The path to personalization in digital customer service

Customer service is cheaper for banks to deliver digitally than via other channels – the trick is to do in a personalized way.

Jennifer Timbrook from STAR Financial Bank joins us to discuss her Indiana-based bank’s approach to digital customer service.

A few takeaways from the conversation:

• Nurturing customer relationships is rapidly shifting toward digital, and that will likely accelerate as more digital natives start using more banking services.
• The data collected as a part of digital customer service is helping STAR to anticipate customer wants and needs, a key component of personalization.
• STAR wants to increase digital customer service for the sake of efficiency, but how far they go will be decided by the customers as they do their banking.

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INTERVIEW TRANSCRIPT

So Jennifer Timbrook, system analyst at STAR Financial Bank. Welcome to the BAI Banking Strategies Podcast.

Hi Terry, it’s great to be here.

So Jen, could you start us out by giving us some background about STAR Financial Bank? How long you’ve been around, where you operate, who you serve, asset size, stuff like that?

Sure thing. So STAR Financial Bank is an Indiana based community bank. We are about three billion in asset size and have been around in Indiana, we just hit our 80 year mark. We’ve got 36 locations spanning across Northeast Indiana all the way down into central Indiana. We serve retail customers, small business and commercial, as well as customers seeking wealth management and private advisory.

With a history going back that far, 80 years as you mentioned, your bank has been in the customer service business far longer than the start of digital banking. Before we get too deep into digital things, tell us about how STAR thinks about delivering customer service overall, regardless of the channel being used.

To us, customer service is really about our customers experience. When we’re thinking about customer service at STAR, we aren’t just thinking about our customer interactions with our bankers, it’s also about how are our service is giving exceptional customer experiences. At STAR, we believe to give great customer service we have to also provide great customer experiences. So whether that is in their interaction with our services in the physical branch or if it’s online, on the phone or over chat.

Now let’s move into the digital part, the heart of our conversation here. Share with us an overview of STAR’s broad digital banking strategy and how far along the bank is in implementing that strategy.

Overall, our digital strategy is to deliver digital services that are intuitive and frictionless and self-service with online banking being the primary hub for the digital experience. Our strategy is mainly fueled by the desire to be able to meet our customers where they want and those that want to do all of their banking from their couch, or wherever, can do that with ease.

And how far along are you in getting there?

We’re off to a great start but there is still so much to uncover. It’s hard to picture the day when we say, “Okay, we’re done implementing our digital strategy.” Because technology continues to grow, so does the opportunity to serve our customers in new and better ways, and we continue to push goals out further and further. Right now we have about 40% of our customers who are mobile banking only. We are working on a pilot for self-service ATMs and this would allow our customers to do more transactions than just deposits and withdrawals for their checking and savings accounts, but allows them to pay off their loans or make loan payments and other banking transactions that they wouldn’t have to do at the branch.

Within this enterprise-wide strategy for digital, where does the digital version of customer service fit?

Really, if we are truly able to meet our customers where they are, then digital customer service is essential for us. Whether our customer is browsing on the website, banking on the mobile app or completing an application, we don’t want them to need to search online to find our number to call or visit a branch. Our goal with digital customer service is that our customers can interact with our bankers in whatever fashion they choose with just a click of a button, whether that’s with chat or a voice call or a video call, they don’t need to go out searching on how to reach us. I think there is also space for us to grow with our ability to provide more personalized banking advice without our customers needing to actually initiate the interaction, but we are still exploring that.

Customer service that’s face to face or that’s between people over the phone has a person feel to it and that personalized feel is valued by many customers. Our research of BAI indicates that it’s a key reason why many customers choose and stay with a particular bank. So how do you emulate that important personal touch in your digital customer service?

I think we’ve just started to scratch the surface of this space. One way we’ve tried to do this is with the new ability for video FaceTime-like calls and another way we do this is by delivering digital services online that feel like STAR and that’s providing consistency throughout the interactions customers have with the bank, whether those are in person or digital. As consumer behavior shifts from in person to digital are recognizing that our ability to know our customers personally and give that personal touch is going to increasingly come through the data we can gather from our digital channels. So we’re working on using that data to provide recommendations to our customers for new products or services. I think when we’re able to provide recommendations before they maybe know what they want, that does give a personalized touch. STAR knows me, they’ve offered a service that is going to be really great for me or that I want to explore. How did they know that that’s something that I need? Another way that we’re trying to emulate that personal touch is exploring an option for some sort of wizard that a customer could work through to help them find what they’re looking for, maybe without working with the banker, but maybe answering a few questions and it takes them to certain products or gives them personalized advice based on that. But that’s also something we’re still exploring but we think would be another good way to give that personalized experience digitally.

As a community bank, I’m guessing STAR focuses on long term relationships as one of the ways to differentiate itself from larger competitors that would no doubt love to move in on your business. How do you build and maintain close relationships with those customers who are using digital to bank with you either exclusively or primarily?

