Unifying Deposits and Loans for a successful Retail Banking Strategy

While digital account opening has been a top trend for several years, financial institutions are now looking beyond account opening to create a unified customer experience by digitally transforming their lending process to meet rising customer expectations.

Customers expect anytime, anywhere access, a quick turnaround time, and a “one-stop shopping experience” for all of their needs.  Digitizing any line of business is a great start. However, without a unified strategy for deposits and loans, banks are at the risk of losing customers to a financial institution that offers a unified banking experience to customers.

Join this webinar to hear our clients discuss the importance of creating a unified digital journey and how to overcome the key challenges faced during this transition.

Agenda of this discussion:

• Why a unified digital strategy is more important now than ever
• Challenges faced in the digital transformation journey
• How to conquer those challenges
• Insights and best practices for delivering top-notch customer experience
• Q&A

Mukul Agarwal:

Hello and welcome to our panel discussion, unifying deposits and loans for a successful retail banking strategy. I’m Mukul Agarwal and shall be your host and the moderator for this webinar. I thank you all for making the time to join us today. The response has been overwhelming, and we are excited to talk about the need of a successful retail banking strategy. Let me introduce our panelists today. We have Greg Sullins. He is EVP strategy at Wilson Bank & Trust. We have Barbara Denuyl. She’s VP consumer loans at American National Bank of Texas. We have Joli Hensley. She’s the manager of digital channels at Advia Credit Union. And Ankur Rawat. He’s our banking production director at Newgen.

The format of this panel discussion, I will be asking questions to each of our panelists. And at the end of the presentation, we will open the forum for Q&A from the audience. I request you to type your questions in the question window of your go-to meeting anytime during the webinar, and our panelists will address them at the end of the session. Without further ado, let me start with our first question to our panelists. First question, what is the cost of no decisioning or delayed decision for retail banks in 2022, and why does it matter? Greg, would you like to take it first?

Greg Sullins:

Sure. Sure, absolutely. Thanks for allowing us to join, all of you. I think that question really around no decision, meaning not to move forward. And that to us really means not to move forward with your customer. And so our customers today, they’re really expecting an Amazon-like experience. Everything is real-time today. They use their mobile devices. Order something, it’s on their doorstep that afternoon. And so they’re expecting that same type of thing from us as their community bank. And so for us, we believe that you really have to start to make the changes, make the investment and start to keep pace with the demands of your customers, be they on the consumer side or the commercial side. So really important. The opportunities are significant out there for both you as a bank and taking care of your customers.

Mukul Agarwal:

Thanks, Greg. Joli, your thoughts on it.

Joli Hensley:

I agree with Greg. The competition out there is fierce. If you don’t respond to somebody inquiring, whether it’s trying to open up a new account, inquiring about a loan, they will go elsewhere and there’s other people that are going to serve them faster and you’re going to lose out. So if you’re talking for not having a great lending strategy, if you’re taking more than a few minutes to turn around lending decisions for your consumer, they will go elsewhere. If you are talking about the onboarding, even the delay in opening that account or not having a good process to cross-sell the services to them, are you onboarding them? Not just opening the account but are you able to get a debit card in hand? Are you able to get them check orders, get them into the online banking all at the same time within the few minutes? It makes a difference today.

If you’re having them having to come in branch because you have delayed decisions and you’re slow, I mean, now that’s more costly, right? Now you have to have a human involved. You have your staff now service, that potential member customer, which is just overall more costly and shouldn’t have to happen that way. For us, for our members who can digitally self-serve in any instance, right, it’s more cost-beneficial. But in addition to that, it’s more convenient. And so if you are not going to offer that, they will go elsewhere, and there’s competition everywhere who is constantly putting ads in front of your potential customer or current member or whoever that is. And it’s easy enough for them to click on it and go elsewhere. So you have to be able to serve that up.

Mukul Agarwal:

Thanks, Joli. Barbara, how about you?

Barbara Denuyl:

Well, I’m going to have to agree with both Greg and Joli. Being in the digital world, we need to be able to provide opportunities for our customers, whether it’s coming into the bank or being able to allow them to bank and do their lending 24/7. We know everyone is busy. Not everybody has time to come into a location, a physical brick-and-mortar building. And we do want to be able to provide that service to all of our customers and keep them from going to the competition if the local and other institutions do not have that. But our overall goal is to provide the best customer experience for all of our customers and to make it to where they can bank how they want to.

Mukul Agarwal:

Thanks. Thanks Barbara. Ankur, how do you take this?

