Catching the Next Waves in Digital Banking

Last week I had the opportunity to attend the American Banker Digital Banking Conference, and the well-used saying that “the only thing constant is change” has never been truer. It's amazing how some things keep coming in waves. So, let’s look at what has changed and where the change is coming from.

Change 1: Digital Deposits

The deposit tracks were the tracks that had some of the most attendance. Last year, if you had asked what bank was looking for deposits, you would’ve been laughed at. This year? Not so much. One great session held by BANK called out that you can’t look for just that standard operating line; look for niche deposits, like HSAs and others, for a source of deposits. The key takeaway is that while you have to hunt for those deposits, they are out there.

Change 2: AI

Last year, AI was tied to machine learning and supported together as a “nice to have.” This year, AI is the “must-have,” but I feel that the steps so far have been incremental. Like any journey, it starts with one step, and if we call AI what I like to call it (Augmented Intelligence), I think we are making good steps. We are augmenting the intelligence of bankers and streamlining.

Keynote speaker Andrew Yang shared that “…the negative effects of AI will be more conspicuous, and it will erode trust in institutions." I agree. I am sure we have all been on the receiving end of a chatbot that is not getting our needs right. Personally, I left one certain mobile provider because of ongoing poor customer support that always forced me to chatbots. I was not calling daily or even weekly, this was only a couple of times a year, but the trust that they could handle my needs was gone.

Sure, they saved money (maybe) with AI and/or chatbots, but they also lost my revenue (and that of the five Horrocks kids). Bad lifelong earnings plan there. When it comes to AI, ask yourself whether you’re building trust along with efficiency.

Change 3: Sweet Emotions

In another general session, Wells Fargo spoke about the power of beauty. I love the tech and operational efficiency that fintech brings, but it was easy to see that the providers who bring that tech, along with designs that enable users to feel emotions of joy, peace, etc, are going to lap those who are just providing technology. A common statement on day one was, “Your customers’ expectations are set by their last amazing experience.” How would you rate your bank’s service versus top providers like Apple?

So, reflecting back, what was old (deposits) is new again and more critical than ever. The new technology could be what kills trust in banking if it’s not used wisely, so choose wisely. And nothing beats good, old-fashioned emotions when it comes to reaching your customer; they’re even better and faster than 5G or any modern tech on its own. Any bets that these are the hot topics next year? Let’s see what the next wave of change brings for digital banking together!

Author Bio

With more than 25 years of experience in the financial services industry, Mike Horrocks possesses a unique and extensive blend of financial expertise, technology skills, process redesign abilities and solution management experience. Horrocks’ background enables him to create go-to-market strategies for new solutions, help clients convert strategies into revenue generating initiatives and forecast market direction.

As the Vice-President of Product Management at Baker Hill, Horrocks’ responsibilities include the identification and development of new market opportunities in the business of lending, risk management, and analytics for financial institutions. Mike holds a MBA both in International Finance and Venture Technology Management from Indiana University and a B.S in International Finance from Brigham Young University.

Before joining Baker Hill, he held executive positions within several other organizations, including Experian, Profit Technologies, SAIC, Broadway and Seymour (FIS), Zions First National Bank and Zions Data Corporation.

Horrocks is a member of many associations including the Risk Management Association and Bankers Without Borders. In his free time, he enjoys traveling internationally with his wife and five children.