The death of the ‘omnichannel’ in digital banking

Penny Crosman: (00:10)

Hi, I'm Penny Crosman with American Banker, and I'm here at the Digital Banking Conference in Austin. And I'm here with one of our Digital Bankers of the Year, Alex Carriles. So Alex, you are one of our Digital Bankers of the Year this year. Congratulations!

Alex Carriles: (00:26)

Thank you, Penny.

Penny Crosman: (00:27)

So one thing I wanted to ask you was, you built a lot of mobile banking programs when you were at BBVA. Do you feel like that prior experience really helped you to be effective so quickly coming to Simmons First National Bank?

Alex Carriles: (00:44)

Yes. I really feel blessed to have had the opportunity to work with a phenomenal group of people at BBVA. I think that BBVA had some of the best in the industry in terms of let's call it being really innovative, fast and aggressive in the digital space, trying things that were really out of the box at that time. I mean, you remember in 2012 we were the first bank that actually launched standalone enrollment for mobile when everybody else asked you to go to online banking to enroll for mobile. It was a bold move and now it's common practice. So it was really a great learning experience working with such a great, talented group of professionals, because it challenges you every day to be better, to be up to the standards that they set. And they were setting really, really high standards. So it was a great learning experience.

Penny Crosman: (02:05)

So one of the things that you've done at Simmons First National Bank is you've created a new account opening experience. And there were a number of interesting things you did with that. Can you tell us a little bit about how you developed that and what some of the new features are?

Alex Carriles: (02:21)

Sure. What we did is first, we wanted to know what our customers look like at Simmons. So we're looking at the demographics and the type of customers. We had the average balances, all of this, and they realize that customers in general for community banks tend to be older than the average population. And that happens pretty much in the majority of community banks. So if we wanted to attract a younger generation, we needed to have a product that was really custom built for them, that would not only resonate with them, but have very specific issues addressed. For example, do you know that if you don't have another bank account, so you're trying to open your first account ever, it's nearly impossible to do it online at any of the top 20 banks in the country.

Alex Carriles: (03:36)

You know why? Because you have to fund your account while opening it. The only way to fund it is to link another account from another bank to transfer money. So if this is your first account, how are you supposed to do that? And it is one of those things that blows my mind. Why are we so hung up on the idea that a new account needs to be funded on day one or day zero? It's like, don't you think that the customer will know how to put money tomorrow or the following day? I mean, are they putting money for the rest of their life in that account? No. They'll figure out how to keep adding money for the rest of their lives while they have that account. So why does it have to be on day zero? So what we did is we completely eliminated the funding stage.

Alex Carriles: (04:32)

It's not like, Hey, now let's fund your account. You can choose to put zero. It's like now there's no funding step whatsoever. You enter your information or actually more than enter. We get your information from your driver's license. So we scan the 2-D barcode on the back of your driver's license or ID and get off your info. Why would you have to type your data, your name, address, date of birth, all of that stuff. It's already there, your ID type, the number, expiration date. We have everything. So there's no typing whatsoever. Number one, that's the difference. Number two, we know that you are a real person because you have a real valid driver's license and we do a live test. So we look at your face, ask you to move in a certain direction. So we know that it is you. We have the match.

Alex Carriles: (05:28)

We know that the driver's license is not a fake because we connect to the DMV that issued that driver's license for validity. So once we have all of that, then you accept the terms and conditions and you're done. You have an account, but how do I fund it? How do people put money in their account? You can do a mobile deposit. Hey, I got my paycheck. Well, when you get your paycheck, take a picture of it. You deposit it through mobile deposit, or, Hey, I have a Venmo account that has money virtually going back and forth between my friends. One time somebody pays for lunch and then they pay me back. And it's money that has been floating around or PayPal. While that money is there, you can now transfer it to your new account, or you have cash. You can go to a branch, you can go to an ATM, you can get somebody, send you money with Zelle, so you can have a gazillion options.

Alex Carriles: (06:22)

So why do we need that to do that on day one? And we've changed that. And we noticed that younger customers, particularly under 23, more than two thirds abandoned the account opening process when they get to funding, because they don't have another account to fund it from. So by eliminating that step, we noticed that we had a much better throughput on our account creation funnel. So the number of accounts, that of applications that were coming in, and the number of accounts actually being generated was greater than before. And you would think, okay, and how many accounts are left unfunded? Well, we give our customers up to three pay cycles to fund that account. I mean, if after three paychecks, you haven't funded your account, you're not going to fund it. Let's get real. So at the 30-day mark, we start sending you reminders that you need to put some money in your account, tell you how to do it. If they still don't do it by day 45, we lose the cap. What is that percentage? It's approximately 1.02%, which is extremely low, particularly compared to the 66% abandonment rate for younger customers. So we think that was the right move.

Penny Crosman: (07:53)

That makes sense. So, when you built this out, did you do this all with your own internal team of technologists, or did you get some help from a third party? 

