blend quite a bit is being able to see not just that digital layer that sits in front of your frontend employees, but also your customers. We also see the archaic technology that a lot of people are still using that I used 30 years ago. And so again, that creates a big gap for them today, I already talked about this, but the swivel chair, just having too many systems, it being complex and cumbersome. And then in the branch world itself, sure you're going to have some lifelong bankers that are going to be there, but by far and large we know this is a high turnover position. So training some individual for 15 or $20 an hour that might have a commission plan or whatever the case may be. And that constant turnover where you're spending 6, 8, 12 weeks putting them through basic platform training and then loan training, and then all these other new products and services training, a lot of times, again, that becomes a big costly expense that the banks are incurring. And so having simpler technology that is intuitive, just like a consumer experience, our montage is if a customer doesn't need to be trained on it, then why should a banker?

Peter Shot (11:52):

Well, I think the responses kind of speak for themselves. I think across the board. I think again, omnichannel is a must have more automation around verifications. I'm just interested to dig in on that one and if anybody feels like, what are the verifications where you see the most challenge? I mean obviously we're doing identity verifications, we're doing income verifications, obviously credit is out there. Where are the biggest opportunities or biggest challenges in verifications to date? If anybody wants to offer an opinion, we'd love to hear that. I think we probably have a number of those up here, but I'd love to hear since that is such a big part of it. All right. Do you have an opinion Brian?

Brian Knight (12:41):

I do have an opinion, obviously, but with that, I mean I agree with the audience. I mean, omnichannel is, it's a must have. I mean, we've stitched this together for the last several years, and from the consumer's lens, I mean everybody's done a really good job with this, but obviously the technology, as I mentioned before, the archaic framework that sits behind this, the scenes, it's becoming a little dated. And so in order for you to be able to evolve with that, adopting omni-channel solutions that give you that line of sight regardless of channel is going to be a must.

Peter Shot (13:15):

And the other one up here is cross sell, which is again, a holy grail for many. How do you do it better? What are the tools you need? I think technology silos have always been one of the biggest challenges.

Brian Knight (13:31):

For sure. And on top of that too, you also have to take into consideration other regulations. So cross sell, it's become a dirty word for a lot of bigger banks in addition to causing certain situations, and nobody wants that. So how do you create a fair and equitable way to be able to provide the best product for those particular customers? Well, in fact, you can leverage technology to do it right? Because again, if you're looking at individuals based off of numbers and not necessarily the person sitting across from you becomes a lot easier for things to become a little bit more fair across the board. So one of the things I will just share with you, and you've probably seen this with some of the other vendors that you'll meet throughout this conference, but the embedded of or embedding things like for example, decision management platforms into your overall architecture that allow for cross sell components to be presented to the consumer and a consumer facing experience, but also on the banker side. So simple things all the way down to maybe this consumer doesn't qualify for this particular product, but how do I save that business? How do I get them into a relationship with my particular institution? Or again, how do I deepen that relationship? And it's not something as generic as, Hey, looks like you qualify for our platinum credit card. Okay, great. But it would be more specific things like I can save you some money and help you refinance your auto loan, right? I see right now you're paying $740 a month to Audi Financial and I can get that payment down to roughly $400 a month by converting you to one of our loans. So again, utilizing those particular pieces to alleviate the kind of push or the goals that you may have on your platform folks to expand that business and use the technology to be a little bit more fair with it and personal, I think is the key.

Peter Shot (15:30):

And is that, when you say personalized, is that structuring specific proactive offers to a customer around something whether Sure. I think most of the time when a customer comes to you, they may have a purpose in mind, but they really say, Hey, I need $50,000 for something, whether it's a home improvement, an automobile, or whatever, and the opportunity to take them through. Here's the other options on what you have as opposed to all I have today to offer you is car loan, so here's your car loan. And it could be a personal loan, it could be a home equity if they qualify. So how do you see that working in the systems that we have today where we've got those silos that they may not be able to cross over?

