The Financial Brand Insights - Spring 2022

#2 banking publication in the world. Nearly 2 million readers, and host of the fastest growing annual conference in banking.




HowThese 10 Innovative Leaders Prioritize Onboarding

Patelco CU

First Fed

Fidelity Bank

Valley Bank

UMB Bank

Citadel Credit Union

First Financial Bank

Bank of Hawaii

SouthState Bank

Nuvision Federal CU

Digital customer acquisition dictates future success. Industry leaders share strategies to reduce friction and improve customer experience. PAGE 19

In This Issue







Misunderstood Fintech Trends Affecting the Future of Banking

Consumer Finance Perspective: the New Normal


6 Fintechs to Watch in 2022 47


Tap into Generosity to Engage NextGen Customers 25

3 Proven Ways Marketers Can Laser-Focus on the Customer Technology Is Only One Piece of the True Digital Transformation Puzzle

Gen Z's Top Priorities When Selecting a Financial Services Provider 5 Ways Banks and Credit Unions Must Mitigate Risks and Losses in 2022 Why Financial Marketers Should Focus on Customer Loyalty





How Banks Can Avoid Being Fooled By Marketing Technology Acronyms How Banks Must Recalculate the True Value of Checking Accounts It takes More Than Convenience to Acquire Credit Card Users

How Small Banks Can Counter Fintech and Megabank Marketing Budgets Why Omnichannel Account Opening Is Crucial for Bank and Credit Union CX





Homeward Bound? Rethinking Your Ops Center To Cater For Remote Employees



Build Trust. Accelerate Growth. 19

The Operational Resilience Long Game 39

The Gig Economy: How Banks Can Find Hidden Revenue Opportunities





DISCRETIONARY SPENDING AND BUYER BEHAVIOR 47% considering a purchase greater than $10,000 within the next 6 months

If you attended the Digital Marketing for Financial Services Summit in September 2021, you may have had the opportunity to attend our presentation, “How 2021 is Opening Wallets & Opportunities”, offering practical advice for Financial Institutions based on data from the above studies. Read below to dive deeper into some of the most telling insights that drove our recommendations for the consumer market specifically. Carpe Diem: Discretionary Spending and Buyer Behavior While the economic impact and uncertainty of 2020 gave consumers reason to reduce spending and increase saving, the gradual re-openings of 2021 fueled optimism and provided opportunities to unleash pent up demand for bigger ticket items. In fact, nearly half (47%) of respondents to our 2021 survey said they are considering a purchase greater than $10,000 within the next 6 months, such as a vehicle, home improvement, or big vacation. As well, fewer consumers are putting off this type of big spending. Seize the day! While 29% reported plans to delay a big purchase in 2020, only 11% reported having those plans in 2021. This enthusiastic behavior creates opportunity for financial institutions offering credit cards and loans to help consumers bring their dreams to life. For instance, 45% of those planning a vehicle purchase expect to use a loan to finance it, and 21% of those planning a home renovation

New N rmal the Consumer Finance Perspective

45% of those planning a ONLY 11% plan to delay a big purchase

vehicle purchase expect to use a loan to finance 21% of those planning a home renovation expect to use a credit card

(It's probably more optimistic than you expect)

expect to use a credit card. Thrift and Caution


Just because consumers seem ready to increase their personal spending again, it doesn’t mean they have thrown caution to the wind. After having experienced a once-in- a-lifetime event like COVID-19, one can understand how consumers’ mindsets may have changed to become more diligent, and generally more prepared for a rainy day. We see this sentiment reflected in their intentions to shop around for the best financing options in 2021. Between one quarter and one half of respondents reported having searched for a better deal on investment advisor fees (27%), mortgages (34%), and credit cards (41%) in the last 12 months. Since most households (80%) have not experienced any positive change in their income as a result of COVID impacts, it is understandable that they would continue to be thrifty despite the inherent desire to re-engage in spending on larger items again.

80% have not experienced any positive change in their income as a result of COVID impacts

In 2020, Phase 5 conducted a study of over 2,000 North American consumers to better understand how COVID-19 in its early days had affected their attitudes and behaviors related to consumer financial services specifically. In 2021, we returned to market with that same study plus a few additional questions given the context and wisdom provided by another year. Findings from this latest study (and its comparison to previous results) have given us several key insights regarding key elements of the “new normal”, and the financial services FIs can offer to meet consumers’ needs.

By Steve Hansen Partner, President of Phase 5 US

With 2022 upon us, it has now been almost two years since most of us first heard of COVID-19. Without a doubt, everyday life has changed and, in some ways, will never be the same. The impact has been felt across both our personal and our professional lives, leaving many of us wondering when we will arrive (or if we have already arrived) at the “new normal”, and what exactly that means.

