Reframing Personalized Engagement - Synovus Partnership with Personetics

In this session, Liz Wolverton, Head of Consumer Banking and Brand Experience at Synovus Bank, and Jody Bhagat, President of Americas at Personetics, will present real-world examples of how Synovus and Personetics have partnered to bring hyper-personalization and enhanced capabilities to Synovus' customers. This case study discussion will provide attendees with valuable insights into how Synovus is driving innovation in banking and reshaping the future of customer experiences in the financial services industry.

Transcription:

Jody Bhagat (00:11):
All right. Welcome everybody. What a beautiful venue we have in Boca Raton. Let give it round of applause for American Banker. This great event only thing was you guys see all the nice boats out there? All the parking slips for the yachts were taken, so I know many of you probably had to Uber in instead, but I'm really pleased today to be joined by Liz Wolverton. She's one of the leading executives in banking and probably one of the foremost practitioners in personalization, so she's the main attraction, but I'll give you a few tidbits as part of the warmup act. So just by way of background, Personetics is a global leader in the space of data-driven personalization. We serve 18 of the top 40 banks in North America and have over 140 million end customers on the platform. And our vision is one where every end customer is making smart financial decisions.

(01:11):
So I'd like to share an extract from a article that was in the financial brand forum around the changing landscape of banking. There's five key trends I'd like to share. It starts with the battle for deposits, which continues to rage on the elevated interest rate environment is putting more money in motion, and there's also pressure, cost of funds, pressure, as well as deposit duration pressure on the income statement. The second is cost pressure on transformations. Now many of you in this room are undertaking some kind of a transformation data transformation. Digital, we might be in a core transformation. These are multi-year efforts, but there is more and more pressure to deliver near term results, specific use cases. We have all seen the dramatic gains the industry has in digital sales. Some of the leading institutions are well north of 50%, but the underlying not so secret is that digital originated accounts can have lower quality, can have lower profitability and lower engagement, and that can have a material impact as digital sales grow.

(02:27):
Lastly, we're all familiar with the success that B of A has had with Erica. It serves 2 million interactions every day. Last year on this stage, Michelle Moore from Wells Fargo talked about their launch of Fargo virtual assistant, and now they're making that virtual agent even smarter by using analytics. And the last is beyond helping customers with just bank products, there's a movement towards delivering a combination of products, tools, content, insights, trackers to be able to deliver better on jobs to be done. That is a journey that a customer is trying to accomplish over the period of time. Now we don't know how these trends are going to evolve, but one thing we can say with some certainty is that there will be a greater separation between leaders and laggards in the industry in terms of real financial economics. So in this environment where customer expectations are rapidly evolving, advancements in technology are happening so quickly, how is one to compete and compete effectively, particularly with national and super regionals, continuing to expand their presence in level two markets? Well sell just did this research, actually this is just last month, and they said the next evolution of retail delivery is personalized, valuable experiences for customers. And they talked about the evolution from personal financial management to something called personalized financial engagement where you're recognizing needs delivering value and reinforcing engagement. In fact, they have said that the future will be about customer engagement.

(04:14):
And they've talked about how in the previous generation, let's say the last several years, there's been a focus on historical transaction view of spend of basic budgeting. It's fairly reactive, high cognitive burden for the customer. Where we are today is more around personal proactive advice, helping customers progress, and where they project we will be as an industry moving forward is doing it for a customer with predictive and anticipatory action. So for instance, you know that a customer can save 10% of their paycheck, encourage them to do so during that interaction or even better do it for them.

(05:00):
Now the traditional methods are insufficient to achieve this level of customer engagement moving forward. And we'll talk about each of these briefly, personal financial management tools, marketing lead list for bankers, and then also digital banners. So let's start with PFM, which has underdelivered on its promise over the last several years, partially because it's historical view and limited value. In fact, those customers that engage need to take on even more cognitive burden to get and extract value, which creates a natural ceiling. And that's why you see single digit adoption of personal financial management tools. And worse yet, it has negligible business impact for the bank.