Ankur Rawat:

Yeah, yeah. And again, I could not agree more with Greg, Barbara, and Joli. I think the idea here is there are clear benefits of the digitization strategy, right? So choosing to automate digital account, opening all of those things. But a lot of institutions question the cost of delay, and we have to get to a number, right? So what we did is that we have analyzed based on the secondary research, based on the experience, based on what analysts are saying. And there are two key benefits of having a digital strategy. And this is also the cost if you do not automate your processes, right? So one is the customer acquisition cost. So if you are not automating or you are operating in a manual environment, really the customer acquisition cost is higher because you have manual workarounds, the abandonment rates are higher, and the error rates are higher.

So you end up spending more to acquire every single customer in the market, right? And we have seen that that acquisition cost just by automating reduces for each customer by $62, right? And with that, based on a particular benchmark, we have seen that anywhere from 150,000 to 200,000, that’s the kind of savings institutions are doing by automating digital account opening. And people who are not automating it, that’s kind of the cost that they could have saved, right? So that’s the cost of delay for them.

The other aspect of this is not having additional customers just because they did not have the great experience. So losing out on those customers. So what’s the value of that? So, again, based on those researchers that we have done and what analysts are saying, the overall customer lifetime value for every customer, which means that what kind of revenue each customer will provide to you as a bank or credit union throughout the lifetime is around 2,000 to $4,000, right? So with that, if the customer digital account opening allows you to have more number of customers, we have seen that. Every year, you are able to add a million dollar worth of customer lifetime value just by automating that process, right? So these are the two angles we can see reducing the cost and also the opportunity cost that could have been saved or added to the institution’s portfolio.

Mukul Agarwal:

Thanks, Ankur. Our next question, do you think that our digital strategy for deposits and lending should be unified and why? Joli, what’s your thoughts on that?

Joli Hensley:

So as far as having a unified platform, absolutely. And the reason why is if you are onboarding a new retail consumer customer and you are getting them set up with checking account, all of the whole caboodle there, why not have a seamless introduction into your credit card or into an auto loan or something that is even more profitable, but stickier, right? And really, truly onboarding them to your products and services as a member. You’re going to increase profitability. You’re going to keep them from having to navigate into different systems, right? You’re going to streamline it for them. You’re going to make it extremely easy.

When you can have a platform that allows for those connections to seamlessly take somebody through like one user experience that truly is that seamless, you’re going to increase profitability. Not only that, they’re going to look at you for the next thing and the next thing because you’ve made it so easy. The same can be true for the lending side. If somebody is coming on board and they’re looking at you for a loan, you should also not only be able to onboard them instantly with that loan, you should be able to upgrade them and to your checking. And again, try to get the whole relationship instead of these singular products. It’s overall going to be more convenient and profitable.

Mukul Agarwal:

Thanks, Joli. Barbara, your thoughts on this?

Barbara Denuyl:

And again, I agree with Joli. It’s kind of like we’re all on the same roadmap at this point. But having the seamless integration between the different delivery channels and making it easier for the customer, whether it’s the one-stop shop for them. I think that’s our ultimate goal, whether it’s the customer experience that we’re looking at and making it where the customer feels that they can go into one location and be able to either onboard, open that account, go into their lending and start that online application.

It does make that more of customer-friendly. And even not just on the customer side of it but having the platforms to where the frontline staff or the back office staff only have to navigate between one platform, it makes it a little more user-friendly. So that way, that frees them up time when they’re waiting on customers so that they’re not jumping between the different platforms, and they can devote more of their time and provide more of consultative sales for their customers that are in front of them or through the digital piece. So it kind of frees up the time on both sides of it. But the digital strategy of keeping deposits and loans should definitely be together for that streamlined process.

Mukul Agarwal:

Thanks, Barbara. That’s a very early point. Greg, your thoughts on this?

Greg Sullins:

No, I think these points are spot-on. We’re all in the business of gathering deposits to lend out money. That’s our business. So that’s what we’re in the business of doing. And we as organizations, community banks like here at Wilson Bank & Trust, we need to be focused on the customer. And for many, many years, there’s been such a product focus. Maybe it’s on the deposit side or the loan side or the credit card side. But back to the opening points, we’ve got to look at this from the consumer’s perspective. And it’s just natural to bring together an architecture that for us, it’s about an omnichannel banking, whether it’s the digital side, mobile app, the walking into our branch network, calling us. Bringing all that together and using the integrations over and over and over again, there’s so many different providers that we have to connect with to stay in compliance to provide information.

And so to have that integration to know your customer to present perhaps a loan solutions for your deposit customers or deposit solutions for your loan customers, we need to be cross-selling, deepening those relationships, making it easier to do business with. In turn, that allows us to provide tools and solutions for our employees to… We’re all need to make it easier for them as well. So to us, it’s just a natural evolution of where we are and where you need to be in bringing together deposits and lending. I think we use the word unified, but connected banking is a term that how do we get all of this connected on behalf of our customers, our employees, provide a better experience. So just echo what Barbara and Joli have indicated so far.

