How to Rebuild Banking’s Marketing Infrastructure
Rab Govil shares how financial institutions can streamline complex compliance requirements, optimize offer management, and enhance customer experience by implementing purpose-built systems that integrate marketing, communication and compliance processes.
By Justin Estes, Contributor at The Financial Brand
Financial institutions face unprecedented challenges in product innovation and customer communication. From managing complex compliance requirements to optimizing offer management across multiple channels, banks struggle with outdated systems that hinder their ability to compete effectively.
On a recent episode of the Banking Transformed podcast, host Jim Marous spoke with Rab Govil, CEO and founder of Naehas, whose platform transforms how banks create, manage and execute financial products and offers across multiple channels.
Q: What problem in banking did you initially set out to solve when you founded Naehas?
Rab Govil: We kind of fell into this business; it was not like it was what we started into. We initially started doing online marketing and landing page optimization, and one of the top four banks in the country came to us and said, "Man, we like what you’re doing, but we have a different problem for you."
The problem was, amid the 2008/2009 financial crisis, their budgets were going to come down, they needed to continue to deliver returns, but they needed to do much deeper personalization. They needed to get more offers out in a much shorter period.
So they said, "Can you help us build this?" We took a long, hard look because we realized that this was really a one-way door. If we went down this path, the rest of the business would go away, and we were committing to the financial services industry. It was a big bet, the company type of bet, and we made it, and it’s turned out wonderfully.
That customer has now been a customer of ours for 16 years. If you look at their customer experience and marketing infrastructure, we are the engine behind it. They create the offers in our platform. They get strategic planning and governance for those offers, and all the channels happen in a platform. All 1,800 of their employees log into our platform on a daily basis.
Q: How have financial institutions traditionally handled marketing and compliance processes?
Govil: It is insane. You go to and talk to some of these employees at these financial institutions, and they feel just beaten down. Literally, they kind of go from system to system. They enter the same information like five different times into these systems, and then they make a mistake. And the organization comes down on them really hard because the regulators come down on them really hard.
What happens is, as prime rate changes, that creates a level of anxiety within that organization because you go to a marketing organization or a customer experience organization, and they’ll tell you that they have no idea where all the different places they need to make the changes to implement the prime rate. It’s a three-month process to this organization because nobody understands the impact of change across everything.
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Balancing Innovation with Compliance
Q: How can banks strike a better balance between innovation in customer engagement and regulatory requirements?
Govil: I’ll give you a non-intuitive answer, and then the more prosaic answer. The non-intuitive answer is that first and foremost, to do anything extraordinary requires will. It requires will on the part of the executives to say that this is important. It also requires courage because financial institutions inherently don’t want to take a lot of risks. So they attract people who don’t want to take a lot of risks.
I think when we look at the folks who have really succeeded with us, they had the courage and the will to think about a process that was different, but much better than what they had. And it’s been a journey with these folks.
My perspective to executives in these spaces is to have a strong North Star about what you want to achieve, but have an agile mindset in delivering value every quarter. We’re going to put a process in place, we’re going to have the North Star, this is what we want to get to, and we all agree on the North Star. But we are going to put a process in place that if you’re not delivering value to the business or to the customer in a quarter, we are doing something wrong.
Q: Does it require a shift in mindset from risk avoidance to risk management?
Govil: Sometimes innovation is forced on these financial institutions. They get to the point in their career that there’s literally either an MRA or a consent order, and they need to fix these processes. So sometimes, necessity is the mother of invention, in that case, they don’t have a choice. You have a gun to your head, what are you going to do? We need to innovate.
I always find that fascinating. I say, "Man, you could have avoided this if you had taken care of this four years ago." But you know what, it’s the human condition. That’s why people sometimes struggle with exercise; the returns are not right then, and the returns are like six or nine months ahead.
But the folks who are proactive, I generally find that it’s almost a trait in them. If I asked you this question, Jim, you’ve been in this industry a long time – tell me who the top 10 innovative people in this industry are on the marketing side. I bet off the top of your head, you could say it, because they act differently and think differently.
Breaking Down Financial Services Silos
Q: Is Naehas a compliance company, a marketing company, or a communications company?
Govil: Great question. I think we are a financial services company. A company providing value to financial services. We don’t consider ourselves working in one domain versus the other. We intend to create and market amazing products and offers, get them into the customers’ hands quickly, and ensure they have a wonderful experience.
It drives me nuts because companies will spend so much time acquiring a customer, and part of acquiring the customer, they’ll make a statement, "Hey, if you deposit so much money into our bank account, we’ll give you $500." Then they don’t tell them anything about it.
They don’t tell them that, "Oh, you have three stipulations, you’re only going to meet the direct deposit stuff, but if you just put another thousand dollars, you would’ve got your $500." And then the customer gets upset and calls them up. The company can’t figure out how to find out where they stand in front of the stipulations. So then they say, "Oh my God, this is going to become a dispute, so let me just give them the money."
Nobody wins in that whole marketplace. And the struggle for them is they have all these providers and they say, "Oh, okay, to make this work, I need to buy this piece from this person, this piece from this person, this piece from this person, and I need to put it together." But then I have to deliver a great customer experience, and it doesn’t happen.
Implementing Change in Conservative Organizations
Q: What common patterns have you seen in how successful financial institutions approach change versus those that struggle?
Govil: First National Bank of Omaha is a great client. They’re a regional player with about 30 billion in assets, but the leaders there have always been very thoughtful. They want to approach things in a much more innovative manner.
The folks who are proactive, I generally find it’s almost a trait in them. They act and think in a different way. Even though your organization may be conservative, it really does get down to leadership because if the organization is so caught up in avoiding risk, it is so caught up on avoiding anything that could possibly hit a nerve… communication, engagement.
I remember when we would shut down programs because four branches would call and say a customer complained. And nobody ever did the math to say you had four customers out of a 10,000-piece mailing. And customers know today more about what can be done than ever before.
The Future of Banking Operations with AI
Q: How do you see AI playing into banking’s operational processes going forward?
Govil: My master’s degree was in AI, which was a very long time ago. It was called "expert systems" back then. But literally, I think AI stands for anything that was a little more advanced technology than anything that people could do at that time.
My perspective on AI is that in some cases, it’s very different than the way we have done things, but in other cases, it’s still exactly the same. AI allows you to do certain functions very easily, which would have taken an enormous amount of programming effort. You could have done the same thing, but you would’ve had to build 200 rules to do exactly the same thing. And here, AI can do it by asking certain questions.
There are other places where AI does a very poor job. If I’m going to calculate a balance for a company, I want a real rule. I want the calculation to be exactly exact, but I don’t want it to be kind of exact. AI is no different than any other big revolution we have had, whether it’s been databases or other things. It will unlock a lot of capabilities that used to take humans a long time to do. But it needs to be symbiotic in the way it works with humans.
Q: How can banks get back to fundamentals while embracing new technologies?
Govil: I think I will go back to the highest level purpose. Financial institutions matter, and sometimes people lose sight of that. Look at any country that doesn’t have a well-developed financial system; they have a lower quality of life. It’s just reality.
Financial institutions matter. They improve lives in the communities they work in, but we have lost our way in some cases. The lesson I leave people is to go back to why you exist as a financial institution. It’s to make your customer’s life better. And if you can always index back to that, then we can make the technology work, we can make the processes work, but we have to constantly index back to that purpose.
If I were to get on my soapbox, I would say, "I care about financial institutions, you matter in the world, you make people’s lives better. Let’s help you make your customer’s life better and make money along the way." And that’s why we exist as an organization.
