Innovating with Intention: Technology's Role in Deepening Customer Relationships

In an increasingly digital world, trust is built not just through products, but through seamless, secure, and thoughtful experiences. In this fireside chat, leaders from Citizens and Plaid will explore how financial institutions can leverage technology to meet evolving customer expectations while deepening relationships. Hear how Citizens approaches innovation with a customer-first mindset, and how collaboration can offer more intuitive, impactful digital experiences. This conversation will offer practical insights on using innovation as a tool for long-term retention and engagement.


Transcription:

John Pitts (00:10):

My name's John Pitts. I'm the Head of Industry Relations and Digital Trust at Plaid. We're going to have a half hour fireside chat talking about innovation with intention. Technology's role in deepening customer relationships, and I am here with my good friend Lamont from Citizens. You want to introduce yourself and then we can kick it off?

Lamont Young (00:33):

Yeah, I'll be quick. I want to get into the content. Good morning guys, and thank you for being here. I know we appreciate you guys taking time to join our session. My name is Lamont Young and I am the Head of Digital and Omni Channel Banking for Citizens. We're based in Providence, Rhode Island, 10th largest bank in the country. Super excited to talk to you guys today

John Pitts (00:53):

And Lamont was also the person for anyone who was at the previous session who was responsible for the opera singing that happened outside. So he tells me it was not him doing it and we'll see. You'll also notice if you look carefully, you probably can't see it from here. Lamont and I have switched pins, so I've got the citizen pin on and he's got the plaid pin on. It's a good indication of what good partnership really means as we enter into the digital space because none of us can do it ourselves. So let's get started just by talking about sort of the consumer side of things. Citizens has a clear focus on deepening customer relationships. How does that principle shape your approach to digital innovation today?

Lamont Young (01:37):

Well, I think for Citizens it goes a little bit broader than just digital innovation. We start with thinking about the full client experience from the time we start to build products to how we organize teams. I think digital is sort of a piece of that overall sort of pie, but from a digital perspective, I think the easiest thing to sort of think about is we want digital to be obviously the primary channel at which our customers service themselves, but it also has to be a compliment to the other channels that clients choose to engage with. So digital's got to be a compliment to your contact center strategy. It's got to be a compliment to your branch strategy and I think that's what's most important for us.

John Pitts (02:15):

Are you seeing that strategy evolve over time in terms of what that breakout is of which channel your customers coming through, which one they're engaging in most and how is that informing how you think about evolving your offerings and your products?

Lamont Young (02:29):

Yeah, I think probably twofold. One is we've had a conservative effort to where we put our investment dollars. There's been both a natural migration of customers to self-service channels, and then there's also sort of the steady push that we've done the sort of drumbeat of adding new services to our digital ecosystem. That doesn't mean we've abandoned the strategy of thinking about the importance of our branch network or our contact center. The reason why my job is aligned the way it is is because we think it's really, really important to digitize all client touchpoint and not just focus on the sort of self-service channels. We want to make sure that if you choose to bank with us in person, you get a really streamlined digital experience and if you choose to bank with us over the phone, you get the sort of same. So I think that's incredibly important, even an environment where customers are choosing to go digital self-service more and more.

John Pitts (03:22):

So it's interesting from our perspective because we only interact with you all digitally and we only interact with your customers digitally. So Plaid is the largest financial data access network in the country. Roughly around 140 million consumers have connected at least one app with Plaid. The median number is three apps and the fastest growing segment is actually consumers who have done six apps. What's interesting to me is especially as you break down the demographics, we about a year ago launched the ability for a consumer to sign up for an account with Plaid to make their connections easier over time. In one year of those 140 million consumers, 45 million opened that account with a direct plaid relationship to manage their connections, and that's growing pretty rapidly. What that shows me is that this shift towards digital first, and it probably won't always ever be digital only, and you guys will see that, but for a digital first relationship, we're seeing that take up more and more of the mind share of the consumer and certainly more and more of what their expectations are in what they look for in a financial services experience. What do you think about that sort of consumer expectation side and in particular the consumer trust side as you move from physical to digital where you've got to establish that relationship and maintain that trust relationship?

