Digital Banking with Elizabeth Gujral // Cornerstone Hot Takes

Hey, GonzoBankers. Tony DeSanctis back for another hot take. Let’s talk about digital banking.

Ron Shevlin and Liz Goodall just did a great study on digital banking. I asked Liz to join us to give us a little bit of an overview on what’s going on there.

A couple of interesting tidbits, Liz, that came out of this study. The first was money doesn’t buy you digital happiness, does it?

No, it doesn’t. I think, as you saw in the report, low performers are spending a ton of money as a percentage of assets to kind of catch up on systems. We’re seeing a lot of movement from those core-provided digital solutions into the newer, next-gen digital banking solutions.

Overall, if you look throughout the report, the amount of money that a lot of our low performers are spending is not directly correlating to high performance in the metrics.

Yeah. So let’s talk about the performer thing. I probably should have led with that, but you broke out the study into high performers, mid performers and low performers purely on a financial basis. So this was ROA, ROI, efficiency ratio, sort of all the key performance metrics.

When we talk about low performers spending the most, the least profitable organizations were spending the most on digital. Maybe some of that, as we talked a little bit about, is catch-up, right?

Right.

Having to invest because they’re far behind. But generally speaking, more money doesn’t necessarily mean a better digital experience. Maybe more money, more problems.

Right. Exactly.

So a couple of the other themes I think that came out of it were that the top performers, from an economic perspective, were also the most engaged from a digital perspective, right?

Right. So you saw that there was higher performance on mobile engagement. Active mobile users as a percentage of total users shows us that they are actually pushing and getting their members and customers into the mobile app and consistently using it.

Yeah. So I think the number was like 76% of high performers versus 67%. So basically 11 percentage points. It’s almost a 15% reduction in engagement in the mobile experience. So that mobile experience is a key part of that.

They’re also having more success selling, aren’t they?

Right. Our low performers, their new products per digital user were half that of the high performers.

So not only are you getting them more engaged in the digital experience, but you’re more effective in cross-selling them into products as well.

In addition to being more engaged in the mobile experience and more effectively selling, does that mean it requires more service? Are there a lot more questions and calls to agents? Tell me about that.

No, it’s actually the opposite. The better the engagement and the better the experience in digital, the fewer requests there are going into chatbots and live chat agents. You’re creating this experience where users don’t have to consistently go to agents for service requests and questions. All the answers are in the digital banking experience.

So to recap, don’t just throw money at the problem. Look at the solution in the context of its ability to engage customers and solve their problems without them having to escalate to a live agent or chatbot. That gives you the opportunity to turn that into a sales opportunity and cross-sell them other products.

Exactly.

So if you haven’t checked out the study yet, it’s on our website. Go ahead and check it out. Lots of interesting tidbits there. Thanks for the time.

Yeah. Thank you.