Aligning Technology and Strategy for Banking Success

Jim Marous (00:12):

This is a fun experience. We did this, started three years ago with the live recordings at the event. Two years ago, we did them in a small room like this, did it without any audience or anything like that. Last year, we took them to a stage level. And it's interesting because a little background to myself, I've been banking my whole career, which means a long time.

Jim Marous (00:37):

Started at National City Bank in Cleveland as a management trainee, went through the rotation process, which in some financial institutions still exists, where basically you were taught how the bank does things so that you'll do them the same way. Which in today's world kind of stifles everything the university graduate is taught when they leave school.

Jim Marous (00:58):

They're taught about innovation, all these exciting things, and financial institutions are going to be moving to the digital world, all be great ,and then you go through this rotation and kill their spirit right off the bat.

Jim Marous (01:08):

The other thing is that — and we'll refer to this because there's a lot of signals on the things that are challenging financial institutions, I talked about it, I think the first day … was anybody started as a teller in banking?

Jim Marous (01:23):

So, you probably are the ones that raised your hand when I said, "How many of you at one point or another put coin out of your handbag or your wallet, put it in the drawer so you could balance?” Because you go, “There is no way I'm holding back my counterparts who are probably doing the same thing from leaving that day." And the next day you go, "Oh, now I'm over the exact same amount. Okay, how do I do this without getting fired?"

Jim Marous (01:46):

But that risk adverse nature is what challenges us, and it's interesting because when we wrote the Retail Banking Report Trends and Priorities for 2025 sponsored by Q2, one of the underlying themes, the things that aren't talked about as much, is what gets in the way. The things that get in the way is our risk adversity as an industry. It is doing things as we've always done them.

Jim Marous (02:12):

Whatever financial institution you work in, you have not had a going out of business year. You have been successful to some degree throughout the whole process. Your leaders probably have at least 20 years, not only in the financial institution, but on top of that with each other.

Jim Marous (02:30):

So, they've succeeded together, patted each other in the back, gone to golf — and I'm going to as much as we say we have a diversity in boards, most organizations still do not have diversity of boards, at least from the decision-making standpoint. But when they have not had a bad experience and they have been rewarded for their successes, how do we get them unstuck? How do we get them to say, "I'm going to embrace that change."

Jim Marous (02:55):

The good news is, at this event, we have organizations that a lot of them are under $10 billion in assets. These are the leaders in our industry today. Believe it or not, the organizations that are doing the much when we talk about this, Fabio, is that they're the biggest because when they’re safe they can pay out of it, and the smallest.

Jim Marous (03:16):

Because there's that innovative spirit that came from the family business mentality: credit unions, community banks, they all have lived the world of, "I've got to pivot, I've got to look, I got to change." And some of the most fun I have in the industry today is interviewing or going to visit the smaller finance institution that says, "I know I have to do things differently."

Jim Marous (03:38):

And so, I want you to learn two things. Number one, only thing that's going to get in your way is yourselves. And number two, the opportunity that we're talking about in this world today can be embraced by an organization of any size with the right leadership.

Jim Marous (03:55):

150 people out there wanting to help you on every stage of the business from new account opening through onboarding, through closing accounts, through retention. So, our focus today, Fabio, why don't you introduce yourself before … I don't need to introduce myself, but you can introduce yourself.

Fabio Biasella (04:12):

Good morning, everyone, Fabio Biasella, I am the Director of Strategic Services for Engage FI. Engage FI is a strategic and technology consulting group. I have like Jim, been in banking my whole life. I started as a trust banker in Illinois in 1990, and have moved through the industry and grown through the industry through the years and has spent a good deal of time at a national marketing research company for community banks and credit unions where I did a lot of strategy work.

Fabio Biasella (04:43):

And I've seen firsthand the mindset you're talking about here and the evolution of the mindset over the last several decades. And I'm excited to talk about it with you today and talk about the challenges and the changes that are needed to take place.

Jim Marous (04:56):

So, our agenda is kind of loose but structured in that we're going to be talking about the research we did for the trends and priorities report because it really gives us a benchmark for what we see in the industry.

Jim Marous (05:08):

We do see change from year to year. It's not like it stays static. What's interesting is part of what we do is we ask organizations, "How digitally mature are you?" And it's interesting that it actually went down between last year and this year. And you say, "Okay, how could that happen?" Because the marketplace is moving faster than we are. So, we rate ourselves on a grading curve that's harder.

Jim Marous (05:31):

So, we say, "Well, we kind of thought we were digitally mature because we had this, and then we realize that this year, it's table stakes," that's how fast it's working. So, one of the key elements, one of the first things in the report this year, was the rating of where are the priorities, where's the investments? Not surprisingly, it's been the same for the last couple years.

Jim Marous (05:52):

The top priority in financial services, credit unions and finance and banks, no matter what the size, it's the customer experience. We need to improve the customer experience, we have to improve engagement, we have to improve the CX and UX, and that definition evolves a little bit, but customer experience is number one.

Jim Marous (06:11):

Fraud and security from a prioritization is further down, however, when we dig deeper, we realize that when it comes to investment, when it comes to fear, risk and fraud is top. Also, the second layer of this was where are you investing, and even though the questions were asked together and in any survey you go, "Are they trying to trick me?" It's interesting because the prioritization from an investment standpoint where you look at data and AI and insights, it was ranked lower than five.

Fabio Biasella (06:49):

It was in the bottom half.

