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Hosted by top 5 banking and fintech influencer, Jim Marous, Banking Transformed highlights the challenges facing the banking industry. Featuring some of the top minds in business, this podcast explores how financial institutions can prepare for the future of banking.

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From Personalization to Profits in Banking

Consumers want their financial providers to provide integrated experiences that leverage insights to create intuitive engagements. To accomplish this, banks and credit unions need to build the data infrastructure and analytics capabilities that can be applied across the entire customer journey.

Personalization must become a strategic priority, using data to create a differentiated value exchange with the customer in real-time.

I am excited to have Jim Stapleton, Senior Vice President at Epsilon on the Banking Transformed podcast. Jim shares how banks and credit unions can deepen relationships by understanding customer behaviors and offering timely solutions.

This episode of Banking Transformed is sponsored by Epsilon

With 50+ years’ experience, Epsilon for Financial Services accelerates clients’ ability to harness the power of data to enhance, activate, and measure campaigns with confidence. With market-leading insights into customer's actions (even when they’re not interacting with your brand), Epsilon can predict upcoming life events and deliver optimized messages across owned and paid channels, while respecting and protecting consumer privacy and client data.

Learn more about Epsilon for Financial Services

Jim Marous:
Hello, and welcome to Banking Transformer. I'm your host, Jim Marous. Founder and CEO of the Digital Bank Report and co-publisher of The Financial Brand. Consumers want their financial providers to provide integrated experiences that leverage insights to create engagement. To accomplish this financial, institutions need to build the data infrastructure and analytic capabilities that can be applied across the entire customer journey. Personalization must become a strategic priority using data to create differentiated value exchange with a customer in real time.

Jim Marous:
I'm excited to have Jim Stapleton, Senior Vice President of Epsilon on the show today. Jim will share how banks and credit unions can [inaudible 00:00:58] relationships by understanding customer behaviors and offering timely solutions. So financial institutions must support a business plan that prioritizes customer centricity as opposed to product centricity. This includes, but is not limited to rethinking and automating back office processes, leveraging modern technologies, upgrading data and analytics capabilities, communicating with contextual personalization, and prioritizing both speed and scale of customer interactions. So Jim, let's start by defining what you believe is meant by personalization. Obviously we're talking about more than simply putting in a name on a communications piece.

Jim Stapleton:
Yeah. It's a great question, Jim. And I would tell you that my thinking on that answer has evolved over the last few months. I had always thought about it, by the way, being relegated specifically to the marketing activity of banks and credit unions. More and more, I'm wondering why are we keeping this intelligence captive to one department? And that infusing our knowledge of consumers and their emerging needs, okay? Which is very different than targeting criteria, right? We're talking about what do they need based on where they are in their life stage, perhaps inflection point in their life stage? It's typically when their real needs arise. So being able to trigger off, that's what I think of when I think of data driven personalization.

Jim Stapleton:
I've got to push 1,000 checking accounts this week. Who can I go target them and starting really with the consumers, particularly the ones you're currently serving and saying, "What are their needs?" I know a lot about them. I can know a lot more through my first party data. I can really round out that view with a robust third party data augment to get a holistic view that should give me a pretty good idea of where they are in their life stage and potentially an inflection point that's occurring. I'll give an example. So if you were able to discern that someone is having a baby, right? There's going to be a new baby in the household, that should give you some indication that potentially this could be the first child, all of a sudden their needs and their financial needs have just changed. They're going to start thinking about things like life insurance, which they didn't think before. They're going to start thinking about maybe I need to start thinking about 529 that I never thought about before.

Jim Stapleton:
So rather than try to go get somebody who's, by the way, single, no kids and mistakenly try to position these products in front of them or take somebody who, by the way, is well past that life stage inflection point, has already got that cared for. And to be honest, those aren't high churn products, I just mentioned. 529 is in life insurance, right?

Jim Marous:
Right.

Jim Stapleton:
They tend to be set and forget. And so if those are your products that you're going after and you want to be there at the moment, I call it a jump ball moment, in the marketplace, you've got to really be able to detect that and detect it in advance of it occurring and be there at that moment. That should be your new marketing lens. Not, "I've got a bunch of SKUs and I need to find people to buy them." So don't start with the product. Start with the individual and be looking for that data-driven intent signal that says, "This is an always on campaign and this consumer just entered the zone of this campaign. So that's what I think about.

