BMO’s Digital Banking Goals: Solve Customer Problems and Generate Revenue

Artificial intelligence is a growing part of BMO Financial's digital banking effort in both Canada and the United States. But on the ChatGPT front, the company is in the exploration and experimentation phase. Likewise, it's not so keen on diving into the metaverse, although it has made a special foray onto the Twitch gaming platform. And the Twitch move gives BMO pioneering status in the banking industry.

BMO Financial Group describes itself as “digital first” and much of what customers see in both Canada and the United States comes from a team run by Mathew Mehrotra, its chief digital officer.

Mehrotra says one of the greatest barriers to digital improvement isn’t technology, but something much more human: complacency. An easy trap to fall into is thinking that any particular digital service is “one and done,” he says. “But it never is. You can develop a new capability, but that’s followed by so much optimization and expansion.”

His team has to be aware not just of what customers want to do digitally today, but what they may want to do someday.

A relatively recent development is that digital has ceased to be seen only as a cost center or as a means to increase efficiency by reducing the need for people to use traditional channels. Increasingly, digital channels are facilitating sales.

“Digital generates huge amounts of revenue for the company,” Mehrotra says.

Driving Higher Digital Banking Adoption

Mehrotra has been with BMO Financial since 2010, initially in strategy development roles. But he has been working on digital transformation in one way or another for the past six years.

In his current role, he oversees a team of hundreds responsible for digital banking in Canada and the U.S. (where its bank unit, BMO Harris Bank, now markets itself simply as BMO). Their work includes product management and design that routinely wins major awards from BAI, Celent and other organizations.

To execute on its strategy, his team partners with BMO Financial’s technology division.

Mehrotra’s job covers digital channels across retail and business banking and wealth management services. While there is overlap in the underlying technology for products and services in the two countries, some separation is inevitably necessary.

That’s because the digital banking team has to accommodate different regulatory and compliance requirements as well as differences in the tech services offered. For example, the U.S. bank unit offers the peer-to-peer payments service Zelle, which is owned by major U.S. banks. In Canada, BMO Financial’s mobile banking app enables payments, as well as other services, executed through Interac’s e-transfer service. (Interac is a for-profit interbank organization.)

Mathew Mehrotra quote We are trying to get digital experiences to where they were meant for you

Succeeding in digital requires “working to meet customers where they are,” says Mehrotra. His meaning is two-fold.

First, it’s literal. Provide quality mobile banking, for example, because most people live on their phones now. (In the U.S., the company’s mobile banking app has a 4.8 out of 5 rating in the app store, while in Canada, its app has a 4.6 out of 5.)

Second, it goes to state of mind. For example, while the hype behind metaverse banking has subsided, some still expect it to become a “thing.” Mehrotra leans to the conservative side on that. “In our industry, it’s unclear how customers are ultimately going to use it,” he says. “I would say it’s very early days.” (The company is actually on the gaming platform Twitch, but more about that later.)

Meanwhile, online banking and mobile banking are still growing. In Canada, 70.8% of customers were digital adopters as of the end of the first quarter of 2023, which is up two percentage points from the first quarter of 2022. In the U.S., its digital adoption rate was 59.3%, up four percentage points.

Its definition for “digital adoption” is customers who have logged into online or mobile banking in the previous 90 days. (The data is adjusted to eliminate the impact of joint accountholders relationships.)

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Artificial Intelligence Keeps BMO Digital Relevant to Customers

BMO Financial is working to use artificial intelligence to help customers get on top of their finances and stay there.

Many of the frequent updates to the company’s digital services come from customer research that teases out common problems. Often the products and services devised reflect a blend of outside fintech expertise and internal tech development.

“I’m a big fan of starting development with problems,” says Mehrotra. “The opportunity for digital AI aligns most to the challenge of personalization. We’re trying to get digital experiences ultimately to where they feel like they were meant for you alone.”

In Canada, an important result of this process is BMO Insights, a digital tool that flags potential money challenges before they impact the customer. To see the insights, customers need only log into mobile banking.

The types of insights fall into the following categories:

  • “Just Arrived”: Funds coming into a customer’s account that are out of the ordinary.
  • “Heads Up”: FYIs to be aware of but that don’t demand immediate reaction.
  • “Good News”: Timely tips for making transfers to savings.
  • “For Review”: Helpful information regarding recent account activity.
  • “Take a look”: A warning that something in the account might be off and might require action to fix the problem.

Another way U.S. customers interact with artificial intelligence is with BMO Assist. This AI-powered chat tool supports digital sales and service needs.

But one form of AI that Mehrotra is not rushing to adopt is ChatGPT. He believes banks must move carefully with that technology, though, he says, adoption is likely not too far in the future.

“It’s obviously very impressive technology, especially its natural language abilities. But the bar for our customers is pretty high,” he says.

“I think there’s a lot to be gained, but it’s pretty early days in terms of adoption of the technology in a large bank.”

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The Metaverse Can Wait

Some metaverse backers like the idea of having branches in the virtual world where customer avatars would be able to meet with customer service avatars. But this doesn’t jazz Mehrotra.

He says that getting involved with metaverse banking violates his “meet customers where they are” philosophy. He doesn’t think many people have a burning desire to bank in the metaverse right now.

BMO Financial’s branch network is wide, so if someone really needs a face-to-face consultation, they can readily find a banker to speak with, Mehrotra says. And for routine digital transactions, the company has robust mobile banking services that are easy to use.

“So, candidly, I struggle a bit with the specific value of the metaverse in banking,” Mehrotra says.

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What’s BMO Financial Doing on Twitch?

However, his “go where customers are” rule does have a use case in the world of Twitch, the Amazon-owned online gaming network.

BMO Financial streaming on Twitch Stardew Valley with host

Sean Frame, BMO Financial’s gaming relations specialist, plays a popular online game while discussing financial matters with followers on Twitch.

In May 2022, BMO Financial launched what is believed to be the first financial institution presence in the world of Twitch, an interactive platform for both gaming and talking about gaming. (At least one credit union, PenFed, has sponsored major gaming events in Twitch.)

The initiative, called BMO NXT LVL, “reimagines how and where people can connect with their bank,” BMO Financial said in a press release when it launched. The service is unique. The company selected, from among dozens of would-be volunteers, personal banker Sean Frame, to become its “gaming relations specialist.”

Frame, in BMO-branded clothing, presents a unique blend of financial advice and online game tips. He wears a headset as he discusses financial topics, such as Canadian student loans, while playing popular online games with various Twitch influencers. The gameplay occurs on the screen behind Frame. These sessions are accompanied by related promotional social media streams on Twitter, LinkedIn and TikTok.

The effort isn’t generating a huge following on social media and has a fairly small subscription base on Twitch, but it’s a beginning in a different sort of world.

“It’s a huge universal landscape that a portion of our customers are engaged with every day, frequently,” says Mehrotra. “It makes a lot of sense for us to be there in context of that experience and that segment of the population.”

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