Brian Knight (16:12):

And I mean that's the important part about making sure that you have an architecture that spans across your entire technology stack. So for example, and again, going back to what we do at Blend, a lot of people just thought we were an online application, but in reality, we are an orchestration layer, for lack of a better term, that sits on top of and across all of your entire tech stack in your institution. So what that does is it allows for us to break down those silos. So feeding things like your credit box for auto or your credit box for credit cards or deposit account origination or whatever the case may be into one single platform allows for technologies like Blend to be able to personalize that experience, not only for the consumers who want to do things in a self-serve format, but again for your bankers as well. And like I said, we are moving a lot of that friction from the process where they automatically think in training, we used to teach people first question out of your mouth is, do you own your own home? And the reason why they were asking that question is because we were going to tie everything back to a home equity loan because that's how the bank made more money. Well, what happens if the borrower says no or the person says no? Then what do you do? So instead of having to go through all of that and remember this kind of checklist of things that they're running through in their mind, actually the technology can help personalize those offers for them as well.

Peter Shot (17:40):

Again, feel free to jump in at any time, just shout out and we'll pause. But moving on to a bit more, coming back to the branches, if we see them as product and service delivery or distribution centers as opposed to just doing transactions, taking deposits, typical branch transactions and more towards profit centers and using that as a way to drive P and L for the branches, what do you see some of the challenges around that? Where do you want to go from there?

Brian Knight (18:15):

I mean, I think it goes back to everything we've been talking about thus far, Peter. I mean in the fact that they have multiple systems or whatever that they're using, they don't necessarily have the best real time guidance to help them be able to make certain decisions when they're working with consumers. A lot of times, again, the technology is so cumbersome where they're having to bring a customer into session, create that customer information record, and then open this one product, then open another, and something like a shopping cart type experience I think would help with that as well. Because the goal of the branch really is to develop that personalized relationship. You want people to know that they've got someone that they can work with individually as they're going through this. So I think removing the friction is a good way to say it.

Peter Shot (19:07):

Right, Well, I'm interested to see some of the responses from the audience is funny. Number one so far has been the contextual guidance. And I think back on the previous slide, one of the things that ranked really low was taking a banker through an application. So it seems like there's, in my mind, a little bit of a conflict there between where we think that it's important. I think obviously having a banker be able to move through an application and maybe giving them the cues on when to offer something else, seems like that should be a good thing. It also seems like that training to how, what's the best way to cross sell? When's the right time to offer it? I think the servicing these pre-approved offers, or we kind of call it proactive, this is what is probably the best for you based on what we see in your profiles or in verifications when we can automate those verifications upfront, looking at your income, your credit, all those other components, and putting them into a decision engine.

Brian Knight (20:16):

And I mean, I agree with the audience. I mean, I'll be honest with you. I mean, having been a banker, sitting there looking at that lobby of people that are all staring at you while you're over there trying to talk to this person about their daughter's college education and whatever else, and they're thinking like, well, this guy please just shut up so I can get over there and get my checks ordered or put the stop payment on this particular item. So really having the technology that enables the bankers to fulfill those types of requests and guide them through the process to do it the first time, in my opinion, it's probably going to be one of the most paramount solutions. So it cuts down on training expense for your organization. It cuts down on just the amount of knowledge that the banker has to have, but allows them to do what they do best, which is fulfilling those relationships. And I think it goes nicely, like I said Peter, with number two, which is helping them better understand how do I run through that financial analysis for that consumer? How do I make those recommendations to where I don't have to worry about getting in trouble, if you will, or the bank getting in trouble?

Peter Shot (21:18):

And I think the pre-qualified offers is a good way to do it, especially if you have an existing relationship, for sure. Those are much easier than somebody coming into the branch or online without a relationship where you don't have as much background on them in terms of they're in your servicing portfolio or you have other banking relationships with them. So I think those are kind of the key things that you want to look at when you're going to offer these pre-approved offers. Alright, we'll move on to another topic. We've been trying to identify some themes here around we're driving out capturing automation, making things easier for bankers, omnichannel, all of those things is how do you think about all of these solutions as well altogether? How do you see that all coming together?

