Marketing

Know your customer well

By Charis Palmer

June 11, 2010

US banking giant Wells Fargo is celebrating 15 years of providing online banking to its customers. Today, the bank serves 17.2 million active online customers, has three million active mobile banking customers, and receives more than two billion customer visits per year. We sat down with Wells Fargo head of online sales and marketing, Stephanie Smith in San Francisco to talk about the future of online and mobile banking.

OBR: Where do you think Internet banking might be headed, now we've seen the first wave of innovation bedded down?

SS: We're celebrating the fifteenth anniversary of having launched online transactional banking in the US and it amazes all of us that it's only been 15 years.

There are a few things we see happening. Customer demand is insatiable and it hasn't stopped in terms of what people expect to do online. We think Personal Financial Management (PFM) will be a continuing area of focus, certainly for us but also for our customers.

PFM really just means I want to be able to automatically manage my spending my money and my budgeting and my payments in a drop dead simple fashion and have it be integrated into all of my transaction history and payment history and displayed to me in a way that's intuitive and easy to use.

It's about Wells Fargo as a company making customers successful financially. Customers are obviously focused on how to manage their money smartly and also how to make their money go further, given the economic environment.

The second thing we see happening is mobile. The mobile adoption rate is exponentially greater than the adoption rate was for online banking when it was first introduced.

We all introduced mobile banking a decade ago and it was too soon. Now the time is right with the convergence of smart phones with 3G networks, with VoIP, with social networking, with video. All the conditions are right for this sort of explosion.

We have a significant number of customers who use our mobile channel and we brought bill pay to that channel over the course of the past 18 months.
As a company, we really believe that mobile is not in lieu of the online channel, it's an add. But for a set of our customers and those who are younger, it is a replacement. They actually don't use desktop computing to gain access to the Internet the way we might.

OBR: How do you think mobile banking will evolve, and where will you be investing?

SS: The devices will change and it will move on from just a smart phone to tablets, to iPads, to Kindles. These are different ways in which consumers will access the Internet and cloud computing through a device that is not tethered to a desk.

Were fascinated by how our customers will use these new devices and what it means for us in terms of what do we develop and how do we engage with them? Customers are multi-channel and so very few of our customers only use the online channel at the expense of our other channels. A lot of what we've been working on from a customer experience standpoint is how do you design customer experiences that take into account the cross channel nature of what customers do?

We didn't want to pick a winner in mobility, so we developed text banking, WAP and mobile apps. We really didn't know where customers would settle.

Customers are smarter than we are about what they truly want to do with mobile devices, so we needed to maintain the flexibility about what we developed to deliver banking and financial services to mobile devices without trying to pick a winner, because if we picked a winner we'd likely be wrong.

OBR: Are you thinking about a redesign of your site for iPad, or do you just see it as an extension of the existing applications the bank has built?

SS: We're thinking about what our site will look like from a form factor standpoint but also what's the user experience and what does that mean for the design of the site and the design of our capabilities.

If you look at wellsfargo.com right now on an iPad it functions fine, but it doesn't take full advantage of the capabilities, so that's what we're looking at. We don't need to redo the site to have it function but we want to take advantage of the full capabilities that are currently available on a tablet PC.

OBR: How do you build business cases for investment in something like the iPad, and the online channel in general? Is it all about cost take-out from other channels?

SS: As a company, we're not building out mobile banking because we think it's cool, it's because our customers demand it.

As a company, we believe passionately that if we help our customer succeed financially we will do well as a company and so we put significant investment into all the online channels, not necessarily because we start out with a solid business case where there's cost take-out.

In many cases, we expected to have a channel stack up and we fully expected to pay for that because our customers were demanding multi-channel access and usage. We believed that the benefits would flow over time as we developed capabilities.

So, for example, the online channel we've been doing for a long time. I would not have expected to see the kinds of cross-sell and customer engagement that we see through the online channel but it's actually turned out to be a very, very powerful channel for us from a cross-sell standpoint.

OBR: Cross-selling successfully through the online channel is quite uncommon in the industry. What does Wells Fargo do differently to make it work?

SS: We do a lot of work behind the firewall with cross-sell. Wells Fargo really believes that we can help customers be successful when they have more products with us because, the more we know about them, the more valuable we are to them as a financial services provider.

As a company we are very focused on cross-sell and that doesn't change when it comes to the online channel. We are very focused on how we take all the information we have about a customer and use it to intelligently target offers and services that customers can use, and consequently we have a very high cross-sell rate behind the logon. The online channel is tailor made for cross-sell if you have the right data infrastructure and the right marketing infrastructure, and the right sales platforms.

But that's not something that 15 years ago would have been part of the business case of the online channel. We wouldn't have thought about cross-sell.
The company invested in building an online sales platform that supports over 80 different products, so we focus there on how to make the customer experience easy.

For example, for a deposit account application we reduced the time down to seven minutes to apply for a checking account if you are a new to the bank customer. For a credit card, it takes on average five minutes to complete.

We keep thinking about how to make it simpler and easier to apply online and how to do it in a way that's integrated into the information that we're gathering. For existing customers, we think about how to take all the information we have about them and pre-fill the application so then all they have to give us are a couple of bits of information that we don't currently have. It pays off.

OBR: Where does responsibility for customer experience sit within Wells Fargo?

SS: The glib answer is 'customer experience is everyone's job', but it's actually true. We do have a dedicated team of usability and information architects who work with the different platform and product teams within the online services group.

OBR: And what about innovation? Is it also everybody's job?

SS: It's everybody's job. The belief is that innovation isn't the cool sexy stuff, it's also about how you constantly come back to better design for the sake of the customer. Innovation is not just customer facing, but is also how we think about redesigning our work processes.

We don't have an innovation team, it's just something that works across the entire Internet services group.

OBR: How does Wells Fargo reduce customer churn and stop customers switching to other institutions?

SS: We're very focused on how we deepen our relationships with customers. The deeper the relationship, the more likely they are to stay with us, the more likely we are to know more about them, the better we can serve them.

We do focus a lot on how we increase the number of products they hold with us, how we increase the share of wallet, but also thinking about retention.

There's a lot of work that goes on within different product groups but also across the company with distribution channels on things like retention and how we increase balance growth and utilisation.

In the online channel it's about data - if customers are in a secure session, we give them the information we hold about them. It's then easier for us to talk to them about the value proposition of bringing more of their balances to Wells Fargo than they might have otherwise.