Customer-Led Innovation in the Spotlight at DIGITAL BANKING 2023

I was at American Banker’s DIGITAL BANKING conference last week at the historic Boca Raton Resort in South Florida. The 1920s-era property provided a cool and unique environment for an ambitious schedule of presentations, demonstrations, and both group and individual conversations over the 3-day event.

More than 90 banks and credit unions attended. Across 15 presentations, 10 demo sessions, and more than 20 one-on-one conversations with bankers and technologists, I gathered several perspectives on the present and near future of retail digital banking. While I couldn’t be everywhere at once – there were four tracks in parallel at some times during the conference – here is a summary of the event from my vantage point. Connect with me at the email above to discuss more.

The key themes were customer-led innovation, increased specialization, and financial inclusion

• Customer-led innovation was the overarching theme of the conference, with those next two themes flowing from it. Several sessions covered the concept of identifying the customer’s unique needs at either the segment or individual level, delivering capabilities to meet those needs, and focusing on a customer-centric experience design.
• Specialized digital offerings, even for smaller banks, are increasingly seen as a strategic imperative. Banker presentations stressed the ability to identify and act on those opportunities. Demonstrations focused on developing specialized offerings to meet those needs, either through internal innovation or in partnership with fintechs.
• Financial inclusion was a recurring theme, particularly when delivered through alternative data sources (a theme within itself here). A regulatory regime that is focused on equitable banking and more open to the use of data “beyond FICO” for expanding access to lending and other financial products is partially driving part of this innovation.
• Other concepts repeated throughout included best practices for fintech/bank partnerships, former “big bank” leaders now leading smaller banks, bringing their expertise and data-oriented approaches and bigger product thinking to their new organizations.

Some noteworthy stories about modernized banking products, insights into digital bank organization, and generative AI in production

• Ally Bank elaborated on their new “One Ally” experience and the transformation required to get there. As leadership explained, Ally is “moving from a ‘product’ company to an ‘experience’ company.” Examples: they’ve focused on making even mundane banking tasks into better experiences and recently began reflecting modern money experiences by converting “Checking Accounts” to “Spending Accounts”. Ally described the end goal as “one single product ecosystem.” There’s been an extensive rebuild of infrastructure to enable this.
• Arizent presented a recent survey on banks’ ability to align effectively on customer experience. One of the key findings was difficulty delivering good digital CX across platforms, particularly for mid-size banks. These findings align with my recent research and upcoming report on digital collaboration challenges within banks.
• Southstate Bank revealed that they’ve built an internal generative chat tool for employees, using OpenAI services. In one of the first in-production uses of OpenAI at a bank, I’m reminded of Lando Calrissian in Star Wars: “That thing is operational!” The bank has trained the model on their intranet to provide chat-based expertise for employees on self-service employee resources.

Predictions for 2024 focused on accelerated specialization

Leaders from Synovus, Colony Bank, and Atlantic Union Bank gave perspectives on the future of innovation in the year ahead, for smaller banks in particular. Those predictions were supported by individual conversations I had with other attendees so here is a summary:

• Increasingly specialized services will continue to differentiate banks who can deliver, including new areas like “Silver-tech” where family banking goes up a generation as well as down.
• No-Code/Low-Code solutions will increase in popularity. It’s more than just business-owner control or speed to market, it is about the pricing of the platforms that offer LC/NC and managing tech staff shortages, especially at smaller institutions.
• Coordination of risk and product teams within banks to align and execute on innovation will become a strategic discipline, imperative to enable customer-led innovation. Capitalizing on specialized opportunities to differentiate will be faster at banks with strong internal partnerships and collaboration.

Attending large events like this gives Celent an incredible cross-industry perspective to share with our clients and the ability to connect people and ideas across our network. Recently our colleagues attended Money 2020 Europe and you can find summaries from Zil Bareisis here, and Kieran Hines here.

As always, please connect with us directly for an expanded perspective or to learn how Celent can help your organization make faster, smarter, and more efficient technology decisions.