(05:45):
Many of the institutions that I speak with talk about how their point of distinction regional banks and community banks is the value of the local relationship, the strength of the relationship with the banker, which is true, but delivering marketing lead list to bankers typically has fairly low productivity, partially because while it might be modeled well, it's uninformed outreach and it results in low banker productivity in some frustration. And then lastly, sometimes we feel like we're in the middle of Times Square and we go onto a mobile app or a website, got a bunch of banners, all giving us action and advice on what to do. But there's fairly low conversion rates. The redeeming quality is you can actually deliver them at scale.

(06:37):
So we believe that banks should consider reframing this relationship and anchoring it around personalized engagement, delivering personalized insights based on real transaction activity that can help you identify what is the implicit need that customer has at any given point in time and deliver an action that suggests this is how to improve the situation. In fact, actually building trust by looking out for customers. And we feel that this is actually a key step in the evolution of the trust relationship between customers and the bank as a trusted advisor. So this is not just intuitively correct, it's also empirically validated as well. So you know how the tools to anticipate over 70% of cashflow issues that your customers may have. And if you can anticipate that issue that a customer may have a cashflow issue in the next 14 days and you can deliver them a personalized loan offer, how many of you have received an unsecured line offer and you're pre-approved or an unsecured line offer?

(07:47):
Almost everybody has, but the acceptance rate on that is fairly low. But if I come to you instead and say, look, you need $6,000 to cover your expenses for the next 30 days. Here is a personal unsecured line for $9,000. You've been pre-approved for that results in a much higher conversion rate. And also not to mention the removal of the penalty fees and the call in as a result. And the opposite holds true as well. And you can tell now, how much can a customer say beyond the expenses that are required for the next 30 days, encourage them to take that money, open a savings account if they already have a savings account, then consider a discount brokerage or add the money into an account that they have. And you will see that action also is a materially higher rate of conversion than just saying, consider opening up a savings account. This isn't all about sales, it's actually about customer engagement, helping them with the basic day-to-Day banking customers respond really well, for instance, when you help them understand what their subscriptions are on a monthly basis. In fact, even informing them that you have two, maybe three insights in music subscriptions and maybe you can save 10 or $15 next month by removing one.

(08:59):
And we know that customers that are more engaged with insights, they have higher average deposit balances and greater numbers of accounts. So those are some things to consider. I'd like to pass it on to Liz, who will share with you a bit about Eno's journey and their ambition. Liz,

Liz Wolverton (09:18):
Thanks. Did you practice that? Because you said nine minutes and that was like nine minutes on the dots. Boom, he did his job. Let's see if I can do mine. I'm a little more conversational, but this has been exciting journey for us to partner with Personetics and I've been in banking for 20 years and I think what I love about being in banking today, banking has trials over those 20 years and has its trials today, but it's, we're really thinking about doing banking differently and not just thinking about it. We have partnerships that can actually make it happen because at the end of the day, some of the things that Jody's talking about are pretty massive ambitions, like helping every individual make smart financial decisions. I mean, that might be a pretty big lift, but I think we're getting closer to it. So I'm going to tell you a little bit about what we've done with Person attics specifically, and then really just give you three truths in terms of our journey and hopefully wrap it up in the next 18 minutes because we are between you and drinks.

(10:18):
And then we'll all go celebrate together. And you can ask a bunch of questions out there over cocktails. So Jody has mentioned the Insides project for us, it's called Ma Synovus Insights. Ma Synnovus is our digital application. We have a desktop version and we have our mobile app. And within that app, instead of we've taken it from what I call kind of empty reporting. So your dashboard that does nothing other than tell you kind of what you have is balances the same things we've been doing on statements for years and years and years and actually gives you small what we like to call digestible, actionable pieces of observation and really advice. So it's taking it from what I call empty reporting to actionable advice. We've done that in phase one. We rolled it out in July of last year. So just for some context, we've been in market, we're about to celebrate our one year anniversary anniversary with phase one of Insights, which is simply delivering those observations and advice and we're looking to move forward to those automated actions that Jody talked about.

(11:25):
We've also done this in tandem with amplero, which is automated email marketing engine. Both of these have some very sophisticated modeling and AI behind them, but they are operationalized through the digital app and the other employer through marketing. And the reason that I mentioned those together is really kind of the first truth for us, and that is that the context of what we are doing in terms of relationship is changing. This slide really shows you what the past was like. We had all these boxes and lanes that we put different people in the bank in. So the branch, you go be personal and you greet people and you know people and that's your box and you stay in it and you make people happy and feel like we know them as a bank, mobile and desktop and ATM, please be very efficient, lower the clicks the better, get people in and out, help them to self-serve quickly.

