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Digital banking's No. 1 risk: Losing the human touch

AUSTIN, Tex. — At a conference designed to showcase how technology is vastly improving the mobile and online experience for banks’ customers, one common theme is emerging: Human contact still matters.

Whether it’s applying for a loan through a mobile app or building an investment portfolio via robo adviser, users want to know they can quickly and easily speak to a human being if they have questions or run into problems, bankers told audiences this week at the Digital Banking conference hosted by American Banker here this week.

Cort O’Haver, president and CEO of Umpqua Holdings

“Over the years banks have invested significantly in technology around the customer, and in lot of cases, those technologies have created horrible customer experiences,” Cort O’Haver, the president and CEO of Umpqua Holdings in Portland, Ore., said in a speech Wednesday.

Umpqua in 2017 developed its own mobile app that lets customers interact with actual bankers, instead of a chatbot, if they need help. (Umpqua has since sold the technology behind app to Kony, provider of digital services to banks.)

And O’Haver himself tries to be as accessible to customers as the CEO of a $27.3 billion-asset company with about 270 branches in five states can be. In nearly all of those branches is a phone that customers can use to speak directly to senior executives, including O’Haver.

Often the calls are to thank him for the bank’s services, but from time to time O’Haver will also field complaints.

“The most important calls I get are from our customers that are having an issue,” O’Haver said. “And it may not be that big of an issue to me, but it was a big enough issue for them to drive and go into one of our locations, pick up the phone and ask me for help.”

“It reinforces the fact to me how important human relationships are with people, and certainly when you're dealing with people's money,” he added.

During another session at the conference Monica Herlihy, an executive vice president at Citizens Financial Group, explained how the Providence, R.I., company is using a combination of technology and face-to-face interaction to help clients with their investment needs.

The $161.4 billion-asset Citizens offers a robo-advisory platform, SpeciFi, designed for customers seeking to invest a minimum of $5,000. The platform creates a customized investment portfolio based on a client’s financial goals and risk tolerance, but Herlihy said some users still want to interact with a financial adviser.

“You can do that type of investment online, but also have access to a financial adviser,” said Herlihy, Citizens’ head of retail banking. “It’s not an either-or conversation.”

Wealth management is a business in which human interaction is particularly critical, and that’s prompting Citizens to reimagine its approach to branch design. It recently opened three so-called banking and wealth centers, two in Massachusetts and one in Pittsburgh, where it can offer retail banking and wealth services to “both affluent and super-affluent customers,” Herlihy said.

Just as knowledgeable and engaged service representatives can improve the digital experience for bank customers, so too can sophisticated technology improve the in-branch experience.

HSBC USA, for example, has deployed a robot, dubbed Pepper, at a few of its branches. Pepper offers basic information about products and services to customers and then alerts employees when customers have more in-depth inquiries.

The $177 billion-asset unit of London-based HSBC also has been experimenting with Samsung wearable watches that branch employees can use to quickly communicate with each other so that they can better serve customers.

Jeremy Balkin, the head of innovation at HSBC USA, told American Banker on the sidelines of this conference that these recent technology investments will play a key role in HSBC’s planned expansion.

The bank announced plans to open as many as 50 branches in the U.S. over the next three or four years as it looks to broaden its customer base. Since selling nearly half of its U.S. branches in 2011, the bank has largely targeted affluent consumers in major metropolitan markets such as New York and Los Angeles.

Pepper, the robot built by SoftBank Robotics Group, will be a part of those plans, but not at all locations, Balkin said.

“Pepper is not going to work everywhere, nor do we want it to,” Balkin said. “But at some of these new branches that we’re building, and not retrofitting an old location, we’re going to have a high-tech and high-touch digital experience, Pepper makes perfect sense to be there.”

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