Adjacent to KeyBank’s corporate headquarters tower in Cleveland, there’s a bank lobby that dates back to the mid-1800s — complete with tall counters, friendly human tellers, and ballpoint pens on chains.
KeyBank is one of the biggest in the US, with more than 1,100 branches, $137 billion in assets, and about 18,500 employees. And while it is steadily investing in its digital relationship with customers — in June it acquired Bolstr, a startup focused on small business lending — it remains committed to the old school, face-to-face interaction that takes place in a branch. Complete with free lollipops for the kids.
“It turns out customers may have strong preferences for digital interactions when it comes to money movement or account balance checking…but [they] prefer human interaction for substantive conversations,” says Dennis Devine, Co-President of Key Community Bank. Devine oversees Key’s consumer and business banking nationally — which includes branches, online, ATMs, mobile apps, and telephone banking.Devine discussed how KeyBank is pursuing innovation in the physical and digital realms with InnoLead editor Scott Kirsner as part of IL’s Cleveland Field Study in June.
The Intersection of Digital and Physical
You don’t visit a bank branch very often, but I bet you do from time to time. You don’t do it to make a payment. You don’t do it to check a balance, because why would you? You have a device in your hand that can do that at any given time.
The result of that is we have invested like crazy in digital capabilities. We’ve acquired a couple of financial technology firms in the past year-and-a-half. [On the day of this conversation, KeyBank announced its acquisition of Bolstr, a small business lending startup.] These branches still matter for the connection that you can make to clients…
It turns out customers may have strong preferences for digital interactions when it comes to money movement or account balance checking…but [they] prefer human interaction for substantive conversations.
That must be the more mature population, or certain age and income categories. [Actually, a recent Oliver Wyman report says that] across age and income demographics, 77 percent of adults prefer face-to-face engagement for substantive conversations.
That’s been the interesting part of innovation: we have to design remarkable, digital-led client experiences, but we have to make it relevant when I want to come talk about something important. I want to take out a mortgage. I want to think about paying down some of the student debt that I have. I want to buy a car. I want to plan for retirement. That intersection is a fun one and a hard one.
Using Data in a ‘Not Creepy’ Way
…What’s different about bank branches these days is our clients trust us with a remarkable amount of information. We know everything that flows through their payment accounts because it’s all electronic now, debit card, credit card, Apple Pay.
We know everything that’s in every application that they’ve ever taken with us. We know everything that’s in the public of record through the credit bureaus and other sources.
Decades ago, you would walk into a branch and they would have known you, maybe, because you’d been there and made transactions in the past. Now, we know everything there is else to know about you.
How do we take advantage of that information and all that you’ve entrusted us with and put it to your use in a powerful, compelling, and not creepy way?
The Average American has a ton of revolving debt sitting on credit cards… American debt is at the highest level in the history of our country. Mortgage debt, student debt, credit card debt, auto debt.
We know that our clients have a lot of debt. We’re not going to sit and say, “Hey, here’s all this creepy intel we know about you.”
We are going to trigger our colleagues in the branches when they meet one of these clients to say, we think this would be a worthwhile conversation to have to help them understand — because most of that debt is sitting at high interest rates, revolving with credit card companies. That’s the worst possible thing you can do.
Nudging Consumers Toward Financial Wellness
Do you know what the worst day of your month is in terms of your financial responsibility? Payday. People can be pretty good. Then they get paid, and it’s like, “Woohoo!” Payday happens on a Friday a lot of times, which doesn’t help. We will politely remind our clients on that day of the month or that day of the week – because we know when payday is for each one of them — how to think about savings in polite, thoughtful, triggered gamification-like ways in order to cause them to be more financially healthy and to think about saving on those days.
Right now, it’s a digital engagement. It’ll be an email. It’ll be an alert. They won’t even really know that it’s taking place.
People don’t get up and say, “I’m so lucky I get to go to the bank today,” but they do think, “I actually feel pretty good about the fact that I’m making progress in my retirement, or I am buying a home, or I am helping my kid buy a car or go to school.”
The mission we’re on is we believe that everyone deserves the confidence and peace of mind to dream big. That’s the mission that we have. We exist to empower the financial wellness of our clients one decision at a time.
How We Approach Innovation
How do we think about learning and innovating? Hire brilliant people who are constantly pushing the needle.
What’s fun about that is [one of the] financial technology firms that we acquired, HelloWallet, had no bank partners. It was a startup in DC. Their mission in life was to help employers…help their employees be more financially well.
