Umpqua Holdings Corporation’s strategic plan to boost profitability and simplify operations by 2020, called NextGen, appears to be performing above expectations, according to the bank’s fourth-quarter earnings for 2018.

The Roseburg, Ore.-based bank realized $16 million of a $24 million-to-$36 million target range for annual cost reductions. Another $8 million in cost reductions are expected to come in over the next two quarters.

Umpqua also benefited from a $6 million gain in non-interest income from the sale of its innovative technology subsidiary, Pivotus Ventures, to Kony, an Austin, Texas-based developer of cloud-based digital applications.

Also see: Kony’s Deal with Umpqua to Acquire Pivotus Ventures Was Aided by ‘Cultural Affinity’

President and CEO Cort O’Haver during the bank’s earnings call last week touted accomplishments in three NextGen priority areas: balanced growth, operational excellence and human digital. He said the bank started “several of the end-to-end customer journey redesigns, beginning with commercial lending, which will improve the customer experience and create tremendous value by increasing the speed-to-market and decreasing the cost per loan.”

Umpqua’s human digital strategic priority is how the bank is “creating a differentiated customer experience,” O’Haver said. Go-To, which is the bank’s human digital hybrid platform for customer interaction, launched as a pilot in September.

“Our human digital initiatives use technology to empower our people to form deeper more meaningful and profitable customer relationships,” he said. “On the consumer front, we launched in five markets last year, Go-To, the industry’s first human digital banking platform.”

Go-To is ready to deploy in all stores across Umpqua’s footprint by early February. “Early indicators from last year’s pilot and limited rollout suggest that this new channel is deepening customer relationships in meaningful ways and we look forward to sharing more detail later this year,” O’Haver said.

With Go-To, Umpqua would appear to have an interest in retaining as much control over the customer journey as possible. O’Haver previously told Bank Innovation there’s “something powerful” about having humans involved in the digital experience, rather than using technology for technology’s sake.

Traditional models for financial services marketing are “very broken,” Phillip Rosen, CEO and co-founder of Even Financial, an API-powered recommendation firm, told Bank Innovation. He said even when consumers shop online, for a mortgage or insurance, for example, and engage with reputable partners, they’re still likely subjected to an inundation of sales emails and phone calls.

“And that’s largely because a lot of the actual transaction can’t be done in-app or online yet,” he said.

Whereas fintechs and startups have contemplated user experience to be about “making a really beautiful, joyful experience,” Rosen said banks are “simply learning how to actually complete the transaction in a digital manner, online.”

He said, ideally, a customer would be able to go onto Zillow, for example, and get pretty deep in the mortgage application process as they’re engaging with a real estate agent.

“But you’re going to have to go out of flow, and most banks are going to require phone calls, and then you’re going to have brokers calling you, trying to sell you,” Rosen said. “They have to put functionality into somebody else’s hands, to really get the ideal user experience, and I think that’s frightening to them.”

O’Haver said the human digital aspect of NextGen is also an important differentiator in wholesale, particularly by developing an integrated banking experience. “We are using technology to empower our bankers, with smart insights at the right time, and to help our customers advance their companies through automation and other digital capabilities,” he added.

The bank saw growth in non-mortgage fee revenue, defined as non-interest revenue from wholesale, retail and wealth management divisions, CFO Ron Farnsworth said during the earnings call. That excludes fair value changes and gains from portfolio loan sales, he added.

“This is the measure we are looking to increase $30 million to $40 million by 2020, over 2017 levels,” he said. “With the various NextGen initiatives we have laid out, we are happy to report good progress on the first of the 3-year plan, increasing this fee revenue by $15 million, or 12% over the prior year.”

Farnsworth said Umpqua expects to have lower expenses in 2019 and onward. He said the bank will continue to reinvest roughly a quarter to a third of certain cost saves in new technologies and initiatives.

Umpqua’s market cap is $3.93 billion.

O’Haver will join the fireside chat at Bank Innovation Ignite 2019. The event will take place March 11-12 at Seattle’s Hyatt Olive 8 Hotel. You can join the event by registering here.