Jim Stapleton:
Now, what I said early is, that all sounds really marketing oriented, but why aren't you doing the same thing in the care and feeding of your existing customers? And it could just be information, it could be the way you approach them, it could be what information appears on the website, on the banner ads, right? That is helpful and productive to them given your knowledge and awareness of their life stage. So that's what I think about it as. And it extends beyond marketing into the digital experience. The ongoing life cycle experience of the consumer.

Jim Marous:
It's interesting, Jim. You gave us so much to unpack here. So one of the things that, what's happened and you said personalizations really changed is, you think since COVID where people were kind of sequestering in their houses, people became more aware of things like Netflix and Hulu. They became more aware of things like Instacart. All these digital engagements that really looked at data and provided insights into what you may do next. And I think financial institutions are really trying to play catch up. Now, the good news is you, mentioned about the potential of the baby being born. If a financial institution is risk averse, they're going, "Yeah. But how about if we get this wrong?"

Jim Marous:
The reality is two things because of COVID, is customers realize that you're trying to help them with the data that you collect. And sometimes, you're going to be off based a little bit. You can build that into the equation and you can do it where you're not stepping so far out there, but in the same sense, what you're trying to do is they understand, you're trying to serve them better. And you said it really well around the fact that the redefinition of personalization goes beyond the name and really looks at how I'm going to engage and also, and then we're going to get to this a little bit later, the deployment or democrization of data across an organization.

Jim Marous:
So when we're talking about personalized experiences. Let's call it hyperpersonalization. One thing I'd like to see is from your perspective, how do organizations go behind what I'm going to go beyond simple personalization to building greater engagement? Which I mean by that is, how do you make it so that a dialogue starts and it goes deeper than simply, "Oh, I sent something out that prompts this product that's customer centric, but really is pushing product still."

Jim Stapleton:
Yeah. Well, what we're seeing, some of the best practices out of the banking community is number one, to your point, there's actually a pretty solid expectation that you are meant to. It's a trusted relationship. There's a very different expectation from a clothing retailer and how much you should know me and how much you should not know me. Then there is your banking relationship. If you really step back and think about it, banking is built on trust. I make a deposit, I trust when I come back to get it, it's still going to be there. That's a lot of trust. It's fundamentally a trust based relationship. Exactly why the banks are very concerned about losing any trust and having any kind of reputational risk. This goes beyond regulatory concerns around privacy. There's sort of a qualitative and you got to this sort of a, how do I do this in a way where I am perceived as helpful, not creepy?

Jim Marous:
That's a great example. Disney when they first had those bands that monitored where you were going in the park, consumers go, "Geez, do I really want that to happen?" Until a character came up and named the child by name, if it's a talking character obviously, and basically made the entire experience better through that. Now, mistakes are going to be made. But I think as you said, the balance between creepy and helpful, but we have so much data. You talk about the personalization experience. When you look at lowest hanging fruit, the things that, geez, guys, you got to hit this one out of the park. You talked about some product journeys instead of pushing the checking accounts, trying to get 1,000 in a month.

Jim Marous:
What are some of the lower hanging fruits that you've seen out there that you go, "You know what, guys? There's no losing this." It's going to win every time and it's going to be one of these things that if you build this engagement it's, and you mentioned it so well and it builds trust. Then it also gives you the flexibility, once in a while, mess up. But the customer just like Amazon is not going to kill the relationship [inaudible 00:09:28] you misjudge what they were going to try to buy. They're happy with all the things you helped them in the past. So what are some low hanging fruit items that you see the financial services industry do?

Jim Stapleton:
Yeah. So I think something that falls well inside the safety comfort zone for banks is when you, first of all, the average consumer interacts digitally with their bank every other day, either through the mobile app or the website. And there is marketing inventory in those interactions. Meaning that the consumer's going to see something. They're going to see that the banner, I like to use the banners. The rotating banners, right? When you log into the mobile, the web app, web interface for the bank, they're going to see something. So a very safe zone is to have that next best offer insight. Most banks have a huge portfolio of services and abilities that they can deliver to a consumer. So if we use that sort of knowledge, that holistic low latency knowledge of a consumer to understand that there's an inflection point in their life stages, that they're in need of something, there's a really good and productive needs-based conversation to be had with that consumer. Prioritize that topic as first in the five banner ads.