25%-50% have searched for a better deal on investment advisor fees (27%), mortgages (34%), and credit cards (41%)





WILLING TO TRY SOMETHING NEW 29% increase in the number who used a mobile banking app compared to 2020 92% are comfortable with applying online for a credit card compared to 52% in 2020

Willingness to Try Something New (Or Non-traditional) In addition to shifting attitudes around whether and when to spend money, consumers have shifted the way they interact with their financial institutions. It’s no surprise that when people were first required to stay home, their tendency to adopt digital tools and tech solutions increased. For example, the amount of consumers who reported using a mobile banking app went from 62% in 2020, to 80% in 2021; a 29% relative increase in just one year. As well, the proportion of consumers who reported being uncomfortable with applying online for a credit card (48%) or mortgage (36%) in 2020 dropped to just 8% and 10% respectively in 2021. While COVID impacts helped to shatter consumers’ tech fears, that bold willingness to try something new may have extended beyond the adoption of digital tools. More specifically, more consumers reported they are moving away from relying on the more traditional primary financial institution (PFI). While 10% of consumers reported having no PFI in 2020, the number increased to 17% in 2021. As they shop around for the best credit cards, loans, and mortgages, multiple financial institutions are in the consideration set 53% to 65% of the time. Summary Consumers have been through “unprecedented times” over the last two years, and there is no question that behaviors and attitudes have changed as a result of these experiences. However it appears that optimism will prevail in the “new normal”. We have indicated that we are ready to move forward, with quality-of-life improvement purchases like homes, cars, and vacations. But we’re proceeding with caution, shopping around to get the most for our hard-earned money, and breaking the mold of tradition when it serves us better. As businesses adapt and invest in ways to better serve consumers in the post-pandemic world, research can help reduce risk and improve outcomes. Contact us to learn more about the complete studies above ( US and/or Canadian market versions), or to discuss a custom study for your organization. Because one thing is certain: times have changed and consumers’ needs and expectations have as well. ▪ We help clients on their journey to customer-centricity by focusing on Innovation and Experience and bringing together expertise in market research, user and customer experience, innovation and design, and advanced analytics.

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are comfortable with applying online for a mortgage compared to 64% in 2020

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reported having no primary financial institution compared to 10% in 2020

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of the time, multiple financial institutions are in the consideration set when shopping around for the best credit cards, loans and mortgages 53%-65%









Innovation, employee experience and evolving consumer preferences are changing the financial services landscape. This includes the way financial products and services are delivered. Many banks and credit unions are exploring ways in which third-party relationships may help address the changing landscape, while others are looking to new or innovative technologies that can increase efficiencies, grow their reach and improve competitiveness. No matter what your organization’s approach is, there’s a new level of scrutiny that you need to apply. Clearly, you must be sure that you’re not doing something that introduces too much risk that could put your long-term viability in jeopardy. However, it doesn’t mean you shouldn’t pursue opportunities. Risk management shouldn’t be the department that says no, but rather the function that enables successful execution with the emerging risk universe in mind. It’s not unlike what mothers tell their kids: “Just be good.” That simple instruction can be applied to pretty much everything you do, including managing risk: • Be good at identifying and monitoring emerging risks whether brand new, evolving or even well-known. • Be good at making sure your

So, where should you begin? What are those emerging risks that you should have your eye on? While each financial institution has its own unique risk footprint, here are five risk categories and loss trends that most likely should be on your radar in 2022. Risk 1: Ransomware To begin, cyber risk and ransomware has to be top of mind. The growing frequency and severity of ransomware attacks is concerning — as six and seven-figure demands have become routine. The fact that ransomware attackers have been telling victims that they must pay the ransom, and that the attackers can steal as well as encrypt data, isn’t a new phenomenon. But the possibility that sensitive data might be revealed is potentially more damaging to your reputation than any disruption caused by the malware.

Ways Banks and Credit Unions Must Mitigate Risks and Losses in 2022

Keep an eye out: Having employees work from home is a great option, but remote work can add many unforeseen security risks.

In addition, threat actors are indifferent to who pays them as long as they are getting paid. Their focus appears to be a disproportionate problem for smaller and mid-market organizations. 72.1% of ransomware attacks occurred on companies with less than 1,000 employees according to Coveware’s Quarterly Ransomware Report (February 2021). This fits the organizational make- up of many community financial institutions, so it is wise to be on the lookout. Further, remote work has opened the door for additional cyber risk. Remote work has highlighted

leadership team understands the risk impact, likelihood, velocity and time horizon of each risk. • Be good at developing and implementing actionable controls to mitigate the risk.

By Brad Neumann Senior Risk Consultant, Risk Management Services at CUNA Mutual Group

• In other words, just be good and things typically go right.