Lamont Young (04:47):

I think for us, we've kind of decided that it all boils down to choice. So I talked a few moments ago about making sure that we digitize all of our consumer touch points because we want clients to actually have the choice of how they actually engage with us. I think it's also important that we recognize that our clients externally are choosing to engage with third party applications. They're choosing to engage with fintechs and the whole notion of that choice, we want to make it easier for clients when they do make those choices. Our partnership with you guys is an advent of that. We want to make it easier when clients choose to engage with fintechs and third party applications. We want to make it easier for them to be able to have control over their data. We want to make sure that their environments are secure.

(05:32):

And so I think it's incredibly important for banks that are recognizing that their clients are making these external choices to invest in the kinds of tools that allow that data to be protected and to give those clients choices. And I do want to give a quick shout out to our Citizens team sitting in the middle table. These guys won an award last night for our open banking API. Again, one of the most critical things that we've been working on over the last couple of years, this API, allows us to be able to seamlessly connect our consumer segments, our small business segments, private banking and commercial segments across the board. We actually do believe based off of client behavior that our customers are going to continue to choose to engage with third party applications. So our strategy is to make it just more seamless for our clients to actually make those choices.

John Pitts (06:17):

So I think that's maybe the critical thing for us to dig in on here a little bit because you, I mean the award is fantastic. It's a recognition of how forward leaning you all are on this. I don't know that that's a universally held belief. One of the earlier panels today was talking about, well as a bank, one of the risks of digital is that consumers might go outside your bank to use a product or service. I don't think about it that way. It doesn't sound like you think about it that way. Let me actually though, because everyone loves audience participation at nine in the morning show of hands and you do have to participate. I'm watching how many people in this room bought something from Amazon in the last month. Please keep your hands up too. Okay. Keep your hand up if you can name the company you actually purchased the item from.

(07:12):

Okay, okay. Right. So you think of Amazon as who you got that from, but you also know you didn't get it from Amazon, you got it from someone else, and that is, in my mind, that's a platform and what I see in what you're describing is sort of a platform opportunity that Citizens is identified where consumers are going to get a lot of their banking services from you, but if they're going to use an app, they're going to use it through you and think about your account as the account they're using that app for. But the core relationship is still with Citizens. Is that how you're thinking about it?

Lamont Young (07:46):

Yeah, I think as financial institutions guys, we have two choices. You can have a closed loop choice where you decide you want to cut yourself off from all third party applications and essentially you want to build every experience under the sun for your clients. Now, I wouldn't recommend that strategy, but you do actually have that choice if you want to close yourself off. But what I can tell you is consumers are going to continuously go after experiences that candidly are going to be really, really hard unless you are a gargantuan financial institution, it'd be really, really hard for you to be able to build yourselves and sort of keep up with the Joneses. Our approach is that we just see it from our client's behaviors that they are choosing some of these third party applications and our viewpoint is that instead of looking at these potential applications as threats, we look at them as opportunities to continue to double down on our brand. There's no reason why if our customers use a third party app like Albert or mentor on the commercial side, if they're using NetSuite or that sort of thing, that we can't still be the brand that is at top of mind when they're thinking about how they use their accounts. And I think that sort of open loop strategy or open ecosystem strategy is what we really try to focus on.

John Pitts (08:58):

Just some insights that we have because fun at the ply level, we get to see the network data of different banks, different consumers, different connections. I think you all know this intuitively, most consumers have at least two bank accounts. They've got a primary account and a secondary account. What plaid can see is that when a consumer chooses which app they want to link, they're also making a choice of which bank account am I linking that app to over time what we see on a pretty regular basis is whichever account that consumer and sometimes it's whichever account within the same institution the consumer chooses. That's my linked account. Utilization of that account goes up, and so you're getting additional services from outside the bank, but it's causing you to transact on that account more and view that account as almost like your top of wallet account in a digital space.

Lamont Young (09:51):

I mean, I would just tell you guys, if you do some analysis, especially of your clients that are heavy users or certain third party applications, one of the things that you're going to find is that primacy actually goes up on those accounts that are actually linked to those third party applications. So in fact, you're not actually losing their relationship with the client. In some cases you're strengthening that relationship. I think the goal is to understand sort of where does that third party application provide value and then where do you provide value and making sure that you're building complimentary services that wrap around that.

