Alijah Poindexter 00:05
Welcome to the buzz, a bank automation news podcast. I’m Associate Editor Alijah Poindexter. Recently I spoke with Bill Clark, CEO of customer engagement firm engaged when I spoke to Mr. Clark about the war for tech talent in the financial services industry, and how banks can adapt their strategy Valmet. I also spoke with Mr. Clark about why banks should avoid a one size fits all solution for digitization and automation. You know, from your perspective, are they losing on the tech front? Is it sort of a war of attrition right now? Are they actually like winning in some spots? If you can speak to that? And then maybe how can banks attract and retain tech talent?

Bill Clark, Engageware CEO 00:44
Well, that’s a great question. And that’s obviously one of the key themes in the report of the findings. So let me take it in two parts. Are they are they losing people? are they losing talent? You know, I can’t speak for every institution, but across our customer base of almost 400 banks and credit unions, the answer is absolutely yes. I don’t think they’re that unusual. I think as we read the general media, I think there is the great resignation. I’m personally not sure where everybody’s going. But they’re, they’re leaving. And I think banks and credit unions are feeling that and they’re feeling it in different areas, they’re feeling it in branches, they’re feeling it in contact centers or call centers. It’s a big problem. One kind of fact, that’s interesting is that we’ve heard from some of our customers is, you know, there can be a thesis that people leave a bank or a credit union to go to another bank or credit union. But one of the things that we’ve heard that was a little bit eye opening was that, especially technical staff, IT staff, you know, software, people’s things like that are getting recruited out of financial institutions to go to non financial institutions, because tech talent generally, is at a premium. And so people that in the past may not have been recruited outside of their industry, are actually getting recruited outside of their industry. So it’s, it’s a tough battle, which kind of leads into your your second point, which, which is, what can banks and credit unions do to attract and retain the talent? And, you know, I wish I had that answer. My my thought, and it goes to some of the things we talked about in the report is that I don’t think people can plan on winning that. I mean, they should try, they should try to retain, attract and retain as many good people as they can. But to plan that you’re going to be able to be fully staffed with the capabilities that you ultimately want, I think is very difficult. In today’s world, it may change. Because it hasn’t always been this way. But right now, it’s really hard. And so the emphasis needs to shift away a little bit from thinking you’re going to get to be fully staffed all the time with the best people and to turn your attention to how do I get the most productivity out of the people I have, and that I’m adding, because retention rates are not that high I’m we’re hearing about departures or churn on staff have been between 30 and 50%, a year in branches and call centers. So I don’t know how you ever get ahead of that. And so what our customers are focused on is, well, for the people I have, how do I make them as productive as possible. And some things are around things we don’t do. You know, there’s emphasis on training. There’s emphasis on coaching, there’s emphasis on deflecting some customer inquiries away from branch or call center employees. But overall, it’s a big, it’s a big challenge. And there’s not a silver bullet answer to it. So I think

Alijah Poindexter 03:55
a good pivot from that would be there’s another part of the report where it speaks about customer adoption of digital capabilities, lag that that really caught my eye. Because again, I mean, the whole point of this digital revolution, as people like to call it is that we’re making things more efficient instead. Again, it’s not just about these sort of ephemeral concepts of experience. It’s about hard numbers and efficiency, and real in automating the process. And so if you’re missing the point there, that’s important. And so if customer adoption of these digital capabilities, capabilities is lagging, you know, what does that mean for, you know, in your experience and your research, what does that mean? What exactly is lagging?

Bill Clark, Engageware CEO 04:33
So, great question. And I’ll give you another couple of data points here. There was a survey, a bigger one done by Gartner, about a year ago and asked people a number of questions, but the two that stood out that are relevant to this conversation are, what percentage of all of a bank or credit unions customers would like to use Digital in terms of how they interact with their institution, and the answer was 70% 70% of the customer base would like to you to interact digitally. Okay, so that that would that would underscore the need and the and the activities of banks and credit unions to pursue digital solutions, that that reinforces that saying, Yep, that’s what our customers want to do. So we should do it. Well, but that the the add on to that survey, The finding was, if 70% of the consumers want to interact digitally, only 9% say that they can do it effectively. So there’s a huge gap in effectiveness, you’ve got a customer base that wants to do it. But hardly any of them report that they feel satisfied with what how they can do it with their institution. So it goes right to your point. So what’s the problem? And I would submit, the problem is that it’s not a one size fits all. It’s not just improve your website. It’s not just live chat. It’s not just video banking, it’s not just appointment scheduling, it’s not just your call center, it’s you have to think about the sum total of all the interactions that your customers might want to have with you, and how to optimize your operations to serve them well, in the most efficient way possible. And that is a multivariable problem to solve. And the institutions that do a better job with that are having more success, not just with customer satisfaction, but their actual business results.