Mukul Agarwal:

Thanks, Greg. Connected banking is something which Newgen also focuses on while working in banking automation. Ankur, your take on this question.

Ankur Rawat:

Yeah. I think another perspective for this particular topic is that why was there a need for a different strategy for deposits in lending? It was really driven by the vendors providing softwares available in the market, right? So we saw that institutions were really driven by the limitations of the solutions, technologies that were available, which were different for lending and then different for deposit side, right? And that continued for a long time. But as Greg said, right, so the focus here is the customers, the members, right? What do they need, right? So the banks and credit unions will have to, again, come back into that customer centricity member focus and ensure that whatever technologies they are using are unifying the experience for their customers, members. And then as an extension, as a added benefit of this strategy, it also serves very well for the employees who do not have to use multiple systems, right?

So Greg mentioned another great point, which is a bit technical in nature, but from the manageability of the systems, you are managing one single system if you unify the technology, right? So your integrations are reused. Your data collection, data models are reused. Easy cross-selling is available. And the training for the employees who are working on lending side or deposit sides is also minimized because they’re using, again, the same platform, right? I think it is imperative and inevitable that these two component functions will be seamlessly synchronized when it comes to digital strategy.

Mukul Agarwal:

Thanks, Ankur. Our next question is… This is an interesting one. What technologies would be critical in the next evolution of digital lending and deposits? Barbara, what’s your take on it?

Barbara Denuyl:

Well, I think as far as the next pieces of technology, being able to increase our ability to auto decision loans and including a more extensive fraud detection package would give us that. I guess, additional confidence in security to continue processing loans digitally. Also, being able to quickly create our electronic documents since we are in the full-blown electronic world now that customers… They want to be able to do true 24/7 banking. End-to-end processing to where they can do, everything from start to finish and never come into the banking centers. And I think that by increasing the different types of technology as far as the decisioning, that would be a good piece that we would need to incorporate and still continue to give that customer experience and dedicate what we’re doing to the customers who do want to bank digitally.

Mukul Agarwal:

Thanks, Barbara. Joli, what’s your take?

Joli Hensley:

Yeah. What we’re seeing is our call center is still busy, right? We have all these digital or ways for members to self-serve. Our call center is still busy. However, the types of calls that we’re now taking are more complex, right? There are different type of call than what we would’ve had one, two years ago. And so what we’re really looking at is how to implement RPA to be able to help with the fulfillment side of those calls coming in. So as our staff are serving those members, how do we create an automated process in the backend for actual fulfillment?

So that way, staff can continue to have quick phone times, right? Reduce wait times for members. Be able to allow somebody to get ahold of us quickly while not having to have all the follow up in the background. So for us, RPA is front and center of what we are looking to do and really just take those simple processes that don’t need, right, our staff to do it, right? These are things that we can create a bot for. So that way, our staff can spend time deepening relationships with members and not on these backend processes.

Mukul Agarwal:

Thanks, Joli. Greg, how about you?

Greg Sullins:

Well, I think a quick example is just by nature of what we’re doing right here is video chat, video banking is going to continue to evolve customers. They like the ability to use your mobile app, use your online banking. But when they need to have a dialogue, they do like to see that person on the other end of the phone. And so video chat, video banking, we’re seeing am doing a lot of research around video notary services. So in our lending areas. In other services that we provide, we find that’s even can help us on fraud and can help us with other better business controls. I think digital signatures, it’s here today, but it’s something we have to continually work on every day because we find ourselves to just other things that we could do more and more with digital signatures.

And that mindset requires you then to change and think about the process flows, whether it’s something that you may have at your teller line all the way through to your new account, opening account maintenance. And then in the lending side, tremendous amounts of opportunity there. And then the next big piece I would just would say is around predictive analytics. Really some of the things… I think as Joli is saying around more complicated questions and information. So the predictive information that the tools that our frontline folks would have the tools to help better serve the customer and provide that better intelligence and information and then eventually even integrate some of those analytics into our digital solutions.

Mukul Agarwal:

Thanks, Greg. Ankur, your thoughts on it?

Ankur Rawat:

Yeah, I think it’s a… I mean, it’s a question which is close to my heart, especially being from a technology company, right? So I see a lot happening, especially in the technologies at two sides of the client, right? So I see customer centricity being one side and another one is the efficiency, compliance, and fraud at the bank side or the credit union side. Because while you have to provide the best customer experience, you also have to ensure that you are not really approving the bad deals or bad loans or enrolling bad customers, right? So there are a lot of things happening in both the sites. On the customer side, I think, Greg, you talked about the video KYC, video notary, servicing, all of those things. And we also see other technologies to be able to verify the businesses even without collecting their documents, right?