Jim Marous (06:51):

So, where we're putting our money and our emphasis is not the same as what we want to focus on. How do you see that in the industry? Because you work with a lot of small organizations, is it different in the small organizations, is it the same as the larger banks?

Fabio Biasella (07:06):

No, I think you're spot on. What I see in working inside of C-suites and in boards is there's a recognition that they need to engage better, differently, and then I'll put it as affectionately as I can — then day-to-day business as usual tends to get in the way of that thinking. So, we're seeing fraud losses increase, so we direct our energies there, we continually-

Jim Marous (07:35):

Rightfully so.

Fabio Biasella (07:36):

Obviously, yeah, and we de-emphasize the investments that need to be made in data, data management to generate the insights we're going to need to create the customer experience. Meanwhile, this is done against the backdrop of consumer behavior where the consumers are moving rapidly and their expectations of our experiences are being driven by you've said this before, the Amazons of the world and the Ubers-

Jim Marous (08:02):

The Ubers and Netflix.

Fabio Biasella (08:05):

And we're feeling though we're getting further and further behind because the things that they're expecting us to do, the context of their digital lives is changing so rapidly that we're struggling to keep up. But on the flip side, the problem is clearly recognized now, and I do see a growing will to start answering this question in the discussions.

Fabio Biasella (08:27):

So, when I can challenge a C-suite team or a board of directors, "Okay, what's the one thing, what's the one investment commitment we can make over the next couple of years to make this happen?" I'm usually able to see them extract that and make that commitment, so I'm heartened by that. So, I'm seeing a little more courage emerge as to evolve the mindset more rapidly.

Jim Marous (08:48):

Courage or fear?

Fabio Biasella (08:49):

No, it's courage.

Jim Marous (08:51):

Okay, good.

Fabio Biasella (08:52):

Now, and again, my estimation through the years, you've said it spot on, we've enjoyed this decades long run of just kind of constantly being able to do good, perform well enough, and if we did a few things well, or we had good growth circumstances, we grew better. If we just avoided doing really terrible things, we could perform and be stable and congratulate ourselves.

Jim Marous (09:19):

And our options, the consumer's options weren't extraordinary out there either. And in the banking industry and other industries, the consumer used to be following, and we used to do things and the consumer was pretty much at our will. They were going to get what they got and it's still many ways that way, where if I go from one bank to another bank to another bank, I may have to really try to figure out the differentiation.

Jim Marous (09:43):

Michael Abbott, we interviewed from Accenture at the beginning of the year, and he said what's really scary is at the mobile platform from bank A to bank B, all get really good ratings. Nobody's giving their digital banking experience bad ratings. He goes, "But the challenge is, if I took away the colors and the logo, you would not be able to the difference between any of the mobile apps."

Jim Marous (10:11):

So, we have a situation, your accounts are listed, you can dig into your balances, you can transfer balances, you can make it a mobile deposit capture and that's pretty much the functionality. Now, that does satisfy the majority of our customers and members, the challenge is, is that really is all they need?

Fabio Biasella (10:28):

Right. Exactly. And let me build on that from my experience. It's feature function rich, but it's utilitarian.

Jim Marous (10:37):

Transactional utilitarian.

Fabio Biasella (10:39):

And that's fine, that's what we've heard that the consumers want because what do they doing? They're checking their balances constantly, but that all grew up against a backdrop of a strong branch network for many of our organizations. And what do we have inside those branches? We have very talented people who have established relationships with those people who had added those digital channels.

Fabio Biasella (11:00):

So, they were much acting like the relationship software in that setup, and I was a personal banker for many years. So, my customers used the digital apps but they always knew they could call Fabio for the contextual part.

Fabio Biasella (11:18):

Now, we're in an environment, Jim, where the generations that are coming up because they're coming in through the digital channel shaped with those experiences that we were talking about, they're expecting that to be there.

Fabio Biasella (11:30):

They may want a Fabio at some point in the process, but they expect a Fabio-like experience right in the process. That one's going to get me in trouble back at the office for sure, but that's the real challenge.

Fabio Biasella (11:45):

So, when we're thinking digital strategy, we need to think about how we're able to move our platforms forward and places like Q2 are good at this as well, giving you the tools to start creating that experiential setup, and that's where we need to be able to go.

Fabio Biasella (12:04):

I look at Jim, and maybe I would be curious because you see so many others — one of the nicer experiences I have is in the health apps. Where you're not just tracking your stats, but they're giving you trends and now, increasingly, they're able to help you anticipate … my health app now senses when I'm traveling and it makes reminders to me that make sure that I get enough sleep and stuff like that, you're able to set that stuff up.

Jim Marous (12:32):

By ordering, making sure I'm getting enough sleep, exactly.

Fabio Biasella (12:35):

I mean, so think about that in our world where our customers and our small business customers and our consumers are living their lives, we're having to be able to now migrate into that type of setup and situation with this.

Jim Marous (12:47):

It's interesting because you talk about the experiential — I'm going to mess with the word too. We're moving away from an experience being what people are looking for. It's like saying the restaurant, I'm going to be okay as long as they don't have rats on the floor, that's not going to work. What people are looking for is, you said they're looking for the engagement, they're looking for the interaction.

Jim Marous (13:09):

We pick restaurants not just because of good food, but because the people that are actually serving us, especially in a post-COVID world where people are starting to come back and the best ones are working at the best restaurant. But not just there, it's your channel integration at Delta Airlines. So, I've told this story before, it's your ability to build engagement.

