How Wells Fargo is using an app to help get new customers

Tearsheet’s one-day “Hot Topic: Mobile Payments” event is coming up in NYC on Nov. 30 and we’re opening up a few complimentary spots to executives from banks and other financial institutions to attend. Interested? Apply here. Wells Fargo just launched a digital-only banking offering for new customers this week, an effort to "meet customers where they are" and build relationships with them. Greenhouse will begin as a pilot program in early 2018, with the intent to make the app available for iPhone customers later that year. At launch, Greenhouse will be focused squarely on new customers, and the bank will have a dedicated service team to interface with them. It offers customers an account tied to a debit card and a second account within which discretionary spending "envelopes" identified by the customer can reside. For example, a customer can decide to create such categories such as rent, utilities, credit cards and other recurring commitments, and set rules regarding how much money gets contributed towards them. "It's not so much catching up with [new] customers -- 80 percent of interactions with the customer are digital in nature today -- people's use of services evolves over time, and what we're doing is connecting the dots here with the change in customer behavior," said Steve Ellis, Wells Fargo's head of innovation. Wells Fargo joins a growing group of banks and startups offering a mobile banking experiences with personal finance features folded in -- including JPMorgan Chase, TD, RBC, and Citi, along with digital banking apps like Moven and Simple. Like JPMorgan Chase's Finn, Wells is focused on acquiring and keeping new customers through a simplified interface and features to help them save. While it doesn't let customers use emojis to think about their purchases as Finn does, it lets the customer lay out what their spending priorities are and set rules as to how much money goes towards them on a regular basis. It's another sign that personal finance management is becoming part and parcel of mobile banking -- a must-have in the battle to get new digital-first customers. "It seems like a very similar value proposition to Moven and Simple, where they have a lot of budgeting and savings capabilities built in," said Carlos Carvajal, CMO of banking technology company Kony.  "It's very practical." The customer Wells Fargo is aiming for is one who would have no qualms about setting up an account on their phone without any people-to-people interaction. To meet this need, Wells Fargo Greenhouse customers can an set up an account on a mobile phone within minutes. But its real goal is about cementing links with the new customers, with the hopes that they'll seek out other products the bank offers as their spending habits evolve. "It's the idea of helping people manage budget inflows and outflows, so they feel like they're in control of their financial positioning," Ellis said. "When that works well, and as they grow and start thinking about other things like simple investing we hope they'll think of Wells." Ellis acknowledged that the ability to create commitment "envelopes" will eventually be built into Wells' mobile banking app, but it's another step on the path of mobile banking customer service innovations the bank has added to build value for the customer. But encouraging customers to be more specific about what kind of spending goes where is also important from a data collection perspective, as the bank can use that information to alert them of major bills coming or to suggest products based on account activity.  "Millennial or not, it doesn’t matter, it is the combination of proactive financial planning and reactive advice from the system that delivers a new level of service to customers, which makes the app sticky and non disposable, said Martin Häring, CMO of banking technology company Finastra. "This data on the other side can be used by Wells to create better service offerings for their clients and new revenue streams through cross selling." By gaining the customer's trust early on, Wells hopes new customers who could look to the bank for other products over time. Though the bank has an extensive branch network with brick-and-mortar locations in most states, Ellis acknowledged that Greenhouse can help the bank expand its reach further. When asked why Wells Fargo decided to create a new mobile banking app rather than fold the features within their existing mobile banking app, to Wells Fargo, it's a segmentation strategy. Ellis said the choice for separate mobile app was driven by a desire to address the particular needs of new customers who may be living paycheck to paycheck or just learning to develop good financial habits. "Our focus is on the emerging primacy of the mobile relationship, and building an experience around that segment's needs."