Choose an Innovative Partner to Grow With

Choose an Innovative Partner to Grow With

Is innovation important? The answer seems obvious. However, upon review of some recent history, we find companies that did not prioritize innovation and development:  Blackberry, Blockbuster and MySpace come to mind. They thought they could tread water and keep their place in the market, but we know how their stories end.

And then there are companies like Netflix, Amazon and Google that continue to innovate, even while dominating the market.  Who would you rather partner with?  It’s clear that innovation is key to long-term success and growth.  With that said, how can we spot innovation when choosing important partner or vendor relationships?

Here are a few tips to make sure you are not chaining yourself to the next Blackberry:


Is there a roadmap?

When exploring a partnership, make sure to review the roadmap with that vendor. If they cannot present a roadmap, take it as a major red flag. It is not enough to simply throw out ideas in a meeting. The truly innovative companies have a roadmap showing the plan to get there.

How is the roadmap organized?

A successful roadmap needs to have a mixture of short-term and long-term priorities, with new innovations and enhancements spanning the entire timeline. It is imperative that the vendor is using their resources to solve short-term enhancements while focusing on long-term goals. If it is just a list of long-term goals, they will miss all the short-term improvements necessary in this fast-paced world. They might be aiming at building a virtual reality app in two years, but in-between they are missing out on smartphone and tablet enhancements. If the roadmap only consists of short-term objectives, the company can get lost chasing technology “fads” (i.e. Google Glass). Often, companies who only focus on the short-term enhancements are also slow to build for the larger, more dramatic shifts in the market. The best vendors will have a healthy mix of both.


Are they active thought leaders?

A true innovator can be found on the conference stage. They routinely have new features to demonstrate. These companies might also have executives on banking boards and other FinTech innovation committees. This company will be on top of the market shifts and user trends. They are worth a deeper look.

 

Are they open to input?

No one company has all the answers. A successful partner has open lines of communication with their customers to receive their unique perspective and feedback that needs to be taken into account for future design. The best companies engage in dialogue with those customers to make sure they are hearing the concerns or ideas. After some dialogue and filtering, ideas make their way into the roadmap and future of the product. The least successful companies shut the door, and enhancement requests go into a black hole never to be seen again. It is simple: if you don’t listen to your customers, you will lose them.

 

Find an innovative partner / vendor that you can grow with. Surrounding yourself with energetic and innovative thinkers will only boost your own company efforts.

 

 

The Power of the Platform

The Power of the Platform

No, this isn’t a political blog piece – there are plenty of those lately!  The platform I am referring to is a technology platform – one that provides a readily available, well documented, and robust API that allows bi-lateral integration with other applications.

Creating value through integrations.

I’ve had the fortune of working for two companies in the past, Intuit and Salesforce, who have embraced the power of the platform, allowing others to integrate with their solutions to make them better and, conversely, integrating with other solutions or services to add even more value to their own applications. A familiar example is apps that are developed for mobile phones.  If Apple had only allowed apps of their own creation to be offered in their App Store, would the iPhone be as indispensable to consumers as it is today? Platforms allow for sharing work done by others, which creates value tenfold over what just one company can do.

Platforms will continue to grow and will ultimately dominate the landscape for software solutions.  Here are two compelling reasons why platforms for financial institutions are ideal:

1. Forces everyone to bring their A-game.

Salesforce and Intuit are confident that they have the best products and continue to improve upon them.  They are both committed to serving their customers with the best solutions – even if that may open the door to a competitor. They realize they can’t be everything to everyone and so having developers create solutions that improve and enhance theirs speaks to the old adage of “rising waters float all boats”.  If you want evidence of how beneficial this has been to each company’s bottom line, just take a look at the stock performances of Intuit and Salesforce over the past 5 years if not longer.  And for the developers?  There are many examples of companies who have created multi-million dollar businesses building a solution on a platform like that of Salesforce or Intuit (ex: Veeva).