Jim Marous (13:29):

When we talk about the mobile app, are we building any way for the person to continually come back? That's what PayPal has done, that's what Uber does. When you're on an Uber app — I've mentioned this at one of my sessions today, maybe it was one of the big ones, you've all heard it.

Jim Marous (13:44):

But where an Uber app now, especially when I go overseas, when I'm going from airport to hotel, it talks about what I can order in for food and have it ready for me by the time I get to the hotel, what restaurants in the area where I am, I may want to go, and it's all based on previous places I've gone on an Uber, and also with OpenTable because they have a partnership with OpenTable.

Jim Marous (14:03):

They will also talk about tours I may be interested in taking on, in my case, Urban Artwork, which I really like when I go overseas to look at where's graffiti, where can I get the vibe of the city? And it tells me that. Consumers are used to that.

Jim Marous (14:17):

On the other hand, a consumer, what would happen if on your mobile app, let's take Chime for an example because they just came out with it two weeks ago — you have the ability with a very quick push to get a line of credit access because your paycheck and your expenditures are not matching. What gets in our way is legacy mentality about a personal line of credit.

Jim Marous (14:39):

We still use credit bureaus to judge it, we still find reasons to turn somebody down as opposed to approve them. And yet, I think it was about nine years ago, a Polish bank said, "We want to give every one of our customers a line of credit. I want all of the departments to get together, everybody's going to have to touch this at some point and you're not leaving that room theoretically until this is done."

Jim Marous (15:04):

Well, that was breaking all the kinds of legacy rules of what's going on, but how did they solve it. Well, they realized there didn't have to be a minimum amount of credit available because for a person to be able to say you had X number of dollars, let's say it's a hundred dollars, but if you wanted more, you just push another button, it got them to know that they were given credit for the relationship.

Jim Marous (15:24):

They had had a 5-year, 10-year relationship with the financial institution, they had not moved. They used their mobile phone in a way that says they're not going to try to go bad. It may happen, but we can give a lot more people a hundred dollar line of credit but how many of your financial institutions would feel comfortable and how many people in your financial institution would go, "Oh, wait, wait, wait, wait, if we gave it to 60% of our customers and 30% of those went bad, then a hundred times, 30% times our customer base means we're going to lose this much."

Jim Marous (15:53):

And I'm having to guess there's something on your books right now that's probably a bigger loss that's waiting in a commercial real estate property or some other business, and I think this is where engagement has to come in, and we see it in the report, we see that financial institutions are talking about it, it's the implementation.

Jim Marous (16:12):

So, in the report, one of the things we found was that, as I mentioned, the digital transformation process has evolved. They don't rate themselves as highly, but not much lower but they're focusing on different things.

Jim Marous (16:25):

But then when we went to a later part of the report, we talked about their partnership with solution providers. We saw that financial institutions of all sizes are now making partnerships with what we call FinTech or solution providers, so basically all 150 companies on the floor, and all the FinTech companies that are not here.

Jim Marous (16:45):

Are you seeing that in … is this giving power to the smaller organizations? Because we're going to be splitting out credit unions and community banks because they did act differently in some of these and this was one of those things. They are much more likely to build partnerships with solution providers while not putting as much emphasis on core, the old core leaders.

Fabio Biasella (17:05):

And we're talking-

Jim Marous (17:06):

It's the big banks, credit unions and community banks, pretty much act the same.

Fabio Biasella (17:10):

Absolutely. You're seeing inside the conversations that I have that they're comfortable with their legacy systems. They understand that they may need to evolve them, but they're no longer really looking exclusively in that direction for kind of a one-stop shop for all of their needs.

Fabio Biasella (17:30):

You are seeing strategies emerge to layer on fintech partnerships, true partnerships now where there's a back and forth between service provider and the client understands and I'm trying to help them understand that they need to deliver good strategies and good, clean kind of rules of what they were looking for, not nebulous statements and we can help them do that. We're actually seeing that inside of a lot of the RFPs that we're helping clients build now.

Fabio Biasella (17:59):

And then nimble FinTechs are being very responsive to how they arrange their resources so they know there's a different level — I don't want to call it handholding but a different level of working together going forward, rather than … when I was in banking, it was you got the piece of software, it kind of got dropped off at the door, and you had to figure out largely with your own devices after three days of training how to do it.

Jim Marous (18:26):

And the RFPs, what are the decision points that they're making their decisions on? Because I think it's changed over the last few years on what they looked for, what they want going forward, and even the scope of these RFPs.

Jim Marous (18:39):

I would imagine (I don't know for sure) there's a lot of RFPs that are very needs-driven. I want a new account opening process and that's not a whole core. They're looking at taking care of the smaller things. Is that what you mean?

Fabio Biasella (18:52):

Yeah, exactly, exactly. So, it comes in both varieties. If the organization's contemplating a large change, it's definitely in there, those partnership agreements. But more and more, we're being approached and I'm seeing inside of my planning sessions the need for these narrower partnership agreements to emerge.

Fabio Biasella (19:11):

And you're seeing clients really struggle and this is important I think for us to share for the FinTechs in the room. They'll have a good idea of what they want do but they may not have the clearest business case for it oftentimes.

