Tag: customer care

Iam Bank, a startup virtual bank based in Ireland that has offices in the U.K., is set to launch in the U.S. this fall — and it’s going to do it via a physical bank branch.

The bank, which is now in the process of buying a Chicago-based bank it declined to name, said it will set up its first branch, known as a “customer experience center” in Milwaukee in the fall.

“We’ve done a lot of research and it all comes down to trust and credibility,” said Simona Stankovska, head of communications for Iam Bank. “For us, the research shows that people have a massive distrust of purely digital offerings. They need to have a human touch, they need to be able to communicate with someone.”

Despite expectations about the death of the branch (for example, a report last month from commercial real estate firm JLL projected that the number of branches across the U.S. will shrink 20 percent in five years), recent surveys support Iam Bank’s view that consumers — especially millennial ones — will continue to demand a human touch to banking. An Accenture survey last year found that 87 percent of customers, including 86 percent of millennials, feel that they will continue to use branches because they trust or sense that they get more value from letting a human deal with their finances.

Iam bank is led by CEO Lee Travers, a financial technology veteran. The company has plans to expand across the U.S. and the U.K., and said it will offer a digital-first banking experience though online and mobile banking, with the help of its virtual assistant, iamEmma. iamEmma will use machine-learning algorithms to provide insights into a customer’s spending habits and offer advice. But when customers feel they need human interaction, they will be able to step into a customer experience center.

“Through the app, you can access your bank account and the onboarding process will be very simple and you’ll be able to speak to customer representatives though FaceTime,” said Stankovska. “But the member experience centers are going to be a backup — if you’ve lost your phone, or just want to speak to a human.”

Through acquisitions, explained Stankovska, the bank will be offering customers an Apple-store type experience where they will be able to speak to real people about any banking issues and take part in personal finance workshops and networking events, including mom-and-baby groups.

Industry watchers note that the branch of the future will be more about building relationships than providing services, a trend Iam Bank is looking to capitalize on and that’s inspiring incumbents like Bank of America to launch employee-less branch pilots.

“Branches are becoming centers that provide personalized financial advice, build relationships, solve problems and, perhaps paradoxically, help customers make the transition to digital,” wrote Richard Fleming and Joe Fielding, in a recent research note from Bain.

While Iam Bank has an ambitious mission, analysts say the startup venture may face some growing pains establishing a foothold in the U.S. market where “challenger banks” have struggled to catch on. “A branch location is an admirable goal, but that’s a significant capital expense to take on, especially if you’re acquiring a branch network in need of a redesign,” said Celent analyst Stephen Greer.

Perhaps no modern American pastime is as popular as trolling companies on social media. And behind airlines, hating on banks might be the most common. A recent Gallup Poll found that only 27 percent of U.S. residents have a “great deal” or “quite a lot” of confidence in banks.

Now, some banks are trying to fight back.

“If you’re not monitoring your reputational risk online, you’re not only doing yourself a disservice, but probably ignoring something much bigger than you assume or believe to be important,” said Tim McCoy, vp of marketing and e-commerce at InTouch Credit Union.

The Texas-based credit union, which has 20 branches in five states, has been testing software developed by financial technology company Geezeo to monitor the social media review feeds of four branches. McCoy said the he’s seen ratings rise since the company has been using it, particularly for the bank’s main Plano, Texas Branch —  from 2.5 stars to 3.5 stars on Google.

“If your star rating goes up, that’s a relatively easy thing to see, but what is less visible is the effect that has from an SEO standpoint,” said McCoy, who noted that the effort was part of a strategy to improve its placement in Google search results.

“So much of what you see online is people looking for an outlet to vent,” said Jim Craig, vp of consulting services for Geezeo, which launched the product Tuesday to help banks. “Often there’s a disconnect between what you see there and what internal surveys are showing.”

Geezeo, whose main product focus is personal finance management tools for banks and credit unions, said the software scans Facebook and Google reviews to give brands an assessment of their online reputation. It also does keyword searches to identify areas of concern such as long wait times.