2. Faster and more efficient innovation.

I think everyone would agree that the pace of innovation is only increasing – and much of that innovation is rooted in mobile.  The ability to innovate quickly is something that old technology simply wasn’t built for.  Using APIs to build an application on top of a platform that already has the necessary base infrastructure needed by every software application eliminates a big chunk of development that doesn’t solve a problem.  Instead, developers can focus their resources on creating functionality that adds value.

The financial services industry and the providers who serve them have been slow in embracing the idea of open platforms. Core or back-end systems tend to be closed environments – protected as if each can survive on their own or enough companies can be bought to “safely” integrate with the parent to offer additional solutions (how well has that worked?).

The Financial Brand talks about Banking as a Platform (BaaP) and how we are on the verge of a massive mindset shift for the financial industry, but one that would come with incredible value to everyone involved. FinTech is rife with companies eager to integrate with other providers and each other as appropriate.

 

Easy Account Switching + Engaged Customer = More Revenue!

Easy Account Switching + Engaged Customer = More Revenue!

American Banker reports that the average checking account costs a financial institution $250 – $400 per year. This means the financial institution needs to make at least $250 in interest, fees, and interchange revenue to cover the low end of checking account expenses. The good news: about 60% of checking accounts cover these costs by bringing in $413 per year on average.

On the flip side, that still leaves 40% of checking accounts carrying a net loss. The factors for this are directly attributed to engagement. The difference between profitable and unprofitable is clear:

  • A profitable and engaged account receives a regular direct deposit.
  • Profitable customers have increased account ownership (savings, loans, etc).
  • Profitable customers are using their debit card 15-20 times a month MORE than the unprofitable group.

These actions are the results of an engaged customer with a primary financial institution relationship. The question in the boardroom is: “How do we make sure our new checking account customers are profitable?” No one wants to see that 40%.

The answer is simple: make switching easier and accessible.

Easier” is now defined as making it digital. Remove any paper or mailing from the switching process. Customers today are signing up for accounts completely online.  Do not force a digital customer to use a physical channel, such as going into the branch.

Accessible” means not just providing access, but providing that digital switch kit at the right time. Allow an applicant to start switching their direct deposit immediately from the checking application. The applicant is completely engaged while opening a new account: don’t lose the engagement by sending an email with instructions to a switch kit. Instead, provide a direct link from the end of the application to keep the funnel moving

Making the switching process easy and accessible will make an immediate impression on the newly acquired customer. It will also make an immediate and positive impact on your FI’s bottom line. With each profitable account adding an average of $163 per year in revenue, simple accounting would say this is a no-brainer!

Why Customer Success Executives are Critical for Digital Bank Sales Success

Why Customer Success Executives are Critical for Digital Bank Sales Success

When we started this journey in 2013, before Gro was a company, we thought of digital sales platforms as the third wave of digital banking. First there was online banking, then mobile, now digital sales. In some ways, we were right. But we underestimated how dramatic the impact of digital sales platforms would be for banks and credit unions. 

 

The digital disconnect.

 

Banks have invested heavily in developing and marketing digital products and services and have been successful in moving 85% of transactions from the branch to digital channels. However, 80% of new account sales still come from their branches even though banks have moved to marketing through digital channels. Why would a prospective customer come to the branch to act on an interest sparked by a digital ad?

We dug into it and learned that while banks were using enticing cash offers in their marketing campaigns with great success, more often than not the offer required the prospective customer to open the account in the branch. It seems so obvious to link a digital offer to digital account opening; however this is not being done. When banks do it right, moving to digital sales affects everything. We spoke with our customers and prospects and found great interest in expert assistance to evaluate how the bank or credit union should evolve to better align sales and marketing efforts and how to prioritize it all. We’ve also heard that this lack of guidance is one additional explanation for why 80% of bank sales transactions come from the branch, even if the bank bought one of the solutions from the first wave of online account opening.

 

Use our success coaches.

