Feb 15, 2019
Banks’ investments are leaning heavily toward technology upgrades – especially those that make self-service, digital banking easier for customers, as Karen Webster with Pymnts.com discussed in a recent conversation with Diebold Nixdorf Vice President of North America Solutions Heather Gibbins.
Amy Lombardo: 00:00 Hello, and welcome to COMMERCE NOW, your source for emerging trends in the banking and retail industries.
Karen Webster: 00:14 Heather. Thanks for joining me today. I'm looking forward to our conversation about branch automation, migrating transactions, and the role of technology in making all of that smooth. Thanks, again, for making the time.
Heather Gibbins: 00:28 Oh, thanks for having me.
Karen Webster: 00:29 So, Heather, I want to start with an interesting proposition. So, it's clear that financial institutions are using data, they're using new tech to keep pace with expectations that their customers have about going digital. Yet, so many studies that we've done of consumers and their preferences for financial services say how much they really love the branch, and how important the branch is to those consumers in making decisions about who they actually want to bank with.
Karen Webster: 01:12 Why do you think there is such a dichotomy between wanting technology to help consumers be more effective, yet the role of the branch in helping them navigate their financial situation?
Heather Gibbins: 01:27 So, I'd probably say a couple things with this. One, when we hear about branch automation, itself, what we're definitely hearing and seeing is that it means different things to different financial institutions, and then what that effect actually has on consumers, itself. I would say in general, the role of branch is transitioning to be less based on transaction, with more of an emphasis on becoming a trusted advisor. And, I think that's where some of the study and research and information that you come back to kind of shows this dichotomy between the two items.
Heather Gibbins: 02:03 So, you have financial institutions that are saying like, "Listen, let's migrate these transactions over to more of a self-service platform." Customers like technology. They're willing to use the technology, but at the same time you've got customers that are saying, "Hey, we want you to help us make better financial decisions for ourselves. Set us up for the future, think about retirement and planning, so that we can manage our finances in a better way."
Heather Gibbins: 02:31 And that's a lot of the research that we've heard and seen, as well, is consumers are looking for financial institutions to basically help guide them and make better decisions with their money moving forward. So, they no longer want them to just hold their money and keep it safe, and maybe get some sort of return on it. They want them to give them their expertise and knowledge to make a better decision moving forward.
Heather Gibbins: 02:57 And, I think that that's where you kind of sometimes have a difference between maybe the actions that are perceived actions that financial institutions are taking versus what you hear in research, but they really compliment each other. It's just really then at the end of the day what's the role of those face-to-face interactions in the branch, itself, going to be moving forward.
Karen Webster: 03:18 Yeah, it makes sense, and your point about self service, I think, is a good one. Not only are consumers comfortable with self service, but they can actually use the services on their own time, so after more traditional banking hours, weekends, holidays, et cetera. So, I agree with that. And given that, that self-service capability is creating less of a responsibility for the branches to engage in those transactions.
Karen Webster: 03:49 You're saying physical branches are really being transformed to create these more one-to-one interactions that build trust and loyalty. What specifically do you mean by that?
Heather Gibbins: 04:00 One of the things that I would say is meant by that is what we're seeing more and more is the role of the branch changing to be, one, trusted advisor, but also to be able to spend more time with what we would consider commercial customers or small business customers. But, you'll see customers like that that are coming into the branch. So, there are these small businesses that are actually getting workspace within the branch. They can conduct meetings in the branch. You've got others that are trying to use the branch space to be more of an inviting place for community members to be able to come in. And, some of them are even showing the local sports games and stuff that are on, holding after hours events there in that space.
Heather Gibbins: 04:44 So, it's becoming much more of a community space, and one that can drive more business within small business owners, itself, or small businesses in general, so that they can have strengthened relationships there and also increase in activity with those businesses moving forward.
Heather Gibbins: 05:04 So, I think that's a lot of what we're seeing when it comes to that, and when customers and financial institutions are thinking about what is that "branch of the future" really look like, those are some of the considerations that they're taking into play as they're designing what that setup looks like versus what you would have seen in the traditional branch in the past.
Karen Webster: 05:25 So, Heather, are these big banks, small banks? I mean is what you're describing, which sounds awesome by the way, something that is particularly characteristic of one type of bank versus another?
Heather Gibbins: 05:36 I think we're seeing it across the board, and some of the larger top ten banks that are out there, they've been playing with this over time, especially in the US, and have been making some headway.