Jim Stapleton:
There's nothing creepy about that, right? So I think in terms of sort of effectiveness and safety, super simple first step is just website personalization based on next best offer, driven by a holistic understanding of that consumer with, again, low latency. In our case, we use contextual browsing data as a sort of an indicator. There's all kinds of wonderful third party data that when aligned to the first party data can deliver on that very simple experience where you're, and by the way, suppress what I already have.

Jim Stapleton:
If I already have your credit card, don't proposition me with the credit card. To me that says you are tone deaf. Now, you can say, "Well, that's super safe." Well, no. It's actually tone deaf. You are displaying to me that you do not really know me and don't care to reflect what you ought to know about me in your communications with me. I can't think of anything that degrades trust and [inaudible 00:12:04] more than that. So I've kind of given you a simple, safe enhancement do and a very simple don't. Product ownership suppression kind of a no brainer, but you'd be surprised how many don't do that.

Jim Marous:
Well you brought it up too, Jim. Is that many institutions, and I'll give you a great example because you just brought it up. Is my business bank reaches out to me, gives me an email, personalize it, talks about my small business relationship, personalized. And then it gets into something they try to sell, okay. It was not bad. But then they say, "Oh, by the way, if you aren't already in an online banking customer, make sure you sign up for online banking. Oh, and if you haven't ever used mobile deposit capture, be sure you try that as well." And all of a sudden you've lost all credibility because I have both. And what's interesting and you brought it up is organizations-

Jim Stapleton:
They're useful, right?

Jim Marous:
And oh, every week. And the reality is what's really challenging is the financial institutions. I understand how it happens because I started in financial institutions. So I understand what happens. This part of the organization finally got their email slot because they only give up so many of them and the organization says, "I don't want to risk not sending it to somebody, whether I might be wrong or I want to make sure I keep on pushing this one area." And you're going, do you understand what is from the consumer standpoint, how they're seeing this. And again, I'm going to get back to the pandemic. Every single consumer is smart enough to know what you can do, which is the most important and what you should be able to avoid as you mentioned. And so in that context, using data to drive acquisition, cross selling is not new. I mean, it goes back 40 years when I was a banker, why is targeting prospects and cross selling across the customer journey still such a challenge?

Jim Stapleton:
Yeah. Well, I think it comes down to, a lot has changed I guess is what I would say about the availability of third party data, but it is still a challenge for a lot of banks to be able to stitch it all together. And identity, right? It's kind of a hot topic, but I'd also say that most people are like identity. I mean, that's not going to help me achieve my results. How can identity help? But it's such a key enabler. When I think about the three major phases of marketing, anticipating, which we've talked a lot about so far, right? Anticipating need, activating and then measuring and optimizing, right? The feedback loop that goes all the way back to anticipation, right? How right were you and how can you improve your predictive models, your detection of signals of intent, of life stage changes.

Jim Stapleton:
So that's a nice virtuous cycle when you get it going, but you'll never get it going if you're operating in one identity space, as you're trying to piece together third party data and your assemblage of that first and third party data from disparate sources with disparate identities. You never really, you try to Frankenstein it together and you've got incomplete data, you've got mismatches, misunderstandings of data, and then you activate it by moving it to a whole nother identity space for activation, maybe multiple identity spaces for activation. And then you do your best to cobble together the measurement of the back end, again, encumbered by multiple identity spaces on that in different types of attribution. And I started with people, I've ended up with cookies and I can't reconcile it back to the individual, right? That identity having sort of, I call it demand with three watches problem, right?

Jim Stapleton:
If you've got a one identity map when you're trying to anticipate, analyze, detect need. Another one, when you go to activate and another one, when you measure, you're the man with three watches who has not a clue what time it is, right? And so having a consistent identity that you then is sort of a platform or foundation upon which you then layer in these three phases of marketing is a dramatic performance improver.

Jim Stapleton:
Especially if you're going to get into this space, not a spray and pray marketing, right? If it's spray and prey, you're kind of okay with all this dilution and lack of fidelity. But if you really want to get down to the individual and do things like journey orchestration, we talk about that, right? That journey orchestration is predicated in the notion that you maintain a view of an individual throughout the entire journey, that you are able to determine whether or not that the individual has been touched by one of your touchpoints and the ability to understand how they reacted or did not react to that touchpoint, such that you can continue down kind of the, if then logic flow tree of a journey, right?