So there are technologies coming in the market where you don’t really need to go to secretary of states and get the documentation. The businesses can be validated even without documents, right? So we are seeing some stuff there. We are seeing a lot of stuff in the assistive technologies like the co-browsing and video chats to provide additional assistance for account opening or any other transaction. At the institution side, what we are seeing in plenty of institutions is that they’re investing heavily now on one of the things, Joli, you mentioned on RPA, which is from efficiency perspective, but then also on the AIML. So artificial intelligence and machine learning wherein there are several use cases, interesting use cases which are being explored.

So how do we ensure that we are able to identify fraudulent activities upfront by leveraging the historical data? Okay. How do we ensure that we are able to provide the best possible, best suited counter offer to the customers or members applying for a loan for which they may not qualify but now you have to provide a counter offer? How do you propose the best possible cross selling, right? So what is the propensity for these customers to accept those counter offers or cross-selling offers, right? So all of those things are there, but then, again, it is extended. AIML is extended for ensuring that you are able to predict fraud, predict defaults, right? So all of those things are pretty interesting, and Newgen is doing a lot in that segment, especially embedding AIML, both in retail lending, deposit account opening, and commercial lending.

Mukul Agarwal:

Thanks, Ankur. Really interesting points. The highlights, which I would like to take back with me, video chat, predictive analytics, use of RPA, AIML, and use of technology for projects. All right. That takes us to our last question for the day. Before that, I request our audience, if you have some questions which you would like ask our panelists, start typing in the questions panel. I’ll take them up after our last question. All right. This is my personal favorite. How did Newgen helped you in unifying deposits and loans for a successful retail banking strategy? Greg, I would like you to answer first.

Greg Sullins:

Well, we’re on that journey together right now. And for us, of course, we started with Newgen a few years ago on the paycheck protection program, which was eye-opening experience for us, which led us down the path to do deposit account opening. When I say deposit account opening, a lot of people refer to online account opening. We did that. We did the in-branch side. So we created that omnichannel experience for opening deposit accounts. And when I say deposit, on both the consumer side as well as our small business and commercial side. We addressed all of our checking, savings, CDs, IRAs, HSAs, the whole menu of all products for both the consumer and commercial side are available now digitally online. They’re available digitally through our branch side and just has really transformed the way that we can now open accounts in the matter of just minutes and then give customers options.

Maybe they want to deal with the funding option. They can do that from home. Maybe they’re busy. They come in, do one thing in office, and then they can activate and do other things, again, remotely. So that’s on the deposit account opening side. Then we are working pretty extensively on our small business and commercial loan origination solutions, both lead and opportunity management platform. Really comprehensive small business and commercial loan small business portal to generate new leads and new opportunities that we’re excited about. And then really just the comprehensive commercial loan origination solution.

Then we started earlier this year, really starting to work heavily on our customer and account maintenance and working with the Newgen team to digitize the way that we have to deal with just a host of customer and account maintenance transactions.

So those are some of the initial things that we’re working on. We have a very lengthy roadmap that spans into retail lending and CRM and other pieces or areas that we’re focused on, but we’re excited of what this means as a unified platform. Because, for example, when we did… We had 19 different system interfaces with our deposit account opening solution. Well, the good news is we get to use many of those with our core system or our mobile app or our online banking platform that was interfacing with that. We get to use that when we move to consumer lending, commercial lending, other areas. And so it’s not throwaway. And then of course, the navigation of the system allows our users to be comfortable navigating whether they’re on the deposit side or moving into the lending side. So those are some of the very important steps that we’ve been taking.

Mukul Agarwal:

Thanks, Greg. Barbara, how about you?

Barbara Denuyl:

Well, currently, we are on the lending… Utilizing y’all for the lending pieces. We’ve just recently gone from the in-branch data entry side first where our frontline and in our customer care unit have been able to manually input applications directly into Newgen and process them that way. And then back in October, we actually opened up our online portal for customers to access loan applications through our website to make it to where it does assist them with their 24/7 banking.

And those are the two pieces that have really helped because even if a customer does start an application in-branch, we are able to utilize online but electronic e-sign documents for them in some of our loans. So we’ve kind of got the hybrid piece going on to where they can either start online and go all the way through the process, or one of our representatives can take care of them as well, allowing them to close with their local banker or electronically. At this time, we’re still looking at the ability to, I guess, converge and manage our deposits and look at combining those with the loan portion of it to make it easier for both customers and our frontline staff as well. The experience with the loan portal has been great. It allows that piece for customers in our frontline to… We can help them how they need to be helped and providing that overall customer experience for them.

