Bank of the Future: Employee Experience Strategies for Customer-Centric Banks

Arizent dives deep into the pulse of the banking industry, surveying leaders to uncover bold strategies tackling employee experience head-on. Discover how top organizations smash workflow barriers and forge dynamic paths to unparalleled customer experiences. From cutting-edge tech investments to revolutionary staffing approaches, we explore how they synchronize EX and CX roles for maximum impact.


Transcription:

Janet King (00:10):

All right. Thank you all for inviting us here today. I just want to remind everybody that in this session today, we're going to be sharing some results from recent research that we've done at American Banker. So please remember to download your app because the slides will be available there, and you go to Arizent events and download the most powerful women in banking app. So it's under Arizent, not American Banker in the App Store. Okay, so welcome again, I'm Janet King, I'm the VP of Research and Custom Content here, Arizent Parent Company to American Banker, and I'm really happy to be joined today by Lauren Robbins and Vidya Balakrishnan. I should have asked you how to pronounce your last name.

Vidya Balakrishnan (00:57):

Balakrishnan.

Janet King (00:59):

Balakrishnan. So thank you for being with us today. That was an oversight on my part. So before we get started today, maybe you guys could each just take a minute to introduce yourselves and tell everybody a little bit about what you do at ServiceNow as context for our discussion.

Laurén Robbins To (01:15):

Sure, I'd be happy to. First, it is so awesome to be at this conference. I think it's such an amazing event celebrating women in banking and the future, the very bright future we have ahead of us. So it's just a joy to be here with you. I started my career as an investment banker and a debt capital markets banker, so that's kind of where my roots run in the financial services industry. And those roots really never left me. So I went over to the technology side at Salesforce and stood up their capital markets business alongside many very cool, innovative customers, investment banks in the space, and really advocated for the tech sector to invest on the institutional side. I saw so much focus on the wealth, the retail, the consumer banking side. So it was a lot of fun to kind of bring some light over there.

(02:10):

As I joined and I was starting to do work with our customers in this space, I was seeing more and more focused on transformation efforts that weren't stopping where Salesforce was playing, which was in the front office, things like client lifecycle management or trade fail exception management. And it really was calling for a true front to back solution. So that's what got me really excited to join a workflow orchestration kind of platform company, which is what ServiceNow does. So at ServiceNow, I lead the financial services industries organization, work really closely with the 1200, not all of them, but we have 1200 customers in the financial services space using the platform across their enterprise, 23 of the top 25 banks. And just a joy to work with them in areas like customer servicing, customer onboarding, employee onboarding, risk and compliance as they're thinking about how do they accelerate their transformation in those areas.

Janet King (03:09):

Thank you, Vidya.

Vidya Balakrishnan (03:10):

Great, thanks Lauren. And again, Vidya Balakrishnan, and I've also spent the vast majority of my career in enterprise software. Most recently I spent over a decade at Salesforce and here I am now at ServiceNow where I lead the financial services product teams. So we're the teams that are sitting alongside our engineers and bringing the product to life and building out of the box capabilities for financial services organizations. So Lauren and I are two Ps in a pod, if you will, and we work alongside each other to really bring a lot of the capabilities that we hear from our customers all the time. And we sit in a very unique position because we work with banks and financial institutions all the time. So we hear a lot of common themes, which we're going to talk a little bit about today.

Janet King (04:04):

Great, thank you both. That's really helpful. So as a basis for our discussion today, we're going to be sharing some results from new research we just recently completed at American Banker, and it really explores the sentiment around the employee experience from both the perspective of banking leaders and from those frontline bank employees who are really responsible for delivering on that experience. So it's a dual perspective and I think that provides some interesting insights for all of you in the audience to think about ways that you might be able to optimize the employee's experience to deliver a better customer experience. So let me just tell you a little bit about who participated in the research. So this was research that we conducted in late Q3 of this year, and we had 224 banking professionals respond. So it was 94 banking leaders and 116 frontline employees, and they're people that are sitting at banks of all sizes. We have the very largest banks down to community banks and credit unions. So I think it's a really well-rounded sample to give you some insights and perspective from both the frontline and sort of the management levels of the banks. Before we dive in, Lauren, can you just take a minute to talk about why ServiceNow was interested in partnering with us on this research?