Layered security controls at different points in the transaction process can regulate authentication risks so that if one control is defeated, another one exists that can help prevent unauthorized transactions. Deploying an out-of-band authentication method for online banking enrollment through websites is a growing practice. In fact, it’s considered a “must have” control to help mitigate these risks. Risk 3: Smash & Grab Attacks Automated Teller Machines (ATM) and Interactive Teller Machines (ITM) have become a staple

Unsafe behaviors and conditions such as uneven or wet/icy surfaces, lighting, clutter and stairs are prime factors. Additionally, the absence of safety alertness, can lead to these types of injuries. A short lapse of attention or distraction — think checking cell phones, being in a hurry, walking with arms full, not using designated walkways and wearing sunglasses inside — are common distractions. Work injuries can be expensive with costs of injury treatment, investigating accidents, implementing corrective measures, training replacement employees and dealing with lost productivity. It really adds up quickly. Risk 5: Class Action Lawsuits From a litigation perspective, if your organization hasn’t been impacted by one of these losses or class actions yet, there is a good chance you’ll be hit with one. And, if you’ve already been hit, there’s still a chance you could be impacted by another. One big target for these lawsuits is overdraft/ NSF fees, which continue to be a sore spot for consumers. In fact, consumer advocacy groups have targeted overdraft programs — often referred to as courtesy pay or overdraft privilege programs — and the disproportionate impact the programs have on certain consumers. Additionally, law firms are sending demand letters threatening a lawsuit (or filing a lawsuit) against community financial institutions alleging customers were improperly assessed overdraft and/or NSF fees. The monetary exposure can be significant with a seven-figure exposure not being unusual with the impact of the statute of limitations for each state. The allegations include: Improperly charged multiple NSF fees on the same transactions (refers to incoming debits that are returned multiple times by the institution). • Improperly assessed overdraft fees on debit card transactions posting to accounts when funds were previously set aside when preauthorization holds were placed. • Overdraft fees were improperly assessed using the “available” balance rather than the “actual”

or ledger balance, and the institution failed to accurately describe this in its agreements/ disclosures. • A newer development has plaintiff attorneys targeting Reg E’s Model A-9 opt-in form for paying overdrafts on ATM and one-time debit card transactions. They claim that the language on this form is ambiguous on how financial institutions assess overdraft fees on these transactions and therefore fails to comply with Reg E requirements. They target the first sentence — “An overdraft occurs when you do not have enough money in your account to cover a transaction, but we pay it anyway.” Class action lawsuits against banks and credit unions due to deficiencies in collection letters continue to be successfully brought forward by plaintiff attorneys. Specifically, Notice of Disposition (commonly referred to as notices of intent to sell collateral) and Notice of Deficiency sent after the collateral has been sold are the letters and notices targeted. Lack of detail in these notices is being scrutinized. These lawsuits often require banks and credit unions to waive remaining deficiency balances, return payments toward deficiency balances, return 10% of the principal amount of the original debt and pay statutory damages. Keep Ahead by Rethinking Protection The above five risk categories and trends are just the beginning of what should be on your institution’s radar. Other risks such as active assailant situations, business resiliency, employment practices, employee fatigue, remote work, vendor/fintech due diligence and cryptocurrency are among the many others that should be considered when rethinking your protection. Remember, when risk management is effective, typically nothing bad happens. But, if you’re blindsided by a problem, your reputation takes the hit. Don’t let not knowing which emerging risks are around the corner take the blame. Be good! ▪

weak security measures, employees not following proper cybersecurity protocol, and inconsistent risk monitoring. While there’s no foolproof way of preventing ransomware attacks from occurring, it can be avoided with the right security, risk management procedures and prepared employees. Risk 2: Weak Authentication Another significant risk also has fraudsters clinging to the cloak of anonymity with fraud and scams through online channels. These fraudsters will most likely continue to exploit weak authentication methods involving fraudulent instructions, business email compromise,

in the digital culture. These machines offer a significant convenience with direct access to cash transactions. And, when many lobbies were closed or restricted during the pandemic, criminals shifted their focus to these machines, but in an unexpected way. “Smash and grab” style attacks

loan processing and online account enrollment. These losses have been significant and quite often request large wire transfers which can lead to big paydays for fraudsters. In one scheme, consumers are targeted in a Zelle/peer-to-peer (P2P) payment fraud using a sophisticated scam to defeat two-step authentication,

— typically using stolen heavy-duty trucks with chains, construction type vehicles, equipment, and even explosives to rip apart the ATM or ITM to gain access to cash canisters — are causing havoc at an alarming rate. These attacks can cause financial loss and property damage over $100,000 in minutes in addition to impacting financial institution operations and the communities they serve. Risk 4: Slips, Trips & Falls Even a seemingly minor workplace or employee incident may result in expensive claims cost or even legal action. In fact, slips, trips and falls are a significant cause of workplace injuries resulting in 48% of all Workers Compensation claims and 55% of the total incurred loss dollars in credit unions, according to the Credit Union Workers Compensation Safety Council from The Hartford and CUNA Mutual Group. Surprisingly, both volume and severity of credit union slip, trip and fall claims are about 20 basis points higher than others within the banking industry, according to loss data.

which leverages the use of one-time passcodes. People are being scammed into providing online banking usernames and passcodes resulting in unauthorized electronic fund transfers from their banking accounts via Zelle/P2P. These losses can escalate really fast due to the potentially large number of members or customers targeted on a single day over the course of consecutive days. One credit union fraud loss went over $2.5 million!