(12:22):
And then marketing please be shiny and appealing and bring people into the bank. And so all of these boxes, people did their jobs, but each of 'em have limitations. The branch doesn't have legs. So how do you make personal somewhere other than within the four walls of the institution in terms of mobile desktop ATM, they may be efficient, but they really aren't very emotional. So how do you translate relationship in every interaction? It was pretty stale and pretty stiff. And then from a marketing standpoint, how do you let marketing use the brain that it really has with all the data behind the marketing to reach people and inform and advise them differently? So what we've thought about is this is a picture of literally, it may not be the prettiest picture in the world, but it's a picture that we use with our teams across all those areas to say we want to deliver relationship differently.

(13:16):
Why? Because we can do things so much differently with the technology, the data and enablement that we have, but we really need to be intentional about what that looks like. And so our first truth is Personetics and Ma Synovus Insights is a capability, but it's not a capability for capability itself. It's part of a much bigger ecosystem that we've said. How do we want the interaction model to be with our clients? When we say relationship banking, what do we think that means? It means something different. Yes, it means I know your name and I say hello, but it also means I've got a lot of information that I can deliver you differently to help you act better in terms of your financial relationship and I can stay connected with you in a much more persistent way. So the capabilities part of this much bigger ecosystem.

(14:06):
The second truth for us is that not only do you have to launch the capability, you have to operationalize around it. So you can't, the project itself is important, but to really enable success, you've got to do a lot more organizationally. The first thing is have it closely tied to strategy. We don't have a person, attics and Synovus insights team that sits on the side in a little room and decides what insights might be the flavor of the day. They essentially sit in our strategic discussions, they're embedded into our strategic team and we talk about a number of things, what's going on in the macro environment around us, what do people need to know? What insights might be helpful to our clients? Because at the end of the day, most important, what products and services do we have that are emerging that we might want to connect to them, that we can study within the behavior and find a different way other than a flyer or a promo to connect to them?

(15:05):
How do we make it more organic? So it's wedded, sorry, it's wedded and weaved into our strategy. The other thing is you're developing the capability, but the capability hopefully is progressing people in terms of their interaction with you. So you can't just develop the capability. You've got to bring your partners along in tandem to develop those things around it. So this specific example is we have insights that might say things like, Hey, we see you're spending less this month. You might be ripe for a savings opportunity. So that insight is going to take them to a webpage that helps them explore how they might do that. I don't want that webpage to look like it did yesterday. The way I brought them into the conversation is different. And so I want it to look different. I want it to seem like a continuum, and then I want that flow to feel different.

(15:57):
It's all about building that connected flow. And then the other really important thing is you got to bring the people along with the capability. If folks are now stepping into the branch after they've gotten that insight, because we know people still, a few people still like to step into our branches and talk to our teams. We don't want 'em to seem like it's on another planet. We won't want them to say, I don't know what that said. I mean, I didn't deliver you that insight. It needs to be connected. So we're bringing our people along at the same time and very much showing them the attractiveness of this to our customers. One thing you hear a lot is digital is so competitive with the branch. We try very hard and have very deliberate conversations about how it's complimentary. And the way that we sell that to our bankers is they at the end of the day want to see their customers do well, and we show evidence and proof points of how connecting more frequently in complimentary interactions with our customers helps them in terms of their financial health and quite frankly provides a warmer environment for our bankers to talk to them.

(17:03):
So it's very intentional in terms of these other operating model changes that go along with it. And this is a little bit of a exhibit of how we do that with our teams. And then I think the third truth and the last thing that I'll touch on today is that at the end of the day, you can have a great capability. You can write everything just right, but if you are not nurturing that ongoing adoption and engagement, you are never going to flow it through the value. And that's a big job. It is. This is not a set it and forget it. You don't just push a button, turn a switch on and it works and it continues to add value. You have to continue to nurture it. The first thing is awareness. We have pretty good adoption, I think, Jody, in terms of where we are versus others.