John Pitts (10:22):

It's also frankly, a great product discovery opportunity, right? Because for free you can see, and this is something that we do with you all, we can give you the visibility into these are the apps your customers are using. This is how it looks for you relative to your peers. That's just product discovery. What do my customers want? Which of those five things that they're using outside of my bank might I want to build because it's the highest value thing to offer them. And then you can almost pick and choose which product line you're going to develop for the in-house product. Absolutely.

Lamont Young (10:53):

Yeah.

John Pitts (10:54):

So can we talk about regulation really quickly because I think there's over the last week a little bit of an elephant in the room in open banking that we should address head on the CFPB or what's left of the CFPB spent about 15 years working on an open banking rule to govern how all of this was supposed to work just this Friday they said new leadership, new management, we're actually not sure this was a good idea. We want to pull back this role. It's going to be tied up in litigation. So I think from my view, we're looking at a couple of years of regulatory uncertainty at the same time over the last 15 years there has been no regulation and you've had groups like the financial data exchange moving people onto API. How do you think about what to do from a business and product perspective in the face of that regulatory uncertainty? Does it matter or is it sort of all speed ahead because this is the right thing to do for the consumer?

Lamont Young (11:52):

Yeah, I would say if you had a strategy in place prior to sort of this administration's bit of dismantling of the CFPB and you felt like your strategy was strong, I would say it should be full steam ahead. At the end of the day, what we all want to do is a make sure that we're doing the right thing for clients and we're protecting client data and more importantly, we're protecting our own ecosystems from a fraud and security standpoint. So while the ruling I think sort of forces us not to have standards across institutions, what it doesn't force us to do is to change course on doing the right thing for our clients.

John Pitts (12:28):

Yeah, I agree mean this is one where I think in that uncertainty, trusted partnerships and good working relationships, the one we have with each other is going to become even more important because frankly, the consumer wants to know that they can trust their connection, trust the security of their data and trust the choices that they've got in financial services. And if we can't establish that for them, they're going to go looking elsewhere for it. But that's a good pivot into trust as sort of one of the aspects of digital. How do you make sure that as that customer is moving from sort of a branch experience to a digital experience or back and forth between the two, that the trust that is core to your brand is conveyed to them no matter how they're engaging with the bank?

Lamont Young (13:19):

So this is going to sound like a very weird answer from a guy who spent most of his career in digital.

John Pitts (13:24):

I like weird answers,

(13:25):

Let's go for it,

Lamont Young (13:26):

But it's just damn hard. Seriously, if you all think about the relationship that your bankers have with their clients, that physical face-to-face, I can see the whites of our eyes, it is really difficult to replicate that in a digital ecosystem. I'm just going to tell you that which is one of the reasons why our approach is such a multichannel approach because we know there are going to be critical moments that matter in the lives of consumers where they're going to want to talk to somebody live or they're going to want to come and see that person face to face. That being said, there are things that we are doing to make sure that customers understand that their data, their accounts, their information is sound and secure. A lot of that goes into the financial education that we do both inside of our digital ecosystems as well as the work that we do with our branches and our contact center colleagues.

(14:19):

I think we try to demonstrate proactively security and fraud alerts, all those things that are necessary to build that foundation and establish of that trust and security with our digital solutions. But I mean it's a day-to-day sort of dogfight. There's never seriously guys, there's never not a headline about some breach that happens with some organization and whether that is your organization or not, that erodes trust amongst customers around all things related to digital. I think at the end of the day, you're never going to have a situation where that trust factor is as high in your digital ecosystems as it is with your people. But I do think that there are things that you can do to mitigate some of those things that build this trust within your ecosystems.

John Pitts (15:02):

I couldn't agree more actually on how complex this is and how much of a daily fight it is and especially as you're thinking about innovating in this space where the innovations you want to drive actually can erode trust in and of themselves. It's a small example, but to me it's an important and telling one tokenized account numbers. So as consumers start sharing their account numbers with third parties, one of the desires is like can we tokenize this like we do with credit card numbers because that's a better security layer. We are big fans of tokenization as a way of controlling risk in the ecosystem. However, we've seen some token implementations where the consumer shares a tokenized account number, they don't know they're sharing a tokenized account number and it shows up in one of their apps and they look at the account number and they say, well, that's not my account. Did I just get hacked? Is my money going to go to the wrong place? What's going on? And so even as you're introducing new technology, you've got to make sure you introduce it in a way that is both good for the ecosystem but understood by and functional for the consumer and in digital, frankly, that's incredibly challenging because no one can do it by themselves. You're always almost always working with a partner in implementing that.