Heather Gibbins: 05:46 We've also seen some that have more of like nische kind of clientele in the market that have gone and moved forward with these types of branches. Where we're seeing a lot of our activity right now, in North America specifically, is in those smaller regional and community banks because number one, they've got to keep up with what some of the others are doing; two, they're trying to figure out how do we really differentiate ourselves from what the competition is doing. Or, maybe how can we kind of get ahead of what they're doing. We are talking about really catering yourself to small business types of clientele and also the community.
Heather Gibbins: 06:26 A lot of that is a way for some of these smaller financial institutions and credit unions to be able to kind of have that personal touch that can give the type of experience in consumer or business journey that these small business owners are looking for that's beyond what maybe some of the larger financial institutions have been able to achieve.
Heather Gibbins: 06:47 And so, it gives them a way to really look at this from a differentiation and competitive advantage moving forward.
Karen Webster: 06:54 Yeah, that makes sense and I think the whole point of the smaller regional community banks is to become more a part of the community and the fabric of businesses. So I can see where that would be something they'd want to really wrap their arms around. But, as with so many things, Heather, technology which is enabling a lot of these things to happen certainly can't happen just because technology is making some of these automation ideas reality.
Karen Webster: 07:32 What are the things that people and business process need to do in order to really fully embrace the capabilities that technology can provide?
Heather Gibbins: 07:43 Yes, so I think that's probably one of the number one things that we tell all of our customers that we're talking to is, if you think that you're just going to put some technology into place and that's it, most likely you're not going to be successful.
Karen Webster: 07:57 Right.
Heather Gibbins: 07:59 A couple of the biggest things that come around that are really like the people and the processes, and probably more important than that, the training that goes along with it. So, a couple of examples, and even in just some of these branch automation or branch of the future type of concepts, a lot of what we talk about as a part of that, yes, technology comes into play there, but when you talk about having meeting spaces and the more open area, and you've got some people that are doing coffee bars and big screen TV's and all that kind of stuff, a lot of it doesn't even involve technology.
Heather Gibbins: 08:33 So, when we get into this more consulting and advisory services, a lot of times they're taking what you consider your tellers and they're becoming more sellers, right? Or, advisory consultants. The thing with that is they must have information at their fingertips when someone walks through the door to be able to enable them to be successful. So, a big part of that that comes into play from a technology side, but maybe less than from what you would traditionally consider is really data. You have to be able to share data from all of your different systems in order to enable what you want your people to be able to do moving forward.
Heather Gibbins: 09:10 The other thing you have to really think about is the training aspect of that of how you want them to interact with customers, how you want them to greet customers, how you want them to take them around, what your new branch looks like. But, also to make sure that they feel comfortable using the technology that you now have into play. I can guarantee you that if you walk into a lot of financial institutions, credit unions today and someone comes in and wants to do just a check deposit, that teller's going to take the check and do the deposit just like they do every day.
Heather Gibbins: 09:43 More than likely, what a lot of executives are probably wanting those tellers to do is to actually either: a) show them how to do it on the ATM so that they can do it themselves, or open up a mobile banking device, show them how to download the app and show them how quick and easy it is to be able to do that transaction at home. And there's so many customers out there today, and consumers out there today that don't even know that their financial institutions have that as an option.
Heather Gibbins: 10:13 A personal story, we had a friend and she made mention that she owns a couple small businesses and she couldn't go to the bank to deposit some checks because they weren't open. It was a Sunday, and I just kind of looked at her and said, "Who do you bank with? I'm sure that you can do it on your phone." And she literally, I walked her through how to do it, not even a member of that bank or anything like that, and she said, "Heather, this is like life changing."
Karen Webster: 10:36 I was just going to say you changed her life.
Heather Gibbins: 10:39 Yes. Exactly. So, it's just those simple things that sometimes some of the financial institutions need to think about, like hey, how do we make sure we're training our people to get the expected behavior we want from consumers, but also makes it a better experience and more convenient for them?
Karen Webster: 10:58 So, you mentioned two things. Tellers as sellers, I thought that was awesome. And there's a training process around that, and that is just any other change management training process, it takes time and it will eventually be successful. But, data sharing strikes me as something that could be a bit more problematic.
Karen Webster: 11:19 How are the financial institutions you deal with addressing that, and getting the right data in the hands of the right people so that all the things we talked about are possible?
