Editor's Note: To compete with big banks, one financial institution upgraded its digital banking strategy to offer a more efficient way to evolve with the pace of innovation.
Banks must rise to the challenge of meeting the advancing needs and expectations of customers, more and more of whom are mobile-first and accustomed to the high level of digital service and performance of today’s tech giants. At the same time, mid-level financial institutions are tasked with competing with the big banks and their seemingly unlimited budgets.
In a recent article in American Banker, D3 customer Kevin Karrels, senior vice president and digital channel strategy executive of First Tennessee Bank (FTB) describes how the institution addressed all those challenges when it decided to replace its aged, legacy online and mobile banking products. According to Karrels, the incumbent products were making it nearly impossible for the bank to address the rapid pace of change in the marketplace while also adding cost and complexity to their IT operations.
Karrels said, “It would take three weeks to change one word in the online banking platform, and when his team wanted to add new online and mobile banking functionality they had to perform the task twice – once for the online product and again for the mobile product.” FTB undertook an expansive review of the options in the marketplace, reviewing the large, multi-product line vendors, small Fintech early stage providers and options for building their own digital banking platform.
“At the end of the day, the largest players could not respond fast enough and we did not have the resources to build and support our own product,” Karrels said. “So we took a long look at the Fintech players with our primary filter set to identify the most modern technology stack with an architecture that would be viable for a minimum of 10 years. D3 fit that set of macro requirements and had a team in place that saw the world and the future of digital banking as we do.”
There is evidence that other financial institutions are also taking a hard look at their current digital situation and finding that it is inadequate when it comes to even reaching parity with consumer demands today, much less a decade from now. A recent industry survey of 163 FIs identified the following investment priorities, many of which relate to the digital revolution still unfolding:
- 41% Digital enhancements
- 12% Customer relations software
- 10% Omni-channel initiatives
- 9% Training initiatives
- 8% Core systems conversion
- 7% Customer service channels
- 7% Branch transformation
- 6% Social media participation
Quality & Quickness
For institutions like First Tennessee that are 100 percent intent on enhancing its digital capacity, saying goodbye to multiple vendors and partnering with a single fintech for its online and mobile overhaul is a critical first step. In the American Banker article, Karrels highlights that working with D3 to provide an API-based platform that brought speed and agility to the process and facilitated the kind of continuous innovation required for competing with the big banks.
First Tennessee decided to upgrade its online digital banking experience first and its mobile option second. Even as they were rolling out the mobile option this past August, plans were already being made to add functionality in the near term that customers had recently demanded. “This old model of waiting for the annual release and getting a fraction of what you wanted simply will not work in today’s digital space,” said Karrels. “You have to bring new functionality to market more often and faster.”
The bank is now providing a highly personalized digital experience, which is very important to today’s banking customer. Additionally, the advanced analytics helps the bank anticipate customer needs and add value through tailored offerings. These options are having a tangible impact on FTB’s customer satisfaction. The article also noted that First Tennessee has seen a five percent year-over-year increase in digital banking usage since implementing the D3 digital banking platform.“Under normal circumstances there is no way we could commit with the largest banks in the country,” Karrels stated. “They simply have too many resources and too much money. They can prototype anything and fast fail on anything but still hold their market condition in most cases. For regional banks the key is technology and a partner who understand that, if built correctly, technology will level the playing field.”