Fabio Biasella (19:25):

So, to the extent that you may have to spend some cycles of energy helping them develop and narrow their business case, I think I'm seeing that. I've seen that a couple of times. That helps the client understand more of what they want rather than less, and for those clients that are willing to embrace that, then they're able to go much faster.

Jim Marous (19:44):

Interesting. This is something that's come out in the last year, a lot more discussion about that North Star, about you have to define, and it's put in different ways with different interviews we've done on how important the first part of this question has to be: what is your destination either for this component or overall as an organization? And if there's not an ability to define that on a very narrow case basis, you'll never know if you got there, and you're going to be aimless.

Jim Marous (20:12):

In addition, if you don't know what that North Star, if you don't know what your guiding point is going to be, if you don't know what your final destination on the GPS is, not only could you get off track, but you won't know if you're off track because it'll sound like it feels right.

Jim Marous (20:26):

What is also good though is I think I'm seeing more and more organizations look to partners that have a lot of other partners they've worked with, and that now organizations are saying, "I want the ones that have the most clients in this space because they've already done the leg work."

Jim Marous (20:47):

And if I can stay out of the way, which it's a big if, I'm going to be able to implement it, not in … I mean, back in our day, if you had anything, you’d make a strategic plan and you go, "Maybe I'll have that," but now we're getting to implementation cycles that are three months long.

Fabio Biasella (21:04):

And they have to be. So, that bags the several things there. First of all, I think next time you and I get together, we need a third chair. We'll just put your phone right up on it and we'll start pointing to it as we talk about these things because it's really the third guest in our conversations.

Fabio Biasella (21:18):

So, strategic clarity is important. Best rules of thumb I've done hundreds of planning sessions with credit unions and banks through the years. If you can distill your strategy down onto a one-page poster, you've got something that you can really then use to lever the organization.

Fabio Biasella (21:37):

I did that at both of the shops that I had privilege of being a part of, and it does really help crystallize the discussion and take the content from your planning process, and help you position it then into your North Stars because then, the leadership team can decide on the North Star after the board and the C-suite sets the kind of the strategic direction.

Fabio Biasella (21:58):

Makes a nice easy connection to strategic direction to North Stars and then you can embed the North Stars into all of your business planning efforts, and I'm seeing that more and more now, so that you can then begin to train in deeper in the organization that these connections and focus the conversation.

Jim Marous (22:17):

It's interesting because when we look at the report, there are a lot of components that look almost like a trend line where evolution from 2020 to 2021 kind of followed the path that we would expect. However, there are some aha moments. Aha moments not just from that whole question threw me off, to it was different between a community bank/credit union and a larger bank.

Jim Marous (22:42):

One of the biggest ahas that we've discussed is (and it's kind of like one of these things I can put my head through the wall and go, "I don't get it"), is that the number of organizations that were going to expand their branch network was 62% I believe the number was.

Jim Marous (23:02):

And there's sometimes when I go back with the data going, okay, we maybe stated the question wrong and there's something wrong here. And the number that we're going to actually shrink branches was less than 20%. That did not make sense to me.

Jim Marous (23:18):

And the smaller organizations tended to almost double down on that, they even had a stronger number. What is causing that? In a time when we realized that one of the things that is pulling this back, the anchor is the cost of physical structure.

Jim Marous (23:35):

Number one, what are you seeing as why are branches being built or expanded beyond … and I can give the outliers, like the Wells, the Bank of Americas and Chase and Capital One that are a different mindset, and they have a different strategy behind that that nobody else has. But why are they doing it? And do you see that this trend's going to continue this way?

Fabio Biasella (23:59):

Two things there. Kind of just to put it as flatly as possible; you're still seeing in the research the mentality of the last 20 years. How did we grow over the last 25 years as an industry? We expanded our physical footprints, you still have leadership teams who feel that oftentimes that is the only way they can grow, and we'll give them the grace.

Jim Marous (24:29):

And we'll make the excuses for that. So, we want people from this area, it’s a really growing area, we got to have a branch there, or we go back to the old legacy thinking on branch building and branch de-building and taking them down.

Fabio Biasella (24:43):

And then there's a bigger implication. So, okay, you're going to grow the traditional kind of way where the markets expand and you expand your physical presence in them, but two things are happening.

Fabio Biasella (24:55):

You now wind up with these enormously complicated networks of branches, oftentimes they're acquired often, so they're not consistent in look and feel and footprint, so you have that challenge. Some are too close together, some are too far apart, some are in areas that are hard to get to the usual monopoly of things you have.

Fabio Biasella (25:20):

So, you're going to keep seeing that, but you're also going to start to … I'm going to go but you're now starting to see emerge the notion of, “Hey, I've got to rationalize that whole network. I've got to optimize all of that channel,” and sometimes, it's about closing branches, sometimes it isn't but there's this growing-

Jim Marous (25:37):

Sometimes just resizing them, rethinking the way the branch has to be done.

Fabio Biasella (25:40):

The cold hard reality is we have all these physical footprints. For many clients that I've seen, we are not staffed for the way the world is now in a declining digital transacting world. We're still staffed differently and overstaffed in some cases. I mean, some of the shops I've seen have twice the number of bodies they actually require for the transaction counts.

Fabio Biasella (26:06):

So, you have this real kind of moment of reckoning because you can't have all of this infrastructure over here that was set up to do one thing in a declining environment, and then all of the "newer" digital infrastructure over here not getting necessarily the care and feeding that it needs. So, you're going to see that strategy start to flip around.