Heather Gibbins: 11:31 Yeah, so I think it can go in various stages or phases. Just to give you a real quick example, too. At one point I needed to get pre-approved for a loan. We were going to buy a new house, and I was shopping around from different providers and I decided to take one of my local financial institutions, and go online and fill out the form. And a few days later I had realized I still had not gotten any information back, and I thought oh my gosh, did I just give all my information to someone and I have this security problem now.
Heather Gibbins: 12:06 So, I picked up the phone and I called the call center, and when I called that call center they were like, "Heather, we don't have any information that says that you did this." They said, "Did you fill it out online?" And I said, "I did." And they're like, "Oh, well yeah if you fill it out online, we're not connected to that system. It's a completely different group and so we can't help you. You need to email the person and maybe they'll help you."
Karen Webster: 12:30 What?!
Heather Gibbins: 12:30 So, again, my consumer's journey was not the greatest. I ultimately did not go to that financial institution. But, I think that this is very common.
Karen Webster: 12:40 Right.
Heather Gibbins: 12:40 I don't think it was specific to this one financial institution. So, some of this is just behind the scenes, if that teller can go on and be able to log into the system to see information. Some of that is just a very simple sharing of data. It's not the best use case, but they need to be able to have access into systems to see information.
Heather Gibbins: 13:01 We've got other financial institutions that are saying, "Okay, we want to have full, let's say CRN integration", so when someone walks into the branch, if they go to the ATM, I can see on my tablet exactly who's at that ATM, if there's maybe some sort of value add service that I could offer them, to be able to disclose to them. If they have a CD that's coming up for expiration, and I might be able to go help them renew that. That it gives them the information they need to help.
Heather Gibbins: 13:31 So, we've got many that are saying, "Okay, let's figure out what's the role of these tellers moving forward?" In many cases they're calling them something else, maybe they're a concierge or that type of thing, and giving them a tablet that can help them have better interactions moving forward.
Karen Webster: 13:47 Is part of this, too, training consumers and small businesses that this is just as effective as walking into the bank? I know that sometimes people think that if they go to the bank, somehow service is expedited or availability of funds is faster than if they did something electronically. Is there some of that that needs to be dispelled, too?
Heather Gibbins: 14:13 I think there's some of it in some cases, but at the end of the day when you look at consumer behavior today and think about who are some of the strongest ... And I go to retailers when I think about this, too, and I talk to customers about it because the interactions that consumers are having with retailers, whether it be people like Amazon or even mobile applications that they're using, like Uber, or walking into the Apple store, they're comparing you to that on a daily basis.
Karen Webster: 14:45 Right.
Heather Gibbins: 14:45 Right? And in many of those cases, they're not interacting with someone face to face, right? Yeah, I would tell you I've never interacted with someone face to face at Amazon, yet I would say I have a very strong relationship with Amazon, right?
Karen Webster: 14:59 Yep.
Heather Gibbins: 14:59 Probably the number one thing that I use on a daily basis.
Karen Webster: 15:04 Yep.
Heather Gibbins: 15:04 And my loyalty and trust factor and everything with them is just as strong, if not stronger, than other places that I go face to face. So, I think that's also another thing that these financial institutions need to look at, kind of like you said with the research that you've seen that people want to do things face to face. Sometimes they're doing things face to face, not because they really want to, but maybe because that's the way they: a) have to do it.
Karen Webster: 15:30 Right, right.
Heather Gibbins: 15:30 For some reason it's easier that way or more convenient than another method. And one example I would use is, you go to the grocery store and see the self checkout lane. I'm the type of person that I'm going to go to the self checkout lane. But, I don't go to the self checkout lane if I have a huge cart of things, because I know that that scanner's going to yell at me all day long because it won't all fit in the little spot I have to bag it. Or, I know I have bananas today and I have no idea how to weigh them. Or, I'm getting a gift card and I can't get it activated. So, that's what then moves me back over to face to face. It's no longer easy or convenient. It's kind of the way I have to go, to go to the person at the cashier.
Karen Webster: 16:11 Yeah, some of it is just, as I said, force of habit or a misperception about funds availability and things which are easily remedied through education. You talked about mobile, and the first part of our conversation was about shifting from face to face to self service and adding face to face in a different, more value-added capacity. And now mobile is just another layer on top of that.