(17:47):
But 20%, come on, I want a hundred percent of people adopting and engaging in this. So we have very specific efforts in terms of making sure that it's visible. Today as we started out, we're very intentional as Jody, you talked about banners not putting it in the middle of the space that people come to banks. So when they come to the dashboard, we didn't want to slap it right in the middle because people come to do a very specific thing. And if you disrupt that in a very careless way, there's an immediate rejection of that new capability. So we put it in a more cohesive way, but there are other ways that we can send alerts or use other tactics to make it more present to our customers. So we're going to continue to build and do that and nurture it, building that credibility first and making it more warm.

(18:38):
And now we're going to be a little more aggressive in terms of how we're trying to get it up to increase the adoption. But in addition to that, we've got to keep the insights relevant. Personetics does a fantastic job of vetting and testing insights across financial institutions, but I'm really picky about what we put in front of our clients because it can't just be irrelevant. It really has to be relevant to where our customers are, where our segments, what Synovus looks like in terms of our segments and our segment needs. And again, very attached to our strategy. So we have active teams that look at what are the next insights that we need to develop. Again, not just sitting back and taking what's in. Here's a great example. We're doing a huge conversion. Every free checking customer will convert over to a new product starting in the fourth quarter of this year.

(19:34):
And if any of you run consumer banking or deposit shops that that's a high point of risk. So how do we begin to talk to those customers through insights ahead of time? And by leveraging the information that we know about 'em, it may be that one of our new products has benefits based on balance levels. We want to report that back out to them. Hey, we see that your balances have averaged 10% in excess of X, Y, Z as we transition later in the year, here are the benefits that you will now get out of the new product. So it's using that day-to-day conversation that we can have through insights to warm up certain products or services that we think are going to meet their need. There's a fine balance though between that and between seeming like you're advertising in this space. And that is one thing I want to talk about because we have a recent lesson learned.

(20:31):
I don't think Jody and I have even spoken about this, but I'm real sensitive to anything seeming like it's marketing. I'm looking at my head of digital over here. He goes, oh, I know you're real sensitive about that. We had a refer a friend program, and I thought that's kind of middle ground. It provides a benefit to our customer. If they refer a friend, they get a $50 benefit. So it is asking them to bring somebody else into Synovus, but it provides them a benefit. So let's give them an insight about that. That insight has not rated extremely well for us because the feedback that we have gotten back is it feels like you are entering into a marketing space With me. I like the insights that I'm receiving when I feel like they add me value. This one feels a little weighted towards marketing, so we'll adjust it.

(21:21):
And that's a great thing about a product like this. We're learning, I think in this environment, we have to learn what works and what doesn't work with our customers. And I will say we have a very high bar. If an inside is not rating at least four out of five stars, it's probably not going to last long. Good is not good enough here because if this is going to be a key part of the relationship, it's got to be great. It's got to be really relevant. And so you'll see we've only rolled out about 60 insights as opposed to, I think some folks have a significant number more than that, but we're building as we go and we want them all to be great.

(22:04):
Here's something fun. And again, this is about that third truth of not just setting it and forgetting it. We had some insights that I thought, I'm really not sure why these aren't rating higher. We want them to be above that four bar because I really feel like we need to keep them in market, but they're just not doing as well today. And we've learned a lot about tone and how you're speaking to people through just a sentence or two and how making small tweaks to that makes a huge impact and how people receive it makes sense, right? I mean, the way you talk to somebody impacts how they receive it. So why do we think it's any different in the digital experience? And this is where I think we're getting smarter at banks about translating that relationship means translating that emotion. I use this with an example because the way we were saying, telling our customers that their spending was going up before sounds a little bit like I would talk to my teenage daughters.

(23:05):
You're spending more than usual view your transactions. It sounds very declarative. It sounds very bossy. Instead, hey, that's different. You spent more than yesterday. Why not take a look? And I know that seems simple, but our ratings on that went up from 3.6 to 4.7 stars. The engagement with that went up. So it's very simple tweaks, but it shows you the intention that you need to have and the design of these engagements with your customers. And then there are a couple of other examples here. This is really important that we at Synovus are getting this right because we really think it's much bigger than this in terms of how the relationship is going to transition. I love this slide because it really is to me, the future and the future is not far away today. How many of you have, you don't have to raise your hands.