Fabio Biasella (26:28):

So, the way I'm putting it, and we discovered this in a planning session so the client actually figured this out. We have an omnichannel strategy basically at most shops, and that omnichannel strategy evolved from the branches into the digital world through the ATM world into the digital world.

Jim Marous (26:46):

Into the online banking world to the digital world.

Fabio Biasella (26:48):

Yeah, exactly — into the mobile, into digital, if we want to be really succinct. That omnichannel world is now less relevant in a declining transaction world. It's about a digital strategy and everything else lining up behind it. So, we're going in an interesting evolution everyone from where we added the digital channels to support the branches, to the branches needing to be redesigned to support our digital strategy.

Fabio Biasella (27:22):

In every sense of the word: branch support, tech support, cross-selling, fulfilling the destiny — fascinating change taking place, we're working with more and more clients who are realizing that. So, hopefully, as more clients start to look at the network like that against this reality of change, you'll see this notion of, “I got to continue to add branches, slow down or moderate into, I got to take a look at this whole network,” very exciting time.

Jim Marous (27:48):

It's interesting because to build a branch still costs, in most cases, I'm going to say $2 million and some are 3, some are 1.5-

Fabio Biasella (27:55):

Depending on where you are, you bet.

Jim Marous (27:56):

But let's say 1.5, I'll take the low end of that. If I'm working with a financial institution, if I'm working in the financial institution, and I'm going to say, "Am I going to do better by building this branch and getting the business that I hope to get in that branch, or should I use that money to make it so I can actually open the front door of my financial institution to the digital customer that wants to open accounts?"

Jim Marous (28:23):

Many of you have heard my podcast heard everything else I talk about on an ongoing basis, is my biggest pet peeve is if you have a new account opening process, it takes 14, 15, 12, 10 minutes, your system is broken, and that's why they're coming to your branch.

Jim Marous (28:40):

And I will guarantee I'll come into any of your banks, and I'll talk to your board, I'll talk to anybody and say, “I will generate more accounts than you could ever do in a brand-new branch in your first year immediately upon changing your new account opening process.”

Jim Marous (28:54):

And I got that validated on the first day of the forum where I said, "How many of you have gotten down to a three-minute process?" Very few people raised their hands. I asked one, "What happened to those numbers?"

Jim Marous (29:07):

And I think it was Brandon, he said, "They went up by …” I think your number was 23%, and then he caught me in the hall later that day and said, "I'm sorry Jim, I did you a disservice. I way underestimated what the rise in number of accounts was instantaneously." Want to share that a little bit.

Brandon (29:27):

Exactly. So, I was looking at a point in time kind of year over year when we did the switch, but it wasn't the transition from one vendor to another, it was reducing friction, it was plugging in multiple tools, and just a couple years span, we've more than doubled the number of accounts coming in from digital for our credit union.

Fabio Biasella (29:47):

Channel to channel. So, double twice the number coming in from digital versus the branches?

Jim Marous (29:51):

No.

Brandon (29:51):

No. Digital.

Jim Marous (29:53):

Just opening digital. And I'm going to have you on the show again because the reality is if you are able to tell your management, "I can double the number of accounts I can open if I just fix what I've told you we need to fix …" oh, and by the way, it doesn't mean you're going to buy the technology that can do that. It means that you're going to take advantage of the technology that's being given to you and not get in the way.

Jim Marous (30:16):

And I say get in the way because the worst thing that the companies that can provide this Q2, all the others that can provide a digital new account opening experience want to hear is after they come in and you said, "Yes, we want it, we're all in," that you say, "Yes, but we still have to start with a driver's license."

Jim Marous (30:31):

I'm going to tell you right now that's going to double the amount of time instantaneously and it's going to cut your number accounts back to where it was. So, you've got to do it by the rules and if you break those rules, you might as well build the branch.

Jim Marous (30:42):

But the reality is it will not cost you (and I'm not even getting into the numbers) a million dollars to get a new account opening experience, and it only takes three months at the outset if you play along to get that implemented in your financial institution.

Jim Marous (30:57):

I can't say it enough because don't think about remodeling, building, tearing down anything within your branches until you get your front door open. And then realize that your senior management or the people that are the naysayers are going to be right.

Jim Marous (31:11):

The cross-selling on that digital account-opening will not be the same as it would be if you had the branch. What do you do? You humanize the digital experience and engage the people that are right now only doing transactions and get them involved in the process.

Jim Marous (31:28):

Get the person to the closest branch if you have a branch near the person. If it's outside your marketing area, you don't need that but the reality is there are ways digitally and non-digitally to engage and build a great onboarding process that goes beyond a thank you.

Jim Marous (31:43):

And it is the most frustrating thing in my daily living that I want to make banking better, but if you keep on fighting against me (I'm going to use it personally), I can't fix your diabetes if you keep eating and not working out the same way. And until you get that wakeup call and you realize that every one of the financial institutions here, everyone, one of their top priorities is new account generation, I already showed that.

Jim Marous (32:08):

Doggone it, I got your solution for you and the worst thing you can have happen is be the last one in your marketplace to fix the problem because your growth will not be the same if everybody else is getting the accounts. In addition, they don't want to talk about a lie.

Jim Marous (32:25):

We get a report that says, "But our customers want the branch. Look, how many accounts are open in the branch.” Let's try to figure out where those started. Didn't it start digitally and then they came to the branch because we made it so hard for them? Yes, it does. And why are we getting tracking on that? Because we motivate the Branch Manager, the new account opening personnel to bury the fact this person started digitally and the client's never going to complain.