Karen Webster: 16:46 What are you seeing, the FI's you're working with, how are you seeing them incorporating mobile into the mix?
Heather Gibbins: 16:54 So, I think mobile is probably becoming one of the most widely asked items when it comes to putting it in the mix. So, we've got some financial institutions that are saying, "Okay, how can we integrate the mobile device with the ATM itself." Right? So, how can I pre-stage transactions?
Heather Gibbins: 17:16 One of the things that also comes up is how do you start using your mobile device maybe to not only pre-stage the transaction, but as an authentication method at the terminal itself, as well.
Heather Gibbins: 17:29 The other thing we have people looking at with mobile is thinking about how do I add other services into that mobile application and that can speak and talk back and forth with the other channels that we have? So, we have a lot of customers that have talked to us, and in my 12 years that I've been here we've always talked about Omnichannel. So, with Omnichannel, how do you get all the different channels that the financial institution owns? So that could be mobile banking, online banking, the ATM channel, the call center, the branch, all working together and kind of sharing information and playing off of it.
Heather Gibbins: 18:06 That could be as simple as if you have online banking and you set up bill pay, and you're paying your bills on there on a regular basis. Then if I go to the ATM, it could say, "Heather, are you sure you really want to take that $300 out? You have these bills that are scheduled to be paid in the next two days, and you're not going to have enough money in your account if you do that." Right? So, again, it's the financial institution advising me through digital, do I really want to do that and if so, oh yeah, send me a text reminder that I need to make a transfer, or I need to think about what I'm going to do. So, it's really getting mobile involved and digital in general coming together with the physical location.
Karen Webster: 18:48 So, when we talk about smart ATM's and introducing mobile and authentication through biometrics, is that what you're talking about?
Heather Gibbins: 18:57 Yeah, that's a big part of it. I mean, what we've seen over time, and if we look globally at some of the global markets, biometric ID verification has been going on for many, many years over there. In the US market, we haven't seen as much adoption, especially around the banking or financial industry, itself. And we've always said, "Oh, it's not widely accepted here in the US like it is in other regions."
Heather Gibbins: 19:25 However, probably anyone that's listening to this, if I were to ask them, "Okay, can you go check your email real quick." They're going to go to their phone and they're going to use their thumbprint to access their phone. Right?
Karen Webster: 19:38 Yep.
Heather Gibbins: 19:38 And this thing, I took my kids to the orthodontist last week. They walked in, they did their thumbprint, and we moved on. I never even had to do anything. So, now it's becoming, okay, it is more widely adopted.
Karen Webster: 19:51 Right.
Heather Gibbins: 19:51 How do we start to transition that adoption into the financial industry. I mean, I'm sure like me, when I go to log into apps on my phone, I'm really annoyed if I have to try to remember my password for these different applications if I can't just use my thumbprint.
Karen Webster: 20:08 Yep. Yeah, no it's friction, friction, friction, friction. It's a mess, and we're all trying to get rid of that.
Karen Webster: 20:15 You know, one thing that we haven't touched on, and I'd like to spend just a minute on is the landscape of risk associated with now having so much of a digital mobile presence within the banking channels. What are you seeing there and how are you helping financial institutions balance digital with managing those risks?
Heather Gibbins: 20:38 I think that one of the biggest things here is I had come across some research not too long ago, and it basically asked consumers, "Who do you trust most with your financial needs?" And the first answer that they trusted the absolute most was who they bank with on a daily basis.
Karen Webster: 20:58 Right.
Heather Gibbins: 20:59 The second item outside of that was other banks and credit unions. And then the third started to get into people like Paypal and Amazon and other spintec corporations. And that's really kind of thinking about ... You start to talk about who are these other entrants coming into the financial space, and a lot of times you're getting into these spintecs.
Heather Gibbins: 21:22 But, I think this is really important information, because for financial institutions consumers are saying, "Hey, we trust you the most." which means, when you start to look at risk and security, they have to stay at the forefront and the top and be very proactive about what they're doing as far as security measures, whether that be at the ATM or through digital and how those all plays together, especially when you start integrating with other spintec organizations in more of a connective commerce-type of ecosystem.
Heather Gibbins: 21:55 And that some financial institutions are really, when we have these conversations, is at the forefront. Everyone's talking about Windows X right now and how do you make sure that you're staying up to date and migrating all your terminals, both from a physical and logical security perspective to stay on top of it.