Mukul Agarwal:

Thanks, Barbara. Joli.

Joli Hensley:

For us, our online account opening prior to shifting over to Newgen, it was a seven to 10-minute process. About 80% of them had to be touched by human. So the end-to-end for members was very low, right? So it was costly. It wasn’t great conversion, high abandonment. So since coming over to Newgen and really getting both our online and our in-branch on the same unified platform, not only does it create a omnichannel experience but most of our applications are end-to-end in under three minutes, which is a huge cost savings or time savings for members. It’s over 50% don’t have to have any type of staff touch with that application, which is great and it probably would be higher, but we’ve also been able to introduce businesses to open accounts online. So that’s something that we hadn’t had before.

And we didn’t know what to expect, but surprisingly, we have a lot of businesses who want to start that process online. Not only that, it walks them through easily. We were able to crack the code with beneficial ownership and really make that a simple process to understand and to help not only our frontline staff navigate but also our business members online as they are opening that account and providing clear direction for both the online and in-branch experience as far as what documentation is needed, right, whether it’s a business specialty account. I don’t know if any of you have this problem, but when you have a lot of different account types that are all very unique. Sometimes the training can be hard, but we were able to work with Newgen on what is needed for each individual type and requirement. So that way, we just bulletproof it for our staff to really make it clear. So that way, they could spend less time trying to figure out how to navigate the system and more time really deepening that member relationship and learning about more about member needs.

So for us also, we have branches across Michigan, Illinois, and Wisconsin. So we are in multiple markets. So what I really like about what we’ve been able to do is we can now serve each market more individually. So we can offer things based on zip code and residency, which as we know in our markets, things can vary quite quickly. Whether it is savings rates, loan rates, whatever that is, what I do like is that we are in a position now to be able to respond to that and being able to create unique experiences based on that.

I also really like the fact that we can more easily integrate into fintech partners, right? If we want to offer plaid to be able to help streamline the account opening or the account funding process, we’ve been able to do that. Newgen has been really great at being able to create those different developments for us and in those connections to continue to create a seamless experience as we find new opportunities. So for us, it’s been a huge efficiency as well as easy to navigate backend. The Newgen team’s always been fantastic to work with. You know, you always feel heard as far as what you’re trying to achieve and really working together to problem solve what these friction points are and being able to deliver those solutions.

Mukul Agarwal:

Thank you, Joli.

Ankur Rawat:

Yeah. And just to add to… Yeah, just to add to that, Joli, last time, I think we had discussed… You had discussed a very unique thing that you did, right? So you mentioned that your members when opening CDs, right, they would have to come to the branches to select the preferences. Once the CD expires, what would happen, right? Will the funds be transferred or reinvested, right? So you kind of ask Newgen to create that into their online experience itself. So that when they come to the branch, if at all, right, they are actually discussing more on the relationship and you are able to make those sticky relationships rather than having them to be coming to the branch as just to set up those two options, right? So I think that was very interesting comment that you made in order to kind of handle anything that could be done online in the digital experience itself.

Joli Hensley:

Absolutely. We often like look through our calls and we work in partnership with our MCC and our branch teams to find out like, why are members calling us? Why are they coming in? And if you can allow a member to open up a CD online, well, darn it, that’s a friction point when they have to then contact us to get it changed into something else. And so we did. At the time that members open up CDs now and self-serving online, they can select what they want to have happened to that CD when it expires, right? Do they want it to auto renew? Do they want it to go into their savings account? And how do they want those interest dividends paid, right? Do they want it to compound? Do they want it via check? How is it that they want it? And by being able to allow them to select that upfront, it reduces the need for them to have to call us prior. So that’s a nice big enhancement for us as well.

Ankur Rawat:

Yeah. Yeah. And another point that I remember from… So I visited Wilson Bank team, I think, a couple of weeks back, and we were having discussion with their business users. And one of the things which was very interesting was they kind of segregated the exceptions that were happening previously. So they said that there were process related exceptions, for example, something was missed out. Documentation was not submitted properly and those kind of things.

And then there were applicant specific exceptions, which cannot be avoided. For example, if there is a OFAC check, those kind of things, right? So earlier, the process specific exceptions were too many, right? So 50 per day, they were handling that, “Hey, this got missed out,” and they were calling the customer again and all of those things. By being able to bake those into the solution itself to ensure that the solution takes care of what is required, for which type of product, for which type of business, the exceptions, process related exceptions really were eliminated, right? So there are zero process related exceptions that they have now. Obviously, there would be some applicant related exceptions, but I think that was a huge win that we saw and discussed with the branch reps. Yeah.