Laurén Robbins To (05:25):

Yeah, absolutely. So I'll start with a bit of a provocative statement, which employee experience, customer experience in banking? Nothing new. In fact, I'd argue probably pretty overused terms, but when I walk in to meet executives in the banking sector and we talk about top priorities in 99% of cases, customer experience still remains number one. So while there are certainly firms leading in the space, there's always work to be done. I would say on the employee experience side, it's probably 50 to 60% of executives I hear focused on this and it's increased over time, but I'd say it's kind of kicked into high gear in recent times. And if I think about the opportunity is that the firms that are getting this right, that are leading are seeing real tangible business impact. They're seeing deltas in their shareholder returns and their ability to drive revenue growth and their cost efficiency. And so there's a real opportunity in getting this right. But what I've also noticed is that a lot of the disproportionate effort in this area has really been directed at the front end. And so what I love about this survey is we took the opportunity to really look at employee and customer experience across all functions in a bank that touched the customer experience to really have that holistic look. So I'm very excited to share those findings today.

Janet King (06:57):

Great. Well let's dive in. And I think as you so succinctly put, customer experience is a critical priority for banks and with good reason. If you don't deliver the right customer experience or if you fail to do that, it can have significant impacts on your bank. It can drive significant changes in outcomes like how easy it is to retain your existing customers or grow share of wallet or successfully even convert and onboard those perspective customers. And Forrester had some great research on this topic, but I love this one insight that I think kind of sums it all up, which is just that retail banks that regularly practice customer experience optimization grow 3.2 times faster than competitors that don't. So they can back that up with data. And I think that's really critical and there's lots of other research that demonstrates that as well. There was another study that I saw that said something like 48% of potential banking customers will eliminate a bank from consideration if they've had a previous negative experience or they've heard bad feedback, CX matters. But it's also true to your point, Lauren, that employee experience matters and it's really critical to be able to empower your employees to deliver on that vision. And I think McKinsey had an example of a bank that had really done some detailed analysis of their customer feedback and they were able to really redesign five critical customer journeys that resulted in them reducing their service call volumes by 20%. So that's pretty significant. So Vidya, let's start with you. Where do you think banks can win and lose with their approach to customer experience?

Vidya Balakrishnan (08:41):

So what we're seeing across the board in most of our customer base is ultimately they're telling us that they have a lot of solutions out there that solve for the front office. So when you think about customer experience, often what comes to mind is the front office capabilities. So we're able to answer the call, whether that's in the call center or take the request from the web, but then the real messy part happens after that. How do we make sure that the customer experience doesn't just end with entering in that there's a problem, how do we solve it and really get to that holy grail of a straight through process?

(09:23):

What we see often is what we call the messy middle. It's like we've got the front office takes in that does the intake, and then where does it go? Well, it's usually across many departments, so it's across middle and back office and they're all using different systems. They're not using the same system that the customer first used to enter the information. So we're often just realizing that that ends in frustration. What does that look like for the customer? Well, the customer's trying to apply for a loan and their house is closing in a few weeks and they want to be competitive. And so they're unable to get through that process quickly or they're disputing a transaction and we're going to talk a little bit about that in a second. But they want to be able to know that the bank that they have put this trust into the relationship with is on their side and is going to advocate for them through that transaction and resolution to that dispute.

(10:25):

So this frustration has really kind of given an opportunity to a lot of competitors out there. So the incumbent banks today are really trying to compete on this customer experience journey, but we see a lot of neobanks challenger banks that are competing very well with customer experience. And so they're not actual banks typically, but they're able to resolve issues in a very customer friendly manner, which ultimately helps with growing their footprint. So top line revenue and then also enabling opportunities for OPEX as well for taking out OPEX as well. So there's a lot here, and if I just touch on disputes in general, and one of the things that we've solved for on our platform is to ultimately, we've partnered with Visa and taking that process that is so cumbersome with a dispute and streamlining that with tools and technology to make sure that the customer feels like they are being heard in a timely and respectful manner.

Janet King (11:37):

Yeah, thank you. Lauren, you talked to a lot of banks in your role, so what kinds of conversations are you having with them about the role of the employee experience in this equation?

