Digital transformation in banking is fiendishly complicated, and many traditional financial institutions stumble in the yawning gap between theory and practice.
It’s not just about adding some new tech. Successful digital transformation requires a whole new way of thinking, and sometimes new leadership. Bank. In the last seven years under Melissa Stevens, Cincinnati, Ohio-based Fifth Third has focused on delivering solutions to its customers, rather than deploying systems, and has filled out its offerings by partnering and acquiring fintechs that could deliver on specific customer needs.
Melissa Stevens has more than 20 years’ experience in the banking industry. She spent 17 years at Citibank, where (among other roles) she was managing director of Global Digital for Citi’s Global Consumer Bank and chief operating officer and head of Citi’s Consumer Innovation Lab. In 2016, she joined Fifth Third Bank as chief digital officer because (as Melissa puts it) “sometimes you got to go where the grass is fed differently.” She is now EVP, and chief marketing officer.
In a conversation with Jim Marous, founder and chief executive of the Digital Banking Report and co-publisher of The Financial Brand, Melissa explains how Fifth Third’s leadership enables focused digital transformation to deliver real-world outcomes, quickly.
Q: Melissa, you have had an extensive career in banking, spending almost two decades at Citibank before joining Fifth Third. What drew you to Fifth Third seven years ago?
Melissa Stevens: Fifth Third had a new CEO at the time, Greg Carmichael, with a technology background. Most people who do the commercial banking track have been the CFO of the company, then they become the CEO. Greg, on the other hand, had been in IT at General Electric, then chief information officer at Emerson, and entered Fifth Third as CIO.
To come in as a CIO, then move into operating P&Ls, and then become CEO — that was impressive to me. It told me that Fifth Third was a company that was dedicated to transformation and technology, but not in love with tech for tech’s sake. It signaled that they were committed to a defined strategy to improve engagement and service capabilities, as well as focus on everyday operations and long-term planning.
Q: Seven years later, what are your top priorities today?
Melissa Stevens: We’re investing in modernizing our core systems to drive innovation. This includes enhancing digital channels, such as our mobile app and business client portal, to better meet our customers’ needs.
At the same time, we’re optimizing internal processes to add value for our clients and differentiate ourselves in the market. Overall, we aim to create a seamless and enriched customer experience by strategically integrating technology with improved service.
Read more on The Financial Brand’s coverage of digital transformation.
Take Citi’s Twin-Track Approach
Q: You can do that simultaneously?
Melissa Stevens: A lot of people think, “Well, I have to hollow out the core or modernize the core before I can actually do the digital transformation.” We’re challenging this conventional wisdom by pursuing both objectives at the same time. This parallel approach allows us to improve internal processes and modernize our technological infrastructure simultaneously. We’re not waiting for one to be completed, to start the other.
As a result, we’re able to enhance our service quality and introduce innovative digital products more efficiently. By operating on these dual tracks, we’re not just solving problems; we’re transforming the banking experience for our clients. For example, technology has enabled us to reduce the account-opening process from 30 days to just three to five days. At this point, we’re a bit unique in our ability to drive organic growth compared to our peers — which we’re very proud of and we’re continuing to invest in.
When I look at digital and ask, “Well, what are the priorities?”, I’d say we’ve spent the last seven years driving an overall transformation strategy that really was about creating a centralized digital team and getting the solutions that our clients need from the channel standpoint, the app that you have on your phone, the portal that you use if you’re a business client.
Secondly, we are really advanced on partnering with fintechs — both in terms of investing from a private equity standpoint, but also in terms of commercializing solutions. We don’t believe that we need to build them ourselves. We can partner with others and actually scale it in a way that’s better for clients.
Pick The Right Fintech – And The Right Relationship
Q: How do these collaborations work, and how do you go about selecting your partners?
Melissa Stevens: It’s a mix. Partnering with fintechs is strategic and selective. We take a look at whether they’re solving a genuine problem that needs to be solved and we assess the leadership team. Based on these factors, we either invest in them from a private equity standpoint, commercialize and start doing business directly, or sometimes acquire them. Our portfolio includes companies that we’ve built, bought, and partnered with, creating a diversified and enriched set of solutions for our customers.
We have bought some fintechs and been very, very successful with that. Our first was a really small app called Doba, which was an automated savings app for consumers. Next was Provide, which is a medical practice, healthcare finance — you’re looking to buy a dentist office, but you need help in the financing, you need help in getting that going, and that’s also been incredibly successful for us.
These acquisitions have effectively filled gaps in our service offerings and delivered significant value to our clients. By integrating the strengths of these companies, we’ve scaled solutions to better meet our clients’ needs.
- How Banks Are Tackling Fintech Partnerships & Managing Other Risks
- Competitive Pressure Forcing More Bank+Fintech Partnerships
- Read more on fintech in banking.
Benchmark Customer Expectations Beyond Banking
Q: What additional strategies are you implementing to elevate customer experience? Do you look beyond traditional banking paradigms for inspiration?
Melissa Stevens: We’re continually inspired by advancements in other industries to improve our own services. If a Domino’s Pizza order can be tracked from the oven to your doorstep, or if Amazon can provide real-time updates on deliveries and show you a picture of your package inside your front door, why can’t we offer the same level of transparency and convenience in the financial sector?
We recognize that our clients are comparing us not just to other banks, but to customer experiences in food, retail, and beyond. Therefore, we’re committed to achieving what we term as “the art of the possible” by integrating technological advancements and providing real-time status updates, for example, on loan applications. It’s this outside-in perspective that drives us to reshape the banking experience for our clients.
Q: How do you gain a comprehensive understanding of what your customers truly need and want?
Melissa Stevens: In the banking industry, it’s pretty common to use surveys to gather client information about needs and wants. While surveys provide some insight, they’re not the full picture. We take it a step further with our “Job to Be Done” approach.
Essentially, we ask, “What’s the primary reason our customers are using our services or app?” Is it for everyday banking like checking balances, making payments, or perhaps for more complex tasks like treasury management for a business? Understanding this core need is what drives the design of our processes and the direction of our technology strategies.
From there, we build additional features and functionalities that align with these core needs. For example, if we know that the majority of our mobile app users are primarily interested in transferring funds, then we make that process as intuitive and quick as possible. This mindset applies whether you’re an individual account holder or the CFO of a mid-sized company.
Remain Flexible And Agile in Digital Transformation
Q: How do you maintain the momentum of digital transformation?
Melissa Stevens: We adopt a mission-driven approach. We set up specific missions and teams. Instead of hiring a large, permanent team, we allocate resources for a period ranging from one to two and a half years per mission. Nothing is static. We continuously evaluate whether these teams should keep doing what they’re doing or pivot to something else. We keep our efforts targeted and agile, allowing us to adapt as technologies and customer needs evolve.
For a longer version of this conversation, listen to “Digital Transformation Lessons From a $200B Bank,” an episode of the Banking Transformed podcast with Jim Marous, available here or wherever you get your podcasts. This Q&A has been edited and condensed for clarity.