Jim Marous (32:54):

The new customer's never going to complain because the new account opening person, has gotten just massively friendly. I want to get you through the process. It's going to take a little while, but I'll fix everything that wasn't done right digitally. We're going to start from the beginning, but we'll make it quick for you, and the person's never going to leave. So, how did Citibank solve this problem?

Jim Marous (33:11):

I did tell this in a story somewhere this week. Citibank had a broken new account experience. In fact, they still, I believe, may still have a broken experience. They fixed it by making it so that every time a person got into a new account opening and abandoned it, they immediately got a call. How did they do that? Because the first thing they collected was a mobile phone number. That happens everywhere.

Jim Marous (33:33):

People used to, "Oh, I don't want to give you my mobile phone number." No, they'll give you your mobile phone as part of the account opening because they know you're going to need it eventually. If you do it first and if you get their mobile phone, you can not only call them, you can send them an SMS text, which is the only thing we open nowadays.

Jim Marous (33:49):

If you have any kids that are in sports, you know that email's the worst way to communicate with the kids, you're going to be able to communicate with everybody. And the reality is you don't have to even fix your new account opening experience digitally if you have the process and the integration of channels.

Fabio Biasella (34:05):

And a simple step there to marry that to your excellent branch staff — have the branch staff send those text messages: "Hi, I am Jody from the branch. I see what you drew and call if you have any questions or how can I help?”

Fabio Baisella (34:20):

I mean, so that's really an excellent manifestation of what we're talking about that's going to be possible you're going to need to happen because we talk about this too, you and I offline all the time — the next generations coming up are digital natives and I know we all know this, but we tend to treat it just kind of as yeah, and the sky is blue.

Fabio Biasella (34:46):

They're going to evaluate you coming into those channels first. I don't care how good your people are, if the evaluation is poor on the way in, chances are they're never going to get to your wonderful people. And the relevancy argument for those groups is different for the relevancy argument that we just spent the last two decades growing successful with.

Fabio Biasella (35:08):

That brings up the other key point that I want to make sure we take away from today. In my travels, clients are now finally to truly understand what it means for the baby boomers to be almost done with their work lives. The last few will be retiring in the next five years, and our industry … on mass, you know what I mean?

Jim Marous (35:32):

There's going to be exceptions.

Fabio Biasella (35:36):

On mass. And we have grown with that consumer segment dutifully for the last 40 years, and we've enjoyed this unusually different, not normal period over the last 10 to 15 years where the capital was just tumbling in, the deposits were tumbling in because this is the largest, wealthiest, and most upwardly mobile generation in human history.

Fabio Biasella (35:59):

They're done with that part of their lifecycle, and the generations coming up behind them are not positioned the same way. They're obviously more digital, they're generally more indebted already. I mean if you look at Gen Z, even last time I looked Gen Z as a group, depending on how you cut the age ranges, over a trillion already in debt.

Jim Marous (36:26):

And it's interesting because we talked about Gen Z earlier you and I. I just went and talked to a gentleman named Jason Dorsey really continues to follow the Gen Z generation and there's some big surprises. Number one, they are more like me than they are like the generation before them.

Jim Marous (36:44):

They need stability, they need trust, they want to see branches. They may never visit one, but they want to see it because they want to have a partnership that they can rely on. They have no patience for friction over things that take time, but they're more likely to stay home longer than the generation before them because they're fearful. This is the generation that in high school or college experienced COVID and got shut down.

Jim Marous (37:15):

As you said, at the very edge, some of them were old enough to actually remember the day that 9/11 happened, that those who aren't, it was a major part of their growing up years. These people are fearful. We are doing nothing to help them on a daily basis in the news media because the whole world is a lot more challenging.

Jim Marous (37:37):

But I think we have to remember that if we think that Gen Z followed … their generation is just even more digital, more apt to start a new business, that's not going to be the case. These people are insanely different from a standpoint of what they want from their financial institution. So, we have to think of it differently as you talk about wellness. You mentioned it, the indebtedness.

Jim Marous (38:01):

Yesterday, I was happy that a person from Debbie, the app that helps people get out of debt was here, and that was the very beginning of their journey and they say, "We have so many more people that we can actually serve helping them get out of debt." This generation has gotten into debt not because they're irresponsible, it's because they're trying to bridge the gap between their payday and their paycheck.

Jim Marous (38:31):

I mean, their paycheck and their rent, and their rent and we have to really address the fact. And I was talking to Colin Walsh from Varo yesterday and saying, "At the beginning of Varo is to serve the underserved community." And it was to help them get money, get deposits, get savings.

Jim Marous (38:47):

He says, "If I was to rebuild it today, I'd build it more under the credit side of the business because these people need credit from an emergency standpoint. They need to be able to learn how to get out of debt, the SoFis of the world." So, they're different generations.

Fabio Biasella (39:04):

Exactly, but let's build on that. So, they need strength, they need stability, they need trust. If I look around this room, that's the relevancy argument for all of these wonderful community FIs in here. We're local, we're trusted, we have a history of trust.

Jim Marous (39:19):

And we're building digital for your needs as well.