Jim Stapleton:
There's a lot of predication there on, you've got to have personal level identity in all three stages. And actually it's not just a once through, it's at every touchpoint, you have to have all three stages. You keep coming back and so journey orchestration to me is like this wonderful air traffic control system, right? In which every consumer is an airplane and you're trying to route them properly through a process depending on how their level of engagement, their interest is. And you need clear identity throughout that entire process. So we're seeing banks that are starting to get in credit unions, that are starting to leverage that and starting to, that's a key enabler that not a lot of people talk about, but in the absence of good, clear identity, you're never going to get very far with any of these techniques, right? The sort of state of the art that we all strive for becomes very, very difficult.

Jim Marous:
I'm a financial institution and I want to do what you're saying and it all sounds somewhat cumbersome and really difficult and is taking data. And you work with a number of financial decisions. And one of the excuses that I know that financial decisions have is, "yeah, we'd like to work with you, but our data is just a mess right now. It's in multiple places. We know we have it. It's not clean. It certainly doesn't include third party information." How does Epsilon help a financial institution go from garbage to something that's maybe not completely south for everything but usable. So in other words, I can't fix everything at once, but I got to start driving an ROI. But the worst excuse you hear is, "my data sucks." Because the reality is, there's no institution, you started to work with that they don't think their data sucked. How do you help organizations make it so they can leverage the data that is already internal to drive results.

Jim Stapleton:
Yeah. Great question. So we routinely onboard the first party data, right? That's the key and I don't care how desperate it is. It can come in fragments and pieces and they may not have, they may have a different database for lines of business, right? So, I mean, it could be an utter mess, right? They may not have complete contact.

Jim Marous:
Well, by the way, it usually is. Anybody who's listening to this, they think they're the only institution that and you hear it all the time. Yeah. But you don't know our institution, guess what? You have enough clients.

Jim Stapleton:
You may still be in the top quartile, Jim, I think is what you're saying.

Jim Marous:
Exactly.

Jim Stapleton:
Yeah, no, it's just the reality, right? And a lot of that's legacy and where you came from. So anyway, we will take all that fragmented data and we will onboard it into our identities core ID, you've probably heard about it, sort of our identity map. And we've got a lot of techniques to contact complete. If you don't have complete PII for identity matching, we can kind of complete that to improve match rate and the onboarding. And we'll bring that all in consolidate it. So it may be for the first time you've got a consistent cross line of business view, right? Of a consumer, which is pretty exciting sometimes just in and of itself before we've begun to overlay the third party data, but we've taken everything we license and third party data, whether it's our TSP data, think of demographic type data, our digitally derived data, we can align into that same core.

Jim Stapleton:
It's pre-aligned basically into the core ID space. So we can create this environment. The third party data is already aligned to core ID. And then we can bring in the bank's first party data. And suddenly they've got an environment where they've got a holistic view of their existing customers. They also have a broad view of their prospects, so they can say, "hey, these are not our customers." And know a lot of information about that prospective audience. And like I always mention before, once we're in that core ID environment with that data, they can do all the analytics, the really signals of intent, derive the signals of intent. And then we've got direct bridges. Now, both obviously to our own DSP network for paid media activation, as well as a variety of other DSPs, where really we're still using that core ID natively along with its underlying device map to be able to know that you're reaching these people.

Jim Stapleton:
Once you've fallen in love with that audience, expressed in core IDs, we're going to go activate those individuals, not the cookies, but those people, right? Through digital campaigns, we can also bring that back for their known customers for cross-selling back into their own channels. And then lastly, we can measure it back to the same core IDs, right? So you've onboarded your data, you know who those individuals are, you have decided which ones are just perfect for the product and you've identified their need and you're ready to go proposition them for a solution to it. And then you can immediately tell how they react, right? Yep. And that's the once through, and then you decide, hey, I want to do journey orchestration. Fantastic.

Jim Stapleton:
Now we can keep that same core ID of that individual throughout the entire journey and really support your journey orchestration tools. So that's and the easy step, the easy first step is just onboard the data, begin to understand your customer holistically, not only across your lines of business, but with all this third party data kind of rounding out. So you really understand not just your narrow view of the interaction with the consumer, but what they're doing with the rest of their life outside of their interaction with you.

Jim Marous:
Okay. So I'm the same financial institution, and you've now convinced me that you can hold my hand and actually make my data impactful and I can do something with it, but you know what? This is all bigger than a bread box. And I need to find the budget and the resources internally to support something. But I can't support everything. Does Epsilon give me the capability to say if my major initiative today is generating more loans that you can say, I can compartmentalize your solution to make it easier to absorb, easier to pay for, easier to deploy and quicker to deploy, simply for a compartmentalized part of the business before I get to the broader perspective.