Alijah Poindexter 06:43
You know, so So when, let’s say a community bank, middle middle American community bank, 20 billion, that’s a little too much, let’s say 500 million in assets, if they you know, you see a press release come to the wire, they’ve adopted a core solution they’ve moved, it’s always, you know, they’ve been they’ve moved their core processes to the cloud using some type of provider. Do you think what, no doubt that a lot of these, these banks and credit unions are thinking that this will solve all their problems. So you would say that they’re probably missing a point with that, and taking that US, US just moving all of our processes over to this sort of this cloud platform, regardless of if it’s a hybrid cloud, public cloud, private cloud? I mean, that’s kind of beyond the point. The point is that, if they’re expecting this to sort of solve all their problems, that would probably be missing the point.

Bill Clark, Engageware CEO 07:30
Absolutely true. And let’s drill in on that for a second. So yes, a lot of people are moving, or are upgrading and help them change vendors, but are upgrading their core system. Absolutely true. And the core providers are doing that. And as you said, a lot of that move involves going from on premise solution or hybrid to going to cloud solutions. So let’s drill into that a little bit. What’s the major benefit for the institution of doing that? The primary benefit is not for the customer, the primary benefit is it saves them money. It’s more efficient, because they don’t need the internal staff to maintain those systems on premise. They’re in the cloud. That’s the whole rationale for cloud based systems generally. So it’s great for the institution. And it makes sense. And all the core providers are looking to move their customers to the cloud. That makes sense. But if you’re a customer, of that community, financial institution, can you even tell if you want to go on your on your phone and check your checking account balance, whether that the core system is on the premises of the bank or in the cloud? Do you even know that? No, you? Yeah, probably not. So there’s no benefit there. So yeah, it’s essential I get it. It’s I’m not saying it’s a bad idea. It’s the trend is there, because there’s economic advantages to the institution to do it. So they should do it, and they are doing it. But that’s not going to fix your that’s not going to fix the 70% of the people want to interact digitally, but only 9% can, that’s going to do nothing for that. So then you move up the stack. So let’s say you move your core system, right, you’re in the cloud, you’re saving money, you’re on a more advanced system. That’s good. What else are you doing? Well, another big trend out there is mobile banking, we need mobile banking, most people have mobile banking, not everybody, but they need mobile banking. Well, how does mobile banking work? Did you get the mobile banking? Or the digital banking from your core provider? If you did, it might be integrated with your core system. But it might be that might not be that that great to use? Or did you go to one of the major digital banking providers, you know, they’re they’re winning a lot of business, they dominate the market. So that’s good. So you have a better user experience when you’re using mobile, or you’re on the website. But do you still get the full experience that you need to have a better engagement? So for example, it’s great if I have a great UI on my phone to interact with my my service provider for my my bank or credit union, that’s great if I just want to check my balance, or I want to see the hours of a branch, or I want to ask what is my routing number? That’s great i for those three things, I shouldn’t have to go into a branch, I shouldn’t have to call a call center. That’s terrific. But if I’m curious about mortgages, and I mean, curious, beyond just what are the current rates, but if I want to understand how do I qualify? What’s the difference between a jumbo and a regular mortgage? What are prepayment options? What are duration options, what’s really the best thing for me, you don’t want to do that with a call center. A call center is not staffed with experts, a call center is staffed with generalists who turn over frequently. And if I’m the institution, I don’t want those customers, especially qualified mortgage borrowers, I don’t want them trying to do that on a self service on my website, and I don’t want them trying to do it on the call from the call center. I want them connected with a mortgage specialist, whether they’re in the branch, or they’re doing a video call or a phone call. And in that case, when you figure out that’s what the customer wants is a is, you know, they’re they’re seriously qualified and in the market for a mortgage, you probably want to set up an appointment for them with one of your specialists. And in that case, the only digital aspect is the appointment scheduling. The actual interaction is with a person. And so you have to understand the wants and needs and the requirements of your customers. And you have to figure out the channel and the right use of technology to deliver that for the customer. So it goes back to my point about one size fits all is a myth. It doesn’t.

Alijah Poindexter 11:53
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