 

Gro has put together an expert team of Customer Success Executives, each with 20+ years of banking experience, to help FIs make the transition to a digital sales platform. We’ve trained them on what we’ve learned so far, and they have access to cutting-edge proprietary metrics that provide empirical data on what choices are driving our customers’ success.

Furthermore, we’ve setup programs so banks and credit unions have access to these executives throughout the lifecycle of using our products. We believe bank sales growth is an evolutionary process that should be continually evaluated and tweaked to optimize growth. As this space matures, more best practices will arise and customer behavior will change. We think banks and credit unions should reevaluate their campaigns frequently to maximize their customer growth and share-of-wallet.

Our Customer Success Executives are also available to banks and credit unions that aren’t customers. Let us know if you’d like to setup a time to speak with them about how your institution can sell more products and attract more customers.

Happy Selling.

A Growing Demand for Online Account Opening

A Growing Demand for Online Account Opening

Wells Fargo scandal sparks change in how people want to bank.

The fierce public outrage from the Wells Fargo new account scandal caused significant damage to their reputation and implications for the banking industry as a whole. Wells Fargo was fined for illegal practices that stemmed from their corporate culture of high sales quotas, which motivated frontline employees to cheat in order to boost numbers by opening accounts without customer authorization. Wells Fargo was cited specifically for violating consumer protections included in the Dodd-Frank Act that prohibit financial institutions from engaging in unfair, deceptive, or abusive acts or practice, known as UDAAP.

 

Banks are under a microscope

 

With this colossal breach of trust, Wells Fargo became the perfect poster child for the Consumer Financial Protection Bureau (CFPB) to showcase what they do and why it matters. Putting the rest of the industry on notice, the CFPB has pledged to step up their examinations of bank sales practices and to pursue other financial institutions that are taking advantage of consumers. With the regulatory spotlight on UDAAP, all banks must look at their sales practices and make adjustments as needed. Changing a sales culture that is deeply ingrained in retail banking is no small undertaking and will take considerable time and staff retraining. To make matters worse, this all comes at a time when the banks, still reeling from the regulatory reforms that followed the 2008 financial crisis, are under intense pressure to grow revenue.

 

Digital account opening is no longer optional

 

With handcuffs on the frontline staff, the value proposition for online customer acquisition just got more attractive. For some time, online account opening has been an important tool to reach digital-only consumers and allow financial institutions with a limited branch footprint to compete effectively. Since the Wells Fargo scandal, it is expected that more and more consumers will prefer to interact with their bank through an online channel, where they feel more in control and not at risk of being worn down by aggressive sales tactics, or worse yet, duped by the banker.

The regulators are fired up and will be looking at sales practices for UDAAP violations across all channels. A key advantage for the online sales channel is that the rogue human element is not a part of the equation. UDAAP compliance for online account opening can be thoughtfully implemented with technology and audited centrally. While the tough times for banks just got tougher, this turmoil may translate into opportunities for financial institutions ready to connect with consumers looking for a change. Chances are that fed-up consumers will be looking online instead of walking through the doors of the branch.

3 Unnecessary Habits That Keep You From Acquiring More Customers.

3 Unnecessary Habits That Keep You From Acquiring More Customers.

 

Stop doing these today and watch your digital onboarding skyrocket.

They say old habits die hard. And in the case of bankers, this seems to be exceptionally true. With the rapid rise in the use of mobile devices for banking tasks such as account opening, bill pay and deposits; it’s time to leave these antiquated practices behind that undermine your customer acquisition efforts.

Banks need to do everything in their power to make the application process as simple as possible. Reducing keystrokes, limiting decisions, removing unnecessary questions – all help improve the experience and increase your chance for a completed application.

Here are three things that should NOT be a part of your digital customer acquisition process:

 

Physical Signature cards.

