Citizens Financial Group is making innovations based on customer value to ensure that its technology investment serves specific needs.

“Innovation needs to start from the customer. What’s the need you’re trying to solve?” Brendan Coughlin, vice chairman and head of consumer banking at Citizens Financial Group, said this week at Fintech Nexus USA 2023 in New York. “If you don’t [innovate with customer value in mind], you’re going to end up with an economic model that doesn’t work.”

One area the bank is investing in, based on customer need, is its Citizens Pay business, which launched in 2021, Coughlin said. Citizens Pay provides financing options for large purchases that allows clients to pay for items through a virtual line of credit, without the need for a credit application or loan.

The point-of-sale offering is an area where the bank has identified “significant running room,” Chief Financial Officer John Woods said during the bank’s Q4 earnings call in January.

Citizens is working to “modernize the payments ecosystem and create customer value to create an alternative to credit cards,” Coughlin said.

The bank is looking at payments and buy-now, pay-later “differently than fintechs,” he said, noting Citizens Pay reports data to the bureaus, underwrites customers in full and allows for customer acquisition cost savings.

The key is to think about solving customer friction before starting a project, he said. “If you start with technology and try to find innovation, it’s like running around with a hammer trying to find a nail,” he said.