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Banks striving for connection in digital age

App labs test for easy use with genuine customers by Andrew Moreau | September 29, 2019 at 1:43 a.m.

Little Rock lawyer Sam Piazza doesn't know exactly when he last walked into a bank branch, although he recalls it likely was more than a year ago.

"I really don't go to the bank that often," Piazza said. "I use online banking all the time and make mobile deposits."

Arkansas-based banks are moving swiftly to attract and retain young professionals like Piazza, 25, who had his first account opened by his parents at age 13. He has opened several checking accounts since with the same bank and remains a loyal customer.

Banks savor that kind of relationship, even though they're not that common anymore.

Statistics show that 25% to 40% of people who open new checking accounts close them in the first year, according to Laurie McLachlan, chief marketing officer for Digital Onboarding, a Boston-based financial technology company that works with banks and credit unions.

"Financial institutions are spending a lot of money to attract customers, and it's just going right out the door," she said. "Whether it's a small bank or the biggest institutions in the country, they all have this problem. It's one thing to open an account, it's another thing to build a relationship."

Providing an engaging and robust mobile banking experience is crucial to building the relationships that keep customers, bankers across Arkansas say. "Mobile banking is table stakes whether you want to attract a customer or retain one," said Jason Kincy, head of marketing at Arvest Bank.

Banks are finding that deploying technologies that satisfy customers by making their lives easier is especially crucial at a time when banks are experiencing fewer teller transactions and branch visits. A Citigroup study from 2018 found that 91% of mobile banking users prefer using mobile apps instead of going to branches for help.


And a 2019 nationwide survey by Financial Management Solutions Inc. demonstrated just how lopsided traditional banking has become. Average branch monthly volume of teller transactions has declined by 41% since 1992.

The nature of banking is evolving, but customers still expect a personal touch.

"It's not always the most technologically capable product that wins the user," said Alex Carriles, chief digital officer for Simmons Bank. "It's the one that touches their heart, the one that feels warmer, the one they enjoy using. And it may not be the best technically. But it's the one that creates an emotional attachment that makes you like to use the product."

Gone are the days when products were rolled out and customers were sent texts or emails forcing them to adopt the service with no regard for whether they liked it or it met their needs. Or when customers were given a handful of brochures after opening an account and were left on their own to figure out how products and services worked.

By comparison, customers today are being pampered. They're invited into experimental laboratories to test products before they're debuted. Bankers are going out to coffee shops or other public places to meet with customers to find out how they use mobile banking products.

"We are very resourceful when it comes to making sure we are doing the right thing for our customers," said Angie Garrett, executive director of digital innovation and strategic analysis for Arvest. "I've gone to coffee shops. I've stood in the middle of Bentonville square. I've been in bank lobbies meeting with customers."


Providing mobile banking services is not about showcasing new technology -- it's about delivering a digital experience that is fast, convenient, easy to use and personal.

Mobile banking customers demand and expect banking tools to be on par with the best digital tools in the marketplace.

"In mobile banking, we're not being compared to Bank X or Bank Y or Bank Z," Carriles said. "We're being compared to Instagram or Facebook or Snapchat in terms of ease of use. The reality is we're competing in a completely different league.

"You need to have the best digital experience in banking on par with the best digital experience in the market, period. It's not just about banking."

Smartphones altered how banking tools and products are used -- and the reliance on the devices to access financial information is not going away. More than 75% of Americans own smartphones and 60% of those owners use mobile banking.

Arvest reports that active users of mobile banking are rising. In September 2017, Arvest recorded 64.3% of its customers were active users. That increased to 71.3% by Sept. 1, 2019. Active users are defined as customers with checking accounts who used the services once in the past 90 days.

Essentially, mobile banking means using a smartphone or tablet to perform online transactions -- to interact with a bank without going into a branch.

"Mobile banking gives you the freedom to have a great experience wherever you are and whenever you want to use the service," Carriles said.


To build a better experience for customers, Arkansas banks are increasingly relying on an experimental laboratory environment to stay current on products and anticipate future customer needs. And the state's largest banks are going out to recruit experienced digital innovators with strong backgrounds in data analytics to build and run their labs.

Innovation labs are designed to foster collaboration and encourage engagement among customers, bank employees, potential vendors, and the developers and designers who create digital products.

The Arvest Experience Lab, referred to as EXP for Explore, Experiment and Experience, opened in 2018 in a 4,300-square-foot facility in Bentonville. EXP has 10 employees and includes a work space for employees or partners and facilities for vendors to pitch products.

Garrett, who runs the EXP Lab, and her team are responsible for using advanced data analytics, financial technologies and "design thinking" methods to reinvent the digital customer experience. Design thinking means getting in users' shoes to see what they see and intimately understand how they react and use features.

"We're really data-driven and customer-focused," Garrett said. "It's all about using the data we have to improve the customer experience."

Carriles joined Simmons in mid-July and already has jumped into directing the premiere of a new mobile banking app that will be released next month. Simmons, he said, is working to set up an innovation lab at its offices in the Little Rock River Market District. He expects it to be operating before the end of the year.


Customer experience gets thrown around a lot when discussing mobile banking. Simply put, it means putting customers in control, providing them with right products and services -- and teaching them how to use the technology.

At Simmons, for example, Carriles adjusted the rollout of the new banking app to "invite" customers to use it, rather than forcing them to convert from the current version. The initial plan would have deployed the new app and shut down the old one. "The fact that we would do that makes it inconvenient," Carriles said. "For most customers, that's a shocking change."

The new version scheduled to launch Oct. 16 invites customers to use the new mobile app while keeping the other one running as a safety net. Customers can toggle between the two until they are comfortable with the new version. "That gives the customer the choice of doing it at their own pace," he said. "The experience is incredibly good for the customer because it puts them in control."

Arvest and Simmons pull in customers to test potential new products while employees, designers and developers watch. "We need to know if we're doing the right thing in the first place," Garrett said. "And the second thing is, determining whether we're doing it in the right way."

Watching customers navigate through prototypes is the best way to find out what works and what doesn't. "Everything we do and create here is with the customer in mind," she said.

Customers' reactions in a test environment are revealing. "Nothing is as meaningful for a developer as when they see the look of horror in a customer's eyes when they are trying to do something, and they're looking all over the page, and they don't know where to go next," Carriles said.

Little Rock-based Bank OZK operates OZK Labs, a 16,000-square-foot innovation facility in St. Petersburg, Fla.

Bank OZK has invested heavily in technology to enhance customer mobility, growing from eight employees in 2016 to 49 employees today. The lab focuses on software and product development, according to OZK Labs President Marcio deOliveira.

"We focus on building technologies that cannot be purchased off the shelf," deOliveira said. "These are technologies that are unique to Bank OZK."

Mobile banking in Arkansas will continue to grow even as branch operations shrink, bankers say. As a sparsely populated rural state, Arkansas' financial institutions will continue to operate community bank branches for the foreseeable future.

"That's the struggle we have in the state of Arkansas -- especially in rural areas," said Randy Dennis, president of DD&F Consulting Group in Little Rock. "It's been a tradition that people in rural areas want to do business with a person. Then you have the younger generation who want to bank wherever they are and whenever they want.

"There's still a place for community banks, especially in Arkansas, to provide that interaction with people."

That's just fine with customers like Piazza. Knowing that you can find a human when you need one is comforting. "I like to know that there will always be someone here in town where, if I really needed something, I can just walk in and ask," he said.

SundayMonday Business on 09/29/2019

Print Headline: Banks striving for connection in digital age


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