Lamont Young (16:18):

I think clarity, to your point, clarity is key for the consumer. The more concise and clear we are with what's happening to your data or your accounts at any given time, the easier it will be for consumers to actually have that trust. Which is why I go back to that sort of, it's going to be up to each one of you all in your own financial institution to decide whether or not your ecosystem is open or closed. And again, the more close your ecosystem is, I think the harder it is to be able to build that trust longterm simply because at the end of the day, your clients are going to interact with brands that are not yours that impact their financial wellbeing. Our rationale for identifying partnerships that we can help drive our partnership with you guys as well is all focused on the fact that we want to make sure that those touch points, whether we own them or not, that touch our customer's financial lives, that we have some influence to be able to make sure that we build that trust with customers over the course of time.

John Pitts (17:13):

So let me get into everyone's favorite topic, which is risk. How do you balance and think about the approach of we want delightful, seamless digital experiences for our customers, but sometimes we want friction because friction is a good tool of managing risk, preventing account takeover, making sure that our customers not getting scammed by something you, this sounds like you're probably not going to have a silver bullet answer to this. You're going to tell me it's complicated, but I don't want to front run your answer. Do you have a silver bullet for how you balance that consumer experience and the risk management you have to do?

Lamont Young (17:50):

There are zero silver bullets for this werewolf. I will say it's for us a little bit of both art and science. The art side of it comes from lots of conversations with customers. As we start to introduce new protocols or new experiences, you can gleam a lot from upfront research. And so I have the privilege of having our UX research team sit in my organization and it is fascinating what you can actually glean from clients. We do know that just looking at consumer behavior that a lot of the stuff that you put in front of clients, clients actually don't read. And so it is really important for you to make sure that you got the right visual cues so customers actually understand where we're going to introduce friction. I think we do lots of post experience validation. So we'll take a look at client behavior once we put something in production, we'll take a look at app store comments, we take a look at comments that come through our contact center, but it is never going to be sort of that here's your playbook.

(18:53):

It works every time around how much friction you actually introduce. It is all about making sure that you have that balance counterbalance and that all the parties that are involved in any process you have, whether it's product operations, fraud risk that everybody understands it has the same risk tolerance. So you're all on the same page. The worst thing you could actually have is to have your fraud guys have a different view around risk tolerance from your product folks, from your digital folks, from your operation folks. And so I think what we realize is that organizing ourselves around a common risk tolerance has become one of the most important things to make sure that we balance being able to protect the bank and protect the bank's interests along with not actually introducing really hardcore friction and client experience

John Pitts (19:35):

And not just sort of internally understanding each other's risk tolerance, but between partners understanding each other's risk tolerances. Because plaid's network, we've got 7,000 apps that are connecting and at least one citizen's customer is connected to at least one of those 7,000 apps. So just think about that from if you were partnering directly, I don't know about you all, I don't know a lot of banks that have like 7,000 companies that they connect to and do the risk management over. So that means we're risk managing that ecosystem, but we've got to be aligned with your thinking on how that works. And the thing that I think is great in the digital space is not just that ab testing that you're talking about from the consumer experience, but also the nimbleness to do just the right level of risk management or friction for a individual consumer during an individual transaction.

(20:26):

And that's really hard to do in the physical space, but the digital space, we can do things like stepping up authentication, even if our partner doesn't have something like pass keys built in, we can do a step up pass keys authentication if we see any indication in our network that there's something off or potentially questionable about that connection, like, oh, the sim card got switched more recently. We can see that sim card switch that additional layer one, I think it's just beneficial for everyone. But two, the fine tuning of it means that for the consumers where there's not a risk, you can give them that delightful experience for the consumer where there might be a risk you can then bring in those extra layers of protection to protect them and protect the bank.