Brian Knight (22:11):

It needs to live in one tool. I mean, in my opinion. So you guys have all worked in a branch where you've been at a teller line before. I mean, everybody's got a branch automation platform, but I mean, as I mentioned multiple times, I mean they're swiveling between your SCIF records and maybe that BA platform that sits on top of core, it's not super intuitive. And then if I've got to jump into take a loan application, I'm now going into either a custom that you guys have created that sit on top of a loan origination system or something else. I have to go through all these different channels. And a lot of times they don't talk to each other. I mean, even something as simple as doing a wire transfer, Peter, I've got multiple systems I've got to touch. So for me, really the best thing that I would see is just having everything live in one system to where it would be easy for the banker to be able to navigate, right? And then automating things where we can, the banks have been doing this forever using tools like zip plus four. I'm going to make it super simple where you're automating things like validation of a borrower's address. So why not automate other things that typically require a lot of time and multiple systems that they have to touch. I mean, we accomplished that at Blend several years ago. If you think about the mortgage process before that was just this big black box where a borrower would have to work with a loan officer and take a bunch of pieces of information, and then they would give them this list of stuff that they needed from them in order to put their loan into processing. And we prove that we could automate a huge portion of that and alleviate the time that it took for banks to and loan officers to close loans.

Peter Shot (23:52):

This was kind of a layup for everyone, just having to do yes and no. So we'll let you off the hook on that one. I think this next question is a little more redundant based on all the themes we've talked about. And it'd be just, again, interesting to, I don't know if we've given you a multiple choice on this one, but we want to talk about the primary and practical tools that you need to have these outcomes that we've been talking about. And you'll see the themes are the same as we've have. We've been talking about omnichannel, guided in scripts, cross sells and so forth. So this is really an opportunity for us to see what are the highest ranking ones out there. I mean, if you have to choose, and sometimes you don't and sometimes you do, I want to make it omnichannel, but I can't have scripts or I can't have the cross sell as well, but they obviously have to work together. Or just having one without the other doesn't seem to work. I don't know if you get some thoughts on that part?

Brian Knight (24:49):

I agree with the audience and because like I said, if we take a look at the lack of transparency and continuity between channels, it goes back to everything that we've just been saying. And like I said, the banks have done a really good job of creating that veneer and the customer thinks that you do, but do you truly have those tools to be able to accomplish that? And then the last piece that they also have highlighted thus far as well, so dependencies on back office that cause service delays, it's a huge deal. And so anywhere that you can automate certain things in the process and alleviate those delays, I think really create that long lasting and lifetime customer experience for you guys.

Peter Shot (25:39):

This was, I think our last question. So I think we want to just wrap up on some of the themes we've seen here. Sure. Obviously the continuity in the channels is important, the technology that can support that. This probably the reason we're all here and these dependencies on back office systems that need to be alleviated and how much more of it, I think in our blends world, we like to believe we're bringing some of these things more to the front of the process. So we can use automation for things like verifications. We can use decision engines to drive these things and then prompt a banker with what's the right offer. This is the way to present those offers in conjunction with the way the customer wants to do it. I mean, lens is a technology tool that we set up for our customers, so we don't always have the answers. We want to do it the way they want to do it based on their workflows, based on things they want to do. But maybe we want to talk a little bit about how you see that progressing in as things change and some of the tools Blend is using and or other things you've seen in the marketplace too.