I think it starts with, one, sticking to our core values and ensuring that we’re living and breathing those values throughout all of our interactions we have with customers. And also, in order to maintain long term relationships, we have to also be able to continue to provide the great experiences and the services that our customer needs and expects. We have to evolve as the needs of our customers evolve. As we mature digitally, the hope is that we are providing the services that they want before they know they want them and that’s how you maintain those relationships. I also think it’s about being available to our business customers. We’re willing to make customized experiences that don’t hinder their business in the long run and establishing true partnerships that result in mutual success. Shifting from a traditional banking approach to one relying more on digital, no doubt it doesn’t move in a straight line. I’m sure this is what you’re experiencing and many other banks out there are experiencing the same things as they try to make that transition.

What are some of the bigger challenges that you’ve met with at STAR and how are you dealing with those challenges?

One thing that comes to mind is employee resources. One way we worked to help combat this is by really focusing on documenting and optimizing our operational processes. If your process is documented, then you can answer the questions of, “Why are we doing this? Do we need to be doing this? Is there a better or more efficient way to do this?” And then in the long run with optimized processes, you’re able to free up your employees for more meaningful work in that digital transformation space. Another thing that we have definitely struggled through is providing self-service while also mitigating risk. Ensuring that we have the right checks in place to keep our customers safe from risk but also not putting so many checks in place that the experience is bad and it takes them forever to do something that shouldn’t. So for this, we’re really continuing to leverage our partners for solutions that work for us. And then the last thing I was really thinking about was customization, I think it has to be top of mind. Are we sure the customization that the customer’s asking for is really going to make their experience better in the long run? Or is because they have all this customization, they can’t do the self-service that our other customers can do because they’re set up differently or they want something customized. So we want to make sure that we’re taking what the customer needs and we’re fitting that with our systems and not changing our systems so much that to fit our customer, it will hinder their experience in the long run.

So now that we’ve looked at some of the tough stuff, let’s talk about some of your successes in this transition toward digital. Can you give us some examples of where your digital customer service has outperformed expectations and what do you think has allowed that to happen?

So actually just in October, based on a recent survey to our customers, we deflected 800 customers from calling in to our call center with the chat functionality, and that was direct customer feedback on those engagements that were via chat. In October, we had 6,700 calls into our call center so anything that we can do to get that down and drive our customers to an easy solution over chat is a great success for us. This can mainly be attributed to the accessibility of having that chat feature to our customers and then also a shift in our customer behaviors. So it’s almost becoming a standard for websites and apps across a lot of the different service industries to have a way to talk to someone without calling in. I can think right now of DoorDash, I use the chat feature because my driver ran off with my meal and said he delivered it. But when you think about mobile banking, customers aren’t comparing our app to other banking apps but really their expectations that our app works like the rest of the apps that they deal with. So you see more services providing that chat option across all industries. Customers are used to this and they like it and use it when the experience is great and when they see that we’re offering it.

That brings up an interesting question. The feedback that you’re getting from your customers on the digital customer experience, what sorts of things are they noticing and appreciating based on the feedback that you might be getting from them?

It’s really cool, we can see some of those answers are just a simple, “This is great. Thank you so much for providing this feature it made it so easy.” And then you get the individual shout out that are calling our bankers by name and saying, “Jane was so positive and helped me through this problem.” And I think it gives that personalized feature when they know they’re talking to STAR and we’re able to get their questions or problem solved quickly and they don’t have to wait in the long queue lines of our call center.

Knowing all of the competing priorities that are always in play at banks and that resources can often be hard to come by to deal with those, how much of your digital transformation of customer service is being done in-house and how much of it is being done with outside partners?

We take a hybrid approach to it. So as a community bank, we want to compete with the regional banks and big banks and be able to offer what they offer and also have our own things that make us special but to do this, we really do rely heavily on third party partnerships to provide the competitive digital offerings. However, we don’t want to just offer an off the shelf digital product, but to keep us competitive, we augment those third party relationships with our internal development and digital teams so that we can get the most out of these platforms and integrate them all together. We also keep much of our customer support and house so when you call STAR or chat with STAR, you’re talking to one of our bankers and not a third party call center. The current trend in banking is clearly toward digital for any number of reasons. For the customer there’s speed, there’s convenience, 24 hour access. For banking institutions, the potential benefits include a lower cost structure, scalability, and the ability to reach over a wider geography.

When it comes to customer service, I would think that it’s a little more complicated given individual preferences. So what kind of balance are you shooting for at STAR between human based customer service and digital customer service?

I can’t give a percentage of we want to be 50% digital and 50% in bankers. The balance for us is more dictated by how our customers want to be served and we’ll meet them where that is. I do think if you look at the trends, digital is becoming the preference but it’s not for all. Really, we’re striving to be able to meet our customers in both spaces consistently and with that personalized touch. While I say that, going back to our digital strategy intuitive, frictionless self-service options, I think we can naturally drive our customers to need a banker less for the day to day and instead rely on our bankers to help them navigate more complex needs or issues. We want our customers to feel empowered to handle their banking needs on their own without needing to involve us but also making sure that when they do need to talk to a banker, it’s an easy and seamless process. Really for us, our customer service is only exceptional when the customer journey as a whole is exceptional. So it sounds like push people to digital to the degree you can for simpler transactions. Save the human interactions for those that are perhaps a little more complex and require a little bit more customization and personalization.

Jennifer Timbrook from STAR Bank, many thanks again for being with us on the BAI Banking Strategies podcast.

Thank you, Terry. It was a pleasure.