Lamont Young (21:10):

It is actually one of the benefits, not to oversell our partnership with you guys, but it is one of the benefits of working with firms like Plaid. And I'm going to introduce one of your competitors, MX and others. And the rationale guys is exactly as you just said, we can't build everything. And so part of what our partnership allows us to be able to do is take advantage of the scale that you all have with working with so many different partners. Our ability to take advantage of tech that you guys are sort of building and embed that into our ecosystem, I think is what is going to give us scale that we probably couldn't achieve on our own.

John Pitts (21:47):

So I want to leave at least a minute or two for questions, but let's end with a slight shift onto what all this digital is adding up to, at least in my mind, which is AI and starting to incorporate artificial intelligence both into the bank and I think most interestingly consumers who might start bringing their own AI to the bank relationship and thinking about things. How do you think about AI both in-house, in the consumer relationship and then more broadly how it's going to get incorporated into the banking sector?

Lamont Young (22:24):

So it's both a gift and curse on the curse side of the house guys, if you don't have your data environment ready for ai, doesn't matter how good the AI is, garbage in, garbage out, that's the sort of curse and it's what a lot of banks are actually dealing with today, how to make sure that you've got the right data environments where you've got good source data, that data is hydrated, it's good hygiene behind it, you're feeding a number of source systems into a lake or whatever your source system actually is. That's incredibly important. So I've probably have been asked the AI question on maybe 10 panels that I've been on the last two years or so, and the promise of AI is amazing, but the reality is for a lot of us as financial institutions, it's darn hard to figure out where to start just because there's lots of work to do around data cleanup.

(23:15):

So I think the first thing you need to do is go back to your technology teams and your data teams to make sure that you do good data cleanup. But to directly answer your question, I think the promise is massively important. There's use cases guys to actually use AI to actually help out with fraud and I mean fraud, everything from the kind of check fraud and the kind of payments fraud that most of us are actually seeing across our institutions. I was just talking to another conference attendee about some of the fraud that their institutions are actually seeing around mortgage fraud, where you've got customers that are creating deep fake W twos and those sorts of things. AI's got the ability to be able to combat a lot of that stuff. And so the use cases in my opinion, are boundless. I think you've got an opportunity to use AI to extend relationships with your clients to understand and proactively gauge where their needs are going to be at any given time. And so opportunities are boundless, but it all starts off with really good clean data. And it also starts off with your ability to be able to securely share data across partners that connect through your ecosystem.

John Pitts (24:27):

And I'll do a tiny bit of plaid selling here and say it also matters on how you're getting new data into the bank because it's not just your data. Your customer's got financial data that's sitting outside of your walls and having a data in strategy so that your AI is not just looking at a part of that customer's life but is looking at their holistic financial life is critically important. I think we've got probably, lemme check the time here. Yeah, we have time for about two questions if anyone has a question in the audience. Otherwise yes. How do you prioritize third parties for those who couldn't hear because the acoustics here are amazing, how do you prioritize which third parties to partner with?

Lamont Young (25:15):

I had say it's for us, it's probably a two step process. Part of it is taking a look at customer behavior so we recognize where our clients are actually going and we prioritize from that vantage point. The other component is really about what actually fits the strategy of our organization at any given time. So there are lots of use cases that we're actually finding on the commercial side of the house for third party integrations. And so we're going to take a look at where do those partnerships provide value to us? And that's kind of how we sort of set the hierarchy for who we tap first.

John Pitts (25:46):

And from our angle, I think that was probably mostly a question for him, but for me, one of the amazing things about Plaid is we only have that tiny little bit of real estate on the phone screen when the consumer wants to link their bank and we have space to show about six to eight options a bank, which means mostly consumers are searching and you would be amazed what consumers search for when they're thinking about what's the account I want to link and that data on where is a consumer trying to connect. If we don't have a connection there and we're starting to see tens or hundreds of thousands of consumers saying, this is what I want to be able to connect to my apps and my bank account, that's a huge sign for us of that consumer demand is there. It's not being met. We've got to figure out a way to meet it. Time for one more question. Don't be bile. Alright, that means we answered all of the questions that everyone had about digital banking. Please join me in thanking Lamont. It's a wonderful conversation. Congratulations again on the award. You guys have a fantastic API. Congratulations to the Citizens team. Great job and thank you everyone.