Real money: Digital banking fraud can rapidly get out of hand. One credit union had a P2P scam loss of over $2.5 million.

Managing these risks requires a layered security program. The use of multifactor authentication alone for online banking is not sufficient to protect consumer accounts.





Gen Z's Top Priorities When Selecting a Financial Services Provider


With more banking and financial services options available to consumers than ever before, banks, credit unions and fintechs are looking for solutions to attract and maintain a relationship with the fastest-growing consumer group — Gen Z. Based on responses to our survey of 1,039 consumers from various regions across the United States (approximately 40% of them from the Gen Z segment), the four most important factors for Gen Z in choosing a financial service provider are: • Trust and security • Rates, products, services and special offers • The ability to talk to a person when support is needed • A great digital experience The research analyzed the data by comparing percentage differences between three demographic segments. These were: Gen Z (age 15-24), Millennials (age 25-40) and Baby Boomers (age 57-75). The patterns identified provide insights regarding consumer banking perspectives that can be used to inform product, services and marketing strategies of financial institutions and fintechs alike. Prioritizing Trust and Security Among the top priorities when choosing a financial service provider, “level of trust and security” was selected by at least 48% of each of the three demographic segments. That said, while most respondents from each group indicated

Take a step back: How well does your marketing team know Gen Z? Would they know that trust and security ranks at the top of Gen Z priorities?





that they at least somewhat trust their primary financial institution regarding their personal financial data, Gen Z and Millennials were less likely than Baby Boomers to completely trust them (figure 1). At the forefront of trust is the security of personal data. While financial institutions appear to have secured a general sense of trust from their customers, it’s clear that they have work to do in order to gain consumers’ complete trust in regard to data security, particularly as more consumers prefer digital banking experiences. At least 57% of each segment indicated that they would like their financial institution to consider providing advanced identity and credit protection, and nearly half of each segment expressed interest in data protection for digital assets. Among Gen Z and Millennials, the second most important category was “rates, products, services and special offers.” Baby Boomers also

prioritized this category but were more likely to prioritize in-person or personalized features — including the ability to talk to a person, the friendliness of the staff and the closeness of the branch.

The younger generations still care about the person-to-person conversation, even if they prefer digital as the first connection point.

Innovating with Digital Banking Experiences

When choosing a financial service provider, every generation rated a digital banking experience as at least somewhat important. Nearly half of Gen Z and Millennial respondents indicated that the digital banking experience is “very important” when they’re choosing a financial service provider. In addition, 20% of both Gen Z and Millennial respondents — and 13% of Baby Boomers — also suggested that banking will be online-only in the future . And Gen Z has higher interest in more types of digital experiences than any other age group, including automated financial guidance (39%) and virtual assistants for managing money (31%). Gen Z and Millennials are also most comfortable using technology companies to conduct various banking tasks, as shown in the chart (figure 2). Finally, in terms of support preferences, Gen Z and Millennials again turned to digital. While all age groups showed high interest in live human chat, call center services and visiting the branch, 53% of Gen Z respondents and 42% of Millennials wanted to be able to find their answer online. Further Insights from the Data Without reliable and secure financial data access, consumers have little transparency or insight into what is going on in their financial lives — and it lowers trust in their financial institutions. By having secure access to their data, they’ll be able to make more informed decisions about their finances and feel good about completing those banking actions digitally. Ultimately, this is what will drive higher retention and greater brand loyalty across all consumer age groups. As financial institutions speculate on where to invest in future product development,

Tasks for which consumers are comfortable using tech companies Figure 2

delivering features that can enhance trust, like stronger security services, are a safe bet among both younger and older customers. Money management tools and virtual assistants should be considered as additional opportunities worth exploring, particularly for younger generations. More details from the research MX released a joint whitepaper with Finn AI, Q2, and Rival Technologies, based on the research described in this article. The paper explores the use of financial products and services by Gen Z, Millennials, and Baby Boomers and provides valuable additional insights into the relationship between Gen Z and digital banking, customer support preferences, and money transfer apps’ adaptive solutions. About MX: MX is the leading data platform for the financial world, providing the industry’s fastest, most secure, and most reliable connectivity network. MX partners with 16,000+ banks, credit unions, fintechs, and 85% of digital banking providers to power the money experience for over 200 million consumers. ▪