I remember going to the bank with my mom in the 1970’s to deposit a check and watching the bankers check her signature against a card they pulled out of a huge file drawer, much like the one we used at the library back then. Signature cards have been in use for many decades, and are just a known part of the banking process that is still in practice today. They made sense 30 years ago when everything was done manually. But today, banks can use sophisticated risk-based tools that can compare a potentially forged signature with a signature from a recently paid low-dollar transaction.

The love affair with the signature card is not just about the signature; banks use them to record the customer’s agreement to the account terms and conditions. Even our lawmakers understood that “wet signature required” was an outdated concept and passed the E-Sign Act over 17 years ago to pave the way for digital commerce. It’s time to break this habit of yesteryear and 86 the signature cards.

Eliminate friction caused by requiring your mobile-first customer to sign and mail a signature card. It’s more convenient for your customers and saves time for your employees. And you aren’t breaking any compliance laws.

 

Point of contact in case of death.

I’m not suggesting that you don’t collect this information at all. I agree that it’s good practice to have another name on file to cover the “God forbid” category. But is this information needed up front or relevant to deciding whether they get approved for a new account or loan? Forcing a potential loan applicant to make this type of decision up front can bring the entire application process to a halt. This can open a Pandora’s box of complicated family relationship decisions that are best avoided on the front end of an application.

Collecting this type of secondary information after the account has been opened and funded removes a huge barrier for new applicants and allows banks to realize deposits and revenue more quickly.

 

On-Screen Disclosures.

Please don’t send your lawyers and compliance officers after me. Disclosures are no doubt an important requirement. In fact the law is very clear; new account disclosures must be provided in a form the customer can retain before an account is opened. The law, however, does not require cramming the fine print on a screen. That is a bad user experience and even impractical given the wide variety of digital devices used today, many of which have limited screen real estate.

But again, it’s about what is needed up front. Assaulting prospective customers with fine print before they can hit submit on their application can seriously delay or derail the whole process. You can comply with disclosure and E-Sign regulations by emailing disclosures during the application process. On screen display of disclosures is old school.

Emailing important disclosures immediately after the critical information has been gathered allows customer to retain and review the documents at their convenience.

The Gro Digital Sales Platform solution has streamlined the account opening process to collect the bare minimum information required to process and approve a new deposit account or loan applicant. Our workflow has been proven to reduce the process from 30 minutes to under 4 minutes, and has our bank customers have seen a significant reduction in mobile abandonment from 80% – 35%.

 

Foil Phony Accounts with Anti-fraud Features.

Foil Phony Accounts with Anti-fraud Features.

 

This account opening solution can actually help keep you in good standing with federal regulators.

The Wells Fargo scandal was an eye opener for all of us. The pressure for bank representatives to open new accounts is so great that it became common practice to open phony accounts in customer’s name and charge maintenance and overage fees.

This is wrong on so many levels, I’m not sure where to start.

1. Really bad customer service.

2. Opens your institution up to federal scrutiny and lawsuits.

3. Puts all FIs at risk of further federal regulation and compliance.

As a responsible banker, there are simple steps you can take today to make sure this does not happen to you. As part of our Digital Sales Platform, Gro offers Consumer Protection Plus, a patent-pending feature that uses SMS text and email validation to ensure that consumers are involved in the account opening process. It provides an extra layer of security for your customers, and documentary evidence during regulatory examinations for you.

 

What does Consumer Protection Plus do?

– Proves customer involvement in the account application

– Provides a superior user experience and a familiar verification process

– Ensures a working communication channel to the client for future cross selling, collections, digital banking, etc.

– Delivers disclosures electronically

 

 

How does Consumer Protection Plus work?

During the account opening application process, the applicant is prompted to enter an email or a mobile phone number where they can receive a verification code. The code is sent instantly and the applicant enters it back into the application. The transaction of the verification is recorded and proof can be viewed and reported from the Gro Admin Portal. This verifies that the applicant is actively involved in the process, protecting them from unwanted account fees, and protecting the FI from fraudulent employee practices.