Alex Carriles: (08:07)

We were working with the Open Anywhere team at Jack Henry, because they already had the integration with Banno. We wanted to make it extremely easy for existing customers to open an account. So that integration and single sign on was critical, but we worked really closely with Open Anywhere to literally change the way we wanted the flow to be. We designed several screens. We asked them to add a new feature, which was the ability to add HTML screens. It's like, since we want to customize it, why don't you use that option? And when they started seeing that it was a really valuable element in their design process, they made it available for other customers and they thought that that gave that tool a lot of flexibility so we can change the flow. We could eliminate steps. We can basically design the content on the pages and also have the controls that we wanted and the thresholds that we wanted in order to approve an account. So it was really interesting that it was almost like working with an in-house development team because it was a great collaboration with the team from Jack Henry.

Penny Crosman: (09:28)

So in your work, you've got your own team to manage. And then you've got the people at Jack Henry and Banno to work with and then I'm sure you have risk and compliance and legal people to work with. What do you think are the keys to effectively communicating and working with lots of different people coming from different angles, different parts of the organization and other organizations?

Alex Carriles: (09:56)

I think the key is to get them involved early on. I've always said particularly for the control areas that they will be involved in either one of two stages of the project: when the project is being born or when the project is declared dead. It's your choice when you want to get them involved. So since I don't want to have a project declared dead, I'd rather involve early on and it's great because sometimes there are things that you might have concerns about how they're going to react to doing things in a certain way. And then they may surprise you. Like, oh no, that's fine. We're okay with that. Oh really? Yes. Oh, okay. Maybe you just need to put a disclaimer that says X, Y, Z, and that will take care of this thing. So it's really good that early on, we can find out if there are any fatal flaws or there are any things that really would cause them heartburn and know, so we can work on solutions while we still have time while developing the project and not basically ask for an approval and a go, no go meeting because we're trying to release the product tomorrow they go like, what, what is that? Why haven’t we heard about it? 

Penny Crosman: (11:23)

You hear a lot of stories like that, for sure. So I know that you, as we talked about this, don't like the term omnichannel.

Alex Carriles: (11:34)

That's an understatement.

Penny Crosman: (11:35)

It's something that’s been in this industry a long time. Trying to get to the omnichannel where everything is seamless. What don't you like about that word? And what's a better goal to strive for?

Alex Carriles: (11:48)

To me, the problem is you remember, first we started talking years ago about multichannel being able to do things in different channels. And then the buzzword came out. Omnichannel, you can do it everywhere, whatever you wanted. And then the example started appearing in real life. Like, look, you want to open a new account? So you search for it on your mobile phone. And then you go to your desktop computer to fill out the application. And then you go to the branch to sign the contract. That's omnichannel. No, that is basically a complete disaster because let's figure out and let's be real about this thing. You're searching for it on your mobile phone. And that's true. I mean, more than 60%, 70% of the searches today happen first on the mobile phone. But once you let's say find an account that you want to open and you try to apply there and go to a website that is not mobile friendly, you get an absolutely horrific screen that is unreadable.

Alex Carriles: (12:55)

And then they ask you to fill out 50 things. So you are with a mini keyboard on screen, trying to read that thing, trying to type is completely unusable. And then if you don't have a good e-sign agreement and the controls in place and the audit trails, you can't agree to that thing electronically, you have to go to a branch to find the documents. Once you pick up your documentation. So that's not omnichannel. That is basically an excuse to patch with one channel patching the other channels’ deficiencies. 

Alex Carriles: (13:53)

I had an account at a large institution. I mean, you can imagine I have accounts at multiple places. I want to know what others are doing. So I wanted to set up on my mobile phone, wanted to enable text alerts. I go open the app, try to select it. And I get a message that says to enable text alerts, please go to online banking to enable them. So I'm on the mobile phone, which is the one that is going to receive the text alerts. And I have to go to online and do it. That's ridiculous, but that's omnichannel right now. You're reducing two of them. Another example.

Alex Carriles: (14:54)

I recently sold a car. I went to a dealership and I had a car loan with one of the top five institutions. The process to get the loan and the rates was really good. So it was the bank that the dealership got the best rate. So I go to sell my car to a dealer and they ask, what is your pay off quote. I went into the app, and it said to get the payoff quote, call this number. So we called in like, Hey, I'm here at the dealership. I need a payoff quote. Oh, I need to know who I'm speaking with. Okay, there you go. First 20 minutes of grilling me. What did the person that opened your account have for breakfast six months ago? And what was the weather that day you opened your account? After you go through all of those questions you go like, okay.

Alex Carriles: (15:52)

Yes, Mr. Carriles. How can I do for you? I need to know what is the payoff quote for my car loan. Oh, oops. For security purposes, we cannot give you that information.Why do you just grill me with all of these questions? Oh, but we can fax you the payoff. I'm at this dealership that is a brand new dealership, they don't have fax. This dealership opened two weeks ago. Everything's brand new, state of the art. Like they don't even have a fax number, who uses a fax number? Well, you have another option. We can mail you your pay off quote. That'll be convenient to receive in five to seven days. So I guess that's also omnichannel, right?

Alex Carriles: (16:47)

Why didn't they also add an option to get the payoff quote by smoke signals or telegraphs?