Fabio Biasella (39:22):

And A, we have to begin building digital for their needs and then we have to cast that relevancy argument around trust, stability, strength and advocacy into that channel. We let our people in our buildings do that for us with the prior generations, we need to now make that happen inside of the digital channels. That can be a significant differentiator in your experience in terms of having maybe being able to craft those types of experiences and those types of messages for these younger generations.

Jim Marous (39:57):

It's interesting Fabio, since we've talked about the report itself, which please, I think there's a QR code outside on getting the report. Please get the report, please share with everybody in your organization. I'm not saying it's the best report in the world, but it's a great starting point. You'll be able to get it from your Q2 representative as well, it is the eyeopener from the differences.

Jim Marous (40:20):

Q2 went a step further and had us dig into the credit union, which I'm going to tell you the community bank space is the same. It acts basically very similarly. They have some of the same dynamics. Please get the report, but there's nothing like feet on the ground, meeting people in person. We've been here now for two days and two hours, and the back and forth talking, you and I don't have any trouble having an engagement, having talking with people.

Jim Marous (40:49):

What are you hearing on the floor that is the momentum? What is exciting people today and what are the people challenged by? What's scaring the people? And maybe not scaring but certainly challenging them.

Fabio Biasella (41:04):

So, the chatter on the floor has been fantastic. My experience here the last couple days has been good. Not commercializing to make a commercial for you, it is what you would expect when you bring together a bunch of forward-looking marketer types.

Fabio Biasella (41:17):

They're willing to embrace a challenge or embrace a problem and now we're starting to see answers coming into view to help and to shape those challenges or deal with those challenges. Lots of good buzz in terms of the amount of AI platforms that you see out there kind of built now to answer these specific questions or helping engage.

Jim Marous (41:41):

The elevator speeches aren't the same on the floor. And just three years, four years ago, you could get on an elevator and not be able to tell one vendor from another. They're getting very specific as to what they solve.

Fabio Biasella (41:52):

And I love that trend. In working with clients, some of the problem is the enormity of task. The task just seems too daunting so they throw it overboard. I've had good success now helping teams break the task down into smaller pieces, and they're actually now looking for answers for just those pieces. Now, that will cause some sort of its own proliferation challenges for some clients, but if we can get the top two priorities answered in a very narrowed way, it's great.

Fabio Biasella (42:23):

So, I see that taking place, and then I still see that kind of undercurrent of fear or concern particularly around the risks involved, uncertainty around all the changes that are taking place in the macroeconomic environment in particular, but the zeitgeist is positive here.

Fabio Biasella (42:47):

The challenge is we need to take this energy back to our team's writ large, and you need to be able to start posing these questions like this. We need to evolve the mindset and the problem solving, the way we solve problems in a much more narrow way. And I think we can overcome the challenges, we are going to have to overcome these challenges.

Fabio Biasella (43:11):

I shared with Jim, I got a sneak peek at some bits of research, total millennial primary institution status for the big five institutions, the last bit I saw last week was 76%. 76% of millennials indicate that one of the large five institutions is their PFI in 2025. In 2020, ladies and gentlemen, that was 49% — now that's tough. The tough news on Gen Z, you don't have data from 2020 because they were still too young, but the first snapshot for Gen Z's already at 72%.

Jim Marous (44:01):

And by the way, as far as new account opening, Ron Shevlin will argue that Chime's one of those financial institutions. We don't measure them the same in many cases, but from a standpoint of opening, what's also important, to your point, the first thing you said, the breaking apart of the solutions.

Jim Marous (44:16):

We have to realize that, be it you are doing it for this reason or you're better implementing this reason, what's great about that breaking apart of the solutions and finding the things I need today, make sure you don't make it an annual event. This is now quarterly. I don't think there's a solution provider out there that can't bring you something of major significance to you that can't be implemented if you help it quarterly.

Jim Marous (44:45):

In addition, that means ROI within six months, that is insane. I mean, I'm sorry, I go back where you couldn't do anything without having a one to two-year plan, this is not needed. You can even replace core in 18 months.

Jim Marous (44:59):

I've interviewed financial … now, mind you, I'd never do that. It would scare the day … somebody said they replace your core and their digital banking platform in 18 months and I said, "And you're still here," because it's insane.

Jim Marous (45:13):

On the other hand, you have the Zions Bank of the world and I kid them about they take it well, that took them 10 years. The process was, as she said, if she started again today, it would take her two years because they started before anybody was ready to work with them, and they were building along the way.

Fabio Biasella (45:29):

Well, these are the things we talk about at Engage. We challenge our conversion teams to figure out how to make this a core conversion in six months, 90 days, and the tools are out there now to make this happen believe it or not.

Fabio Biasella (45:41):

So, it's a very exciting time in that in terms of you're finally having the wherewithal available to any shop to be able to set aside the notion that we can't go fast enough. We can go faster and this is where partner selection becomes important.

Fabio Biasella (45:57):

Because you want to know … I counsel clients this way when we're talking about setting up a framework for partner selection. I'd want to know, if I was having sat in the C-suite for a few years, I was always asking not about where they were now and what all the bells and whistles were, but how well they were going to be able to let me be positioned where I need to be in the future.

Fabio Biasella (46:24):

That's the true meaning of partnership inside the C-suite from my perspective, having sat inside the C-suite for a few years. And you're going to see that more and more, and you should be taking that knowledge back to your shops and your planning processes as well — start asking of your vendors, “How are you going to enable the change that I need to make, whether or not you're able to do that change for me?”