Because many reviews tended to be negative, following a discussion with the bank, Geezeo worked with the client to find ways to encourage more customers to leave reviews. According to Geezeo, InTouch has experienced a 132 percent increase in customer sentiment on Google.

“In most cases, people are very happy with their local bank or credit union, but that’s not being reflected in their online platforms,” he said. The software could be used by any bank, but Craig said he expects most business to come from banks and credit unions with assets between $500 million to $2 billion.

While Twitter, Instagram and other platforms were relevant to online reputation, the company said Facebook and Google have the most lasting effect (particularly for searches) and that’s why the software is focusing on them.

InTouch said it worked with Geezeo to approach a couple of hundred customers in each of the targeted branches by email who were encouraged to post reviews. When asked if the move was a means to populate the platforms with mostly positive feedback, McCoy said customers were not given incentives to leave stellar reviews.

“These are not bought, we’re just asking members what they think about us,” McCoy said. “I have no interest in gaming the system, but I’ve heard of other platforms buying or manufacturing reviews to improve scores and that’s not what this is.”

Mark Arnold, a branding consultant who works with finance companies, said it’s important for banks to boost online reputations by capturing good customer experiences, but the emphasis should be on superior service that organically drives positive online feedback.

“You need to be doing such great service and products that they’ll naturally want to do that.”

With talk of intelligent machines making the banking experience less personal, at least one major institution is taking a turn in the other direction by letting customers video conference with real people.

The Royal Bank of Canada, Canada’s largest bank, launched its MyAdvisor pilot this week — a feature that lets customers schedule video conferences with financial advisors. The bank said it’s making the move because talking to a real person still matters for their customers. “Clients told us that when it comes to investing, trust is key,” said Michael Walker, vp and head of mutual funds distribution and financial planning at RBC. “For most clients, they build trust with human beings first — not just technology.”

For now, MyAdvisor will be invite-only to a group of 500 customers in Ontario, but the bank plans to roll out the service across Canada by July. RBC is currently focusing on investment advice, but Walker said it plans to roll out video conferencing for other services as well. During a video conference, the customer and investment adviser can review the customer’s portfolio together and assess progress towards financial goals — mimicking an in-branch experience.

Analysts say RBC’s virtual real human advice service is optimal for the more complicated interactions, particularly when a concrete answer isn’t available.

“The robo-advice stuff may be great for entry-level consumers that have more simple needs, but for more a more complex investing picture, it’s difficult to get that programmed in — the complexity of human needs and wants require more of a human interaction connection,” said Ron Shevlin, director of research at Cornerstone Advisors.

RBC said the feature is not intended to take away from its efforts to use machine learning to improve the banking experience.

In the United States, video conferencing is currently available within branches, with Bank of America’s ’employee-less branch’ pilot earlier this year being the most recent example. But the capacity to do that remotely has been slow to catch on, in part because of money and infrastructure requirements.

“RBC has the resources to make this happen — this is not an inexpensive proposition because of the bandwidth and technological infrastructure required; they’re making a big investment and big bet that the customers are going to want it,” said Shevlin.

RBC’s use of technology to connect with real people may be a sign of an emerging consensus that the future of banking will be more about choices rather than a barreling towards automation.

“Often when the topic of digital and machine learning or artificial intelligence comes up, it’s in the context of a binary debate, either one or the other — humans or automated — the reality is that this bank and others serve very diverse audiences whose behavior and preferences are rapidly changing,” said Bob Meara, senior analyst at Celent.

Despite the advances in automated customer service capability, the human touch may be difficult to replace.

“The question isn’t so much ‘whether AI can do it all?’ but ‘do we want it to do it all?” said Martin Häring, chief marketing officer of banking software company Misys. “The emergence of ‘human’ advisors via video is not a backlash to bots, instead it enables banks to add the human touch to complex decision making processes.”

Photo credit: RBC