Jim Stapleton:
Yeah, absolutely. What comes to mind when you mention that Jim, is a really nice, tight little project that we do for clients where they will say, "I want more loans", like you just said, right? And will say, "great, send us your last several campaigns with the conversion file", right. In other words, who actually took, who took, who didn't take. We're going to do, we can load that into our system and then look at all the third party data attributes of the, so just simply here's my customer base. Here's who took the offer, here's who did not, and we'll look backwards at 15 months worth of history and say, what made the takers different than the non takers? All right. And build a propensity score. And then we'll say, "give us your next audience that you want us to score", and we'll score it and send it back to you, you activate it in a, through your traditional channels.

Jim Stapleton:
So you don't need kind of the entire system. You could just use sort of the third party data insights. Now we call it signals of intent. We can help sort of just propensity score an audience based on empirical data of history. And what I love about it Jim is, marketing used to be where the marketer would say, "hmm, what are the attributes that I think make up my target audience", and it's human beings who are all autobiographical, whether we want to admit it or not. It's like a survey of one. Honestly, right? And maybe your intuition is excellent and maybe your intuition is not, maybe it's excellent for a very small subgroup of your potential audience. And the good news is you'll, because you used your intuition, that audience, you'll have some success with, but you might be missing others. You may be misunderstanding. What are the needs that led people to take your product? And so when we do this regression analysis, we don't presuppose anything. All right. We basically say, let the data speak for itself, right? So it's very data driven.

Jim Marous:
And what's interesting is, we don't talk about it much in the industry, but when you move from a product to a customer-centric view, you take what you just described here on the loan side, as opposed to having maybe two loan programs a year. What you've done, is you've taken the data and you're finding all the triggers that indicate a person's going to want a loan and you're doing it in smaller, incremental wins, but over every day of the year. So the end result is much greater, right? And we forget about the fact that moving from product to customer centricity means I'm going to be there when you're about to want something and I'm going to get a greater end result, but I can do it at scale because it's a machine. I mean, it's mechanizing, automating the process to a degree that your results are going to be there.

Jim Marous:
You know you talked about this earlier, too. When we talk about, let's say, I'm going to pivot a little bit to, let's say a new account customer. Those new account customers we've seen are, if they're digitally, if they've opened the account digitally, they're probably harder to cross sell, only because we haven't built a really good digital cross sell process in many organizations. But more importantly, we don't have a human interaction. So many organizations say, "well, that's why I want to drive him into the branch."

Jim Marous:
But when you talk about spreading the data insights out and your redefinition of personalization that you did, how important is it today for institutions to democratize data insights across the entire organizations for both the internal departments, but even more importantly, the external resource you have, let's take, for example, branch employees, how powerful is it if an organization takes what you've just described, which is next most likely product, the next most likely purchase, whatever it may be, next most likely service, maybe not even a product and having the humans in the branches that right now are really underutilized, actually use that data to reach out and do what they're best at, which is engage customers?

Jim Stapleton:
Yeah. Great question. So I immediately think of maybe three concentric rings, right? Around the data. So once you've done all the wonderful thing, we've already talked about, consolidating the data, rounding it out with third party data. Now the question is who has access to it, right? Inside the bank and we definitely have clients where really it's just the data scientists and the analytics teams that literally have direct access. Even people you consider marketers, right? Who don't know coding and analytics tools, don't have direct access. They have a analytics buddy they might be as aligned with, that if they come up with the right request, they can submit a request and two weeks later get an answer, maybe two months, right? But the idea of iterating that way or exploring into data, or collab, getting your hands dirty with the data as a marketer just doesn't happen, right?

Jim Stapleton:
Now, we've deployed this capability. So when you said data democratization, it's exactly the way we describe it with the clients who are adopting this capability, we call discovery, which is very simply a gooey interface, drag and drop that a marketer can use to explore into thousands of attributes of first and third party data, begin to formulate hypotheses, we see sizing of audience, get exposure to the types of data that's available. When you have thousands of attributes, by the way, that's not intuitive, right? I mean that you need a data dictionary, you need some familiarity with it. So there's definitely some handholding that goes with this discovery tool, but they can start to just interact in size and get their own hands on the data.