Great. Great. So any other comments from Greg, Barbara, Joli? You do have the questions, I guess. Okay.

Mukul Agarwal:

Yup. That brings towards the audience Q&A. Just give me a moment. I’m going through the question. All right. This is interesting one. I would like all our panelists to take portion of it. What are the preparations you should make before starting the digital account opening journey? Barbara, your thoughts? Repeat it again. What are the preparations you should make before starting the digital account opening journey?

Ankur Rawat:

Yeah. And it could be digital account opening or lending, right?

Mukul Agarwal:

Or lending.

Ankur Rawat:

What we’re discussing today is kind of a digital strategy. So what are the key aspects, I think. That’s what we’ve asked.

Barbara Denuyl:

Well, I think from our standpoint, you want to take a look at what your business requirements are for your institution before taking that journey and then comparing that with what Newgen can offer. And then the thing about that part of it is it can be tailored to your individual needs very specifically. And once the two sides can meet and agree on what needs to be done and how it can be recreated, the two teams working together can seamlessly make a product that benefits the institution and then transitions over and makes a product that will help be utilized for the customers. It’ll cut down on errors, exceptions, and help in that aspect as far as eliminating that additional risk that’s out there.

Mukul Agarwal:

Those are interesting points. Thanks, Barbara. Joli, your take on this.

Joli Hensley:

Yeah. I would say know what you’re trying to solve, right? So what are the pain points that you’re experiencing today. And in truly knowing what you want the solution to help you solve. So for us, we didn’t have business online. We didn’t have the ability for you to open up accounts online. We had staff who didn’t always know what documentation went with what specialty to type accounts. And so we’d have errors, and it’d be costly, right, to go back and fix that and a poor experience to get… And more documentations from members.

And so I think really being able to identify what the pain points are and how it’ll help streamline your business is really important for upfront. And I’d also say think through the different types of integrations that you’d want to have. Who do you integrate with today? Who might you want to integrate with to create a smoother process going forward and making sure that you rope in those partners early and give them plenty of time. And then of course, knowing your business requirements, right? What are the details of each of those products? So when it comes time to mapping and testing and all of that, you are very clear. But before, you just go and implement a solution. Definitely know what it is that you’re trying to solve.

Mukul Agarwal:

Thanks, Joli. Greg.

Greg Sullins:

I think there’s some excellent points. Again, one of the things that… To echo what Joli is saying, what problem are you solving? And for us, for deposit account opening, we didn’t have the menu of products and services online that we wanted. In in-branch, the cycle times for the current environment was extremely long and error-prone. And so we were able to in about a nine month time from starting with Newgen to deploy this solution to cut cycle times down by 60, 70% in-branch. We were able to fully deploy all of the products and services in the online channel and create that omnichannel experience. And so that was important to make sure that you had agreement on what you were working to solve because there’s other things that we still want to do to take it to the next level.

And I can’t emphasize enough another point around the partners, right? We did 19 different systems that we interface with for our deposit account opening. Some of those when we started the journey, if we knew what we know today, we wouldn’t have started the journey with them. So, you want this to be a fully digital environment. To be a digital environment, your partners have to be able to want to ability to have APIs and be able to play ball with the Newgen solution or any solution for that matter. And so if you have vendors that don’t want to play and provide APIs to allow to collaborate and create that digital end-to-end, you’re going to have issues. And so that’s going to cause you a lot of time and money and frustration. And so that alignment early on with those business partners to establish the vision of where you want to go, the problem you’re trying to solve, and either they’re with you or they’re not. And there’s plenty of other solutions and vendors out there that can help you get to that end game collaboration and accomplish that goal.

So those are, to me, first and foremost stand. And then the final thing for us, which was really important was we identified team members within the bank that were dedicated to the transformation. To me, I tell every reference client that if you try to do this with doing your day job and trying to transform and asking your manager of various departments to do this, plus try to make this transformation, you’re going to have problems. Not saying you can’t get it done, but it’s going to take you probably twice as long. And so for us, it was important to get the senior management, executive management support and engagement, and then identify people that got up every day with a thought of, “Hey, I’m working to create this new future state environment.” And they collaborate closely with the people that have to take care of your current environment, but that was the difference maker. And we know that we’ve been able to implement the solutions on a much faster scale than many other that have attempted this journey because of those fundamentals.

Mukul Agarwal:

Thanks, Greg.