By generation

75% 75%



Figure 1


Credit monitoring

Level of trust in banks and credit unions



29% 29%

By generation




Completely trust




Gen Z (age 15-24) Millennial (age 25-40) Baby Boomer (age 57-75)

Money management




Somewhat trust




14% 14% 14%







Gen Z (age 15-24) Millennial (age 25-40) Baby Boomer (age 57-75)

5% 15%


Somewhat distrust





Completely distrust












edition of the Connected Shoppers report, we saw that in 2021 three types of digital channels grew transaction share by nearly 40%: brand websites and apps, retailer websites and apps, and online marketplaces. Emerging channels’ share of transactions increased more than 20%. In 2023 it’s expected that physical stores will regain a bit of share at the expense of some digital channels, but delivery apps and others will hold onto their gains or even grow (figure 1). A surge in digital transactions brings new competitive threats. 70% of people agree that loyalty is more difficult to maintain than ever. In addition to changes to physical locations, the stopgap measures to keep in-person associates working amid temporary store closures are here to stay. Fewer than half of in-person associates use a mobile device during their working day even now.

The role of technology More executives want mobile technology in the hands of employees — up to 74% by 2024, an increase of 54% since 2021.

Why Financial Marketers Should Focus on Customer Loyalty in 2022

Going forward, executives want to empower associates with the technology they need. They project that 74% of associates will have a mobile device in 2024, an increase of 54% over 2021. That

brings a very clear strategy for loyalty. Recreating the In-Person

Experience in a Digital World We know that financial institutions are rapidly going digital because consumers expect them to be where they are. Shopping on Instagram, chatting on WhatsApp, browsing product reviews on Trustpilot. Bank customers and credit union members want to have excellent experiences on every channel, at any moment. We are in the era of a new customer-brand relationship. And marketing leaders are often the ones driving this inside-out transformation to meet the imperatives of both business growth and an excellent experience across all channels. Whilst technological agility becomes more essential, the true North Star is winning consumers’ trust. You build it over time by listening to needs and wants. And then responding with relevancy every time. This is where the line has blurred on digital channels between friends and brands. Consumers expect brands to talk to them in the same authentic, human way as friends do. These interactions done right help grow stronger relationships, and foster loyalty. For example, our research shows that in 2020 the amount of social media referrals to ecommerce websites doubled quarter over quarter. The number of orders from this channel doubled too, and this trend has continued.

Transaction trends: digital versus physical Figure 1

Share of total transactions



12% 12%

Physical store

Brand’s website or app Online marketplaces Retailer’s website or app Other digital channels Delivery app



• Social media • Messaging apps • Voice assistants • Gaming consoles • Live-streaming video

3% 2021

By Lincoln Hull Director of Product Marketing at Salesforce

Nathan Barling Vice President of Product Marketing at Salesforce


17% 17%

Consumers are demanding empathy more than ever. That is what 15,000+ global consumers and business buyers said when surveyed about a new era of customer engagement for the Salesforce “State of the Connected Customer” report. While 66% of customers expect companies to understand their unique needs and expectations, only 32% of executives say they have the full ability to turn data into personalized prices, offers and products in real time across channels and touch points.

Digital services have made the ability to switch financial service providers easier than it ever has been, but they have also created a great opportunity to drive loyalty through personalization. Experiences are just as important as the final offering when driving loyalty. 80% of people agree that the experience a company provides is as important as the product or service it offers. With the pandemic driving more digital adoption, these experiences have been mainly digital. In the fourth



3% 2023







THE FINANCIAL BRAND © January 2022 SOURCE: Salesforce





Figure 3

“customer satisfaction metrics” remains the key focus for financial marketers, with 35% voting it the most important, significantly more important than any other KPI. Other customer-metric scores like customer referral rates, customer acquisition costs, and content engagement are seeing the biggest boosts in popularity of metrics now being tracked. Metrics are only valuable if action can be taken using them, and financial marketers have come a long way in their ability to both automate measurement and evaluate results live — enabling them to take action while a campaign is in flight. 85% of marketers have said they are using marketing attribution tools. These are pivotal for being able to optimize marketing strategies. However, marketers have become more KPI- conscious across the board, with customer referral rates, customer acquisition costs, and content engagement seeing the biggest boosts in popularity. Regardless of the specific metric, the increasingly strategic nature of marketing means that KPIs must be in line with those of company leadership. 78% of financial marketers say they align their KPIs with those of their CEOs.

