Future Digital Finance West 2017

December 04-December 05, 2017

The Wigwam, Phoenix, AZ

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How US Bank Strives for “Single Channel Excellence” with “Multi-channel Consistency”

Today, satisfying modern consumer demands means investing in digital channels. The benefit, in the long-term, is that these channels often come at a lower cost – SeacoastBank, for instance, recently moved its routine transactions to ATM and digital, with the cost of each transaction dropping from $3.30 per branch transaction to 25 cents per non-branch transaction. However, complexity arises in face of the fact that, as much as technology has transformed everyday banking, digital channels are still not the be all and end all for customers: they want physical channels, too.

The need to keep a tight focus on delivering seamless experiences across multiple channels – both online and offline – is a priority concern for Gareth Gaston, Executive Vice President and Head of Omnichannel Banking at US Bank. Though the bank has indeed shrunk its physical footprint somewhat in recent times, it still maintains over 3,000 branches in 28 states, for the branch, says Gaston, remains as relevant as ever – even as digital grows in prominence.

“Listen, we think the bank branch is still important, and what we see today in our numbers is that customers continue to use the bank branch,” Gaston said in an interview at the Star Tribune last year. “Other industries have had their debates about whether or not the physical location matters, and I think everyone now recognizes that physical branches, or stores, or whatever, are still a very important part of customers’ lives.”

The Omnichannel Imperative

Nonetheless, US Bank is also a major advocate of digital channels – indeed, well over 60% of the bank’s customers transact at least some of their business digitally, Gaston told Banking Exchange in June. But, for US Bank, when it comes to the digital vs. physical banking debate, the approach should not be “one or the other”, but rather a holistic strategy that combines and amalgamates both into one overarching omnichannel experience for customers.

For banks, according to Gaston, the idea is to serve customers well no matter what channel – or what combination of channels – they choose for their transactions. Some prefer the branch, others prefer mobile, and still more flit between the two and even want to use more than one concurrently. And this is what makes “single channel excellence” and “multichannel consistency” the two most important watchwords for Gaston.

“Digital is a core activity for our customers,” he said. He added, however, “I don’t believe a digital-only bank can scale. […] It’s hard to be part of a community if all you are is an app.”

And so, while US Bank continues to push forward and innovate its digital offerings, it does so without leaving its branches for dead. “Nothing has suggested that we shouldn’t have them, or that we should have significantly fewer of them,” says Gaston. “Customers don’t want one channel only. Cash withdrawals from ATMs are not falling off a cliff, for example. The risk of obsolescence in retail banking is often overstated.”

Putting Innovation and Technology to Work for Millions Of Customers

US Bank is far from relegating its branch presence to the history books, as some commentators seem bent on insisting is the general direction in which banking is heading. But, even though customers want the option of talking to a real person at a branch over certain financial matters, the fact remains that these same customers are becoming increasingly digital, and their digital needs must be addressed.

Between 2014 and 2016, US Bank’s mobile app was improved 27 times, as the bank employs so-called “agile” development methods to keep pace with the digital demands of its customers. One of these upgrades came in the form of introducing Touch ID to the application. This was in direct response to US Bank customer feedback, who were asking for an easy yet secure way to login to online and mobile banking.

“We have been looking at ways to use biometrics, such as voice and fingerprint, to authenticate identification for several years,” said Gaston in a press release following the launch. “Today, we have critical mass. With more and more devices using fingerprint as an option to unlock tablets and phones, customers are not only comfortable with fingerprint login, they expect it. This enhancement is one more way US Bank is putting innovation and technology to work for millions of customers.”

Beyond the Touch ID addition, for person-to-person payments, US Bank now texts customers a PIN so they don’t have to remember passwords to complete their transactions, and can send money to (and receive money from) anyone across the country faster than ever before. What’s more, the bank has also introduced a new way for customers to deposit checks via their mobile devices – improved in-app image capture capabilities allow customers to import a check into the app from various angles or under low-light conditions.

Being Where the Customer Wants You to Be

As consumers become more and more comfortable with digital channels, there is greater demand for mobile banking experiences that replicate those from non-financial companies, such as major retailers, airlines, and technology companies. As Gaston puts it: “We’ve got changing customer expectations we’re keeping up with. The customer’s expectation is set by the latest iOS upgrade or what Amazon has brought to life in their experience.”

But the future, as US Bank sees it, is not a digital-only banking world. Customers still want and need their local branch, and as US Bank continues to strive for excellence online and on-mobile, it is the omnichannel experience that brings the physical and digital together that remains the most important factor.

The last word goes to Gareth Gaston. “Our philosophy on life is we want to be where the customer wants us to be. Branches are still a very important element of the overall channel mix. Of course we’re always thinking, ‘Are the branches in the right place? Are they in the right format?’ […] It depends on what your needs are. For day-to-day banking transactions, then yes, most of those will be mobile or on the web or a call or an ATM. But there’s a benefit in being able to go in and sit down and talk to somebody about your mortgage or your investments or, especially, your small business.”

Hear Damian Warren, US Bank’s Head of Channels and Sales Pathway Experience, at Future Digital Finance West 2017 this December.

Download the Future Digital Finance West 2017 agenda to learn more.