Laurén Robbins To (11:47):

Yeah, employee experience has been an interesting topic with our customers in the banking space because like I mentioned, employee experience is becoming more and more of a C-level priority. But if you look at the way banks are defining it, they're very focused right now on the employee journey. So acquiring talent, onboarding talent promotions or transfers, offboarding talent. So they become a proud alumna and those are moments that matter. They matter very much. We partner with a lot of banks delivering great outcomes in this space around automation. That standard charters a great one that automated the delivery of its HR services to its employees and saved 104,000 hours a year by putting in things like digital channels and self-service. They were able to deflect 85% of cases using self-service, putting in a live agent. They were able to answer 90% of initial questions asked to the live agent within 30 seconds.

(13:01):

So these are important as you're an employee navigating a life event or a career change, these are very important moments that matter. My invitation to those of us in the room around the employee experience is that there's another dimension of employee experience that often isn't tackled in the employee experience initiative. And that's, gosh, once I have this amazing onboarding experience, I actually have to go in and do my job and serve the client. And when I walk into a world where I'm operating in spreadsheets and emails, I'm toggling across many systems. Man, that feels really different than the amazing onboarding experience I just had. And a customer that we've partnered in the banking space with quite closely with is Bank of Montreal, BMO, in their treasury and payment services division. And I love the work they did as they were trying to modernize and reimagine not just their customer experience, but a big driver behind their effort was an employee experience as well because they had big ambitions to expand their reach.

(14:14):

Their goal was over 300% of their network, which they were able to achieve. But they said, gosh, our customer experience is now through phone and email channels, which our customers are often wondering what are our SLAs. When are our issues going to be resolved? And our employees, they're working in 20-year-old core systems or they're working manually and they're fielding all kinds of servicing, onboarding, technical support questions, and they're just not set up for success and now we want to scale. So they, they enhanced their front end with digital channels, but they also connected all those channels with digital workflow into their operations and support team, and they gave them a one-stop shop for all the system that brought together all the systems they need to serve the client. And in doing that, they were able to make their agents able to handle with live chat and some of the digital functionality, two to three x the volume that they were previously.

(15:23):

And those volumes, man, they went up, they were handling 3000 customer interactions a month and they took that up to 80,000 a month to able to take in a million a year, which is tremendous. But it speaks to keeping the employee also at the heart of the design principles as you're thinking about transformation because it's easy to do what we've been doing I think frequently in the industry, throwing people up at the challenge, driving up costs to serve as opposed to looking at the tremendous value that technology and the emerging technologies out there can bring as we're thinking about scale and customer experience.

Janet King (16:08):

So let's talk about digital transformation, right, because, sorry, I'm forgetting to speak into my microphone. So let's talk about digital transformation because we're in a place where we've really accelerated our digital transformation efforts in banking and where customers and employees alike are expecting those experiences to be like their best experience in any industry for any company. They're not just comparing that experience to other banks. And what we've seen at American Banker and all of the research that we've conducted on this topic is that customer experience is often a really key driver for digital transformation initiatives. Everyone's trying to transform to deliver better customer experiences, but the data that we have been collecting also suggests that while we've made progress, progress has been somewhat siloed. And what you can see in this slide is that when it comes to making significant progress on end-to-end transformation of the business of banking, we've got about 24% who are consistently delivering value from those digital transformation initiatives at an enterprise level. And about half are seeing measurable results, but really in certain lines of business or functional areas, areas. So the question I have for both of you I guess is what have we learned from our attempts at digital transformation and banking? Vidhya will start with you.

Vidya Balakrishnan (17:32):

So ultimately we meet, I'm not surprised, and we meet with a lot of customers and when they come to us, they're coming to us with a challenge that they're having. And this all resonates with what we've been hearing. And what I would say is a lot of this is rooted in a few things. One is people are afraid to really go forward with their digital transformation because of compliance. So we want to make sure that compliance, the regulatory compliance standards are built into the product so that employees aren't forced to have to figure things out for themselves. I think another big challenge is legacy systems. And the good news is as the bank, you have a lot of power in that relationship and you can really ask for the legacy core systems to really open things up because what you really want to do is allow that data to be unlocked and used on behalf of the customer through work orchestration and whatnot, through other tools as well.

