How Ally Bank Built a Customer-First Digital Experience
Ally's Chief Information Officer Sathish Muthukrishnan explains how the nation's largest direct-to-consumer digital bank transformed from mainframes to a cloud-based AI platform, creating personalized experiences that help customers achieve financial goals faster.
By Justin Estes, Contributor at The Financial Brand
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In an era where differentiation in banking is increasingly difficult, Ally Bank has emerged as a leader in creating exceptional digital banking experiences.
On a recent episode of the Banking Transformed podcast recorded live at this year’s The Financial Brand Forum, host Jim Marous spoke with Sathish Muthukrishnan, chief information and technology officer at Ally Financial, about the bank’s journey to leverage AI and create personalized experiences in a digital-only environment.
Transforming a Digital Bank from the Ground Up
Q: When you joined Ally five years ago, what was your mission and what did you want to achieve?
Sathish Muthukrishnan: Just for people who don’t know, Ally was started right after the worst financial crisis the country has ever seen, in 2008. We are the largest direct-to-consumer digital bank in the U.S. We started not because consumers needed a bank; they needed a better bank. So, from day one, transformation and making it better have been in our DNA.
When I started with Ally five years ago, I was thrilled to be leading technology and product in an all-digital platform. Looking back, it would be hard to believe that five years ago, we were still running on mainframes. We still had a network that was plug-and-play hardware-enabled. We had six different apps. For a digital bank, we had six different apps. Consumers were highly satisfied, but the moment of truth was fast approaching and COVID hit and accelerated everything.
Q: What were the pillars of your technology strategy?
Muthukrishnan: The intent behind launching our technology strategy was to ensure that technology will continue to be relevant in an all-digital bank, but more importantly, to create differentiation and drive significant business outcomes. We categorized our strategy into six different pillars.
In a digital bank, you don’t talk to people. The best way to establish relationship is to give consistency, meet your customer’s expectations and protect their data. So, security became our first critical pillar.
Our second pillar was driving tremendous experiences. The third pillar is how I know my experience is working. That’s when data analytics came in. Measure what consumers do, but more importantly, measure what they don’t do.
Our operational pillar involved migrating to cloud, driving automation and consistency in how we develop and deploy code. And then we needed to preserve our culture and take care of our talent. These pillars laid the foundation for our transformation.
Building a Customer-Centric North Star
Q: What is your North Star at Ally today?
Muthukrishnan: My North Star is simple. I want every consumer of Ally to believe and experience as if they’re our only customer. It’s very easy to say, extremely difficult to achieve. Consumers are expecting magic — their bar for experience is the last best experience they had anywhere, not just with banking.
You could have had your best experience shopping at Amazon or flagging an Uber. When you’re doing banking, they expect the same experience. So, my North Star is for every consumer to believe that they’re our only customer.
To achieve that, we now have about 75% of our applications running on the cloud and about 95% of the enterprise data in the cloud. This allows us to learn from consumer behaviors, understand what they’re expecting and create experiences in real time so consumers think they are our only customer.
Q: How do you deliver humanized banking experiences in a digital-only environment?
Muthukrishnan: I believe our digital footprint is our advantage. During COVID, we saw that our consumers were struggling, so we offered six-month auto loan payment deferrals. My team built something 100% digital, where customers came in, looked at the offer, read the contract digitally and could defer their loan payments.
Compare that to other institutions where customers had to call and wait for days to talk to somebody. The intent was right, but the execution was missing. What we found was that consumers who took the deferral offer never actually deferred their payments – they liked having plan B but continued making payments. It was a win-win, showing up for customers when they needed us most and driving loyalty.
Pioneering AI Implementation in Banking
Q: How did your journey with generative AI begin?
Muthukrishnan: It’s the pursuit of what is next. As a technology team, we are significantly empowered to do what is right for the company’s future. One thing I love about Ally is the focus on long-term strategy — the effort, intent, investment and execution against that strategy never wavers.
We had our cloud strategy and data in the cloud warehouse. At the beginning of 2022, we redefined our network. As we were thinking about AI, we launched our chat assistant, Ally Assist. It coincided with our board meeting. One board member that morning asked, "Did you hear about ChatGPT?"
We saw this moving fast and then saw Microsoft’s investment in OpenAI. My entire leadership team and I went to Seattle for three days, met with Amazon and Microsoft and started asking questions. At that time, Microsoft was ahead of its game. I came back and said, "We need to build something using generative AI."
Dig deeper:
Q: What led you to create your own AI platform?
Muthukrishnan: We created Ally AI because we knew technology was fast-evolving, but there were concerns about sending data to external LLMs. To address this, we built an AI platform that could connect to external LLMs but with added security — it removes PII, tracks all transactions and rehydrates PII for context. We built it in two months.
Our platform can connect to multiple LLMs — from GPT to FLAN to Bedrock. We can pick the right LLM depending on the use case or combine answers from several LLMs. Our content creation LLM is different from what we use for code generation or risk assessment. We have different models for different use cases.
Creating Engagement Beyond Transactions
Q: How does Ally’s communication strategy differ from that of traditional banks?
Muthukrishnan: We have an ambition to be your best financial ally in the nation. We bring that to life by not giving you banking speak. In our products and experiences, there’s not a lot of terms and conditions jargon.
My advantage is that the product team, UI/UX team and technology team are all part of the same technology organization. We challenge each other to simplify the experience that our marketing teams dream up — their focus is always, "How can I make this as simple as possible?"
Q: How does personalization deepen customer relationships?
Muthukrishnan: What is the most personal thing to anybody? It’s their finance, and finance drives emotions. If our ambition is to become your best financial ally, it cannot be transactional; it has to be relationship-based. I need to understand and anticipate why you would come to Ally.
We rolled out savings buckets — your deposit account with multiple savings buckets that you can name yourself. For example, you could save for a pet or your honeymoon. We found people save twice as much when they have a savings bucket, which means we’re helping consumers achieve their goals twice as fast.
Banking is a noble profession. If I can use technology to enable my customers to achieve their goals faster, what’s wrong with creating continuous communication that adds value and showcases what your bank can do to be your best financial ally?
Staying Ahead in a Fast-Evolving Landscape
Q: Where do you look for inspiration to stay at the forefront of innovation?
Muthukrishnan: I categorize it into executing and experimenting. I get inspiration from experimenting with problems everyone says are extremely difficult to solve or too expensive. In six months, that model will be less expensive and more advanced — problems that can’t be solved today will have solutions tomorrow.
I look at the big banks — Chase, Bank of America, Wells Fargo — they’ve advanced their AI journey. But what concerns me is that fintechs identify businesses with poor net promoter scores and use AI to reinvent those businesses from the ground up. That’s my fear. So I ask, "How can I passionately re-underwrite what Ally does with AI to stay ahead?" I meet with venture funds and ask, "Where is your money going?" to gain insights.
Q: What’s next for banking technology?
Muthukrishnan: What a time to be alive. You see opportunities everywhere and technology to solve problems for consumers. If you start questioning why roadblocks exist and how to solve them, your brand becomes more relevant to consumers. You become their next best experience, deepening relationships.
The founder of Anthropic wrote something I simplified to: "You now have access to a world of geniuses in a data center that you can enable through an API." That world of geniuses can help solve problems you never had access to before. You can leverage generative AI to define and solve problems with a small team.