Ankur Rawat:

Yup. And great point, Greg. I just wanted to extend a thought there that one of the things that we have seen, obviously apart from ensuring that the integration vendors are notified and we have somebody who understands that APIs will be required. So that is there. One of the things that a lot of institutions should also keep in mind is that they should take a larger picture of the digital strategy, right, rather than doing a quick fix to their digital account opening. So we have discussed with various institutions. And when they say they adopted a technology and after a couple of years, they’re again releasing the RFP, right? So the idea there was that they tried to go with a quick fix, but you have to look at the overall picture, a longer term vision that, “Hey, you’re going to do this digital strategy. Does it accommodate your basic checking savings? But can it also extend to the HSAs, the IRA solutions? Can it also do in-branch as well as online account opening? Can it also do business accounts as well as consumer, right? Can it also be extended to lending strategy going forward?” Right?

So those are the kind of things that initially institutions may not look for, but they have to be ready that, “Hey, we should be able to expand the solution or technology to that level of automation.” Right? So I think that’s one thing which all of the institutions should ensure that they have a long-term vision rather than having this more of a one-and-done kind of deal because it’s never a single implementation. It’s a continuous process improvement as we have seen, right? So you’ll keep on adding technologies, strategies, steps to ensure that your customer experience member experience is the best.

Mukul Agarwal:

Thanks, Ankur. All right, this next question. Ankur, I would like you to take this up, bringing your technical expertise onto it. Usually, financial institutions don’t know where to start or how to make a business case for digital account to create. How can you help them, Ankur?

Ankur Rawat:

Right. And I think all of you folks, right, Greg, Barbara, Joli, you have all gone through this cycle of creating that business case, right? And I always say that it’s trying to tell people in a practical manner with the data what they already know, right? So everybody knows that, yes, digital account opening is a priority. It has been the top priority for the last year, digital strategies, retail lending, all of those things. Transformation has been there on top of everyone’s mind, but it is just that, how do you kind of create that business case? So I talked about cost of delays initially, right? And we did some study, we did some research and we can always share the data. But as we said, community institutions on an average, if you are opening around 500 accounts per month, and you have an asset size of around 2 billion to 5 billion and so on, there’s a real cost savings in the amount of 150,000 to 200,000 every year with the digital account opening or digital strategy.

And similarly, if you get to have this digital strategy in place, you can really earn an additional million dollar worth of customer lifetime value by adding those customers, which were abandoning the process or not even coming because you did not have an online portal previously, right? So there’s a lot of factors, and we can always help the prospects, the banks, credit unions in creating that business case with real value ROI to their management.

Mukul Agarwal:

Thanks, Ankur?

Ankur Rawat:

Any out from Greg, Barbara, Joli? Any other pointers on how do we create the business case to the management?

Greg Sullins:

Well, just some basic metrics that you may have, right? What’s your cycle time to open these accounts? Maybe it’s taking you 15, 20 minutes to open accounts. Well, if you can get it down to three, five minutes, you can do the math pretty quickly on… Maybe you don’t want to take those resources out of your branch network but you want them to be providing more value added services to your customers or members. So that’s a financial productivity benefit. For us, what’s your error rate, right? What’s the number of errors that are being created in the process that you’re having to follow up and track, and how much time is involved in those?

And then I think it really gets… You get back to sales opportunities. If you enable these new products and services in your online environment should lead to more customers, more volume, better customer experience, all of those things. So I guess my advice would be don’t try to just make it some massive undertaking, right? It’s just what are you trying to solve, what are some of your pain points? And if you improve those by 50% or whatever number that you set your goals, you can start to quickly get into justifying the direction that you’re trying to go.

Joli Hensley:

To add on to that exactly, for us, we collaborated with a lot of different areas, whether it was audit our support teams, our branch teams, our call center, just to really find out what those pain points were and what the best thing would be to solve it, right? And then we took a look at what we had and determined that what we had wasn’t going to be able to fix the pain points that we found. And so then it was really digging in and comparing and contrasting. There’s a lot of great data out there of industry standard, right, where other FIs are falling in line, whether it’s with account opening, loans, speed, whatever that happens to be. And so there’s a lot of great data out there to be able to compare and really benchmark where maybe you’re performing today versus where you could be performing.

And I think starting there and identifying the problems, understanding where you may be a bit behind can set you up very well to then be able to connect with partners like Newgen to be able to see how they can start filling in those gaps. And it doesn’t have to be this large, huge, complex thing. People think digital transformation and it’s all these things, but you can start smaller as long as you have that vision as far as where you want to go. So I think those are some great things to consider.

Mukul Agarwal:

All right. All right. Thanks. And so that, I see we have one more question. Let me put it this way. Have our panelists started seeing ROI in digital strategy? If not yet, how soon do they expect to see an ROI?Barbara, you’re take on it?