(18:37):

One big thing that we see a lot of banks really take on is over time you want to think about a horizon that's like two to three years out in the future. So you want to think about that strategy of, okay, well today I might be taking on one piece of work, but how does that really unfold into the big picture of my digital transformation? Because today you might see a point solution for a very specific problem related to onboarding, but how does that fit into the overall footprint of what you're trying to do for the customer? So definitely continuously improving the system and not really stopping. It's really you want to think about it as a journey overall. And then of course the technology and the platform. So allowing, picking a technology vendor that you're going to be able to grow with. So thinking about a platform where it's customizable and so you can pull in information as needed and then maybe not house and store information when not needed, thinking about who the personas are that are using this information and allowing those personas to have the right information at the right time for the work that they are doing.

(19:51):

Those are all some examples that we see.

Janet King (19:54):

Thank you.

Laurén Robbins To (19:55):

Yeah, I think some of the things you'd call that Vidya are extremely relevant, especially the limitations of legacy systems and a lot of the silos they present. We were doing some great work with McKinsey in the banking space, and I was with them last week. They actually walked through a really cool survey that they did of the top executives in 80 banks, and they were asked What percentage of you have some sort of AI and digital initiative? And you can imagine the answer was 90%. And then they were asked, what percentage of you have achieved the revenue outcomes that were intended by those initiatives? And the answer was 30%. And even more surprisingly, when they were asked about the cost reduction outcomes, that was 25%. And there's a big promise of digital transformation, but it's not yet yielding the results and in the timeframes that the industry is expecting. And I think what you've called out around legacy systems, and I would add people and I would add processes when those are siloed, it makes transformation extremely, extremely challenging. And those are very real challenges. Those investments in legacy systems exist for a reason.

(21:17):

They're often made more complex with things like M&A, which has been prevalent in our space. But I'm an optimist and I think there's an amazing path forward and we see it with the customers we're working with. We've customers that are very deliberate about the customer journeys that are causing friction in their customer experience. I think McKinsey framed, your average regional bank has over 1500 customer journeys at their disposal when you think of all the product lines and all of the geos, but knowing which of those are causing friction in your experience and looking at them end to end and reimagining them to end to end is a really great opportunity. We partnered with Lloyd's Bank around an area that was filled with friction for them and what was exciting, which is in payment operations. And what was really cool is that they were able to deliver an end-to-end solution in 12 weeks.

(22:16):

And we're seeing that, we're seeing that when you know where the cost is and you know where the friction is and you're deliberate about really re-imagining a process, bringing in all the stakeholders that touch the process, rationalizing the systems, and you're investing in the right platforms, that you can get those sorts of outcomes. And for them it was their payments in error. I paid the wrong person bank needs to go recover the funds. And they had over 450,000 cases that were coming at them each year around payment exceptions. And the struggles that the front office was needing to go into the customer and the transaction systems to pull in data to create a case that was funneled into the middle office that was using a different case management system that had to continuously be updated. They had 15 manual steps that were digging for data, sending emails, re-keying data, and it caused for every case that came in, it was four hours for that person to just work on one case.

(23:26):

And you can imagine when that gets multiplied what the impact is. But they were very deliberate in looking at those steps and understanding which were not critical, which could be automated. And they were able to reduce those steps from 15 down to 2. It was literally front office inputs a case and the middle office reviews the data, makes a decision. They integrated seven systems into a single end-to-end connected platform. Once those systems were integrated, they were completely reusable, those integrations. And so they rolled out an additional six processes again in 12 weeks in a really agile sort of approach because they had those great foundations in place. So what ended up happening was that those cases that took four hours, they're now resolved in 27 seconds, and the process that was a hundred percent manual went to 73% automated. And so that type of agility and that type of time to value absolutely exists. So that's why even though transformation has been difficult and it's difficult for very good reason, there's lots of promise in terms of what technology and other sorts of approaches, agile approaches that you can bring into your organizations can bring.