Jim Stapleton:
But it's because, it's sort of the equivalent between programming and C++ and using Excel, okay? We're basically, we have launched Excel for data [inaudible 00:29:59] driven marketing, okay? And make made it available so marketers can get those realtime insights, write better briefs, figure out what creative influences they should have based on the profiling of an audience, all those things in real time. Dashboarding, really cool system. We'd love to do a demo for you at some point, Jim. Yeah. I think you're going to be blown away with it.

Jim Marous:
It's interesting because again, you're multiplying the power of the data. And I used to say, it doesn't do any good to engage with a company like Epsilon simply to make better reports, to find out what I know about my customer base. What's really important is to take it further and say, how do I let my customers know I know about them. We talked about it before the podcast started that my frustration is when my finance institution, I know, knows so much about my transactions and what I need from anything that happens. And yet they don't use that to my advance. They know it, they just don't deploy it. And there's many reasons why, but I think that's a huge missed opportunity.

Jim Marous:
And it's interesting, because it's really the difference between what I'm going to call the new bank, the digital bank and the legacy bank whereby certain things are done the way they've always been done. And then some of the other areas are saying, "no, we can do this differently and get a much better result." So when you look at data and you look at both third party data and internal data, how important is transaction data today and near realtime engagement to the overall success of a communications process?

Jim Stapleton:
Yeah. So everything I've described about defining signals of intent and maybe I wasn't explicit, but third party data is certainly a really cool sort of added ingredient. But first party data should not be thought about as static and irrelevant in that process, right? There are things you can get out of the first party data interactions that are equally viable candidates. And when I said we look back and sort of let the data speak for itself. What emerges is usually a combination of things you pick up on in the third party data. That is a good predictor of whatever outcome you're trying to create, right? But the first party data too, it's a combination of both is what we see pop and emerge. So you can imagine if we're looking at thousands of first and third party attributes, maybe there's six to 10 variables that start to emerge, that used in combination could form a really strong signal.

Jim Stapleton:
And it might be that there's of the 10, maybe six are third party and four are first. So being able to expose your modeling to all of those variables is really important. Jim, you also, you were asking about another ring of democratizing the data and I do want to address it, right? And it's sort of what I would call the bionic nature of data, where, how do you enable human beings? How do you enable them to be smarter? I immediately think of for wealth, for some of our banks that have wealth management where they've got financial advisors and there's a really strong desire. I mean, and I think most of us that do wealth management as consumers. We'd love our app, we love the website, that's sort of our day to day. Just kind of keeping an eye on things.

Jim Stapleton:
But you want to check in with a person and should I rebalance? What's your view of this crazy market we're in? And being able to inform those individuals who are being asked to do more and more and more, right? Their portfolios, they're being stretched thinner and thinner to cover more and more clients. And so that level of intimacy and personalization is under, is challenged a little bit, right? If I've got 300 portfolio clients versus a hundred, my knowledge of Jim and my recollection of the last conversation is diminished.

Jim Stapleton:
So being able to enable, data enable that individual so that when they get ready to sit down for you, for your quarterly or every six month check-in, they've got a summary of some really helpful data that we can extract both first and third party to brief you quickly, right? So that your comments and your advice can be in context with a broader set of data. Now, all of a sudden you're a bionic financial advisor, right? Rather than just struggling on your own with relying on nothing but your own memory of that client. And hopefully being able to personalize your message and your advice.

Jim Marous:
It's interesting, Jim, because another dynamic of this is wealth managers, branch tellers, branch managers, all in the back of their mind, they're saying is digital going to replace me? And by democratizing data that you just described, you're empowering them to be part of the digital solution. What you do is subtly make them very aware that no, you're part of this digital future. We need you more than ever, we didn't hire tellers because they could balance well, we hired them because they could communicate with customers well. If we engage them on the onboarding process, if we give the tools to the wealth manager, they realize, oh, data and digital can empower me to do better and I am part of the equation. So they're less likely to suddenly undermine some of our digital efforts. What's interesting too, is when we look at the power of transactional data, we can't just look at the transfer of data, all the traditional money data.

Jim Marous:
One thing that comes to mind for me is a couple of transactions. One was on an ongoing basis for the last seven years. I have transferred money from one financial institution, my business account to my personal account, twice a month, by writing checks and taking a picture and depositing them because the two organizations don't play well together. For whatever reason, it's just cumbersome. So I'm doing it a different way. Well, both institutions should be able to see that on a regular basis, I'm doing this and I'm sure there's a better way for me to implement that. Secondly, and this is one of these case studies that you hear on the street.