Consistently Deliver Personalized Value Across Every Engagement The 7th State of Marketing Report, shows that the average consumer interacts with nine different touch points. This aligns with how financial marketers are engaging with customers, with over 77% using nine different channels. To secure sustainable revenue growth, financial institutions need to invest in relationships over time, consistently offering convenience and relevance within every interaction. It’s important to get that customer data identifying what channel they prefer, especially with so many different ways to engage. Discover What Is Most Valuable for Every Customer So what interactions can be identified as valuable for relevancy? Personalization starts with data and the 7th State of Marketing Report tells us that seven out of ten customers are willing to share personal information with brands, but only in exchange for some kind of value. Looking at the top metrics tracked by marketers (figure 2), what is interesting is that

Importance of loyalty programs to consumers

ChangingWith the Times Third-party cookies used to be the cornerstone of customer data, but marketing experts now recommend relying more on first- and second-party data to assemble customer profiles.

Free shipping Which of the following offerings make you more likely to buy from a brand?


Simple and/or free returns


Loyalty or rewards program


actually incredibly powerful given it’s depth and comprehensiveness. Small data is built from what you have, it’s a seed that you can grow because it’s focused and purposeful and has more accuracy. In the end you need to start with the small data — given it’s quality and actionability — this is your starting point and loyalty is at the heart of capturing that data. The model has changed and we are moving away from third-party cookies so we need to leverage the power of the existing data (current customers) to drive awareness and amplification. You are essentially ‘flipping the funnel’/ customer journey by leveraging the data you already have versus hitting everyone through inefficient media. Loyal customers create two opportunities: 1. Use media evangelists — through social media, reviews, viral, word of mouth. It is often much more efficient than any paid media. 2. By leveraging what you know about customers (first-party data attributes), you can “find” these same types of customers using “look alike” modeling driving new acquisitions. Essentially you are focused on the smaller more comprehensive data you have versus the broad brush stroke data that is easy to collect but difficult to drive impact. Collecting this great first-party data is why loyalty remains ever important in your 2022 strategy. ▪

Extensive product variety

48% Exclusive shopping events (e.g., pop-ups, special sales, events) 30%

Which of the following is true of your favorite brand?

Offers a loyalty program

50% Offers exclusive shopping experiences and/or promotions 40% Caters to my unique needs 36% Engages with me in the places I prefer (i.e., over email, social media, shopping app, website, etc.) 32% Offers early access to new products 29% Has sustainable business practices 29%

Loyalty Programs Are Table Stakes

The retail industry is a leader in loyalty programs and a good indicator of how financial institutions can prioritize where to focus. One of the most surprising findings is how important loyalty programs are for shoppers. The Salesforce Connected Shoppers report captures some interesting findings when it comes to loyalty (figure 3). The first set of bars shows the top responses on what makes shoppers more likely to buy from a brand. The top two offerings are free shipping and simple/free returns. The third, though, is a loyalty or rewards program. The second set of bars shows the attributes of a shopper’s favorite brand. The No. 1 response was a loyalty program. Shoppers even want their favorite brands to reward them for shopping with them.

Most important marketing metrics and KPIs Figure 2

SOURCE: Salesforce © January 2022 THE FINANCIAL BRAND

Loyalty Creates Better First-Party Data in the Age of Privacy


Customer satisfaction metrics



Marketing/sales funnel


In the age of privacy such as GDPR changes and Google’s plan to end third-party cookie support in 2023, big data becomes less of a strategic imperative for marketers and the focus now becomes first-party data. While big data is important, it’s directional, less specific. Big data is about quantity and less about quality. However, the small but mighty ‘smart data’ — the first-, zero- and second-party data — is

Customer lifetime value


Content engagement


Web/mobile analytics


Customer retention rates Customer referral rates/volume

9% 10%

Customer acquisition costs


SOURCE: Salesforce © January 2022 THE FINANCIAL BRAND





How innovative bank and credit union leaders prioritize onboarding to scale and deepen customer relationships

By Kranthi Palreddy Syphax Executive Director, Marketing & Business Development NCR Terafina

Acquiring customers digitally is no longer a nice to have. It is a necessity. There are few banks and credit unions that are ready digitally today and those that make digital a strategic imperative are primed for accelerated and scalable growth. In its recent What’s Going on in Banking 2022 report, Cornerstone Advisors ranked digital account opening as the #1 top technology in banking for the third year in a row. Innovative organizations have a rare window of opportunity to revamp dated delivery and distribution models that govern customer engagement and retention strategies. How you think through this process right now will not only cast your immediate fate but also dictate how well you are positioned for long term growth and success. As financial institutions navigate through this ongoing pandemic there is a continued push to focus on getting digital account opening up and running quickly. However, it is just as important to carefully address how you repurpose existing sales capacity, particularly underutilized branch expertise to offer real time financial advice and guidance, whether remote or in person, to create a frictionless onboarding journey for your customers and prospects. Community and regional financial institutions, in particular, Strategic imperative: Digital account opening ranked as the #1 top technology in banking for the third year in a row . Cornerstone Advisors

Build Trust. Accelerate Growth.





