Two closely connected concepts — customer experience and digital transformation — are top of mind at nearly every traditional financial institution on the planet. And probably have been for some time.
But that awareness — and the intent to deliver on it — too often run smack into organizational, cultural, technological and leadership issues that slow progress for many banks and credit unions.
The Financial Brand asked subscribers to its e-newsletter to weigh in on whether they thought traditional financial institutions need a Chief Experience Officer (CXO) position and a Chief Innovation Officer (CINO) position to help orchestrate experience across all channels and to facilitate innovation.
Many of the responding executives held one of those two titles, or something very similar. Thus they spoke from experience about these relatively new banking positions. Their views offer a roadmap for other bank and credit union leaders wrestling with the customer experience and digital transformation challenges.
Tools Don’t Equal Experience
“In an economy where experience can make or break a relationship, focusing only on the tools and not the experience of how to use those tools is a recipe for disaster,” says Amy McGraw, VP of Marketing and Chief Experience Officer for Florida-based Tropical Financial Credit Union.
The disaster McGraw refers to was an increase in service quality complaints and a hit to the credit union’s reputation from poor consumer reviews. This happened despite the rollout of new digital tools, or rather, because of it.
“We realized that as we put more and more focus in keeping up with consumers’ digital expectations, there had been no attention paid to the gaps that developed when new tools were introduced, says McGraw.”
As an example of the kind of gap she’s referring to, McGraw says that when the credit union implemented the ability to open a checking account on a mobile phone, the resulting app made sense to them, as financial services professionals. But they had failed to look at it as consumers who may not be familiar with credit unions. So when a person went to open a checking account, the application forced them to open a savings account first — it didn’t even show the checking account options, says McGraw. This led to a 95% abandonment rate for that application.
“A big problem is that many of us who have been in the industry for years tend to project our own thoughts on processes, without looking at them from an outsider’s viewpoint.”
— Amy McGraw, Tropical Financial Credit Union
“A big problem is that many of us who have been in the industry for years tend to project our own thoughts and feelings on processes,” McGraw maintains, “without really looking at them from an outsider’s point of view.”
That problem transcends location and type of institution. Echoing McGraw’s sentiment, Yamikani Mbawala, Senior Manager Digital Banking Sales for Africa’s FDH Bank, says, “My experience indicates that banks usually communicate with customers based on what they think the customer wants, and not what the customer actually wants.”
For Tropical Financial things have changed with the creation of the CXO role. Under McGraw’s direction, Tropical now maps out consumer journeys for every product and touchpoint. The mobile account opening app was one of the first things they worked on. Using Miro.com to map out and walk through the checking app experience helped them find the pain points. “We reworded some of the pages, reduced the number of required fields and put checking options first. We’ve lowered the abandonment to 72% and have put a workflow in place to reach out people who abandoned the application to help them through the process.”
Title Could Be ‘Chief Coordinator’
Dan Clarke, SVP, Member Experience, for Service Credit Union — and previously the CEO of a smaller credit union — has seen how different departments exert control over the consumer experience.
“Everyone is working on their role within the organization. … Someone has to be involved like an ‘air traffic controller’ to make sure everything flows.”
— Dan Clarke, Service Credit Union
“It’s seems so simple when looked at from a 50,000 foot view,” he observes. “We think, ‘Gee, shouldn’t everyone be working together to allow for integration?’ But it’s not that simple because everyone is just working on their role within the organization,” Clarke states. “Someone has to be involved like an ‘air traffic controller’ to make sure everything flows.”
The more experience a CXO has in all areas of a financial institution, the better, Clarke believes. “If you don’t know or understand the back-office processes, it’s tough to just dictate a front-office process to them,” he states. Also, having the ability to triage and prioritize the projects that will have the most impact on customers is a great skill for a CXO, says Clarke.
In many ways, a CXO and a Chief Innovation Officer share similar goals and require similar skill sets. As Chief Digital and Innovation Officer of Louisiana-based Origin Bank, Corey LeBlanc believes both roles are not about taking away responsibility from any department.
“It would be ineffective and arrogant for a chief innovation officer to expect to control all things to do with innovation for every department.”
— Corey LeBlanc, Origin Bank
“Most financial institutions have a significant number of department leaders who have been there for a number of years,” LeBlanc states. “It would be ineffective and arrogant for a chief innovation officer to expect to control all things to do with innovation for every department.” That person’s role is to provide expertise and drive and collaboration to create a seamless leading-edge customer experience — and to help “each department ‘level up’ through the use of technology and data.” LeBlanc believes it’s critical for banking institutions to commit to an individual dedicated to carry out that role.
“The demands of transforming from a legacy branch-based financial institution to a predominately digital one require that someone have a clear focus on the effort and steps needed,” agrees Ralph Cumbee, Chief Innovation Officer at Solarity Credit Union. Otherwise, he says, many organizations “will instinctively run back to the familiar turf of physical branch and person-to-person contact. Our digital-first competitors have no such bias and they are making significant headway at our expense,” Cumbee adds.
To Truly Innovate, Elevate All Staff
FDH Bank’s Mbawala believes in the need for both a CXO and a CINO. But he feels successfully achieving digital transformation requires more than those positions.
“More often than not, banks jump over the process of elevating everyone within the organization to the digital standard they wish to achieve and therefore start getting internal resistance.”
— Yamikani Mbawala, FDH Bank
“More often than not, banks jump over the process of elevating everyone within the organization to the digital standard they wish to achieve and therefore start getting internal resistance,” Mbawala states. Whereas if everyone internally understands what the institution is trying to accomplish, the ripple effect will fuel the bank’s digital transformation.
The Malawi-based bank has been engaged in doing this, he says, led by its Managing Director. Employees in all three regions and 52 branches are being educated on the importance of making money through digital platforms, according to Mbawala.
While FDH Bank still has a ways to go, Mbawala says, “Our employees are now advocates of our digital platforms and offerings. It makes the selling easier and we tend to onboard more active customers because of the one-on-one engagement that we have with customers at the time they sign up.”
LeBlanc adds that, in his view, all employees are innovators and their contributions should be welcomed and acknowledged.
“Innovation doesn’t always equal technology,” LeBlanc states. “It can be as simple as improvements to internal processes or reevaluating current systems.”