Member Exclusive, New banks

‘They don’t have legacy technology or thinking’: Citizens Bank learns from, competes with new digital banks

  • Citizens Bank draws lessons from innovation in banking experiences introduced by fintechs.
  • Nevertheless, the $160 billion bank is convinced human interaction will always be important for its customers.

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‘They don’t have legacy technology or thinking’: Citizens Bank learns from, competes with new digital banks

Incumbent banks are paying attention to what’s happening with challenger banks. And, increasingly, they’re taking inspiration from some of the innovations new digital banks have created for the customer journey.

“It’s incredibly important to be thinking about challengers, what role they’re playing in the market, and how they’ve interpreted customer needs,” said Beth Johnson, chief experience officer at Citizens Bank, last week at Tearsheet’s inaugural Challengers Conference. “[You can see] how innovative challengers can be because they don’t have the legacy — not only the legacy architecture, but the legacy thinking that many of the incumbents have.”


Citizens Bank takes a build-buy-partner approach to launching new services and functionality for its customers, tapping into partners with a special feel for new financial experiences. With SigFig, the bank launched a digital wealth solution a few years ago. Partnerships like this one are a win-win, according to Johnson. They draw upon a fintech’s deep understanding of customer needs and the data and analytics that underpin them, and they combine them with Citizens’ strong, loyal, mass affluent customer base.

Citizens has a variety of technology partnerships in place that haven’t yet been announced, Johnson said.

In addition to fintech firms, big tech also has its sights set on entering banking and payments in a more deliberate way. From Apple’s work in consumer finance with Apple Card to Google’s new banking partnerships, Johnson sees more competition down the road.

“I think they’re all coming,” she said.

Johnson envisions winners — and losers — coming from each of these groups: incumbent banks that can make the transition to digital, challenger banks, and big tech.

For its part, Citizens is continuing to roll out digital capabilities along three lines. First, the bank continues to make transactions like bill pay easier and more seamless. It’s using technology to increase convenience and speed.

Next, technology can provide a layer called insight, Johnson explained. “Can I offer my customers some smart insights that make their lives better? How’s my cash flow? Do I have enough money left? Do I get an alert through my mobile phone when I see that I’m running low in my checking account based on what I normally spend in a month, or when I charge something twice to the same to the same merchant?” she said.

There’s a layer of insight that banks can add, and they can add it in those remote and digital channels through technology that customers find very valuable.

The deepest and final layer is advice. Advice can support deeper, longer term decision making and planning, like financing a child’s college education. When it comes to advice, Citizens’ customers consume some of the educational content digitally, but at the end of the day, they want to talk to a person, according to Johnson.

“I think you’ll continue to see a model where people play a role,” she said. “And that might be in person or that might be through other channels. But that need for insight and advice is really going to continue to drive the need to have good people that can interact with our customers.”

The future will also likely include more women in the C-suite. But, to get there, the industry will need to be committed to it.

“I think if you’re not careful, you fall into legacy thinking,” Johnson said.

“If you look at the data and understand it, it’s clear that we need diversity of all kinds: women, people of color, age. It’s too easy when you’re hiring or promoting, to find people like you. It’s not conscious, so I think it’s important to set real goals and objectives, so that you can get there over time.”

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