(23:59):
It's kind of a rhetorical question. How many of you have banking apps that are simply a dashboard? This is the next step in terms of making it more engagement gauging. But this is really where it's going. Y'all people aren't going to come in prepared saying, I need $5,000 for a vacation. It's a nice one. I need $5,000 for a vacation. Let me go and look at my balances and see how much I want to save. No, they're going to go in and say, do I have enough money for a vacation? And then the banking app needs to look at perhaps the history of the last three vacations they went on and look at our spending activity, the savings activity, and to begin to give a more contextual answer. I mean, think about the way we use ChatGPT and other applications today. We don't just turn that off when we go into our banking app. So if we're not taking these steps forward in terms of the relationship and thinking about how to make digital emotional about how to build the data and intelligence into that interaction, then we're really not going to be able to get here, which is where I think we're going.

(25:11):
And by the way, we've had some pretty good results. I see my JD Power friends are sitting in the front row here, so I'll be really careful about what I say and don't say Jennifer, but I can tell you that we launched Personetics and Ma Synovus Insights in July of last year. We had a refresh of our annual survey results in the first quarter of this year. And among other things, the insights, I think fingerprints are all over a lot of improvements that we've seen. It's hard not to look at a question that was asked to our clients like, are you receiving quick tips that are helping you with your financial management that's gone up 10 points and not see the fingerprints of insights all over that we're only a year in. But results like that, seeing that if we isolate those that are engaged with our insights, their average balances or average relationship balances grew more.

(26:10):
And then lastly, conversion rates. Any of you in marketing in the room, if you get a 5% conversion rate, it's fantastic. We sent out an insight about Zelle and saw 19% of the people that received that insight take the action that we urged them to do. That's huge in terms of conversion rates. So changing the narrative in terms of how you engage, changing the way you're thinking about digital and design and weaving that intentionally into your broader strategy are some of the key takeaways that we've learned. And Jody, I think you're going to talk about a few things coming up.

Jody Bhagat (26:48):
Thank you. It's so impressive. You could see how, first of all, how vested Liz is in the performance, but also how she leads with such humility, and then that spills over to her team as well, which is really exciting to see. So she talked very eloquently about the journey that Cenovus is on, and I think it's hopefully very clear that this is the start of a journey around being able to reframe personalized engagement and customer relationships. So in honor of our McKinsey friends, I actually created the three horizon chart around what's coming around the corner. So the horizon we're in now is personalized insights based on transaction activity. The next horizon that's coming is the combination of where actions and advice that you're considering for customers, how can you better coordinate that or integrate that with personalized insights and the movement forward around delivering of multi-step journeys through combining products, tools, technologies, capabilities and processes.

(27:45):
And lastly, say the marketing banner is dead, not literally, but figuratively, meaning the days of just the banal marketing banner that says, are you interested in this will be replaced with an action or a piece of advice that comes with evidence of personal customer benefit. When you prescribe an action share with the customer what the benefit is that comes with that as well. So we've talked a lot about what is the possible ambition. So how does one get started? Typically you would start with the basic foundational capability around transaction cleansing and enrichment, followed by a personalized insight platform like Cenovus has done, where they're actively considering what are those custom and tailored insights that are more consistent with our customer franchise and our offerings that enhance the brand promise rather than just check a box. The third aspect is then driving behavior, driving action through better coordination between insights and offers and promotions.

(28:48):
And the last is taking that customer intelligence that you're deriving from the transaction data and delivering it not just to the digital channel, but into your banker channel and into your MarTech stack as well. And while there's so much advancements in data technology, all of this is intended to just better deliver on the basic tenants that customers have and expect of their bank, which is to know me, to value me and advise me and take the position that my bank is looking out for me. Thank you very much. Open to a few questions and then off to drinks

Liz Wolverton (29:33):
Or questions of drinks?

Jody Bhagat (29:35):
Which questions or drinks? Well, you can also have questions about drinks, but we may have other people that are better able to answer that. Any questions?

Audience Member (29:46):
You did a great job than Jody. I don't know.

Jody Bhagat (29:48):
I should have planted a question at least.

Audience Member (29:50):
That's okay.

Jody Bhagat (29:54):
Very good. Well, thank you everybody. See you at the reception. Thank you.