Jim Marous (46:51):

That's a great takeaway because if you don't have somebody that has the vision to go forward, you're not going to get there. The other question I would ask, and it's becoming more and more important, is find out from the partner you want to select, give me three examples of organizations that have pushed you beyond where you were at that time.

Jim Marous (47:12):

Because we're finding, Q2's a great example, that the clients are now pushing the vendors to a place that they hadn't gotten to yet, but are they going to be listening to organizations of all sizes? This is the frustration most of us have had with the traditional course, some of them have changed, some of them haven't. Well, do I have a voice if I'm under $10 billion, do I have a voice? That's the question you have to ask.

Jim Marous (47:38):

The good news is in the implementation cycles, because they come much shorter — if you make a bad partnership, in most cases, you can fix that relatively quickly as well. That's not a good new scenario, it's not expected, but ask those questions.

Jim Marous (47:51):

I think we're at the end of our time that was allotted but I think from a recommendation standpoint, I'm going to give a recommendation that it's not going to be as pertinent to the podcast audience as it is to the group in the room today, but it's for anybody that goes to an event, anybody that goes to a user conference, anybody that goes to anything or even opens up ChatGPT and asks the questions — don't stop there.

Jim Marous (48:18):

I've gone to literally tens of thousands of events in my career, most of them I've come back with great ideas that I never implemented that I wish I had. I never did the next step, I never did the just do it step.

Jim Marous (48:36):

If we don't implement what we learn, if we don't keep the relationships we meet in just the hallways, if we don't set our team in place and have a meeting when we get back and say, "I want to go over what I've learned and why it's important," it will go away as quickly as it came into your mind.

Jim Marous (48:54):

We talk a good game, we want to do the right thing, it's that we don't do it. It's the whole personalization thing that I'm talking about, that we are all talking about it. It'd be important, but we're not doing the things to get there and I'm going to say it probably again, at least one or two times today, I did it two times every day up to this point. The world is moving fast than every before, it’ll never go this slowly again.

Jim Marous (49:17):

We see it everywhere. It gets confusing, it gets overwhelming, you need to continually learn. We've talked about if you come out of university today as a Marketing Director or as a professional marketer, they will lose more of what they've learned in the first year if they're a good marketer and pick up new ideas, we cannot stay where we are.

Jim Marous (49:42):

I am frustrated, I told you how frustrated … I told Brian by how many marketers I know in the business that say, "I lost my job, I didn't see it coming." I go the WTF. I said, "What do you mean you didn't see it coming?" I said, "Weren't you looking? Weren't you noticing that the world was moving but you weren't?" Because you weren't let go because you were the best person on the block, you weren't at that moment. You maybe were hired that way.

Jim Marous (50:06):

Secondly, I asked what have you done on LinkedIn lately? And they go, "I go once in a while." That is an ongoing digital resume. If you go to my site, my LinkedIn site, you'll see recommendations I have from the very, very, very first years of my career. Use that to your advantage because it's your networking, it's your tribe.

Jim Marous (50:27):

I interviewed Leda Glyptis more than a few times. She talks about her tribe, who you surround yourself with, who's going to push you on your bad days, who are you going to push on their bad days?

Fabio Biasella (50:37):

And you're going to have to go back-

Jim Marous (50:38):

Fabio's not a bad person, by the way if you get to know him because he's going to push your butt because he never has a bad day, but when he does have a bad day, he won't engage as much.

Fabio Biasella (50:48):

Believe me, I've had my fair share of bad days just like everybody else, but I love what we do. There's a passion that I have for community financial institutions. Their role is so important in the world, it's so important for the fabric of the communities that we live in, that we have to do what we need to do. So, the framework, what you just described Jim, is actually the framework that you need to take back to your leadership teams in your organizations and use it in your planning process.

Fabio Biasella (51:18):

And then I would add one thing, if we want to try to guarantee success, when you go back and do that planning process, just pick the one or the two things that emerged from that process. Don't put 900 things up on the wall that you know you got to do.

Fabio Biasella (51:34):

We'll put the 900 and oftentimes I'm brought in now to have this very exercise. Here's the 90 things that are priorities, none of which are real priorities. Let's actually go through an exercise where we pick the one or the two, and then everything else gets put in the closet, so to speak, and you focus on that.

[Music Playing]

Fabio Biasella (51:52):

You take that framework back that Jim was talking about, the buzz you get from here, come out with one or two things, I think you can start to really move your organizations more quickly. You'll start to overcome some of the angst.

Jim Marous (52:05):

Fabio.

Fabio Biasella (52:06):

Always.

Jim Marous (52:07):

Yeah. I was just going to say always. We have to always look at our time. We started the time here because we'll go on forever. Thank you very much, appreciate your time.

Fabio Biasella (52:13):

Thank you very much, always my friend. Thank you.

Jim Marous (52:21):

I want to thank Q2 as well. Their sponsorship of the report, their continuous support of my efforts to make banking better, but more importantly, their efforts to make banking better is what motivates me every day, and there's other vendors that also have the same mission that Q2 works with every one of them as well.

Jim Marous (52:44):

But leverage your partnerships, leverage the people on the floor to ask them questions even if you're not a partner, and get the answers from them on what should I do next. But I thank you, the team from Q2, you're great friends. I have as much of your logo stuff in my closet as I have of my own, and I appreciate everything you do. Thank you.

Fabio Biasella (53:02):

Thank you for the opportunity. Yep, very much.