Customers expect flexibility when it comes to which channel of interaction they can utilize at any given time for whatever reason they may abandon an application. For example, Cornerstone Advisors conducted a survey that looked at consumers opening an account between 2018 and 2021 and found that there were a variety of reasons for which channel a customer chose to engage depending on their specific inquiry (figure 2). Additionally, the survey noted that the most frequently cited reason for seeking human assistance was convenience. 37% of the respondents believed they would get a faster response.

Brian Berry, Senior Vice President and Chief Information Officer at Citadel Credit Union, a $4.5B organization serving Greater Philadelphia, notes that, “Our member onboarding experience is

Figure 3

Figure 1

Applications for new small businesses surged in 2021

Many institutions do not follow up on abandoned online applications

12-month change in annual business applications with planned wages


incredibly important to us — and our goal is to have seamless integration between digital, call center, and branch channels. We want to ensure our members can engage with us when they want, how they want, through any device or at any location. The branch experience is a critical element to our overall member journey for those who prefer to open an account with us in-person, so we prioritize that along with our digital account opening process.” Similarly BradWaldhoff, Chief Information and Operations Officer at First Financial Bank, a $5B








Credit unions



SOURCE: Total Expert © February 2022 THE FINANCIAL BRAND


2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

must reset and be open to serious change as they have a unique window of time to go beyond the incremental and drive long term profitable growth. In this article we will delve into three key areas that should be top of mind when considering digital account opening: branch incorporation; product diversification; and strength in collaboration. It will also offer perspectives from key thought leaders in the space from a diverse pool of financial institutions that are all leveraging the NCR Terafina platform and working to effectively prioritize their customer onboarding needs. Incorporating Branch Is Essential for Multichannel Success Being able to start and finish an account opening application in any channel (digital, call center, or branch) is crucial, especially for reducing friction in the customer’s experience, minimizing abandoned leads, and deepening customer relationships. A platform that is always aware of the customer’s current channel of interaction and provides tools that feature timely notifications and cross sell touchpoints helps deliver a customer journey that builds loyal and lasting relationships. When financial institutions were asked whether they have a process in place for follow up on abandoned online applications, 43% of banks and 33% of credit unions said they did not (figure 1).

SOURCE: U.S. Census Bureau © February 2022 THE FINANCIAL BRAND

Figure 2

Reasons for choosing a specific channel to engage

experience that spans their consumer and small business product needs across multiple channels. Crystal Radwanski, FVP Digital Solutions and Innovations Manager at First Fed, a $1.8B

institution, based in Terre Haute, IN affirms that “customers expect fast, easy and secure banking

Branch Phone Online

Questions about the products or company

solutions backed by informed and efficient customer service at every touchpoint. Delivering a seamless customer experience no matter the relationship with First Financial Bank, and the ability to continually assess and improve our product awareness, customer development, and relationship management processes is critical.” Product Diversification Is Key Did you know that there are approximately 68 million independent workers in the economy today? And a study by Abound “found that 51% (of independent workers) are managing their professional lives from their personal bank accounts. However, 46% of those do plan on opening a separate account — which means that 16 million independent workers will be looking for business accounts in the next year.” (figure 3) This is quite a compelling figure. Deposits One of the most challenging digital account problems that community banks and credit unions face is offering their customers a unified



institution in Port Angeles, WA explained that, “For us, we recognize the value and importance of helping our customers open different types of accounts, from personal checking accounts to simple business accounts, in an instant gratification world. Prioritizing the needs of our customers begins with understanding the power of offering a simple onboarding application along with a diversified deposits product portfolio.” Since First Fed’s initial launch, they have already seen a year over year increase of 241% in the number of accounts opened and a 193% year over year increase in amount dollars funded to those accounts. The uptake in seeking offerings that incorporate consumer deposits, small business deposits, and commercial deposits in the digital, call center, and branch channels has increased sharply. This trend has highlighted how financial institutions are making a serious shift to meet the complete and changing needs of their customer base.


Questions about which product was right for me 50%



Questions about the application process 29%



Trouble or issues with the application process 12%



Questions about the status of my application 12%



THE FINANCIAL BRAND © February 2022 SOURCE: Cornerstone Advisors





For instance, Joann Marsili, Senior Vice President, Chief Marketing Officer at Fidelity Bank based in Dunmore, PA with $2.4B in assets, noted that “the scalability of being able to meet the needs of both

end processes where you can automate, reduce friction and fraud in the end-to-end user journeys. For example, Patelco Credit Union in Dublin, CA with approximately $9B in assets has prioritized both consumer deposits and consumer loans across digital, call center, and branch channels.