We're talking omnichannel. Another one. I went to use an ATM and I forgot my pin. So I decided, well, maybe I can change the pin number. I called in. It's like, oh, oops, sorry. Yeah, you cannot change it over the phone. Okay. But we will mail you a new pin to your home. That will be really convenient because I'm in front of the ATM right now. It will be really convenient to get it in five to seven days. Very convenient and very omnichannel. So why can’t I do everything that I want to do in a single channel? So to me, the response should be, we need to be channel agnostic, design the process, design the product in a way where you are able to do it wherever you want.

Alex Carriles: (17:56)

And I don't care. And I don't need to know where you're going to do it. That's why it's channel agnostic. So the process itself should be great anywhere you do it. Now, if we're being realistic today, the only true let's call it all in one channel, the channel that can do everything the best is mobile. You have a much more standardized interface across multiple devices. For example, when you're doing mobile deposit, you know that the cameras have certain standards and the protocols to use it, try to do that on a desktop computer. It's really hard to do because not all of the cameras are following the same protocols. So even at that level, it's a lot easier to have a consistent experience through a mobile device. It gives you more flexibility. It's more accessible. Everybody has one. So I think that really this war of the channels has already been fought and has already, has already been won by mobile.

Alex Carriles: (19:12)

So in many cases I can tell you that we're not designing sometimes for mobile first, we're designing for mobile only. And as an example, the account that we, and I were talking about a little earlier, if you try to open this account or our coin checking online and go to our website, you won't see an open button. You see a QR code that you scan with your mobile phone to apply. Funny thing two years ago, I would never have been there to do something like that. Not even close today. After the pandemic, you go to a, I don't know, a restaurant on a highway in rural America, and you see grandma taking out her phone and scanning the QR code to get the menu. So now a QR code is not as scary as it used to be. It's commonplace. So now we can do that. And really let our customers apply through the best channel where we can deliver the best experience. So at least we're being true. We're telling you the experience won't be as good on any other channel. So please go to mobile and you will be really happy. You did.

Penny Crosman: (20:32)

That's ta great explanation. So I just want to ask you one question about leadership. Since we're talking about leaders and leadership. One thing that's obvious about you is that you're very enthusiastic and anyone who knows you or has dealt with you knows that. And I was talking with Ben Metz at Jack Henry about you because I was doing a profile of you. And he said, even in tough, tough situations, he's still enthusiastic. And he said, when he's having a bad day, you're the one he would want to call. What do you think is the key to maintaining that level of enthusiasm, even when you're facing setbacks, you're having a bad day. everything seems to be going wrong, asking for a friend how do you keep that up? All that positivity and, and passion and so forth.

Alex Carriles: (21:22)

I mean, I think that it's two parts. The first one, particularly when we have a problem or a critical situation that is happening, if we don't keep our cool, we will not be able to make the right decisions. I don't know if you notice that when something goes really, really wrong, the first question that most people tend to ask is who approved this, who wrote that, who spoke to the customer because like, why does that matter?

Alex Carriles: (21:59)

That means that you are trying to point your anger at somebody to be able to help materialize that anger. What we really think that we should do is, okay, let's try to think what is the actual problem and how can we fix it first and foremost. So if we try to really keep our cool, and try to see things in a more detached way, we might be able to find answers to problems a lot easier. The other one is at the end of the day, we're dealing with software and we're dealing with things that may fail. I mean, there's always the possibility of a glitch or something unexpected. So it's not like we need to get used to it, but we need to know that it will happen. So if we are going to basically put our lives in a rollercoaster of emotions every time something happens it is going to be really bad, not only for our solutions and for our job, but for our personal health too.

Alex Carriles: (23:28)

And third, I think that as a leader, we have the moral responsibility to set an example for those that are working with us. If my team sees me down and like, oh my God, again, this is terrible. How could this happen? It drags them down too. If they hear me say like, okay guys, let's try to find a solution. In 30 minutes, go and find all of the information that you can, let's see who can come up with the best course of action. I mean, they take it as a challenge, like even almost like a fun thing to do, and we could reconvene and try to figure out things and eventually solve the problem. I don't think that there's ever a problem that is unsolvable. Something was working before. So there must be a way to bring it back to that stage, right?

Alex Carriles: (24:29)

So we just need to figure out how to do it. And again, giving that example to our team members keeps them going. And next time they are challenged with something like that, they'll react in a better way and they will pull their teams forward. And I think that that creates a great spirit of collaboration and makes it fun to work at a place, makes it exciting. Remember Jerry from Ben and Jerry's said, if it's not fun, why do it? And the reality is that we're working eight hours a day, five days a week. If you're not having fun while you are doing that, that's a lot of time every single day. And I really try to have fun. And even when we are on conference calls, et cetera, try to make jokes, lightening up the atmosphere, particularly if we're dealing with something more serious. So people feel a little bit more relaxed and really try to put forward their best ideas.

Penny Crosman: (25:47)

That's so true and people can think better and come up with better solutions and be their best selves. Well, Alex, that was, that was inspiring. Thank you very much. Thanks for joining Leaders.

Alex Carriles: (25:58)

My pleasure. Thank you.