Brian Knight (26:48):

For sure. Yeah, I mean, I think just having gone through this multiple times and worked for a lot of the vendors that you all have probably used, hopefully use Blend. But I think the biggest thing is what I've seen thus far just in a lot of my experiences, that our customers want us to come to the table with a point of view, but they also want to have the flexibility in the technology so that it's something that can grow with them over time to help them accomplish these particular goals. One of the reasons why I've been at Blend for as long as I have is because overwhelmingly, our customers tell us that they view us as a partner and not a vendor. And I think that's due in large part to some of the tools that we've launched. And if you all, I'll give you a little shameless plug. We have a demo tomorrow morning where one of the folks from my team is going to be presenting our composable origination platform and how that transfers over to a lot of the concepts that we've talked about here today. I think that in and of itself is again, one of the things that will help the banks grow through this particular timeframe that we're currently in that's always changing and help foster the branch of the future. Basically.

Peter Shot (27:56):

Our new platform, again, famous plug, the demo will be to talk about how you can adjust workflows on the fly in a low code, use verifications, use decision engines to move all these things forward. So I think with that, that's kind of where we are going to conclude, unless there's other feedback, we welcome it. Is there questions? Sure. Yeah.

Audience Member 1 (28:18):

(No Audio)

Peter Shot (28:49):

Yeah, you want to talk about that?

Brian Knight (28:50):

For sure. And I think the biggest thing, for example, going back to the residential loan, there's a lot of tools that have evolved, especially over the last couple years. So I mean buzzword right now AI, so how do I use artificial intelligence to go through and scrape documents or pull information off so that I can make things a little bit easier? And the mortgage world specifically, and one of the things that we're doing at Blend across actually all of consumer banking is leveraging waterfalls of data sources to be able to alleviate the needs for some of those things that you would have to provide. While technology advances pretty quickly, the GSEs and other regulatory agencies don't catch up quite as fast. So I will say that again, we're hopeful that at some point in the very near future, they will catch up with us along the way.

Peter Shot (29:46):

Yeah, I think along those waterfalls things like asset derived income is probably one of the kind of buzzwords in, at least in the mortgage industry right now, that the GSEs are going through a process to approve that, but that allows us to use transactional data from banking transactions versus having to have documents. And I think that that's the theme overall is data over documents. Is that the data that lives out there, we shouldn't have to have you dig through your files to get a W two and scan it, upload it. Okay. That can still happen and maybe we can do better at it, but there's other ways to derive that.

Brian Knight (30:23):

And Alleviate fraud. I mean, because with our solution, and you guys, if haven't talked to one of the payroll a PI providers, I'm sure there's quite a few of them that are here at this conference, I definitely look into that too because we leverage all of that in our waterfall. So starting with borrower provides N PI data, we hit a plethora of different databases to see what information that we can pull back and utilize that to alleviate the need for you to gather documents. Like Peter said, we're accessing your banking data because again, typically you'd have to provide bank statements. Why would anybody want to do that? That's just filled with fraud, especially when everything's done online. So we can look at your banking data and see if we can glean income data from that. And then last but not least, we have tools that allow for the borrower to log directly into their HRS portals to be able to gather that data directly from the system itself. And then if that all fails, I mean, again, we have the option to allow the borrower to provide docs or take pictures and then use AI type sources to be able to read those documents.

Peter Shot (31:22):

Probably one thing we didn't talk about today, and it's been a buzzword not just in our industry, but across is generative AI and how can that support banking interactions. Right now it's like chat GPT and things like that, but there is a world, and we do see some areas where you can start to, one of the things we talk about here is prompting bankers and AI can start to say, here's the right script for this person based on previous interactions and this is what they're going to react to. It's still, I'd say we're not there yet that we're still talking about it, but I think every time I talk to a customer, that's one of the things that comes up and says, when are we going to have something with this? It's like, we're not right now, but it's one of those things we need to start thinking about, and especially as it, it's not going to replace a banker again, I think we come back to the reason we're here. It's not going to replace them, but there's ways that they can support them in a better way now. So I think those are things to think about as we go through, and I think you'll hear some of those similar themes. Any other questions or any other feedback? Otherwise, we'll let you guys go a little early and enjoy the rest of the day. Thank you.