Janet King (24:39):

Yeah, and I think a lot of the research that we did confirms that when we asked folks, where's your customer experience most broken, it was technology. And they largely think that they're not investing enough in technology to empower people in the ways that you're saying to deliver the best customer experience. And they did talk a lot about integration being a key challenge. So all of your points, I think that you just made sort of support and reinforce what we saw in the research. But to close things out, in the interest of time, I want to skip ahead to compliance because compliance came up a lot as a pain point for both banking leaders and frontline employees. And you can see here when you ask people how effective is your technology helping you mitigate compliance roadblocks in your workflows? Only about one in three think that they're highly effective there from a banking leader standpoint and for the employees themselves, it came up all the time. And the open ends is a frequent point of frustration, a thing that got in the way of working with middle office and back office. So it's a real challenge for these organizations. And I guess I'd like to ask you guys to comment as our closing part of this on why it's such a pain point and foundationally, what are you seeing banks do to eliminate that? And maybe we start with Vidya.

Vidya Balakrishnan (25:57):

Yeah, so I love this because when we meet with customers, one of the first things I ask is where's your pain? Where are you feeling pain? And often we hear we are trying to stay compliant but also focused on customer experience. And it's really hard. Well, the truth is you've got to look at technology vendors who are going to be in it with you and who have built out compliance so that you don't have to reimagine it constantly. You don't have to imagine how to build that constantly. So for example, on our disputes platform right now, we've built in the Reggie and Reg Z rules directly into the product so that we maintain that content so that you have a starting point work with vendors that have some of these things built in already. And then also it's like a lot of times what we hear is compliance is just an afterthought. It's like bring your own compliance is what one customer told us they feel like all the burden is on them. Think about what technology vendors have, industry specific solutions that are purpose built with specific banking standards and regulations that are built into the product. That's what I would say.

Laurén Robbins To (27:15):

Yeah, I completely agree. And I think as we think about the people process technology kind of disconnectedness challenge, one of the casualties of that certainly is making regulatory compliance extremely difficult. And as you think about the opportunity to kind of have a more connected operation end to end, and you have all of the data coming together about your processes, it unlocks so much potential for compliance. When you think about now you have data that's traceable, you have processes that are repeatable, and you have the ability to report on absolutely anything related to those processes. And I think that's huge, right? When you compare to the way I've seen a lot of firms tackle compliance with manual efforts, with spreadsheets, with people, with checkers, checking the checker, we worked with Jefferies on their T plus one regulation, and for those unfamiliar trade settlement times came down the time to settle a trade from t plus two days to one.

(28:28):

And they saw a big challenge in their trade exceptions, which posed the highest risk to not meeting those deadlines. And the initial way they were tackling this, they were going into their trading system, which was Broadridge. They were running reports, they were looking at their trades, they were flagging them, classifying them, prioritizing them. And then they were sending thousands of emails out to their counterparties trying to figure out what was the root cause and trying to get things to reconcile. And so you can imagine the burden that places as you're looking at now, you need to accelerate your timelines for regulation. But what they did was, and we see a lot of customers looking at this approach, is they stood up a central operations workstation. And we see a lot of the banks looking at, all right, if I had an ops hub, if I had a risk hub, if I had a trader or a banker hub and all the different services and processes that touched them, what that could unlock.

(29:30):

And they brought in an integrated data from their system of record for their trading systems, their communication channels across symphony outlook and teams, and gave them one place to bring together all of that data and all that interaction in a single case. And it unlocked huge potential in how fast they were able to now resolve those high risk trade exceptions. They saw a 90% acceleration and the ability to do that. So when you think about the need for speed and t plus one, they were able to get it by connecting those processes end to end. And then when you think about the burden of being audited and all of the emails and reporting and hours long conversations with the regulators about maybe a sample set of data, well now they have data about any trade at their fingertips, and they could have conversations with those auditors in minutes. So they saw a 95% response time to those audits. And I think that's huge because if you look at what we're hearing from customers in terms of the regulatory environment, regulators are getting much more sophisticated with not asking for a subset of your data, but maybe all of your data or the timelines we're seeing for things like RAs and audit and audit response timelines. And so those expectations are coming back on the banking community and they're important to keep top of mind as you're thinking about transforming your operations.

Janet King (31:04):

Thank you very much. I think we're out of time, but thank you all and don't forget to download the app to get the presentation. Thank you.