Heather Gibbins: 22:14 But, this has really become what I consider table stakes in the industry. It's not always the most exciting topic. And, when you go to get approval from a CEO or the CFO, it's kind of like, what is our consumer going to see, and it's not real flashy. However, if they don't do that, it's the first thing that their brand is going to take a hit with and you're going to lose trust, and that's going to open for new entrants into the financial industry stakes if they don't take care of it.
Karen Webster: 22:46 Yeah, a conversation to be had is how consumers perceive innovation within the financial services sector? Because I think, sometimes people think of innovation as what you just described. Oh, it's the flashy, flashy thing that has bells and whistles and people look at and say, "Wow, isn't that so different?"
Karen Webster: 23:08 And in financial services, getting back to the trust factor, consumers want their money to be safe. They want to have a relationship with the financial institution they trust and whom they believe are looking out for their best interests, including keeping their financial information and their money safe and secure.
Karen Webster: 23:29 So, there's definitely, you're talking about dichotomy, there's an interesting dichotomy there as well with perception and reality when it comes to what consumers are looking for and what FI's are providing.
Karen Webster: 23:43 Last question, Heather. It's been a fascinating conversation, but we've talked about a lot of things and I'm curious to get your take on what FI's are doing as they're planning for this migration between branches and automating and self service and mobile, and managing risks. How are they thinking about what I'm doing today, and what I need to be thinking about a little longer term?
Heather Gibbins: 24:12 So I think today in many cases it's the simplicity around transferring the traditional teller transactions onto the ATM itself, or other types of digital devices. In many cases, they're looking at this from a pure standpoint of how do we reduce tellers, how do we improve efficiency? In some cases, how are we expanding the types of transactions that we can offer in a self-service device, which could then allow us to extend the hours?
Heather Gibbins: 24:44 So, they are looking at ways to be able to do that and kind of lower the branch costs, and even in some cases centralize expertise. So, you start to think about how do I not need to have a loan expert at every single location? How can I have them more centralized and be able to have access to many more people in a very easy or convenient way?
Heather Gibbins: 25:06 So, I think those are kind of some of the short terms, like what are they trying to accomplish and how are they trying to do it? I think in the long term, it's a bigger play around how could this morph into something like transaction augmentation where staff can either be remote? Or, in the branch they can have awareness or context into the self service transactions, itself.
Heather Gibbins: 25:31 How can we appropriately interject into things when it makes sense? So, maybe you don't always have to have someone speaking to you face to face, or through video. But, when you do need them, it makes them easy to be there to help you, and that would be with things like exception handling, giving them advice. Again, this goes a lot back to the whole concept of being able to share data across CRN systems, tablets, and that type of thing.
Heather Gibbins: 25:56 We've also got a lot of customers that are starting to think about, okay we've gone through this kind of migration of mobile and online banking platforms, so that you have more one, single digital platform. At least that's the goal for many institutions. Now you have more and more teller transactions moving over to the ATM, but what they're starting to think about is, okay, so what do we do with this teller platform, itself, and how do we bring it up to the 21st century here? And this is where we think there's a big opportunity to leverage the same infrastructure ecosystem between the teller line and the ATM's, itself. To be much more digitized and have a much more fluid consumer interaction moving forward, and make it easier for tellers.
Heather Gibbins: 26:43 So, tellers have traditionally stood behind the teller line and had a PC. Well, in this new kind of branch for the future, all that really should pretty much go away, and it's much more about tablet. Well, how can you just end up using the same platform either across some of your digital channels, or also your ATM and teller platforms and how do those interplay more and more together?
Heather Gibbins: 27:07 So, I think you're going to see also digitization and a collapse of having all of these multiple platforms on all these multiple channels that are siloed, coming together and reducing, which in the end is going to reduce cost for the financial institution, itself, as well.
Karen Webster: 27:27 Well, and they make for a better customer experience. The experience that you, yourself, encountered will be an ancient anecdote when that happens. And certainly from a consumer perspective it can't happen soon enough.
Karen Webster: 27:42 Well, Heather, it's been a real pleasure having this conversation today. I enjoyed it. I hope you did, too, and I appreciate your time.
Heather Gibbins: 27:48 I did. Thank you so much.
Karen Webster: 27:49 Thanks, Heather. Bye-bye now.
Amy Lombardo: 27:51 Until next time, keep checking back on iTunes for new topics from COMMERCE NOW.