As new competitors emerge, Ally is drilling down on its customer-first approach
- In order to compete Ally is banking on its commitment to customer centricity that's been so deeply ingrained in its culture from the very beginning
- The threat of companies like Uber, Facebook and Amazon providing better, faster, more personalized user experiences is something that affects Ally just as much as it affects a player as dominant as Chase
When Ally Bank launched in 2008 there were few, if any, things like it in the market. It was a digital-only bank with no branches that could deliver the same financial products with “the Ally twist” — the personalization and empathy that most financial services at the time didn’t have.
It was the original “challenger bank.”
Fast forward to today and Ally-like banking services are more common. Incumbents are preaching customer centricity and strive to — at least, they say — treat their customers as people or relationships instead of sales and transactions — and they’re all accessible on phones and computers and even voice-based digital assistants. Financial services providers are starting to blur into a sea of sameness as they compete with other industries for the customer experience: Chase and Wells Fargo have launched sub-branded mobile banking products, PFM apps are getting into investing, PayPal offers so many financial services outside payments it’s basically a bank. Ally was immune to the competition when it was up against companies offering similar products, but now the threat of companies like Uber, Facebook and Amazon providing better, faster, more personalized user experiences is something that affects Ally just as much as it affects a player as dominant as Chase.
In order to compete Ally is banking on its commitment to customer centricity that’s been so deeply ingrained in its culture from the very beginning.
“The big learning that has persisted over the last nine years is the need to drive everything we do based on our knowledge of customer needs, pain points, trends, getting ahead of them or staying right there with them,” said Diane Morais, president of consumer and commercial banking products at Ally Bank.
To do that Ally is focusing on growing some of its newer products in 2018 — Ally Invest, its wealth management offering and Ally Home, its direct to consumer mortgage offering — and doubling down on its investment in innovative technologies, according to Morais, who said the bank has an “advanced agenda” and is currently in conversations with fintech startups and participating in labs. She didn’t share further details.
Morais said Ally hasn’t yet made any formal investments in new fintech companies, yet. The bank is more interested in delivering on its promise to solve consumer pain points and put their interests ahead of their need to innovate by launching the next new thing. Everything Ally has built or integrated into its banking offering is meant to address consumer pain points in banking, Morais said — things like technical jargon and not understanding why you’re being charged some fee.
“Financial services is a difficult category in which to create new products,” Morais said. “There’s not a lot of innovation that happens in the product, the experience, the application.”
Ally, which for so long has had found success in its bank offerings through its top notch customer service, has been expanding its sweet of offerings like its peers. In March 2015, Ally announced a deal to buy the online brokerage TradeKing, which was rebranded as Ally Invest. Two months later it introduced its first credit card, a cash-back offering issued by TD Bank. It also re-enter the mortgage business that year. This year, Ally launched an Alexa skill, FaceID for login and joined the Zelle network for peer-to-peer payments.
Ally was also the first bank to market with a digital assistant three years ago, Ally Assist, its first foray into using customer intelligence.
But while financial products can only be so innovative, chief marketing and public relations officer Andrea Riley said marketing has changed more in the last year than it has changed in the entirety of her career.
The power of who owns the brand has shifted from the marketer to consumers; the technology to allow consumers to reach the brand whenever and wherever they want is available — often on multiple screens at a time; and consumers’ demand for more personalized and quicker experience is a pace that seems impossible to keep up with, Riley said.
“That’s where we focus in on: how we can affect most people at the best time with right messages, instead of chasing,” she said.
Despite the way many banks brag about being customer centric or even customer-obsessed, no one does it like Ally Bank. The website alone visually shows how it’s in a league of its own: on the top right of the banking section of its website it displays a phone number customers can call, indicates the line is open 24/7 and specifies how many minutes the next caller may have to wait. All the fees are listen on a single page; there aren’t hidden fees and even when the fee is zero percent the website says it’s zero percent. There aren’t footnotes, asterisks or complicated PDFs to read. It shows customer reviews — all 8,055 of them, not just the three most glowing ones. It shows how the annual percentage yield compares with its competitors. The “Why Ally” section presents multiple pages of information detailing why customers should bank with Ally.
“Some of it may seem obvious, but other banks do not do this,” said Alyson Clarke, a principal analyst at Forrester. “They’ll say something like, ‘well we have lots of branches and we’re open 24/7.’”
Large banks are improving their cultures and operations; they embrace agile development and open banking and collaboration with competitors and new entrants alike. That’s all well and good, but incumbent banks still just aren’t good at adapting to change quickly. For a such a heavily regulated industry, it’s easier said than done. Ally proved it could navigate change, launching a new kind of bank in the aftermath of the financial crisis.
“The best defense to digital disruption or competition is customer obsession,” Clarke said.