‘We’re in a constant beta state’: How Citizens Bank is adapting to the post-Covid needs of young consumers

The bank also plans to ramp up its home mortgages, whose demand is interlinked with that of student loans. “A key trend we’re seeing right now is that people are refinancing their student debt so they can save up and buy a home,” said Schuppenhauer. “If we can offer services that pair student loan refinancing with mortgages, we could become a one-stop shop for customers looking to achieve both purposes together.” 

Citizens is currently experiencing a surge in home equity loan applications, particularly from young customers, as they look to tap their home equity to meet other financial goals. “Home equity applications used to be a laborious task, but we’ve designed capabilities to simplify the process and get them done in just a few taps,” said Schuppenhauer.

In addition to upgrading its products and services, Citizens is rethinking its branch network strategy to better reflect the changing needs of consumers. Earlier this year, while the pandemic was worsening and most of the world was in lockdown, there was a lot of speculation on how this would impact bank branches. Online services such as video banking became more popular. Some hypothesized that banking could eventually become fully digital, and physical branches may never regain their lost significance.

Yet, as the pandemic recedes in many parts of the world including the U.S., the branch seems to be making something of a comeback. Schuppenhauer says many customers have started in-person visits again, which is something he hadn’t anticipated. What’s perhaps even more interesting is that it’s not just older generations that are returning to the branches. In fact, the digital-native Millennials and Gen Z are coming back to Citizens branches in higher percentages relative to other groups, which suggests that they are not ready to let go of in-person banking interactions just yet.

Schuppenhauer says consumer expectations have evolved through the pandemic, and customers now demand just the right mix of convenient digital tools and dedicated in-person services. “What we’ve found is that customers don't just want digital; they want digital and physical,” he said. “And the level of fidelity that they expect in their digital experience – they want that to be present in the physical experience as well.”

Since a growing number of younger clients are coming into the branches, Citizens is also increasing its focus on the interoperability of its digital tools within the branch. “Think about it this way: as a consumer, you should be able to start an application on your couch, and then come into the branch at any point and just pick up where you left off,” said Schuppenhauer. “At the same time, you should also be able to complete everything straight from your couch, if you so choose.”

Although branch traffic is going up again, the nature and intended purpose of the branch seems to be pivoting from transactions to interactions. Schuppenhauer believes that in the future, customers will primarily visit the branch to have conversations and get advice on things like mortgages, student loan refinancing, and new payment options. “We’re repositioning our branches to be advice centers,” he said. “There's been a bit of a mindset shift. Consumers are saying, ‘Give me the ability to self-serve at 2 am – or whatever time is convenient for me – and then let me go into the branch on my own terms and for the things that I want.”

Over the last several years, Citizens has embraced digital transformation, and in the process has become more technologically advanced than some of its larger competitors. How should other financial institutions prepare to truly embrace change and take the digital leap?

Schuppenhauer says the first and most important step is to onboard the right talent that’s capable of reimagining your products and services in meaningful ways. “You’ve got to get people that are just willing to reimagine – to go to the next frontier, and to break things a little bit,” he said.

Another important thing is to have a bold mindset – a willingness to go off the beaten path and do things differently, instead of submitting to the urge to follow existing trends. Ever since Citizens went public in 2014, the company has looked to find the white spaces within banking, rather than trying to imitate what its competitors were doing.

“When you compete to win, you have to think differently than the others,” said Schuppenhauer. “Coming out of the IPO, we asked ourselves, ‘Why go to the crowded credit card space? We won’t be able to compete against the big nationals that already have a really solid foothold – might as well create something different’. And that's what we've been doing across all our services. We're in a constant beta state.”