Jim Marous:
A financial institution said to me once, they go, "we all got fat and happy, really happy with the checks that came out from the government." He said, "what we did, instead of just getting fat and happy about what we were getting deposited, we looked and said, what happened for the next week after those checks came out? And we realized that organizations like Robin Hood, organizations like ACORNs and other organizations were getting massive transfers. Now, while we ended up better than we were before, the change, what we missed was all this insight into what people were doing behind the scenes, as they expanded the relationships."

Jim Marous:
And we've talked about this in the past, and I've talked to your organization about this, that while we still, as financial institutions have the accounts, more and more customers are finding ways to diversify their holding through different FinTechs and different big techs and even different financial institutions. So while we may feel like we're not having nutrition, we're not keeping the relationship. How does Epsilon help organizations? And I'm not just saying by cross sell, but how do you look at data to say, how do we get these customers to be more our customers, as opposed to simply us being the star house of wealth?

Jim Stapleton:
Yeah. Well, I mean, clearly just understanding, I'll go back to where we started, right? Trust is built when you can anticipate and meet my needs and the trust that, especially as the major institutions that I think you're referring to here, right? Are big retail banks here in the US. There is already such an implied trust. I mean, they start from such a great footing. It's one they've earned, right? That they have a great brand, there's phenomenal trust. I don't think consumers leave due to a lack of trust, or I don't think they diversify due to a lack of trust. It's about just being there in their, I think they got first writer refusal is the way I would put it, Jim. That if you can give me an incentive, anticipate my need, put your product in front of me, make it competitive.

Jim Stapleton:
I'm more likely to keep my relationship simple. We're all time constrained. There's great integration in these products and services, the ability, just your point about moving money between institutions. Not always easy, getting easier, right? But man, if I can consolidate to where my wealth management, my checking, my savings, my credit card, all under one roof, I can pay my credit card bill automatically between the accounts. I can have one app, look at my wealth management, look at my banking at the same time. Maybe there's a budgeting app. I mean, there is definitely some synergy in keeping it all under one roof. So I think it's just in some cases, if you're not paying attention to the jump ball in the market, if you've got a consumer and you're not detecting that they're in market for something and getting in front of them, that's on you.

Jim Stapleton:
That's on you as a bank, right? And so we think about, you've got a checking in credit card customer. If we could help you determine that they're checking out mortgage rates, right? Or better yet, I'll give you this example, Jim, we've actually done regression analysis on mortgage and believe it or not, six months before mortgage, you know what you see pop? An interest in home decorating. Isn't that interesting, right? I don't know if that's intuitive to you. It starts with home decorating, then you suddenly realize, then you get to remodeling and then you go what-

Jim Marous:
The roof needs replacing.

Jim Stapleton:
Maybe I should just move. Yeah. Right. This is too hard, right? And either that thing's going to land in the HELOC because they're going to do a renovation or it's going to land in a mortgage and you as their bank today hosting their checking and credit card could be aware of that six months before it happens and start to cultivate awareness, consideration, prop and make a proposal to them, right? As a loyal client, we're offering you this special no fee, origination rate, whatever it is, right? It's yours to lose is what I would say. You've got primacy, you've got trust and you've got the synergy of simplicity that you can deliver. You just got to be there to compete for it. And don't let the FinTech sweep in and grab it because they are looking at that. There's a jump ball and you're still on the ground when the ball's in the air.

Jim Marous:
It's a great example and I, some of my listeners probably heard this story before, but when I bought my Jeep, I decided that I'm going to test the marketplace. So I'm going to do a couple test drives, which anybody who's not aware of this, when you do a test drive, the dealer usually is going to do a credit bureau check, which doesn't impact your credit bureau, but it gives them information as to are you willing, are you able to buy what you think you're going to buy? But what happens though, is when you do that, there's a credit bureau impact that every institution could find out I'm in the marketplace for a car or at least I'm test driving them. Well, that is why when I was buying my car, every dealer, every manufacturer reached out to me trying to sell their vehicle.

Jim Marous:
And they were really close by the way, as far as the kind of vehicle I was going to buy. They saw the kind of range, what kind of vehicle I was looking at and they give me one similar to that. What was very disturbing was not one financial institution reached out to me and said, "by the way, if you're in the marketplace for a car, we can help you." That would not have disturbed me. And in fact, I kept on putting feelers out every way I knew that could have been tracked by a financial institution, social media, doing more test drives. I even, and this is the funny moment is that, I even wrote a check for the down payment on the car, on my personal bank saying, "I know this bank tracks checks. I wonder if they pick up on that?" Zero.