Community banks and credit unions must find innovative solutions and unique ways to address their customer needs. From deposits to lending, the landscape continues to evolve very rapidly and those that do not engage in collaboration, with the latest technology and those fintechs that understand the space, will be left far behind. Crypto Another notable trend that banks and credit unions should examine is cryptocurrency digital account opening. Crypto interest is red hot right now and large financial players are keen to expand into the space. According to a 2021 survey commissioned by NYDIG, 81% of respondents said they'd be interested in purchasing bitcoin from their bank if the service was available. Currently under 1% of financial institutions offer crypto capabilities. This is a ripe market opportunity for community and regional banks and credit unions to provide a trusted space for their customers to learn about and invest in crypto. Strength in Collaboration Lastly, but equally important, when evaluating options for digital account opening, is the power

Key point: Strategically incorporating branch, offering a full complement of financial products, and working collaboratively with a partner are the keys to long term and differentiated success.

Kal Majmundar, Chief Technology Officer at Patelco reinforced that “digital channels are an important part of our strategy to acquire new members as well as bring new products and services to current

consumers and businesses is a huge necessity for us at Fidelity. We are committed to putting our customer needs first and thinking through offerings that will help us continue to build trust and confidence in our brand.”

things better and how we can find new ways to enhance the member experience is essential. This collaborative approach has been very positive for us and helped establish a strong foundation for our new account opening and onboarding experience, which is a foundational component of our digital transformation”, reaffirmed Baron Conway,

Similarly, Shirley Fiano, SVP, Director of Digital Acquisition Channels at SouthState Bank in Winter Haven, FL with $40B in assets shared that, “over the past year our number of online

and prospective members. We want our partners to think strategically and solve problems with us while exploring solutions and executing tactically.” Moreover, an onboarding platform should enable a financial institution to expedite integration with third parties to build a compelling and effortless experience for customers. Likewise, at Bank of Hawaii in Honolulu, HI with roughly $23B in assets, they have seen considerable growth with their online deposits applications which have grown four-fold and have experienced a 300% growth in their HELOC apps. Ruth Erickson, SEVP

and mobile users increased by 44%, and our digital DDA production increased by 54%. We are committed to continue to implement our omni-channel and omni-product roadmap. Having flexible APIs and tailored workflows has resulted in operational efficiencies that support our continued growth and offer us the flexibility to respond quickly to market trends.” Carefully considering the needs of both consumers and businesses from simple to more complex applications will prove to be a central theme for banks and credit unions looking to differentiate themselves and stand out. Lending To ensure financial institutions are onboarding long lasting and profitable relationships, an account opening platform must also span beyond deposits and incorporate lending offerings to provide a unified customer experience. Many community banks and credit unions struggle to handle high volumes of applications and rely on manual processes that require frequent data reentry into dated systems. Even when customers are able to have a digital interface to apply for a loan, the overall user experience needs significant improvement. It demands addressing both backend and front

SVP, Head of Digital & Product Management at Nuvision Federal Credit Union in Huntington Beach, CA with $2.8B in assets.

Given the rapid pace at which customer behavior is changing and the scale of investments from large financial institutions, strategically incorporating branch, offering a full complement of financial products, and working collaboratively with a partner are the keys to long term and differentiated success for community and regional financial institutions. Innovative thought leaders from Bank of Hawaii , First Federal , First Financial, Fidelity , SouthState , UMB , Valley , as well as Citadel , Nuvision , and Patelco share a common desire for cultivating win-win partnerships that enhance their customers and members experience. No matter what financial product or what channel you are considering for digital account opening, find a partner that meets you where you are on your digital transformation journey and works with you to deliver your organization’s long term strategic vision. ▪ Learn more: To learn more about omnichannel sales and digital onboarding with NCR Terafina , visit .

e-Commerce Demand Center at Bank of Hawaii highlighted that “having a close knit relationship with an implementation team and working collaboratively to identify

of effective collaboration. When Stuart Cook, Chief Digital and Product Officer of Valley Bank in Passaic, NJ with a little over $40B in assets, was asked what does it mean to collaborate with a fintech

ways to continue our customers’ experience and drive business growth has been key. This agile approach has been instrumental to all of our winning partnerships.” UMB Bank in Kansas City, Missouri with an estimated $37B in assets, has focused on driving

partner, he stated “when I ask questions about their technology, are they an open book? Are they willing to talk to you about their data model and being open to listening? We always look for partners that are at least 18-24 months ahead of the market. Our intent is to look for transparency and look for those who have high competence and can help us achieve our objectives.” At the heart of collaboration are transparency and trust, two guiding principles that will enable partnerships to deliver successful outcomes. Being able to learn and share knowledge and best practices are vital for winning partnerships. “Flexibility while iterating on how we can do

growth strategically. UmaWilson, Executive Vice President, Chief Information and Product Officer

shared that “we feel we are at a pivotal point in our growth trajectory, and we intend to continue to enhance our customer onboarding experience for varying segments/solutions - to deepen our customer relationships and continue to leap ahead of the competition.”





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