A version of this article appeared in the BAI Special Report: The continued digital evolution in banking. You can find more insight within on sustaining deposits via digital channels, how open banking will shift digital strategies, tapping BaaS for an enhanced branch role and making fraud protection a priority during digital growth.
Daniel Westhues serves as executive vice president of Central Bancompany. He oversees innovation and customer-facing technology, product development, corporate marketing and retail banking. Prior to his current position, Daniel served as director of ecommerce and built generation-one online banking. Central Bancompany is a $20 billion, Missouri-based bank holding company serving consumers and businesses in seven states.
As a midsize bank that has shown steady growth since its founding in 1902, how will the digital evolution impact your organization’s future growth?
We see digital as essential for our continued growth as a midsize bank and will continue to heavily invest in digital solutions that drive engagement with our customers. Banks our size have the ability to stay closer to the customer and their communities than most larger institutions. This has been our competitive advantage for decades. But it’s no longer enough. To remain relevant, all financial institutions are expected to provide the convenience that digital capabilities deliver. We have been a leader in this space among our peers and are proud to offer digital solutions near the same level or better than many of the country’s largest banks.
What about expansion strategies?
Strong digital solutions play a key role in our expansion strategy. Technology allows banks to enter new territories and be competitive quickly. For us, enhanced functionality allows us to be thoughtful on branch expansion. It plays an important role as we consider whether we should or shouldn’t enter a market.
Additionally, we are investing heavily to improve our online acquisition capabilities. We are now moving into version three of our online account opening platform. This platform focuses on simplifying customer onboarding while offering them the solutions they expect as they open their accounts online.
How are retail banking customers reacting as various services enter the digital age? Are they eagerly embracing, somewhat hesitant or even resistant?
You could make the argument that banks, particularly midsize banks, have been late to the game. Retail apps have really changed consumer behavior. They made shopping convenient, added quick and efficient ways to make a purchase, enhanced their loyalty programs and moved into highly personalized conversations. As a result, consumers have come to expect the same type of digital experience within all their apps.
In my career, the conversation has changed from “I didn’t know I could do that online” to “Why can’t I just do that online?” Our customers are eager to embrace the new technology we offer and appreciate it anytime we can simplify their lives. For us, personalization tools are key. We are moving beyond the transaction and focusing on data-driven offers and information to add value. We are in early stages but find customers engaging with the tools immediately and giving positive feedback.
To which digital banking services are they most quickly adapting?
Anywhere we can simplify their lives or keep them more informed—especially when it’s specific to them—is key to quick adoption. Last spring, we rolled out Insights among our digital offerings and the response has been huge. They enjoy things like subscription service management, anomalous transaction notifications and potential overdraft warnings due to spending habits and known expenses.
Customers have also found value in informational insights on fraud protection and financial quizzes. Do customers share any concerns about fraud when it comes to digital banking? If so, how do you answer those concerns? Customers’ fear of fraud has decreased over the years as their expectations of financial institutions increase. Not only do they expect digital banking to be secure, but they are also less tolerant of perceived unnecessary friction.
We are trying to do our part. Not only have we improved our controls over the years—which have been positively received—but we have given our customers the flexibility to manually turn on additional controls, such as out-of-band authentication at every login, if they choose. We continuously email educational material and publish new security tips within the app. At the same time, we are looking to new data points and faster methods of identification to make it easier for consumers to conduct transactions.
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