Jim Marous:
Now, what was interesting? You talked about it. Simplicity and speed. What did I end up doing? Instead of walking the door of my finance institution, I got a floor plan loan, because I know now floor plan loans are not just by one institution, they do a shopping for you to get you the best possible rate. I ended up using Ally who was not part of my decision set, but it got me my loan quicker and easier than trying to give any more signals out to my big top five bank.

Jim Marous:
There's so many opportunities out there and I think this is something that organizations have to realize is that, with the amount of experience you have, you have hundreds upon hundreds of clients, you get these case studies, you get these success stories. If I, as a financial institution was going to say, you know what? I want to engage with you, but I need to get my return on investment in this six month period from now, six months from now, how quickly could you get up and running? And could you actually satisfy what I'm looking for, which is I need some easy wins that prove your points in the marketplace?

Jim Stapleton:
Absolutely, Jim. I'll go back to that signals of intent project. We're looking at a three month turn on that, right? And most of that's going to be paperwork around, what we're going to do with your data, getting approval to take in your, the movement of first party data, right? Is the highest burden. It's a fairly simple thing. Probably the actual technical work time is weeks, right? A lot of it is just discussion set up, gaining approvals. And I guess the final thing I should mention to you, Jim, is we actually, obviously it's a super privacy security regulation.

Jim Stapleton:
All three absolute table stakes for everything we've been talking about, right? And every everyone's going to go, "oh my gosh, you got to be hitting one or more of those trip wires somewhere along the way with all the cool stuff you guys have been talking about." I just want to assure your listeners that we have met and exceeded all three of those. And I would argue that's actually sort of our core competency and differentiator. We even have a solution where we can onboard your first party data without you ever having your PII leave our four walls. It's probably a topic for a whole nother podcast for us, Jim.

Jim Stapleton:
But I'll just leave that as a teaser. So we are super conscious of the need to secure bank, consumer information. No one wants to be breached. No one wants to appear in the front cover of the wall street journal. We already established the fact that banks' fundamental business is built on trust. And if I can't trust you with my data, why would I trust you with my money, right? If you can't keep that secure, how are you going to keep my money secure? So trust is super important. Privacy continuing to change here in the US and across the world, staying ahead of that. And then of course, regulatory requirements. We have an amazing number of fabulous clients in this industry that we are shoulder to shoulder, ensuring that they establish and maintain a very strong profile on all three of those areas.

Jim Marous:
Jim, thank you so much for being with us today. Again, I want to emphasize to our listeners, it sounds like apple pie and all the best things in the world, but the thing is, it's only good if you actually do something. And we are talking to, Jim and I were talking before the podcast that a lot of organizations will go, "we can do that. We can do that. We can do that." The reality is there's no doubt you can, but this is a great example where partnering with a third party provider that's gone down the route has found the pitfall, found things that don't work very well, found things that worked very well. If you want to bring a return on investment and improve your customer experience. And as Jim has mentioned multiple times, the trust level in your organization, then find a partner that can get you down that path fast, by the way, you can always unwind those relationships.

Jim Marous:
And I keep on saying, the biggest challenge now is paralysis of analysis. Go are the days you could evaluate a partner in an 18 to 21, 24 month period because that is lost opportunity. It is better to maybe make a couple missteps, make a couple mistakes today and get it implemented and test the waters because everything you do is going to help the learning curve on what you can do down the for, in the future. Jim, I thank you and Epsilon for this podcast and really hope that people say, "you know what? I actually have to take action", because that's the most important thing right now.

Jim Stapleton:
Thanks Jim for your time today as well and a great dialogue, enjoyed it and look forward to more, to come.

Jim Marous:
I'm looking forward to it.

Jim Stapleton:
All right. Thanks.

Jim Marous:
Thanks for listening to banking transform, the winner of three international awards for podcast excellence. If you enjoy today's show, be sure to give us a five star rating on your preferred podcast platform. Also be sure to catch my recent articles on the financial brand and the research we're doing for the digital bank report. This has been a production of Evergreen Podcast, a special thank you to our producer, Leah Haslage, audio engineer, Sean Rule Hoffman and video producer, Will Pritts. I'm your host Jim Marous until next time. Remember, digital technology provides the opportunity to bring personalized solutions to every single customer individually and on time.

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