Barbara Denuyl:

Can you repeat that question again?

Mukul Agarwal:

Okay. I’ll repeat that. Have our panelists started seeing ROI in the digital strategy? If not yet, how soon can it be expected, ROI in digital strategy?

Ankur Rawat:

That’s a return on investment like the benefits and everything, those kind of things. And typically, we do understand that you understand the benefits, but have you tried to create a matrix around it and tried to calculate what is the value of that benefit? So I think that’s probably the…

Barbara Denuyl:

Well, I know for us, we’ve been… Because we’ve really only been on the true digital side of it for about, oh, probably nine months and getting it out there to our customers, we’re still tracking it and trying to get a footing on it. We had a digital platform before we moved over to the Newgen online portal. And so we’re trying to revamp and pick up speed again with that opportunity and those channels for our customers to work on. I know I’ve seen an uptick probably in the last several months on increased traffic and processing of our loans. But to me, I think because we’re still new into this particular part of it, it’s still really too early to give a good value as far as what we’ve gained from the switch over at this point. But from what I’ve seen so far, things have been very positive and are going very well.

Mukul Agarwal:

Thanks, Barbara. Greg, your thoughts.

Greg Sullins:

Well, I think very quickly we saw benefits in terms of our ability to do more with the same number of resources, right. And we’ve calculated the productivity benefits in… For us, we open around 2,000 new accounts a month. So when you start putting in solutions that Newgen has brought to us like this that you start seeing that benefit very quickly with, again, the speed of opening accounts, the reduction in errors, we’ve seen all that.

We have targeted certain systems, legacy systems that we want to sunset, which are dependent on additional cost takeout that relate to our account maintenance side. So we still have some enhancements. And we know what that cost takeout to be. So on the deposit side, both for the online side, we’ve seen 300% ability to do the same volume. We can do a 300% productivity lift in the online side. The branch side, which is where we have our high volume traffic, they’re overwhelmed, excited with the speed now of opening accounts and reduction in errors. So our return on that is on track, I would say, and we’ve solved the issues that we set out to solve. And so all of those pieces are very encouraging.

Mukul Agarwal:

Thanks, Greg. Joli, your thoughts on it.

Joli Hensley:

Yes. And very similarly, we took a process that we had online that had an over… I think it was like an 87% abandonment rate, and we reduced it down to under 20, right? That’s a cost savings in itself. We’re being able to open more of those accounts and open them end-to-end without a human interaction. Same for in-branch. We’re repurposing time. So our account opening in in-branch went from about 35, 40 minute process down to the actual opening of the accounts. Very simple but it’s allowed more time for those deeper conversations and being able to onboard them with better products and services at that time.

So it’s really taken a clunky process of a staff just trying to figure out how to open the account and now allowing that conversation to shift and be more about the relationship, which has been beneficial. Our audits went down. We were able to reduce audits on our business accounts by 50%, which is not only a time saver for our auditors. It’s for our staff, right? We’re making less mistakes, less time having to go back and correct issues. And so now those staff, right, they get to repurpose that time for other initiatives. So for us, we’ve seen great gains from the get-go of just pure efficiencies.

Mukul Agarwal:

Thanks, Joli. Ankur, if I ask you this question in a different way, what should be expectations of financial institutions in terms of ROI parameters and get the timeline to see an ROI in digital strategy?

Ankur Rawat:

Yeah, and I think… Again, I’ll probably ask the team also to validate that. But we have seen that once the solution is live, right, so you can really see instant benefits, especially from the lower abandonment rates because the customer experience is immediately available, which will not kind of discourage the customers and members in terms of submitting the application. So the abandonment rates will… Immediately, you’ll see the reduction in abandonment rates. And similarly, in terms of efficiency also. So once the solution is live, I don’t think the institutions have to wait long to kind of wait and see the ROI. Obviously, I would say anywhere from six to nine months, they should start getting better ROI in terms of the investments that they have made.

Mukul Agarwal:

Thanks, Ankur. I see we have approached the end of our session now. If there are still any more questions, which you would like to ask, please write to us on webinars at direct newgensoft.com. I repeat. You can write to on webinars at direct newgensoft.com. You will surely give you a reply. Well, with this, I thank you all, Greg, Barbara, Joli, Ankur. Thanks for joining in. I personally enjoyed the last 60 minutes. That was really insightful. Lot of learnings. I believe our audience have to take a lot of things from this discussion. Thank you all for joining. Have a good day.

Greg Sullins:

Thank you.

Joli Hensley:

Thank you.

Ankur Rawat:

Thank you. Thanks everyone. Bye-bye.