If you’re not stressed out about money and you’re saving in your 401(k) and you’re putting money into your health savings account because you’re in a high-deductible healthcare plan, you’re less likely to miss work. That was their model.
We said, “We think that’s a great model, except you only touch your clients once a year during open enrollment. We touch our clients virtually every day, three million clients, north of a million authenticated mobile logins every day. We can have much more impact. Come work with us.”
They said, “We’re not working with you. You’re a bank. We are here to help people sort out the banks and to avoid the bank fees.” We said, “Come join us.”
That team is now fully part of our team. They push our thinking and creativity every day.
We’re a big enough bank that if we want to invite someone to come visit us they tend to be interested to come visit with us. We have innovation days where we’ll invite companies to Cleveland. “Come visit with us. You’ll get the senior leadership of the institution, 45 minutes, sometimes live, sometimes virtual.”
We also have a lot of hackathons with our employees. We’re constantly trying to push our thinking in terms of what’s next and what’s possible. You got to stay in front of it.
Sometimes we just say, “Here’s a new set of data that’s available based on some data supply chain work that we’ve done. Amaze and dazzle with what’s possible with what you can go do.” It’ll be as open-ended as that to try to find ways for people to create new and innovative ideas. A lot of times good business ideas spawn from them.
We actually carved out a pool of what we call innovation dollars. I don’t have a head of innovation, but [within] the sustainability corporate plan, [we] created an innovation pool where we develop innovative products to help low and moderate-income communities.
We introduced a product a couple of years ago called the Hassle-Free Account. What do people dislike most about banks? Fees. We have an account called the Hassle-Free Account. No minimum balance. No monthly maintenance fee. No ability to overdraw.
We even encourage clients with some incentives to open the account. Well, how do you make any money doing that? It’s because clients take the issue of fees off the table, and they’ll trust you with a broad relationship.
It’s started as a low and moderate-income sustainability solution. We had an account called Access Checking. We did some basic client research into other demographic segments of our client base. It turns out they loved it with a little different marketing wrapper around it. You’ll see us lead with it in every market…
Empowering People Deep in the Organization
I don’t have a head of innovation. I do have a head of client experience. The beauty of our business is you can measure and manage everything. Not just what a client says in a survey, but what they tell us on the phone when we transcribe those calls and how they behave. Where they go and what they do. That team has responsibility for the entire client experience…
As you think about a bank that’s been built up over the better part of 200 years, you can only imagine the number of systems, processes, regulations, and controls that have existed.
If you look at my org chart, you would find it mildly interesting/amusing because there are roles that just don’t make sense in a traditional organization. I have a head of branch now. I have a head of digital. There’s product managers. There’s a head of financial wellness. Then there’s a head of retail [banking] transformation, who is shaping the whole future.
If I were to pick one thing that has been the biggest deal for us over the course of the past couple of years, it would be to push decision-making and empowerment as deep into the company as possible. We’re a big bank, and so we spend a lot of money in technology development and innovation in any given quarter, in any given year.
There was a time when that would have meant me, and a group of folks like me, sitting in a room reviewing every business case on every little amount of money that we wanted.
Now, there’s more Tableau users [working with business data] on a daily basis. We…fund Agile squads that have outcomes that we expect them to deliver — client-centered outcomes, business-centered outcomes. Then they just go at it.
…I come to work sometimes to see an announcement of something that is about to take place that I didn’t even know we were planning to do. To me, that’s exhilarating, because somebody had a good idea.
The more you can get the team working through deep into the organization, empowered with the insights and empowered to make the decisions, to me that’s been the best part of our culture.
Dealing with Failure
We have gotten a lot better at [dealing with failure.] I would say we’ve got probably a half dozen partnerships where we’re just experimenting. Some of them are going to fail. What we’d prefer is that those fail quickly so that we can get on and invest in the next idea that we’re going to have.
Everything that we do, we do with an ambition that it will scale up so that it’s worth the time investing in it in the first place. If it doesn’t pan out, it doesn’t pan out. Our company has gotten much more comfortable with that. Let’s recognize the power in the failure and move on to what’s next.
We’re a large bank, but you’ll find that our teams and our digital environment are organized around Agile squads, with releases every 21 days. You want a constant focus around what’s working, measuring what’s working, listening to your client, and innovating.
There’s an overhead attached to [looking back and doing postmortems on failure.] “Get them next time” is a better answer than, “Let’s make sure we know exactly who is accountable for that last mistake.”